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Denied, Decieved, Delayed by BP: Gulf Residents "On Their Knees" for Recompense

Outraged Gulf Coast residents say BP's compensation fund administrator is denying their claims

Dahr Jamail

Gulf Coast businesses are closing down as they fail to secure compensation payouts. (Photo: Erika Blumenfeld)

"I just got off the phone with Feinberg's people and I'm really
upset," says seafood merchant Michelle Chauncey from Barataria,

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

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

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."

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.  

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."  

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.


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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."

'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."

'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

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.

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."

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