Reid suggests BP pay $20 billion for compensation fund

WASHINGTON — Sen. Harry Reid on Monday called on BP to set aside $20 billion in an escrow fund to pay compensation for damages caused by the oil spill in the Gulf of Mexico.

White House officials announced Monday that it has secured an agreement from BP to establish a multibillion-dollar compensation fund for people and businesses suffering from the spill. The officials said the administration and BP are working out the details, including the amount to be placed in an escrow account and how it would be administered.

Reid’s letter to BP chief executive Tony Hayward came on the heels of White House adviser David Axelrod saying over the weekend that President Barack Obama will be demanding that BP establish a cleanup account.

The White House aide did not mention a figure. Reid, D-Nev., suggested $20 billion as a start.

“My message to BP is this: If you drill and you spill, then you should pay that bill,” Reid said in a video posted to his website. “There is going to be no government bailout here.”

In the letter, which was signed by other Democrats, Reid, the Senate majority leader, wrote, “Establishment of this account would serve as an act of good faith and as a first step towards ensuring that there will be no delay in payments or attempt to evade responsibility for damages.

“Although creating this account at this level in no way limits BP’s liability, we believe it will do more to improve BP’s public image than the costly public relations campaign your company has launched,” Reid wrote.