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President Obama: “BP will meet its obligations”

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Editor’s Note to President Obama:

Dear President Obama,

Nearly four years ago, on June 26, 2010, you met at The White House with British Petroleum Chairman Carl-Henric Svanberg in the aftermath of BP’s Deepwater Horizon disaster. Your statement from that day is reproduced below.

Mr. President, as we approach the four year anniversary of the spill, it has become clear that BP has no intention of fulfilling its promise made to you and the people of the Gulf of Mexico. BP has effectively reneged on the Settlement Agreement it authored and signed. Due to the company’s frivolous legal maneuvering and disingenuous, self-serving media campaigns, hundreds of thousands of individuals and businesses affected by the spill have not been paid what they are legitimately due – and there appears to be no relief in sight.

Four years later, BP’s “Commitment to the Gulf” appears to be a hollow one.

Mr. President, we need a voice again. We need your help.

Respectfully,

The People & Businesses of the Gulf of Mexico

——————————————-

Statement of the President of the United States

State Dining Room

2:25 P.M. EDT – June 26, 2010

THE PRESIDENT:  Good afternoon, everybody.  I just concluded a constructive meeting with BP’s chairman, Carl-Henric Svanberg, and I raised two issues at the meeting.  First was the containment of the oil that is still spewing into the Gulf.  As I mentioned last night, my administration has directed BP to mobilize additional equipment and technology, and in the coming days and weeks, these efforts should capture up to 90 percent of the oil that is leaking out of the well.

Now, that’s not good enough.  So we will continue to press BP and draw on our best minds and resources to capture the rest of the oil until the company finishes drilling a relief well later in the summer that is expected to stop the leak completely.

The second topic revolved around the issue of claims.  As I traveled across the Gulf I heard growing frustration over the pace at which claims had been paid.  And I also heard concerns about whether BP will make resources available to cover legitimate claims resulting from this disaster.  So this discussion today was essential.

Currently, under federal law, there is a $75 million cap on how much oil companies could under certain circumstances be required to pay for economic damages resulting from a spill such as this.  That amount obviously would be insufficient.  That’s why I’m pleased to announce that BP has agreed to set aside $20 billion to pay claims for damages resulting from this spill.

This $20 billion will provide substantial assurance that the claims people and businesses have will be honored.  It’s also important to emphasize this is not a cap.  The people of the Gulf have my commitment that BP will meet its obligations to them.  BP has publicly pledged to make good on the claims that it owes to the people in the Gulf, and so the agreement we reached sets up a financial and legal framework to do it.

Another important element is that this $20 billion fund will not be controlled by either BP or by the government.  It will be put in a escrow account, administered by an impartial, independent third party.  So if you or your business has suffered an economic loss as a result of this spill, you’ll be eligible to file a claim for part of this $20 billion.  This fund does not supersede either individuals’ rights or states’ rights to present claims in court.  BP will also continue to be liable for the environmental disaster it has caused, and we’re going to continue to work to make sure that they address it.

Additionally, BP voluntarily agreed to establish a $100 million fund to compensate unemployed oil rig workers affected by the closure of the deepwater rigs.

We’ve mutually agreed that Ken Feinberg will run the independent claims process we’re putting in place.  And there will be a three-person panel to adjudicate claims that are turned down.  Every effort will be made to expedite these claims.  Ken has long experience in such matters, including running the fund that compensated the victims of 9/11.  And I’m confident he will ensure that claims are administered as quickly, as fairly, and as transparently as possible.

BP’s liabilities for this spill are significant — and they acknowledge that fact.  We will continue to hold BP and all other responsible parties accountable.  And I’m absolutely confident BP will be able to meet its obligations to the Gulf Coast and to the American people.  BP is a strong and viable company and it is in all of our interests that it remain so.  So what this is about is accountability.  At the end of the day, that’s what every American wants and expects.

The structure we’re establishing today is an important step towards making the people of the Gulf Coast whole again, but it’s not going to turn things around overnight.  And I want all Americans to know that I will continue to fight each and every day until the oil is contained, until businesses recover, and until the Gulf Coast bounces back from this tragedy, as I know it will.

One last point.  During a private conversation with Chairman Svanberg I emphasized to him that for the families that I met with down in the Gulf, for the small business owners, for the fishermen, for the shrimpers, this is not just a matter of dollars and cents; that a lot of these folks don’t have a cushion.  They were coming off Rita and Katrina; coming off the worst economy that this country has seen since the Great Depression, and this season was going to be the season where they were going to be bouncing back.  Not only that, but this happened, from their perspective, at the worst possible time, because they’re making their entire income for the year in the three or four months during which folks can take their boats out, people are coming down for tourism.

And so I emphasized to the chairman that when he’s talking to shareholders, when he is in meetings in his boardroom, to keep in mind those individuals; that they are desperate; that some of them, if they don’t get relief quickly, may lose businesses that have been in their families for two or three generations.  And the chairman assured me that he would keep them in mind.

That’s going to be the standard by which I measure BP’s responsiveness.  I think today was a good start, and it should provide some assurance to some of the small business owners and individuals down in the Gulf who I was visiting with that BP is going to meet its responsibilities.  But I indicated to the chairman that, throughout this process, as we work to make sure that the Gulf is made whole once again, that the standard I’m going to be applying is whether or not those individuals I met with, their family members, those communities that are vulnerable, whether they are uppermost in the minds of all concerned.  That’s who we’re doing this work for.

All right.  Thank you very much, everybody.

END
2:33 P.M. EDT

Emphasis Added

9 Comments

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  1. Linda says:
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    BP is also limiting their reimbursements by requiring 1099s for rental properties. These 1099s were not required and statements of income and expenses were allowed until 2011. “In 2011 the requirement has been extended by the Small Business Jobs Act of 2010 to payments made by persons who receive income from rental property.” Thus they are refusing to process any claims without the 1099 for years 2009 and 2010! We lost income from our property, my husband passed away, and I had to sell the property for less than it’s
    value. So what says BP!

  2. Kim Lirette says:
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    This is sad to see how our Lawyer are working for the people.Here we are losing everything since BP OIL SPILL with no ending in sight. Then our Govs. not gone try and step up to help the POOR FISHERMEN. That got screw by the biggest lier and crock KENNETH FEINBERG. with his Quick Pay Claims it gone get better.

  3. Eyeswideopen says:
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    Let’s break down what Bp benefited by agreeing to this settlement.
    1.Losses limited to 2010 only. They were on the hook for 3 years.

    2.A Gerrymandered Zone A carving out key financial impacted areas. That reduced the (RTP) Risk Transfer Premium from a multiple of 1 under GCCF to 0.25 under the settlement.

    3.The removal of interim payments required under OPA.

    4.The creation of Coastal and Real Property Loss maps that cover nearly 80% government property excluded from the settlement. Leaving thousands of homes excluded from eligibility.

    5.Individuals who lost their home due to foreclosures or bankruptcies are excluded but required to realize this and OPT-OUT or be bound by the terms receiving no recovery.

    6.Individuals who sold their property at a reduced price after Dec 31, 2010 are excluded but required to realize this and OPT-OUT or be bound by the terms receiving no recovery.

    7.Any Failed Business satisfying subparts (a), (b), or (c), below shall not be entitled to compensation pursuant to section IV. a. The Failed Business or Failed Start-Up Business reported negative EBITDA for the twelve month period prior to May 1, 2010 (or, in the event that the claimant is a Failed Start-Up Business with less than twelve months of operating history, negative EBITDA for the months during which the business operated prior to May 1, 2010).

    http://www.deepwaterhorizoneconomicsettlement.com/docs/statistics.pdf

    8.These are the current totals all located under today’s stats table 4.

    a.2,669 Eligible No Payments (over paid by GCCF since the RTP was reduced).

    b.7,160 Denied because they signed a fraudulently induced GCCF releases that only compensated a part of their losses but the SS/ EIN number was tied to it.

    c.3,141 Causation Denials most are claimants that can’t pass the V-Trend requirement.

    d.9,231 Other Denials these are claimants that understood they were included in the class.

    e.29,100 Incomplete Denials these are claimants that can’t satisfy the document requirements.

    Let’s talk about your interpretation of legitimate / false claims. If someone is sent a notice stating you are a class member and bound by the terms or forever lose your legal rights unless you Opt-Out. Then you are a class member the system will screen you out as demonstrated in item 8 all others following the guidelines will be entitled to recovery for witch BP set aside funds.

    BP has saved billions by negotiating this settlement. Dennis please lobby BP to sit down and try to resolve the legitimate claims for the people in item 8 the unspoken ones.

    As for your arguments against the seafood settlement BP and the PSC are on record that they used the industries revenue to establish the amount not the alleged client list.

  4. Tom Young says:
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    Dennis,

    You agree with Dave’s statement that “BP has not honored its word to ‘Make things right,’ and compensate all legitimate claims in a full and timely manner”? B/c your continued enthusiastic defense of the corporate felon that is BP seems to indicate otherwise.

    As for the fisherman accusations, like BP, you conflate two unrelated issues. In fact, those charges are associated with a completely different fund, unrelated to business economic loss claims. But I suspect you do not realize that as it is becoming clear that you are simply a casual observer and apologist for BP who takes the company’s statements as gospel (or alternatively, one of BP’s paid trolls).

    BP can say they are going to pay “all legitimate claims” until the cows come home. The simple fact is that they are not.

    If it’s a mess, it is b/c BP has intentionally made it so.

  5. Dennis Bradley says:
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    Hi Dave I agree with you.

    The problem is BP are now tied up in the interpritation of the agreement.

    They have stated that they will pay all legitimate claims, the admistrators have allowed huge payouts to businesses, individuals and legal firms that are now proving to be false claims.

    It would ge great if this could be resolved by sittiing down and agreeing all legitimate claims should be paid.

    Some laywers are arguing that all claims should be paid regardless of loss because they say thats how the agreement reads.

    One example is the law firm who claimed to represent various parts of the fishing industry he is now being sued by the guys he was supposed to represent, if you read the press his firm has received billions of dollars.

    Its a mess.

  6. Brian Johnson says:
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    What bp is doing is very blinding for even the most uneducated politics like myself. Raised doing as my parents have done. I only work hard everyday believing in people in general will do the right thing (bp) I don’t know what are who to trust now. My goal is to work hard and try to survive. I cant understand why the appeals court didn’t laugh when BP appeals its own settlement they made? Reading this gives me hope. When I was working in the gulf for BP they were more scared of the media. Being very verbal about talking to them. I believe lets talk, this may get Obama and BP moving. excellent commentary.

  7. Eyeswideopen says:
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    Hate to see this play out but BP maybe waiting for him to push for the Trans-Pacific Trade Agreement that has this provision.

    It’s very unlikely that our U.S. Supreme Court will hear this case with BP having 11 counts of man-slaughter.

    Under the agreement currently being advocated by the Obama administration, American corporations would continue to be subject to domestic laws and regulations on the environment, banking and other issues. But foreign corporations operating within the U.S. would be permitted to appeal key American legal or regulatory rulings to an international tribunal. That international tribunal would be granted the power to overrule American law and impose trade sanctions on the United States for failing to abide by its rulings.

  8. Dave Arnsby says:
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    The solution to this current complete stalemate is very straightforward. Very clearly BP has not honored it’s word to ” Make things right “, and compensate all Legitimate Claims in a full and timely manner.” This applies to claims in the DWH Settlement Program and the BP Claims Program.
    Very soon Judge Barbier will be ruling on the matter of Gross Negligence from the two trials last year.
    Everyone wants this to end very soon. BP surely does, so do the Victims and the Judges and the Shareholders of BP.
    If a verdict of Gross Negligence comes back, BP will be facing massive fines up to $18 billion dollars. None of the money goes to the individuals and business owners, it goes to the Government. None of us will see a cent of it.
    When these last current appeals are decided, would it no be a good idea for both sides to sit down and negotiate a deal that would # 1 Pay All Legitimate Claims Immediately, no more appeals and delays. # 2, Pay a limited fine to the Government. #3, settle remaining State and other claims.
    All claims and fines to be within the ammount BP has already allocated.
    The Victims are made whole, and can restart their lives. The Government is happy and BP can return to Its Business again with a stock value surging back up to $75 a share.
    Is this not a good solution ?

  9. norbert kastner says:
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    excellent commentary but were is our beloved president today

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