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BP Agrees to Pay $20 Billion into Compensation Fund

Posted Jun 16, 2010 11:11 AM CDT
By Debra Cassens Weiss

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Updated: The lawyer who oversaw the Sept. 11 victims compensation fund, Kenneth Feinberg, has a new job: He’ll be overseeing a $20 billion fund to compensate those harmed by the Gulf oil spill.

BP has tentatively agreed to pay about $20 billion into the fund over several years, the New York Times reports. The story relied on two unnamed sources familiar with talks between White House officials and BP executives and lawyers.

President Obama confirmed the $20 billion agreement at a press conference shortly before 2:30 p.m. ET. The money will be placed in an escrow account, and it won't be controlled by BP or the federal government, he said. He also emphasized that the $20 billion is not a cap. "The people of the Gulf have my commitment that BP will meet its obligations," he said.

A separate $100 million fund will help compensate unemployed oil rig workers, Obama said.

Feinberg acted as a mediator resolving asbestos and Agent Orange suits, headed the Sept. 11 Victim Compensation Fund, and was appointed last year to oversee executive compensation at companies taking federal bailout money.

Senate Majority Leader Harry Reid of Nevada had suggested the $20 billion figure Monday, according to the Las Vegas Review-Journal. The newspaper cited this statement by Reid in a video posted to his website: “My message to BP is this: If you drill and you spill, then you should pay that bill."

Updated at 1:30 p.m. CT to include information from President Obama's press conference.

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