Oil Spill Claims Czar Feinberg Blasted on First Day of Overseeing BP Payments

Oil Spill Claims Czar Feinberg
Oil Spill Claims Czar Feinberg

Critics of BP's (BP) program to compensate Gulf of Mexico oil spill victims took aim at Kenneth Feinberg on Monday as he officially started his first day as the Gulf Coast Claims Facility's independent administrator, according to a Wall Street Journal report.

Feinberg, who was jointly selected to be the new oil spill claims czar by the White House and BP, took heat over guidelines established for those filing claims against the $20 billion fund BP set up for victims of the oil spill that followed the April 20 explosion of the Deepwater Horizon, which killed 11 workers. The resulting leak spewed nearly 5 million barrels of oil in the Gulf of Mexico, effecting the region's bountiful fisheries and its tourism industry.

Gulf Coast state officials and lawyers representing those affected claimed Feinberg's guidelines are too restrictive, fail to allow enough time for victims to assess their long-term damages before they file a final settlement claim, fall short in how they view the geographic boundaries of who should be eligible to make a claim, and unfairly deduct any earnings victims may have received from BP for working on the oil spill cleanup from their eventual claims payout, according to The Wall Street Journal.

Claims were previously handled by BP, which was blasted for its lethargic response speed. As a result, the Gulf Coast Claims Facility was set up to administer a portion of BP's $20 billion compensation fund. It received more than 5,000 claims on its first day of operation Monday, according to The Wall Street Journal.

A Three-Year Window for Final Claims

BP, which has processed 78,000 claims since early June and paid out $399 million, previously expressed concern that people who weren't affected by the oil spill would nonetheless try to collect against its fund. The Justice Department, however, is expected to announce Tuesday that its National Center for Disaster Fraud, founded in the aftermath of Hurricane Katrina, will focus now on oil spill claims, according to the report.

Under the Gulf Coast Claims Facility, Feinberg is giving people until Nov. 23 to file for temporary payments, then three more years to submit final settlement claims to cover all their damages. Critics say three years isn't enough time to assess the long-term economic affects of the spill on people's lives -- from the loss of previously held jobs to damage to property values and beyond.

Meanwhile, state officials along the Gulf Coast complain their input about the guidelines went mostly unheeded. Feinberg is heavily weighing claimants' proximity to the oil-slicked shoreline as a factor in the size of payouts, but people in Florida who were further away from the action claim the damage to their tourism industry was severe, despite their distance from the slick. Florida's attorney general ripped into Feinberg last week in a letter that claimed the liability restrictions he was imposing were tougher than those in the Oil Pollution Act, The Wall Street Journal reports.