2nd UPDATE: Senate Democrats To BP: Set Aside $20B For Spill

14th Jun 2010 16:06

(Adds BP comment, in the third paragraph.) By Siobhan Hughes Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--Senate Majority Leader Harry Reid (D, Nev.) and members of the Democratic caucus on Monday asked BP PLC (BP, BP.LN) to set aside $20 billion in a special account to be used to pay for economic damages and clean-up costs of an ongoing oil spill in the Gulf Coast. The lawmakers made the request in a letter to BP Chief Executive Tony Hayward and asked for a response by no later than Friday. The letter comes as U.S. President Barack Obama is preparing to ask BP to set up an independently administered fund for reimbursing victims. "I'm sure when we receive the letter we'll consider it," a BP spokesman said. In a call with reporters, Sen. Patty Murray (D, Wash.) and Sen. Bob Menendez (D, N.J.) said the letter wasn't intended to set a limit on the payouts BP would make in connection with the spill, which followed an April 20 explosion of a drilling rig that BP was leasing in the Gulf of Mexico. The money "is an attempt" to make sure that commercial fishermen, tourism-related businesses and others in the gulf who have "immediate claims" will be "held whole," Menendez said. Asked whether providing the $20 billion would cause Menendez to adjust legislation that currently would eliminate a cap on damage claims that BP and other companies would have to pay for spills and make the policy retroactive, Menendez said that "while I think the $20 billion is incredibly important as a very significant down payment towards the claims of individuals...I just don't want to limit that liability to that." Menendez said alternative legislation introduced by Louisiana Republican Sen. David Vitter to address the liability question would almost certainly be challenged in court and found to be unconstitutional. Vitter's bill would remove the liability cap only for BP, and only for the current crisis. Menendez said it was unconstitutional for Congress to attempt to pass a law affecting only one company. -By Siobhan Hughes, Dow Jones Newswires; 202-862-6654; [email protected] (Corey Boles contributed to this article.) (END) Dow Jones Newswires June 14, 2010 11:06 ET (15:06 GMT)