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Tuesday September 2nd 2014

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IN Interview: Kenneth Feinberg

CLAIMS CZAR SURPRISED BY VOLUME
By Rick Outzen

Kenneth Feinberg, administrator of the Gulf Coast Claims Facility, admitted in a telephone interview with IN that the volume of claims–nearly 500,000 to date–caught him off guard.

“I never anticipated, in all my experience, 500,000 claims,” said Feinberg. “BP had to process 80,000 claims. I figured, let’s add 20 percent and there will be a 100,000, but 500,000 claims? Unprecedented!”

The volume of claims has caused problems in terms of transparency and consistency. Feinberg has caught flak from the Department of Justice, Federal Judge Carl Barbier and the citizens along the Gulf Coast that are still dealing with the aftermath of the Deepwater Horizon explosion that dumped millions of gallons of BP crude oil into the Gulf of Mexico and on coastal shorelines and waterways from Texas to Florida.

Feinberg visited Pensacola on Monday, Feb. 7 at the request of Mayor Ashton Hayward for a private meeting with local elected officials and business owners about the claims process. The IN caught up with him a few days later after he had returned to Washington, D.C.

He was just as frank and direct over the phone as he has been at the town hall meetings the IN has attended. Feinberg willingly takes on personally the complaints fired at his Gulf Coast Claims Facility, which has paid out $3.4 billion in claims to businesses and people impacted by the oil disaster. He is the face of the claims process. Feinberg is purposely the focal point for praise or criticism. It’s a strategy he employed successfully when he administered the 9/11 Victim Compensation Fund.

“It’s not just me obviously,” said Feinberg. “The Gulf Coast Claims Facility is made up of thousands of people working to process claims. On the other hand, I am the administrator. I am the live body that everybody points to for the facility’s success or its failures. And I think it’s important when you attend local meetings and engage local businesses and citizens. It’s important that they understand you’re a live body, you’re a human being, that they are not talking to just some entity with mystery and uncertainty behind it.”

On Feb. 2, Feinberg released a draft Eligibility and Substantiation Criteria and Final Payment Methodology proposal. He has been traveling the region getting input from elected officials, business owners and citizens. Last week, the Justice Department sent Feinberg a letter urging him to speed up the payment process.

Feinberg took the criticism from Associate Attorney General Thomas Perrelli in stride. “From the very beginning of the administration of this fund, I have welcomed the constructive suggestions of the Department of Justice, and we try to implement those suggestions,” said Feinberg. “We are completing the public comment period, which ends Feb. 16. Shortly after public comment period ends, we will implement the new payment program.”

On the same day the new methodology was rolled out, U.S. District Judge Carl Barbier in New Orleans issued a court order that Feinberg can’t identify himself as an independent administrator. He must fully disclose his ties to BP when communicating with potential claimants. When asked about his independence, for what was probably the hundredth time he had been asked the question by someone in the media, Feinberg sounded almost bored. He said that he already made the required changes to the GCCF documentation and in his communications to claimants.

“We have, and will, follow that order of that judge to the letter,” said Feinberg. “We will comply with the judge’s order in all respects.”

The volume of claimants has caused problems with consistency for the Gulf Coast Claims Facility, which Feinberg freely admitted. “It’s an absolute valid criticism.”

Locals have complained that similar businesses are being treated dissimilarly by the GCCF. For example, a golf course miles away from the Gulf of Mexico got paid 100 percent of its claim. Another course actually on the water had its claim denied.

“When you have 500,000 claims, there will be some inconsistency inevitably,” said Feinberg.

To remedy the problem, Feinberg intends to beef up the staffs of the nearly three dozen claims offices on the Gulf Coast. “With the rollout of the final payment program, we will supplement our people on the ground with people who claimants can meet, discuss their claims and get some hands-on, live treatment,” said Feinberg. “That I think is important.”

The oil giant established a $20 billion fund to deal with the largest man-made environmental disaster in U.S. history, but does Feinberg believe it’s enough money?

“I hope so,” he said, not too convincingly. “Remember now, the $20 billion isn’t just for the Gulf Coast Claims Facility. The $20 billion is also being used to pay clean-up costs, pay government claims. So there are others drawing on the $20 billion.

“Based on what I’ve seen so far, I certainly hope so. We will know more in the next few weeks and months.”

The Gulf Coast hopes so, too.

GULF COAST CLAIMS FACILITY OVERALL PROGRAM STATISTICS

Total Unique Claimants: 488,354
Individual: 401,057
Business: 87,297
Total Paid Claimants: 168,632
Total Amount Paid Claimants: $ 3,370,307,581.06
Separate Fund for Real Estate Brokers and Agents: $ 60,000,000.00
Total Amount Paid: $ 3,430,307,581.06
Paid to Claimants by State: Louisiana: $1,098,283,936.67
Florida: $1,203,942,976.00
Alabama: $557,543,338.94
Mississippi: $281,168,129.45
Texas: $95,996,300.00
Others: $133,372,900.00
Total: $3,370,307,581.06

Source: Gulf Coast Claims Facility, gulfcoastclaimsfacility.com

rick@inweekly.net