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Gulf oil spill claim payouts reach $5.5 billion

October 27, 2011 |  3:03 pm

Rig

A year and a half after the massive oil spill in the Gulf of Mexico, the administrator of BP’s $20-billion restitution fund told Congress on Thursday that he has has paid out about $5.5 billion to more than 213,000 victims of the nation’s worst offshore environmental disaster.

"We have received just about 1 million claims from 50 states and 38 foreign countries,’’ Kenneth R. Feinberg told the House Natural Resources Committee.

He’s received claims not only from shrimpers, oyster harvesters, hotels and restaurants but also from dentists and chiropractors. Feinberg didn't go into many specifics, but the Daily Texan reported earlier this month that claimants included a Swedish rope maker who reported lost sales from rope used for fishing nets.

Feinberg said compensation was paid to a couple of Maryland oyster restaurant owners who depended on gulf shrimp for their livelihoods and lost business when the supply was cut off.

Some of the claims, however, are "very creative," he told the committee.

Gulf Coast lawmakers expressed frustration that more of their constituents haven’t been helped.

"So many promises have been made … so many broken promises," Rep. Jo Bonner (R-Ala.) said.

"Many of us feel hopeless,"' said Rep. Steven Palazzo (R-Miss.).

Feinberg said that claims have been denied for a variety of reasons, including lack of proof of damage or losses due to the spill. Of 1,500 appeals to the Coast Guard, he said, his decisions have been upheld  "in every single case. So I think we're doing something right."

Feinberg said that he continues to receive, on average, about 2,000 new claims a week.

A number of claims are suspected to be fraudulent and have been referred to the Justice Department.

The hearing was held the day after won BP won federal approval to drill its first exploratory oil well in the gulf since the April 20, 2010, Deepwater Horizon explosion killed 11 men and spewed oil into the gulf for 87 days.

Rep. Doc Hastings (R-Wash.), the committee chairman, was critical of the Obama administration in complaining that some victims have yet to be compensated for their losses.

But when the White House demanded that BP set up the fund, it drew criticism from Republicans, including the House’s conservative Republican Study Committee, which called it "a Chicago-style political shakedown.''

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--Richard Simon in Washington

PHOTO: A Coast Guard photo of the Deepwater Horizon in the Gulf/ EPA/US COAST GUARD

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