Applause for B-P Decision on Damages Funds

By Libby Casey

In Washington, Senator Mark Begich and other Democrats are applauding the announcement that B-P is putting $20-Billion in escrow and has canceled shareholder dividends for the rest of the year.  The company made the announcements today in response to pressure from the Obama Administration.  The escrow account will be used to pay damage and liability claims to victims of the B-P oil spill disaster in the Gulf of Mexico.

Begich has been calling for the escrow account, and joined a handful of Democrats today in cheering the move.

I look back to 20 years ago with Exxon Valdez if we would’ve had this kind of speed and response and the set-aside if Exxon woulda done the same thing, a lot of lives would’ve been benefited much earlier than after waiting almost 20 years.

Begich says the goal is not to see B-P fold.  He says, instead, he hopes the company’s announcement will stabilize its profile.  Its shares dipped to a near 14-year low today, but after news of its plans to cancel dividends and create the escrow account its shares lifted this afternoon.  Begich says B-P is a major player in Alaska… he met with 200 of its employees on a recent visit to Alaska.

As a state that has BP does business in the state, one of the largest partners in the pipeline, we have a vested interest in an unusual way to make sure they don’t fall under and collapse from an interest in the sate.  But as mentioned, I think we’ve threaded a needle just right in other words creating corporate responsibility at the same time long term stability.

Begich told reporters he spoke to TransOcean today – the company that owned the rig that went up in flames in April.

He’s advocating for that company to also withhold its shareholder dividend payments until its liability is determined.  He says TransOcean was resistant to his proposal and said its shareholders were expecting payments… but Begich says that can be changed.

The board can go back to shareholders as I’ve seen time and time again over the years with other corporations, they acknowledged that, so it’s their business decision to make that.  I think it’s in the right decision they not pay.  Because their billion dollar dividend is paid in quarterly installments.  The next quarter is coming.  My view is they shouldn’t pay it.

B-P’s announcement that it will withhold shareholder payments and set up the escrow account came after a morning meeting with President Obama and White House officials.


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