Six BP executives, including (from left) CEO Tony Hayward, BP America Inc. President and Chairman Lamar McKay, BP General Counsel Rupert Bondy, and BP Managing Director Bob Dudley arrived at the White House around 10 a.m. and were still inside after noon. BP: We care about the 'small people'

BP officials agreed to the White House’s demand that they create a $20 billion escrow fund to pay claims to Gulf Coast residents and business owners, whom the company’s chairman, Carl-Henric Svanberg, referred to as “the small people.”

Emerging from a four-hour meeting with more than a dozen senior administration officials, and a brief face-to-face with President Barack Obama, Svanberg told reporters that BP will also suspend dividend payments to shareholders this year and create a $100 million fund to assist oil rig workers left jobless by the government’s six-month moratorium on deepwater drilling.


“He’s frustrated because he cares about the small people, and we care about the small people," Svanberg said of Obama. "I hear comments that sometimes large oil companies are greedy companies that don’t care. But that is not the case with BP. We care about the small people."

Minutes earlier, Obama veered from his teleprompter script to urge BP officials to consider Gulf residents and business owners, already struggling to rebound from Hurricane Katrina, when making financial decisions.

“This season was going to the season when they were going to bounce back,” said Obama, who returned from a two-day trip to the oil-fouled coast on Tuesday to deliver remarks on the spill in his first Oval Office address to the nation. “And so I emphasized to the chairman that when he’s talking to shareholders, when he is in meetings in his boardroom, to keep in mind those individuals; that they are desperate.”

“And so I emphasized to the chairman that when he’s talking to shareholders, when he is in meetings in his boardroom, to keep in mind those individuals; that they are desperate; that some of them, if they don’t get relief quickly, may lose businesses that have been in their families for two or three generations. And the chairman assured me that he would keep them in mind,” Obama said.

The concessions from BP are victories for Obama, particularly the $100 million fund for oil rig workers displaced by the moratorium. Carol Browner, Obama’s energy adviser, suggested the White House had no legal authority to force BP to pay lost wages. “There’s a very significant legal question about their liability,” Browner told reporters.

But BP executives appeared to get something out of their first meeting with the president.

Obama expressed confidence that the company is in sound financial condition – a question raised by a drop in its stock amid tough rhetoric – and he made a rare appeal for BP critics to heed its financial interest, for the good of the people along the Gulf.

“I’m absolutely confident BP will be able to meet its obligations to the Gulf Coast and to the American people. BP is a strong and viable company and it is in all of our interests that it remain so,” Obama said. “So what this is about is accountability.”

Lawyer Kenneth Feinberg, who was in charge of payments to families of victims of the Sept. 11, 2001, attacks, will oversee the $20 billion fund. The White House made a point to stress that the balance is not a “cap” on the company’s liabilities, and those hurt by the spill can still file lawsuits against BP, Obama pointed that out in his remarks. And White House press secretary Robert Gibbs reiterated it in his briefing with reporters.

The White House had announced this past weekend that it would press BP to set up an escrow fund to pay claims from Gulf Coast residents amid growing complaints about difficulties in getting adequate compensation. Officials said the fund would be administered by a third party. Senate Democrats also sent a letter to BP naming the $20 billion price tag.

Wednesday marked Obama's first discussion with Svanberg and BP CEO Tony Hayward since their oil rig exploded on April 20, despite the president’s four trips to the Gulf Coast.

The six BP executives arrived at the White House about 10 a.m. and remained inside until after 2 p.m.

The oil giant brought its top brass and even came armed with a top Clinton administration Justice Department official, Jamie Gorelick, whose name was floated as a possible attorney general pick for Obama. The White House side of the conference table in the Roosevelt Room was stacked: Obama, Vice President Joe Biden, five Cabinet secretaries, Coast Guard Adm. Thad Allen, Attorney General Eric Holder and top presidential advisers. Both sides had their lawyers on hand.

Obama was scheduled to spend 20 minutes in the meeting. He entered the room with an entourage: Homeland Security Secretary Janet Napolitano and her coordinator for claims oversight, Interior Secretary Ken Salazar, Energy Secretary Steven Chu, Commerce Secretary Gary Locke, Labor Secretary Hilda Solis, White House chief of staff Rahm Emanuel and senior adviser Valerie Jarrett.

The first words BP executives uttered to Obama were an apology, White House officials said.

Asked if Obama accepted their apology, Gibbs said, “I assume so, yes.”

The White House gave BP executives a bit of cover at the start of the meeting, allowing them to arrive on the side of the West Wing and walk at a distance from reporters, rather than forcing them to come through the main entrance for visitors, which would have made it impossible for them to ignore the news media. But ignore the news media they did, refusing to respond to shouted questions on about the size of the fund and whether they had met with the families of the 11 workers who were killed on April 20.

Returning four hours later, the executives spoke to reporters for about five minutes.

“I would like to take this opportunity to apologize to the American people on behalf of all the employees in BP, many of whom are living on the Gulf coast, and I do thank you for the patience that you have in this difficult time,” Svanberg said.

In overseeing the BP fund, Feinberg brings his years of experience running the Sept. 11 fund, which paid billions to the victims of the terror attacks, through a complex legal process where families would agree to take the government payment but give up their right to file a lawsuit separately — a process that conceivably could be replicated for the Gulf disaster.

Feinberg also works for the Treasury Department as the “pay czar,” reviewing compensation of executives of firms that received bailout funds. Sen. Chuck Schumer (D-N.Y.) said he was a good choice, based on his work for the Sept. 11 families.

“The victims can be confident that real help is on the way with someone as fair, diligent and sympathetic as Ken Feinberg running this fund. He did an amazingly good job in New York for the families of those lost on Sept. 11 and received plaudits from all sides. I believe when Feinberg completes his mission here, the people in the Gulf will feel the same way,” Schumer said.

Also Wednesday, Obama, intensifying his push for passing climate change legislation before the midterms, invited a bipartisan group of senators to the White House on June 23 in hopes of reaching a compromise on the stalled energy bill.

The intent is “to discuss the process that the Senate will use going forward,” Gibbs told reporters.

So far the invitees include Sens. Jeff Bingaman (D-N.M.), Barbara Boxer (D-Calif.), Susan Collins (R-Maine), Lindsey Graham (R-S.C.), John Kerry (D-Mass.), Dick Lugar (R-Ind.), Joe Lieberman (I-Conn.) and Lisa Murkowski (R-Alaska).

Obama drew sharp criticism from environmental groups for failing to back a carbon cap in his Oval Office address Tuesday night. Instead, the president — who has vowed to wrangle the 60 votes necessary to overcome a GOP filibuster — said he was open to a variety of possible approaches heading forward.

Senate Democrats interpreted that as a virtual admission that Obama has given up on a controversial cap-and-trade bill passed in the House last year.