Gulf spill payout chief is under fire as claims pile up

Critics allege delays, lack of transparency

February 15, 2011|Brian Skoloff, Associated Press

NEW ORLEANS — President Obama vowed during a White House speech last June that the $20 billion he helped coax out of BP for an oil spill compensation fund would take care of victims “as quickly, as fairly, and as transparently as possible.’’

Eight months later, that’s not how things look to many people along the Gulf Coast.

Tens of thousands of fishermen, oyster shuckers, business owners, hotel operators, and even hairdressers still await payment. Many others whose claims have been turned down question the evenhandedness. And without the data to determine who is right, attorneys general and members of Congress question the openness.

An Associated Press review that included interviews with legal specialists, government officials, and more than 300 Gulf Coast residents found a process beset by red tape and delay, and at the center of it all a fund administrator whose ties to BP have raised questions about his independence.

Now, the dissatisfaction has reached a fever pitch: Lawmakers in Washington are demanding that the White House step in, the Louisiana governor and others want a federal judge to intervene, and the people most affected by the Deepwater Horizon disaster are threatening to line the courthouse steps if they don’t get the changes they seek from administrator Kenneth Feinberg.

“A lot of promises were made by Feinberg and President Obama that this would be a very open process, and I just don’t feel that’s the case,’’ said Representative Steve Scalise, a Louisiana Republican.

Feinberg, the Washington lawyer who runs the fund and was lauded for his work overseeing the compensation fund for 9/11 victims, has insisted that he is being fair.

He has acknowledged that the system is clogged by the sheer volume of oil spill claims, along with inflated or outlandish requests.

Among them: One person filed a claim for the entire $20 billion, while another asked for $10 billion; a boat captain sought reimbursement for lost income for himself and four deckhands, but it turns out he didn’t have any deckhands; and a fisherman claimed he lost a month on the water, but his boat had a hole in it and was dry-docked even before the spill.

Feinberg recently said he believes the Gulf of Mexico should largely recover from BP’s oil spill by the end of next year, and he doesn’t think the entire $20 billion will be needed to compensate victims. Only half of that should suffice, he said.

“Overall, I think the program has worked well,’’ Feinberg said in an interview. “I think the program has been fairly transparent.’’

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