Feinberg Promises More Generous Checks

“I’m not Superman,” Kenneth Feinberg, the designated claims czar for the BP oil disaster, told a packed conference center on the University of West Florida campus in Pensacola, Fla.

For an hour, he listened to restaurant owners, realtors, charter boat captains, shop owners and wedding planners voice their concerns over the new claims process that begins on August 23 when BP turns it over to him. Each wanted reassurance the new process would be better.

Feinberg was blunt and candid in talking to the crowd of 300-plus business owners, public officials and residents, who have seen their summer tourism season fall apart due to the millions of gallons of BP oil that spewed in the Gulf of Mexico from the Deepwater Horizon well.

“You must be eligible and prove your claim,” Feinberg said.

For the first 90 days after BP transfers the claims to the new system, Feinberg will be paying out six-month claims for lost wages and business income. The payments will not hamper anyone’s ability to sue BP.

“This program is entirely voluntary,” Feinberg said. “The process will be quicker, more generous and more efficient than any other remedy.”

He assured the crowd that he would pay all documented individual claims within 24 hours and business claims within seven days.

In addition after Thanksgiving and for the next three years, individuals and businesses, can file claims to cover future loss of income. However, those accepting any of these lump sum payments will waive the right to take legal action against BP in the future.

“If you want full and final payment for all prospective loss, file a claim, and if you accept the check that is offered, then you waive the right to sue BP,” said Feinberg. “It’s your choice.”

Feinberg did give the crowd hope, but the man who was the administrator of the 9/11 trust fund knows how fragile that hope is.

“My credibility will last as long as I can pay your claims,” he said. It was only Monday that BP paid its first $3 billion into the $20 billion escrow fund.

I asked Feinberg if that the initial $5 billion would be enough to fund the first 90 days. “My hope is it would. If not, BP will make sure the money will be there.”

Feinberg’s candor is in sharp contrast to BP’s strategy in dealing with claims. While Feinberg was quick to give the company credit for paying over $300 million in claims, locals are frustrated with the lack of follow-through with most claims.

Just a week ago, Darryl Willis, BP vice president of resources who has headed the BP claims process, told the media at an August 3 telephone conference that his company had created an “Immediate Action Claim Team” that had expanded the claim criteria and was able to pay out over $9 million the first days of August.

The next day, Florida State Senator Don Gaetz (R-Niceville) pressed Mary Shafer-Malicki, the deputy incident commander for Florida, about reports he had received that Florida businesses were not being paid for their May losses.

She sent Gaetz this official statement:
“BP will make claim payments based on the time an area has been impacted due to oiled beaches. This is consistent with the Oil Pollution Act (OPA), which is guiding BP’s claims process. In general, Louisiana had oiled beaches or marshes in May, while Alabama, Mississippi and Florida did not have beaches oiled until June. Specific claims will need to be discussed with adjusters who will factor in a number of criteria.”

This is the type of misdirection that has been the BP strategy since the April 20 explosion: hold a press conference and give broad statements that reassure the public, run ads to reinforce that air of trust and commitment and then, when pressed for specifics, have an underling issue a statement that doesn’t match the press conferences and ads.

Willis’ “Immediate Action Claim Team” has had no impact on the larger claims. It appears BP has begun a new round delay tactics to dump as much as possible on Feinberg. Many have given up any hope of getting money from BP before August 23.

Jeff DeWeese, Pensacola CPA, told the IN, “I’m done with BP.” Before attending public forum on the claims process with Feinberg and U.S. Senator Bill Nelson, DeWeese had received an email from his BP claims adjuster demanding for the second time more documentation for his client’s claim.

“My client owns nine restaurants that stretch from Orange Beach, Ala. to Panama City, Fla.” said DeWeese. “Our firm has handled millions of dollars in claims, and, by far, this client has the most detailed financials of any claim we’ve filed. Yet he hasn’t received a dime from BP.”

The client submitted its first claim on June 22 for its May losses of $77,565. Based on statements by BP spokesman Lucia Bustamante, DeWeese had calculated the claim based on the losses from May 2009, plus a 10 percent growth. He submitted the claim three years of federal tax returns and the 2009 and 2010 financial statements for May.

Two weeks later, DeWeese and his client sat down with a new claims adjuster. They were no longer to add the 10 percent increase. They resubmitted on July 22 a new claim for $428,677 to cover the months of May-July.

On Monday before attending public forum with Feinberg, DeWeese received an email from his BP claims adjuster that BP wanted even more documentation, including tax returns for 2008, income statements for all of 2009 and 2008, payroll registers, monthly budgets for 2009 and 2010 and the websites for each location. Websites?

DeWeese clearly frustrated. “Evidently BP is not going to pay this claim. This is a delay tactic to push out this very large claim until Feinberg takes over.”