OCEAN SPRINGS, Miss. – BP’s compensation fund for Gulf oil spill victims has issued a final settlement payment to just one of the thousands of people and businesses waiting for checks, records show, and that $10 million payout went to a company after the oil giant intervened on its behalf.
BP won’t identify the business, citing confidentiality, but acknowledges it lobbied for the settlement. The amount far exceeds smaller stopgap payments that some individuals and businesses have received while they wait for their own final settlements.
The Gulf Coast Claims Facility was set up in August to independently administer BP’s $20 billion compensation fund in the aftermath of its April 20 oil well blowout off Louisiana.
As of this weekend, roughly 91,000 people and businesses had filed for final settlements, but the fund’s administrator, Washington lawyer Kenneth Feinberg, has said those checks won’t start rolling out until February at the earliest. Thousands of people have received some money to tide them over until a final settlement amount is offered, but only one business listed as paid on the facility’s website has so far received a check.
A BP spokeswoman called it “a unique situation in which an existing BP business partner and BP submitted a view on a specific claim” to the facility.
The facility “reviewed our positions and made an independent decision regarding the outcome of the claim,” BP spokeswoman Hejdi Feick said in an e-mail Sunday night to The Associated Press.
Feick did not immediately return a telephone message Monday seeking additional details.
Feinberg said Monday the facility never reviewed that claim for merit. He said BP struck an outside deal with the business and told the fund to make the payment.
“At the request of the parties, the settlement reached between BP and the other party was paid out of the GCCF fund,” Feinberg told the AP. “It was a private settlement and we paid it, but we were not privy to the settlement negotiations between BP and that party.
“We never reviewed the claim,” Feinberg added. “We honored the request of the parties to fund the claim.”
Rudy Toler, 30, a shrimper and oysterman from Gulfport, Miss., called the payment disgusting.
“It makes me sick,” said Toler, a married father of four who hasn’t received a dime from the fund. “It’s just criminal.”
Early on, he filed a claim for losses of about $140,000 for the six months he couldn’t work through the summer. He was denied. The claims facility tells him his paperwork is under review again, but in the meantime, Toler is struggling to pay his bills and feed his family.
“I’m doing the best I can,” he said Monday. “Every day is a struggle.”
Mayor Tony Kennon of Orange Beach, a tourist town in Alabama hit particularly hard by the oil spill, said the early settlement payment “reeks of favoritism.”
“It stinks,” Kennon said Monday. “It’s exactly what we’ve been screaming about. There’s not an independent entity. There’s no oversight.”
Feinberg has faced repeated criticism from lawmakers, plaintiffs attorneys and claimants who complain about a lack of transparency and independence from BP, as well as claims being shortchanged and paid too slowly, or not at all.
His law firm had been receiving $850,000 a month from BP for its work. Feinberg currently is negotiating with BP over a new payment structure to run the fund through August 2013. Any money left over from the $20 billion is expected to be returned to BP.
Feinberg repeatedly has promised fairness and transparency. He calls the program a success and notes it already has paid out more than $3.3 billion to some 251,000 claimants. However, roughly half of the 484,000 claims filed have been denied because of ineligibility or lack of documentation, meaning they got nothing, like Toler.
And while there is an appeals process through the U.S. Coast Guard for disgruntled claimants, the agency consistently has sided with the facility. Feinberg told AP that the Coast Guard had processed 264 out of 507 appeals filed and in every case has agreed with the decisions by the claims fund.
The program first allowed claimants to file for emergency six-month payments to keep them afloat, but many of those claims were denied. Those that weren’t often were paid fractions of what they claimed they lost.
The process now allows for three options. Spill victims can file for a quick cash one-time payment of $5,000 for individuals and $25,000 for businesses. More than 80,000 claimants have filed and been paid in that category, giving up their right to anymore money or to sue BP or any other responsible company. Claimants also may opt for a final settlement, but also would have to give up the right to sue. Residents and business owners who aren’t ready to make that decision could instead file for interim quarterly payments through August 2013, provided they can show proof of continued losses.