Bob Riley criticizes oil spill claims process after meeting with Ken Feinberg


MOBILE, Ala. – Alabama Gov. Bob Riley had harsh words for the oil spill claims process following a meeting Thursday with claims czar Ken Feinberg and other elected officials.

Whenever claims are processed slowly, Riley said, leaders call a meeting to voice their complaints and payments are doled out more quickly. But soon after, the rate of payment slows again, until another meeting is called, according to Riley.

“This has been as much of a roller coaster ride as anything that I have participated in since I’ve been governor,” said Riley, who is finishing his eighth year in the state’s top job.

“I hope that Mr. Feinberg understands he holds the future of all these small businesses in South Alabama in his hands.”

Feinberg said the information he gleaned from the meeting wasn’t new, but it was in a more personal form.

“I hear in cogent, pointed ways how there are still businesses in distress from not getting payments,” he said.

Feinberg met with Riley, U.S. Sen. Jeff Sessions, R-Mobile, and U.S. Rep. Jo Bonner, R- Mobile, on Thursday at the RSA Tower in downtown Mobile.

Riley and Sessions left after about 45 minutes, and Feinberg spent the rest of the morning listening to a handful of business owners who explained how they and others in their industry feel left out in the cold by Feinberg’s Gulf Coast Claims Facility.

Most of the business owners said that they and others got payments that covered only a fraction of their losses, while some in similar industries received full compensation.

Speaking to media after the meeting, Feinberg didn’t dispute business owner claims, nor did he try to explain the payment amounts.

He did promise that he would “try to do right” by the business owners he talked with Thursday.

Jason Holt, who owns Suncoast Beach Service Inc., said Feinberg took down claim numbers from many of those present and promised to give them his personal attention.

Holt said he got a check for 34 percent of the amount he claimed through Feinberg’s process, while some of his former employees received four or five times what they asked for.

“I had one employee who got a check for $1,500, which was what he asked for, and then a week later he gets a check for another $8,400, no explanation,” Holt said. “I told him to put it in the bank.”

Pete Blalock, a former mayor of Orange Beach who owns three seafood stores along the coast, said that he was more encouraged about the claims process after meeting with Feinberg than he has been all summer.

“We send our claims in . . . and they get paid at 25 percent,” he said. “Something’s not right. He understands, and that’s going to get rectified, in my opinion.”

Orange Beach Mayor Tony Kennon was more cautious in his assessment.

“It ain’t what you say, it’s what you do,” he said. “Call me back in 10 days and I’ll tell you how I feel about (Feinberg).”

Riley said he told Feinberg about one claimant who presented all the required documentation and had gone the extra step of having it audited by a certified public accountant. The claims facility responded with a letter saying that only 2 percent to 10 percent of the claim would be paid, and only if the claimant, whom Riley did not name, agreed to take a final settlement and not sue BP, Riley said.

No explanation was given for the reduced settlement offered, according to Riley, who described the situation as “an incredible injustice.”

Feinberg pledged to check on that specific claim, Riley said.

Feinberg’s facility took over on Aug. 23 at the behest of President Barack Obama, following widespread complaints of the compensation process that BP PLC set up following the April 20 spill. His firm, Feinberg Rozen, LLP, has been paid $3.3 million by BP for its work thus far, the facility has said.

According to the claims facility, Feinberg’s process has paid out more than $1.67 billion to individuals and businesses. It has received more than 336,000 claims, paid 97,000 of them and denied another 32,000. About 150,000 applicants didn’t provide enough financial documentation to prove the spill affected their livelihood, according to data from the facility.

Bonner said that while those payment figures sound impressive, “the numbers only tell part of the story.”

“They don’t tell the horror stories of businesses being paid pennies on the dollar,” he said. “We need to impress upon him the urgency that time is running out for some of these businesses.”

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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