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McCollum to BP: Set Aside $2.5 Billion for Florida

Alarmed at the possibility that Floridians may not be made whole before BP has financial difficulties in the wake of the Gulf of Mexico oil spill, Attorney General Bill McCollum on Thursday asked the company to lay aside $2.5 billion for future assistance.

Several members of the state’s task force looking at oil spill recovery said earlier this week that they were concerned the British oil company could be crippled by the spill – which has cost BP more than $1 billion already – jeopardizing future payouts to Florida and other affected states.

Florida officials have already asked the company for direct infusions of cash, and BP has paid Florida $50 million directly to help with tourism ads and preparation, pledged another $25 millon to reimburse the state for cleanup costs, and has paid Florida residents and businesses more than $6 million in claims for lost income. Gov. Charlie Crist has asked the company for more money for research and lost income claims continue to come in.

McCollum noted in his letter to BP’s top U.S. lawyer, Jack Lynch, that a company vice president said earlier this week at a Cabinet meeting that BP hasn’t set aside a pool of money to pay claims to those who have lost their income because of the spill. McCollum noted that a university economist recently estimated that the state’s economy could take a hit well over $2 billion.

“As Florida braces for what will likely be a staggering blow to its economy, with significant impacts to our state’s workforce and the revenues of the state and local governments, it is essential that BP immediately establish a dedicated escrow account solely for the purpose of paying claims and damages to Florida and its citizens,” McCollum wrote to Lynch. “I call upon BP to deposit no less than $2.5 billion into an interest-earning escrow account so we can be assured of its availability to Florida, its citizens and businesses over the long-term recovery period, with the acknowledgement that the escrowed amount may need to be increased in the future.”

Several members of the state’s Oil Spill Economic Recovery Task Force this week said they were concerned that if Florida doesn’t get the money up front, it may not get paid before the company claims financial trouble, or moves to stop making payments. “Let's get the dollars up front before they find another shield to hide behind,” state Rep. Mike Horner, R-Kissimmee, a member of the task force, said earlier this week.

Crist has also suggested that the state could also still sue BP.

And in case suggesting that as a possibility wasn’t a strong enough signal, Crist this week also named Tampa lawyer Steve Yerrid special counsel to advise him on what legal steps the state should consider in the wake of the spill, which began April 20 with the explosion of the Deepwater Horizon oil rig off the Louisiana coast and continued on Thursday.

Yerrid was one of the trial lawyers who worked on Florida’s team of attorneys in the tobacco lawsuit of the 1990s, which ended up with a massive $11 billion settlement for the state.

The company didn’t immediately respond to McCollum’s request. The only large pool of money BP has set aside was a $360 million escrow account it announced in early June to pay for the construction of barrier islands off the Louisiana coast to help stop incoming oil. The company has paid more than $50 million in claims to people and businesses throughout the Gulf region and pledged to pay all legitimate costs of cleanup and all legitimate claims. It has also promised to spend $500 million on research and monitoring of the spill.

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