BP gives $10 million to oil spill claimant, no review by admin

Posted Feb 2, 2011 by Lynn Herrmann
Of the 91,000 oil spill claims filed by individuals and businesses awaiting final settlement on BP’s Gulf of Mexico disaster last year, only one business has received final settlement payment, an “existing BP partner,” issued a $10 million payment.
Kenneth Feinberg  shown here speaking at a press conference last summer over how to more quickly dis...
Kenneth Feinberg, shown here speaking at a press conference last summer over how to more quickly disperse funds to oil spill claimants, labels the GCCF payment structure a success, even while claiming to not review the details over one $10 million settlement.
BP America/flickr
The Gulf Coast Claims Facility (GCCF), set up last August as an independent administrator of BP’s $20 billion compensation fund, is administered by Washington attorney Kenneth Feinberg. On Monday, Feinberg said the GCCF never reviewed the multi-million dollar claim and instead, was instructed by BP to make the final payout.
The recipient of the $10 million settlement is part of “a unique situation in which an existing BP business partner and BP submitted a view on a specific claim” to GCCF, a BP spokeswoman said, according to the Associated Press.
In an email to the AP on Sunday, BP spokeswoman Hejdi Feick said the GCCF “reviewed our positions and made an independent decision regarding the outcome of the claim.”
However, GCCF administrator Feinberg told the AP: “At the request of the parties, the settlement reached between BP and the other party was paid out of the GCCF fund. It was a private settlement and we paid it, but we were not privy to the settlement negotiations between BP and that party.
“We never reviewed the claim,” Feinberg continued. “We honored the request of the parties to fund the claim.”
Feinberg’s Washington law firm has been receiving $850,000 monthly from BP for its administrative role with the “independent” GCCF. He is currently renegotiating a new payment structure with BP that will continue his role as the facility’s administrator through August 2013, the AP reports.
This apparent lack of transparency has many people up in arms, including Tony Kennon, mayor of Orange Beach, Ala. “It stinks. It’s exactly what we’ve been screaming about. There’s not an independent entity. There’s no oversight,” Kennon said in the AP report.
Currently, those filing claims against BP are given three options. A one-time $5,000 payment for individuals and $25,000 for businesses is the quickest. For those accepting this option, recipients give up their right to future payments or the right to sue BP or any other company found responsible in the oil spill debacle. More than 80,000 claimants chose this option and have received their payments.
A second option allows claimants a final settlement, also giving up the right to sue. The final option gives individuals and businesses the right to file for quarterly payments on an interim basis through August 2013. They must provide proof of ongoing losses.
The Donovan Law Group released a statement in December stating that Feinberg is not the sole party for blame over a shoddy payment system that has left many without receiving a single dime.
The law firm places heavy responsibility on the Obama administration, laying out concrete evidence of the US government’s failure to address first the oil catastrophe itself and then the following payment setup.
Among the many angles covered in the law firm’s statement, it noted:
“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 defense attorney zealously advocating on behalf of his client BP.”
That appears to be true because months after creation of the compensation fund, tens of thousands of claims are awaiting final payment, or even a partial payment. While Feinberg labels the GCCF a success, citing $3.3 billion in payments on approximately 251,000 claims, the numbers are deceiving.
Of the 484,000 total claims, roughly half have been denied because of missing documents or ineligibility. There is, however, an appeals process through the US Coast Guard for those claimants denied. According to the AP, Feinberg said the USCG had processed 264 appeals out of a total of 507. Of that number processed, the Coast Guard has sided with the GCCF on every single case.
In addition to the delaying tactics in paying those impacted by the nation’s worst environmental disaster, discouraging reports continue to surface over BP’s unprecedented use of dispersants in attempting to treat Gulf of Mexico disaster and how those dispersants continue to impact the Gulf’s food chain.
A Woods Hole Oceanographic Institution (WHOI) press release last week states that scientists have found a major component of the Corexit dispersant used to treat the blown out well remains
“contained within an oil-gas-laden plume in the deep ocean and had still not degraded some three months after it was applied.”
WHOI chemist Elizabeth Kujawinski along with her colleagues found the discovery a bit unusual, stating: “This study gives our colleagues the first environmental data on the fate of dispersants in the spill. These data will form the basis of toxicity studies and modeling studies that can assess the efficacy and impact of the dispersants.”
That major component discovered, dioctyl sodium sulfosuccinate (DOSS), was found in the deep sea plume in May and June of last year, located in more than 3,000 feet of water. At that time, concentration levels of DOSS were measured in parts-per-billion.
The plume traveled in a southwesterly direction, and lower concentrations of DOSS (parts-per-trillion) were discovered in September.
“We don’t know if the dispersant broke up the oil,” Kujawinski added in the press release. “We found that it didn’t go away, and that was somewhat surprising.”
As press coverage of the man-made disaster continues to dwindle, there are serious issues remaining over BP’s handling of the environmental disaster, during the event and after its containment.
Health issues for humans in direct contact with the disaster are slowly surfacing and BP’s tactics at delaying settlements appears to compounding what is sure to be a growing problem.