BP sets up $20 billion oil spill fund

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BP agreed to set aside $20 billion to pay damage claims to people and businesses affected by the Gulf oil spill.

The announcement followed a meeting Wednesday between President Barack Obama, BP chairman Carl-Henric Svanberg and other BP officials at the White House

They discussed the ongoing efforts to stop the oil leaking into the Gulf of Mexico and BP's responsibility not only to pay for the cost of the cleanup of the oil spill, but also to compensate residents and businesses that have suffered financially as a result of the oil spill, according to information posted on the White House's Web site.

"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," Obama said following the meeting. "The people of the Gulf have my commitment that BP will meet its obligations to them."

The fund will not be controlled by either BP or by the government, but will be put in an escrow account, administered by a 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," Obama said. "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."

Ken Feinberg, who administered the claims process for victims of the Sept. 11, 2001 terrorist attacks, will run the independent claims process.

Click here for an Associated Press report on the announcement.