shut down sign
© Erika BlumenfeldGulf Coast businesses are closing down as they fail to secure compensation payouts
Residents and fishermen outraged as BP's compensation fund administrator denies 'loss of income' claims.

"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."

Karen Hopkins
© Erika BlumenfeldKaren Hopkins, a Louisiana seafood worker, is calling for Feinberg to resign
'Every trick in the book'

The criticism from angry residents, business owners and fishermen of Feinberg's handling of the GCCF has mounted over the months, and now seems to be at a fever pitch.

At a January 10, meeting in Grand Isle, Louisiana, resident and seafood worker Karen Hopkins handed Feinberg a petition, which now has nearly 800 signatures, demanding his resignation.

"We need him to pay us the money that the company he's working for owes us," Hopkins says. "He's not working for our interests. He's working to save as much of that fund for BP as he can. If he was here to serve us, he'd give us a plan for long-term testing for the chemicals they've poisoned us with."

The chemicals Hopkins referenced are the at least 1.9 million gallons of toxic dispersants BP has used to sink the oil from sight.

At the same meeting, Feinberg said: "We've paid out $1bn in Louisiana alone. Somebody's getting money. It might be the wrong people, but somebody's getting money."

Hopkins, who works for a large seafood company, says every person who complains to Feinberg about their claim is told "to leave him his claim number and he'll look into it".

"I know loads of fishermen who have never been paid one dime for emergency payments. Not one thin dime. He doesn't understand our culture, or the damage this has done to our way of life," she says.

Hopkins believes Feinberg is pressuring people to take the smaller, immediate payments, rather than pursue litigation in order to obtain appropriate levels of compensation.

"He's saying to opt in to the fund, you'll come out with more money than if you litigate this," she says. "He's scaring these people. He's not our lawyer. But he's basically saying if you try to sue us, we'll f*** you up. He's condescending. He's completely crooked and corrupt. He's trying to pull every trick in the book on us."

Cherri Foytlin
© Erika BlumenfeldCherri Foytlin has been speaking out against the injustice she sees in the wake of the spill
'Lives are being destroyed'

The lack of compensation payouts is afflicting people across the Gulf Coast.

"Most of the people I care about are hungry, they've lost their house, they're losing their cars," says Cherri Foytlin, the co-founder of Gulf Change, a community organisation in Louisiana.

"I've met so many people over the last three days who've had red beans and rice for Christmas while this man's firm is getting $850,000 a month for this. I saw people on their knees in these meetings begging this man. I don't know how he sleeps at night. He takes money from BP and claims to represent and care about people in the Gulf."

Lorrie Williams fishes crab from Ocean Springs, Mississippi. Her 11-year-old son has been sick for months with symptoms she blames on toxic chemicals related to the oil spill. Her son's blood tested positive for several of the chemicals in BP's crude oil.

"My concern is not a claim, or money, but finding somebody who is going to treat my son, and other sick people," she says. "For Feinberg to tell me to file a claim, what am I filing for? To get $5,000 since I'm sick? My fear is that in five years my child is going to have cancer. Or my husband or I will pass away and not be here to care for my child."

Kathy Birrin and her husband are financial partners in their seafood business in Hernando Beach, Florida, each owning half of the company. They both filed identical personal claims for their portion of the business' lost income to the same claims officer.

"They paid my personal claim in 10 days, but my husband's was denied six weeks later," Birrin says. "In Florida we're watching them pay strippers and waitresses, while they are denying commercial fishermen's claims. I'm hearing this same thing in all the meetings I'm attending in all four states."

Birrin describes the situation in her area of Florida as a "disaster" and adds: "Our fish are not there this year. We're way, way, way down from what we usually have. People's lives are being destroyed."

Teresa Abraham also lives in Florida, where she has a publishing business that prints tourism related material.

"Most of my clients can't pay me because they've not been paid by BP," she says. "I filed for loss of income, and of course my emergency payment was denied, like everyone else I know who's filed."

Abraham explains that Feinberg promised Florida senator Bill Nelson he would personally look at Abraham's claim, but she adds: "He didn't look at it, and it looks like I may very well go out of business in the next few weeks."

Abraham, who has been in business for 15 years, feels strongly about the way Feinberg is handling the GCCF.

"He's a self-appointed tsar and doesn't answer to anybody," she says.

"My business is down 50 per cent. People are losing their businesses. This is happening now. They are not paying claims to businesses that are desperate. This is extremely frustrating. Nobody has any jurisdiction over this guy, so there's nobody we can go to."