Environmental news from California and beyond

« Previous Post | Greenspace Home | Next Post »

Gulf oil spill: Capped well might help speed up the claims process

July 19, 2010 | 12:56 pm


As long as BP can keep its well capped, the claims process might be able proceed faster, the administrator of the Gulf Coast oil spill compensation fund said Monday.

"The best news for my purposes, in the last week, is that the oil stopped," Kenneth Feinberg told the Economic Club of Washington, D.C. "Until the oil stops, it's very hard to corral the claims….Now that the oil has apparently been stopped, it will make it a lot easier and quicker to get a handle on the universe of claims." 

Describing the challenges he faces, Feinberg said, "Do not underestimate the problems associated with human nature… Do not assume that people automatically will opt into these programs. People are skeptical, angry, dispirited, worried …Human nature being what it is, you have to sell these programs."

Feinberg, who is administering the $20-billion fund set up by BP under pressure from the White House, said that he sees the fund lasting three years. The program is voluntary. Anyone affected by the spill can go to court, but Feinberg said, "I'll be much more generous than any court would be," citing the cost and time of litigation.

Among his challenges is figuring out who should receive compensation.

A Boston restaurant can't get gulf shrimp?

"Highly unlikely," Feinberg said.

A motel lost customers because of oil on the beach?

"Pay the claim," Feinberg said.

A golf course 50 miles from the gulf whose business is down 30%?

"Dubious." Feinberg said.

"Where do you draw that line?" Feinberg said. "That’s a judgment call. You look to the law…But the law only helps you so much."

A major concern is fraud, Feinberg said. "Nothing undercuts the credibility of these programs more than fraud," he said.  

Feinberg, who ran a similar fund for victims of the Sept. 11, 2001, terrorist attacks, described the emotion of administering such a fund.

He recalled the reaction he received when he approached the families of 9/11 victims with a check. "Mr. Feinberg, they haven't recovered my husband's body from the World Trade Center, and you're here to offer me money?"

"No matter how creative you may be in coming up with a program that reasonable people would claim is very reasonable and makes a lot of sense, you've still got to sell it to people who are emotionally distraught," he said. "And that is a big part of what I have to do here."

Feinberg said that he hopes the $20 billion is enough, adding that BP has stated that if that amount "is inadequate, they will continue to honor all additional financial obligations that confront them."

-- Richard Simon in Washington

Photo: Kenneth Feinberg is overseeing the $20-billion fund for economic damages caused by the Gulf of Mexico oil spill. Credit: Joshua Roberts / Bloomberg