The "escrow account" in
2010 is not $20 billion dollars. BP will put in $3 billion dollars in
the third quarter of 2010 (ending September 30) and another
$2 billion in the fourth quarter (ending December 31). Thereafter, it will have to
make installments of $1.25 billion each quarter for the next three
years.

This means that the necessary money will not be available
to pay the tens of
billions in losses that are real and immediate. It also means that
people and businesses will have to get in line.

The real number for the
escrow account in 2010 is $5 billion—six months from now at the
earliest. To put this in perspective, BP has been bringing in between
$26 billion and $36 billion annually in profits on revenue of $250
billion, and pays out more than $10 billion in dividends yearly.

According
to
a report in Forbes, BP could absorb $35 billion in spill costs
before it would have a "material impact" on its operations. But
instead, it will be allowed a paltry $5 billion a year, in an
installment plan over four years.

Another measure of
perspective can be had by comparison of this $5 billion per year
voluntary set-aside to the accumulated potential fines and penalties
under the Clean Water Act.
BP can be fined $4,300 per barrel of oil spilled as a consequence of gross negligence.
With the recent acknowledgment that the spill volume is 60,000 barrels
per day, that is a potential penalty of over $250 million per day. Put
another way, every 60 days accumulates a potential $15 billion fine
under the Act. The voluntary arrangement to set aside $5 billion per
year is meager in comparison.

This, of course,
reflects Obama’s unwillingness to exercise legal authority against BP. Department of Justice lawyers
could be initiating prosecutions for the accumulated fines, but aside
from the announcement of potential investigations, this has not
occurred.

Obama denies that his deal with BP will function as a
cap on its liability, but this remains to be determined. The deal
appears to functionally provide a shield for BP. As one investment
advisor told the Wall
Street Journal,
the agreement puts "an end to the financial bleeding," and allows
investors to assess what BPs total liabilities might be. So while
President Obama stresses that the plan is not a cap on liability, it
certainly appears as one. The installment terms of the payments
themselves limit the amounts that will be made available while people
are seeking claims.

Mr. Feinberg to
the rescue—again

President Obama
announced that the fund will be administered by Kenneth Feinberg, a
Washington lawyer who made $5.7 million in his law practice in 2008.
Mr. Feinberg has played a particular role in Washington at the time of
virtual uprising against the banks and bankersbonuses. He was
appointed to be the “pay czar” by Obama reviewing and approving many of
the obscene bonuses doled out to AIG and other executives after they
were bailed out with hundreds of billions of dollars of taxpayers’
money. As Reuters wrote today, "He has been hailed for soothing the
egos of Wall Street executives clutching on to big paychecks, while
still looking tough to a general public shocked by massive payouts to
firms on a government lifeline."

There is very little
other information about how claims will be processed. There will have
to be determinations made as to what, in the parlance of both BP and
President Obama, is a "legitimate" claim. While Obama stated that
anyone can file a claim, that doesn’t  mean that the claim will be
accepted or paid. Nor does it appear that the decision-making process
will include any of the affected Gulf coast residents or their
representatives from the fishers, shrimpers, crabbers, unions, small
business people and workers in the tourism and recreation industry,
local elected officials, clergy, and independent scientists and
environmentalists.

Details must be
forthcoming about claims payments and standards. Can we expect tens of
thousands of people to receive checks by the end of the month? One
thing is clear: The limited level of the fund necessarily means that
claims cannot be paid equivalent to the damages incurred right now.

The creation of the
so-called escrow fund was the result of a nationwide mass movement. Now
is the time to step up our organizing to make sure that we have the
kind of escrow fund that can really meet the needs of the people and
repair the vast environmental damage caused by BP.