Obama administration officials have created a BP escrow fund for BP executives to put $20 billion in to pay damage claims from the oil spill. The BP escrow fund will be used to pay the damages from the oil spill. It will be used to pay claims of lost income, companies, and other damages by human victims of the Deepwater Horizon oil spill. The $20 billion figure is not a cap, though some are questioning whether the escrow fund is going to help or hurt efforts to stop the gusher and clean up the environmental, political and economic mess.

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BP escrow fund not a liability cap

Estimates for the damages from the BP oil spill vary from as little as the amount of the BP escrow fund up to $ 100 billion. On the Today Show today, senior Obama adviser David Axelrod assured that “this is not a get-out-of-the-situation-free card.” The Obama administration has already said that if the $ 20 billion BP escrow fund is not enough to pay damages, BP will be responsible for more.

Kenneth Fineburg to administer BP escrow fund

At the moment, Kenneth Fineburg is the “pay czar” for the federal government’s TARP bailout. A lawyer, Kenneth Fineburg has experience in administering disaster escrow funds - he administered the victims’ fund for the September 11, 2001 attacks.

BP escrow fund in response to complaints

The BP escrow fund, called for at first by President Obama, is being created because of troubles with BP’s response to claims. Some BP damage claims are paid, though others are nevertheless “in consideration”. Oil spill victims, when submitting claims to BP, have been told they have to provide three years of tax returns.

Will BP escrow fund distract from spill?

There are some commentators, though, who are concerned that the BP escrow fund will not be helpful. Last year, BP earned $ 5.6 billion in profits. The BP escrow fund is a bad idea, according to governor of Mississippi Haley Barbour. She expressed a concern that BP may consider it case closed once they pay to the fund.

Sources:

NowPublic.com

ABC News

AP News