BP claims czar returns to Gulf amid complaints

Michelle Chauncey, who owns a wholesale seafood operation in Louisiana, voices her frustration with the BP claims process during a town hall meeting held by attorney Kenneth Feinberg, in charge of the Gulf Coast Claims Facility, on Monday, Jan. 10 2011 in Bay St. Louis, Miss. About 500 people attended the meeting, many of who were angry with the claims process. (AP Photo/Sun Herald, Amanda McCoy)

Published: Monday, January 10, 2011 at 8:19 p.m.
Last Modified: Monday, January 10, 2011 at 8:19 p.m.

MOSS POINT, Miss. — The administrator of BP's $20 billion oil spill claims fund on Monday promised fairness and speed in compensating victims, but angry fishermen and business owners are complaining that they're still not getting what they deserve.

Attorney Kenneth Feinberg met Monday with oil spill victims in Mississippi and later in Louisiana as part of a two-day tour along the Gulf Coast to explain the compensation process and hear concerns. Feinberg is in charge of the Gulf Coast Claims Facility, which was established in August to dole out BP PLC's money to compensate people for economic losses in the aftermath of the oil giant's April 20 well blowout.

He has faced repeated criticism.

John Fraleigh, 37, of Kiln, Miss., says he is barely hanging on. He's a month late on his mortgage and two months behind on his car payment. Fraleigh owns an industrial erosion control business and a marine products company. Both businesses have tanked since the spill, he said, down 95 percent. He lost one contract worth about $300,000 because the job was canceled after the spill, he said.

He's been denied compensation.

"I haven't gotten a dime," Fraleigh said Monday. "I'm out of time here."

Feinberg came to the coast to explain payment options for claimants, but instead spent much of his time defending the process, offering apologies and promising change.

"I understand there's a lot of anger and frustration," Feinberg told the crowd of about 200 Monday in Moss Point, about 30 miles east of Biloxi. "I'm doing my best."

Oysterman James A. Miller is frustrated that he only received $12,600 from the fund for losses he says topped $56,000.

"We're over this game. You need to rightfully pay us," Miller told Feinberg, his voice trembling. "We are disappointed in you."

"I'm trying to run this facility as best I can," Feinberg responded.

He promised to review denied claims for those who are unsatisfied.

"I will personally do my best," he said.

Later in the morning, Feinberg spoke to residents in Bay St. Louis along the Mississippi coast, with the same angry complaints.

Some, however, are pleased with the process so far, but are just worried about the future.

Oysterman David McGill, 51, said he's been paid for all his losses to date.

"They paid me just like they said they would," he said. "Now I'm looking for future money."

McGill is worried that oysters may be damaged long-term, so he can't decide whether to accept a final settlement.

"How do we know how bad it will be?" he wondered. "Most of the oysters are dead now."

Feinberg acknowledged the decision is difficult, but said he is here to help.

"I know it's not easy. The future is uncertain," he said.

Many residents, fishermen and business owners have been complaining for months that the claims process hasn't been paying them enough, has been denying claims with no explanation or has been too slow in processing payments.

The U.S. Department of Justice has written letters to Feinberg, expressing concern that payments were not being processed quickly enough and that Feinberg wasn't being transparent.

Lead attorneys for plaintiffs suing over the oil spill have asked a federal judge to intervene, claiming Feinberg is nothing more than a pawn for BP, which is paying his firm $850,000 a month to administer the fund. Any money left over is expected to be returned to BP.

The process now allows for three options. Spill victims can file for a quick cash one-time payment of $5,000 for individuals and $25,000 for businesses. But to accept the money, they must give up their right to sue BP or any other responsible company. They could opt for a final settlement offer, but also would have to give up the right to sue. Residents and business owners who aren't ready to make that decision could instead file for interim quarterly payments through August 2013, provided they can show proof of continued losses.

Feinberg personally took paperwork from some of the frustrated claimants who lined up at a community center on the Louisiana barrier island town of Grand Isle, where tourism was devastated last year and oil continues to spot the beaches.

"I will first look at this claim myself," Feinberg told a woman who said her fisherman husband received a $5,500 payment for losses that were many times that.

His repeated reassurances were met with more rancor.

"You are here to tell me that a human life is only worth $5,000," said Karen Hopkins, who said she is with a local nonprofit group, told Feinberg, referring to one of the payment options he outlined.

"It sounds like a broken record, I'll check into it I'll check into it," said another man, who said he is a commercial fisherman yet to be paid for his losses.

Feinberg said that as of Christmas, 62,000 people had filed for the quick payment, and 75,000 had requested a final settlement.

As of this weekend, the claims program had paid out about $2.9 billion to 168,000 people. More than 470,000 claims have been filed.

Feinberg repeatedly said he was working to correct any errors and improve the process. He told reporters after the public forum in Louisiana that he understands the frustration.

"I'm determined to rectify any mid-course correctons that I've got to make," he said.

Attorneys general from Florida, Alabama, Louisiana and Mississippi have also urged oil spill victims to consult lawyers before accepting final payments or the quick cash and agreeing not to sue BP, warning they would get no more money if they suffer new damage from spill.

Feinberg has said repeatedly he is working on behalf of spill victims and that he is not influenced by BP. His goal has been to keep people out of a lengthy court process, thereby providing fewer clients to the complaining plaintiffs attorneys who have already filed more than 300 lawsuits over the spill.

"I'm absolutely neutral," Feinberg said. "I'm not BP. I'm trying to run this facility as best I can."

The April 20 Deepwater Horizon oil rig blast off Louisiana killed 11 workers and led to more than 200 million gallons of oil spewing from BP's undersea well, although BP disputes the federal government's estimate of the amount discharged.

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