Louisiana officials urge BP to speed claims payments


CHAUVIN, LA. — The BP claims center here is housed in a former bar and dance hall complete with parquet wood floors, but there is little to celebrate.
Maps tracking the spread of the oil gushing into the Gulf of Mexico since the explosion on BP’s Deepwater Horizon drilling rig more than two months ago hang on the walls. Other maps show projected paths of Tropical Storm Alex, which soaked the Gulf Coast last week and pushed the oil into the bayous near this town of fishing camps and houseboats. Three rows of chairs are set up in the front room to accommodate the dozens of out-of-work boat captains, shrimpers and deckhands who come here each day to file their claims against BP — and, they hope, leave with a check.

Stephanie Thomas of nearby Bayou Blue said she received about $1,000 from BP for the first month that she could not work as a deckhand on a shrimp boat, but she has not received anything for the second month. After a visit to the claims office on a recent afternoon, she learned that she needed additional documentation of employment and income to qualify for the payment.

Thomas said she is paid in cash, like many workers here, which makes income more difficult to prove.

“That’s what we’re tripping on,” Thomas said. “All of a sudden we need all kind of proof.”

Kenneth R. Feinberg, who was appointed last month by the White House to oversee a claims fund, has said that the biggest challenge to distributing the money — and avoiding future lawsuits — is earning the trust of workers in a fiercely independent industry, whose livelihoods have been devastated by the spill. He said on “Fox News Sunday” that BP had paid out about $130 million so far.

But according to state officials and interviews with residents at the claims center, the most pressing concern was speeding payments to those most affected.

BP community relations coordinator Bob Warren, who works at the office in Chauvin, said the company tried to push through checks quickly during the early days of the spill, resulting in more cursory scrutiny of claims. Now adjusters are evaluating requests more thoroughly, he said.

An analysis released last week by Cannon Cochran Management Services, which Louisiana had hired to review claims payments, showed the number of claims more than doubling in June from 30,000 to more than 85,000 in all affected states. The number of new claims has outpaced the rate of checks sent, and the cost of each claim increased from an average of $1,200 to the range of $1,500 to $1,600. [BP said Monday that it has spent $147 million to settle 47,000 claims, about half of the claims submitted so far, the Associated Press reported.]

“The state continues to be concerned about the growing need in the communities impacted by the oil spill and BP’s slow response in the claims process,” said Kristy Nichols, secretary of the Louisiana Department of Children and Family Services, who is overseeing claims in the state. “For many individuals and families, claims checks may be the only income they receive during this disaster, and prompt payments are vital.”

After taking charge of BP’s gulf cleanup efforts last month, BP senior executive Robert Dudley said the company would start paying small and medium-size businesses a month ahead for money lost as a result of the spill. Dudley said he realized that many companies needed a steady cash flow to pay bills and employees.

The state has criticized BP for not hiring more claims adjusters — the report said there are about 1,000. In Chauvin, four adjusters staff the center every day from 7 a.m. to 7 p.m. In the first month after it opened in mid-May, between 60 and 100 people showed up each day to file claims. Many families brought along small children, so workers set up a play area with toy trucks and a TV showing cartoons.

Yet traffic at this center has slowed recently to about 40 to 50 people per day, so Sunday hours have been cut to 1 to 6 p.m. BP’s Warren said the office here and a similar center in nearby Houma, La., have processed 5,516 claims totaling $12.9 million. He said workers regularly visit residents and local businesses to address concerns and to encourage them to file claims.

Phong Luong of Gonzales, La., said he received a phone call from an adjuster asking whether his business had suffered because of the oil spill. Luong said that the price he pays for seafood for his restaurant, Mike’s Po-boy, has risen by $1 to $2 per pound and that many customers are afraid to order it, worried that it might be tainted by oil. Some have switched to ham or roast beef sandwiches; others have stopped coming altogether.

“They don’t say, but we know” that they’re afraid, Luong said.

Luong works as the restaurant’s cook, and his wife, Thuy Dang, is the cashier. She used to work about 45 hours a week, making $1,200, but now business is so slow some days that she goes home early and only makes $900. Luong typically puts in 60 hours a week, he said, but now has scaled back to 40 hours.

Dang presented her paperwork to the claims adjuster in a neat manila folder, with duplicates of everything. Although she said work began to slow in mid-May, the adjuster calculated her claim for the entire month, and Dang received a $600 check for lost income in May and June.

But the couple is still waiting for approval of a claim for their business losses, which they said total nearly $10,000. So far, they have received half of that.

Not everyone keeps track of things as neatly as Dang, and that can make it hard to demonstrate the income lost as a result of the spill.

Warren said compensation is paid in 30-day increments and is calculated as a monthly average based on annual income. But for shrimpers and fishermen, pay fluctuates with the seasons, and the oil spill hit at a time when they would be expecting peak hauls. That can make the claim checks feel woefully inadequate.

Norris Nettleton is captain of the shrimp boat that employs Thomas and her mother, who is also Nettleton’s girlfriend. He said he paid $125 to cash his $5,000 claim check because he had to pay bills and didn’t want to wait for it to clear at a bank.

But he said the claim was secondary to the hunt for employment. He has applied to be a skimmer to clean up the oil but has had no luck.

“We can wait a little while for the check. We can’t wait on the job,” he said. “It’s going to be a long winter, I tell you that.”

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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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