Gulf Coast fighting for recompense
Gulf Coast businesses are closing down as they fail to secure compensation payouts [Photo: Erika Blumenfeld]
Residents and fishermen outraged as BP's compensation fund administrator denies 'loss of income' claims.
By Dahr Jamail, Al Jazeera
"I just got off the phone with Feinberg's people and I'm really upset," says seafood merchant Michelle Chauncey from Barataria, Louisiana.
Her business, which sells wholesale and retail crabs, has not provided her with an income since the end of May, and her home is being foreclosed.
Attorney Kenneth Feinberg's Washington-based firm, Feinberg Rozen, has been paid $850,000 a month by BP to administer a $20bn compensation fund and claims process for Gulf residents and fishermen affected by the Deepwater Horizon explosion last April.
The Gulf Coast Claims Facility (GCCF), which Feinberg manages, was set up after negotiations between BP and the Obama administration, but over recent months there has been growing concern among the Coast's residents that Feinberg is limiting compensation funds to claimants in order to decrease BP's liability.
Late last month, Feinberg told Bloomberg Television that he anticipates that about half of the $20bn fund should be enough to cover claims for economic losses.
"It remains to be seen, but I would hope that half that money would be more than enough to pay all the claims," he said.
Grade F
Chauncey is angry.
"[Kenneth] Feinberg told me personally I had a legitimate claim, and that he was going to personally look into my claim and see why I wasn't being paid," she explains, adding that one of Feinberg's colleagues gave her his personal number and promised to help.
"I told Feinberg's man that I know strippers who have gotten money. So if I took off my clothes ... and worked in a bar, I'd have been paid, but since I have a seafood business I haven't been paid.
"The really sad part is that my story is not isolated," Chauncey adds. "There are loads of us, and they are all in the same predicament as I am."
Rudy Toler from Gulfport, Mississippi is a fourth generation fisherman. He submitted 62 pages of documentation to the GCCF, but says: "My claim got denied on December 4, with about 100,000 other people."
The GCCF, which also covers cleanup and remediation costs, has received more than 468,000 claims and has paid about $2.7bn to approximately 170,000 claimants (about one-third of those who have submitted claims) in the last four months.
Most of the claims that have been paid are temporary emergency payments.
"You've paid 30 per cent of the claims," Gulf Shores City councilman Jason Dyken told Feinberg at a recent meeting in Gulf Shores, Alabama. "Seventy per cent of the claims have not been paid. Where I went to school that's an 'F'."
The amount paid out averages nearly $16,000 per claimant. But according to the US department of health and human services, the 2009 poverty threshold for a family of three was $18,310.
With mounting problems from an escalating health crisis and decimated fishing and tourist industries, many consider this an inadequate amount of compensation for their loss of livelihood.
Feinberg has recently been on a tour of the Gulf Coast, holding public forums where he has often been faced with throngs of enraged residents and fishermen.
While Feinberg admits that mistakes have been made in processing claims, he has also said that many claims lack sufficient documentation to warrant payment.
"I'm trying to do the right thing," Feinberg has said. "This is an unprecedented job. There are thousands and thousands and thousands of claims. But we're getting through them, and the money is going out."
During his recent visit to the Gulf, Feinberg said: "I will bend over backwards to pay claims." But large numbers of Gulf residents and fishermen beg to differ.
"Last week I spoke up at the Town Hall meeting in Bay St. Louis, and Feinberg told me to give him my number and information and he would personally take care of it," Toler says. "Here it is a week later and I've not heard from him. You can't get answers from nobody. Nobody. Now, I'm 15 days past due on my rent. It don't seem right to me."
Like Chauncey, Toler is angered by seeing residents who are not directly involved in the seafood industry being awarded compensation cheques, while those who are have their claims denied.
"It's very frustrating," he says. "They say on the news they are going to help the fishermen and the people who deserve it while we aren't getting the help, but the people at Burger King and other stores are getting paid."
Circumventing US law?
Feinberg's claims operation is now offering three options to claimants:
• Final settlements for all present and future damages that require the claimant to agree not to seek future compensation or sue anyone involved in last year's oil spill.
• Smaller interim claims that do not require a lawsuit waiver.
• Quick payments of $5,000 for individuals or $25,000 for businesses that require a lawsuit waiver but, unlike final or interim payments, do not call for financial documentation. Only those approved last year for emergency claims can take a quick payment.
Attorney Brian Donovan, with the Donovan Law Group in Tampa, Florida, believes Feinberg is simply doing what he is being paid by BP to do.
"He's doing his job," Donovan says. "Feinberg is a defence attorney representing BP. To think otherwise is being foolish. As a defence attorney, he's doing a great job for BP. But they are saying 'go with us, or sue us'."
Donovan has written: "In lieu of ensuring that BP oil spill victims are made whole, the primary goal of GCCF and Feinberg is the limitation of BP's liability via the systematic postponement, reduction and denial of claims against BP. Victims of the BP oil spill must understand that 'Administrator' Feinberg is merely a defence attorney zealously advocating on behalf of his client BP."
Contrary to what Feinberg is telling claim applicants, according to Donovan, under the Oil Pollution Act (OPA) of 1990, a victim of the BP oil spill must first present a claim for damages to BP/GCCF and wait 90 days. If he or she is not paid, or accepts a lesser amount, that does not preclude the victim from pursuing future compensation. In addition, the GCCF/Feinberg requirement that a claimant sign a general release of all rights and claims is contrary to the OPA.
The OPA, signed into law in 1990, provided the statutory authorisation and funding necessary for the Oil Spill Liability Trust Fund (OSLTF). The National Pollution Funds Centre (NPFC), an administrative agency of the US coast guard (USCG), manages OSLTF and acts as the implementing agency of OPA.
Since 2003, USCG has operated in the department of homeland security. A primary purpose of OSLTF is to compensate persons for removal costs and damages resulting from an oil spill incident. In essence, OSLTF is an insurance policy, or backstop, for victims of an oil spill incident who are not fully compensated by the responsible party.
"If the OSLTF was used as it was intended by OPA, when BP/GCCF does not pay a claim, the victim presents the claim to OSLTF," explains Donavan. "At that point, OSLTF pays the victim and then the US attorney general, at the request of the secretary of the department of homeland security, shall commence an action on behalf of OSLTF against BP and collect the amount from BP. That's how it is written."
Donovan believes that these laws are being ignored for political reasons.
BP created the Deepwater Horizon Oil Spill Trust (DHOST) on August 6, 2010.
"The fact that, pursuant to the DHOST agreement, future production payments pertaining to BP's US oil and natural gas production, rather than hard US assets, are being used as collateral by BP, guarantees BP's continued long-term operation in the offshore Gulf of Mexico," Donovan says. "Ironically, the federal government has acquired a vested interest in ensuring the financial well-being of BP."
While Donovan's firm has been largely successful in assisting its clients in obtaining their settlements, he says: "I'm sure down the road we're going to have to file suit. I don't doubt that."