White House demands BP set aside billions

THE White House and at least two Gulf states have demanded that BP create special accounts that would set aside billions of dollars to pay for the mounting claims related to the massive oil spill in the Gulf of Mexico.

President Barack Obama wants an independent, third party to administer the escrow account and compensate those with “legitimate” claims for damages, Obama’s top political adviser, David Axelrod, said yesterday.

The amount of money set aside will be discussed during talks this week between the White House and BP, but Axelrod said it should be “substantial.”

Gulf states also were putting the squeeze on BP.

The attorney general in Florida and the state treasurer in Louisiana want BP to put a total of $7.5 billion in escrow accounts to compensate the states and their residents for damages now and in the future.

“At the end of the day, my concern is Louisiana,” state treasurer, John Kennedy said. “BP ultimately will do what BP thinks is best for BP.”

The tough talk from the White House comes a day after the Coast Guard made public a testy letter sent to BP demanding the energy giant pick up its pace and present a better plan to contain the spill by the time Obama arrives at the beleaguered coast for a two-day visit today.

BP’s board was to meet today to discuss deferring its second-quarter dividend and putting the money into escrow.

BP’s public image has taken a beating and its stock price has plunged since the April 20 explosion of a deep-sea rig that killed 11 people and triggered a massive oil spill that has coated parts of the Gulf Coast with stinking, dark piles of crude oil and created environmental and economic devastation.

At the same time, tensions between BP and the federal government have ramped up as the public outrage over the spill has grown.

Obama has come under increasing criticism for his response to the disaster.

Obama will meet BP executives, including the company’s chairman, on Wednesday, a day after he returns from the Gulf. The president also plans an Oval Office address to the public tomorrow night.