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Wednesday, June 16, 2010

OBAMA DOES SOMETHING RIGHT, CALLING FOR B.P. TO ESTABLISH A $20 BILLION ESCROW FUND TO ANTICIPATE PAYMENT OF DAMAGES DUE TO THE GULF OIL SPILL

WHILE THERE IS SO MUCH THAT PRESIDENT OBAMA HAS NOT HANDLED WELL WITH RESPECT TO THE OIL SPILL, THE IDEA THAT B.P. SHOULD ESTABLISH A MULTI BILLION DOLLAR ESCROW FUND IN ANTICIPATION OF PAYMENT OF DAMAGES IS A BRILLIANT IDEA.

This is a win-win idea that British Petroleum should take seriously. In fact according to a NYTimes News Alert, B.P. has agreed to such a fund. At the present time, unless it's financial picture is a house of cards (not impossible given the 21st Century genius of smoke and mirror accounting practices), then British Petroleum already has the financial resources to make such a fund immediately feasible. By establishing such a fund, it should be obvious that the payment of reasonable damages by B.P. then has a tangible and significant opportunity to mitigate the suffering of those in the Gulf in real time. What may be less obvious is that by setting aside an escrow fund, based on the appearance of a reasonable finite number with respect to anticipated damages, should ease stockholder fears of open-ended risk and restore a positive public relations image for B.P. from both the public and the stockholder perspectives.

Kudos to President Obama for this idea. Kenneth Feinberg, who presently is the TARP Special Master, and who previously directed the Compensation Funds Program for Nine-Eleven victims, will reportedly be in charge of the Gulf Compensation Fund. There could not be a better choice to head this fund. Let us hope that the word "tentative" (used by the NYT to describe the agreement for the implementation of the fund) does not imply "temporary for a short term public relations lift, until such time as B.P. may back out of the agreement, leaving Obama and the USA in the lurch."

TODAY IS DAY 1475 IN THE CAPTIVITY OF GILAD SHALIT.