BP Agrees to $20 Billion Escrow Fund for Spill Victims

BP has agreed to finance a $20 billion fund to pay the claims of people whose jobs and way of life have been damaged by the Gulf oil spill, senior administration officials say.

The independent fund will be led by lawyer Kenneth Feinberg, who oversaw payments to families of victims of the Sept. 11, 2001, terrorist attacks.

President Barack Obama wrested a $20 billion compensation guarantee and an apology to the nation from British oil giant BP Wednesday, announcing the company would set up a major claims fund for shrimpers, restaurateurs and others whose lives and livelihoods are being wrecked by the oil flooding into the Gulf of Mexico.

Applause broke out during a community meeting in Orange Beach, Ala., on the news.

BP is suspending its dividend through the rest of the year in the wake of the Gulf oil spill. "This tragic accident ... should have never happened," said board chair Carl-Henric Svanberg, who used a news conference to "apologize to the American people." He also noted that "we care about the small people." Svanberg spoke after a meeting with President Obama in which the company agreed to set up a $20 billion fund for victims. The meeting stretched more than 4 hours, with Obama darting in and out of the room.