Rethinking the Process for BP Spill Claims


HOUMA, La. — Two months ago, Kenneth R. Feinberg barnstormed the gulf states and visited towns like this one to pledge that once he took over a $20 billion BP fund to compensate people affected by the oil spill, things would change. Individuals would see their claims for damages turned around in 48 hours, he said. Businesses? Seven days.

This week he has been back on the coast, offering more apologies than promises to angry residents, including a woman at a public meeting here on Monday who held a sign reading, “This is the longest 48 hours of my life.”

And he is acknowledging that he underestimated the time it would take to sort through the tens of thousands of applications for emergency aid, many of them woefully undocumented.

“It has not gone as fast as I had hoped,” he said before a crowd of hundreds, many of whom had met him before, but were now much less hospitable. More than a few people called him a liar.

“These payments will be made,” said Mr. Feinberg, who took over control of the fund from BP on Aug. 23. “That is my responsibility. I’m here to tell you we’ll improve it.”

In response to some of this criticism, Mr. Feinberg has admitted rethinking parts of his claims process.

He announced in Houma that he was reconsidering a decision to deduct the money that fishermen earned as temporary employees in the cleanup operation from their claims payments.

And on Tuesday, at a meeting in Orlando, Fla., he said he was looking anew at a rule that based eligibility for claims on proximity to the oil-tainted areas of the coast, an issue that limits recovery for Florida hotels and restaurants.

While insisting that the law supports the proximity rule, he added, “If I say, ‘No, you’re not eligible,’ what have I done but drive you into the court system, which is something the facility is designed to avoid?”

Lawyers have also angrily accused Mr. Feinberg of discouraging those affected by the spill from hiring lawyers to file their claims.

Mike Papantonio, a Florida lawyer, said lawyers helped document claims and made the process more predictable. Without their involvement, Mr. Papantonio said, “He has destined the process for failure.”

In his Florida speech, Mr. Feinberg acknowledged a shift in his thinking on that score as well. “I am increasingly of the view as I go forward with this program that the lawyers around this country can play a very valuable role,” he said, by helping people package their claims.

He has also started issuing supplemental claims to people who can demonstrate that their first emergency claims payments were too low.

The adjustments did little to assuage his audience in Houma, and in some cases made them even angrier.

“They come up with this thing on the Web site about supplemental payments and I went ballistic,” said Michelle Brooks, 49, a deckhand on a commercial shrimp boat who has yet to have her claim paid. “You’re going to go back and review when some people haven’t even gotten the first payment?”

Ms. Brooks said the captain of her shrimp boat had received his payment, but that it was about a quarter of what he asked for — and a quarter of what he was getting from BP before Mr. Feinberg took over administration of the fund.

In an interview from Tallahassee, Mr. Feinberg defended the program while acknowledging a rocky start. Saying that BP had paid $398 million in emergency claims in four months, he said, “We will easily surpass that, and demonstrate the generosity of this program, the fairness of this program, the consistency of this program.”

His team has already approved “about 16,000 claims” of the 52,000 filed, he said, and authorized more than $175 million. The claims office is processing 1,000 payments each day, he said.

But nearly 15,000 claims have little documentation or none at all, he said. “I don’t need tax returns,” he said. “I don’t need a profit and loss statement. I need something other than ‘pay me,’ and in thousands of cases I don’t have it.”

Two thousand more of the current claims are duplicates, he said, no doubt filed twice by people who went online and visited a claims office for good measure. An additional 500 claims are for losses related to the drilling moratorium, which are dealt with under a $100 million fund that is not under his control.

Beyond that, he said, “I’ve got 1,000 that are very, very suspicious.”

He said that his investigators were combing through such claims and would hand over the ones that look most like fraud to the Department of Justice.

But Karen Yacich, 56, a financial manager at Ameripure Oysters in Franklin, La., is not buying it.

“It’s not the paperwork, it’s just not,” she said.

Ms. Yacich, who described herself as a sort of den mother at Ameripure, was at the meeting in Houma with around 10 other workers. She knew all of their wages and salaries, and she knew that their claims paperwork was uniform and complete: she had prepared the packets herself.

But some workers got a small fraction of what they were claiming, some were still waiting three weeks later and others seemed to have gotten more than they were due.

“How they churned out these checks I don’t know,” Ms. Yacich said. “BP took care of us way better than this man did,” she said. “These people, it’s garbage.”

Mr. Feinberg said that he had added to the processing team in Washington, though the number of people working along the gulf is about the same.

He has faced this kind of anger before, especially in the raw aftermath of the Sept. 11 attacks, when he was in charge of the victim compensation fund.

“I did battle with Ken, serious battle,” said Charles G. Wolf, who lost his wife in the World Trade Center attack and was one of the fiercest initial critics of Mr. Feinberg, calling him cruel and patronizing. Over time, Mr. Wolf said, Mr. Feinberg became more flexible, and now Mr. Wolf is one of his strongest advocates.

Mr. Feinberg said he expected the history to repeat itself. “If the pattern holds true, it will turn,” he said. “It will turn in the direction of success. It will turn in the direction of, ‘I wasn’t sure, but at the end of the day he certainly did what he said he would.’ ”

Gulf Coast residents are not so confident.

Ms. Yacich’s boss, John Tesvich, 53, the president of Ameripure, said he had not filed a business claim yet and had hired a financial expert to pore over his books so the company’s emergency claims payment would be thorough and airtight. He is planning to take his time.

“I personally did not walk in, because I figured there would be some chaos at first,” he said. “I didn’t know it would be this much.”

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

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