The $20 billion fund for victims of BP Plc’s oil spill will be backed by the company’s U.S. oil and gas production, an arrangement that an advocacy group called a conflict of interest for the Obama administration.
Provisions of the Deepwater Horizon Oil Spill Trust were released today at the White House. BP agreed to the trust fund, to be administered by Kenneth Feinberg, after a June meeting at the White House with President Barack Obama and BP executives including Chairman Carl-Henric Svanberg.
Using BP’s production as collateral is “wildly inappropriate” because it may give the administration pause in pursuing criminal charges against the London-based oil company and in cracking down on its safety failings, Public Citizen, a Washington-based advocacy group, said today in a statement.
“It’s to their advantage to have an upper hand with an open-ended criminal investigation still pending,” Tyson Slocum, director of the group’s energy program, said in a statement. “The upper hand is an agreement that directly links a continued robust presence by BP in the Gulf of Mexico to financing an Obama administration priority, the victims’ fund.”
A White House spokesman didn’t immediately respond to a request for comment.
BP reported a second-quarter loss of $17.2 billion compared with a profit of $4.39 billion in the year-earlier period. The April 20 explosion of the Deepwater Horizon drilling rig, leased from Transocean Ltd., killed 11 workers and set off the biggest oil spill in U.S. history.