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Businesses left to wonder why oil spill claims were denied

Michael Konczal, owner of Northeast Marine, isn’t alone in wondering why his claim for damages from the BP oil spill is among those denied or languishing in process.


Michael Konczal, owner of Northeast Marine, isn’t alone in wondering why his claim for damages from the BP oil spill is among those denied or languishing in process.

Pop quiz: Which businesses claiming financial damage from the BP oil spill got a cut of the $20 billion compensation fund?

a. The Jolley Trolley, a nonprofit shuttle bus operator that carries tourists up and down Clearwater Beach.

b. At the Beach Cyclists and Sports Center, a bike rental store with a surf shop on St. Pete Beach.

c. Northeast Marine of St. Petersburg, which specializes in engine repairs on commercial fishing boats.

The answer: none of the above.

More than 88,000 Florida residents and businesses — 12,000 of them in the Tampa Bay area — learned in recent weeks that their claims for compensation were denied or still in limbo.

That leaves a lot of unhappy folks. Many puzzle over why the Gulf Coast Claims Facility, the independent arbiter on who receives BP money and how much, turned them down. Some simmer when they hear about similar businesses or shady operators who received fat checks.

"They have some formula that nobody knows about,'' said Lenny Stamos, owner of Beach Cyclists. His $34,000 claim was rejected just before Christmas. He thinks the agency looked only at three previous years of revenue — years that included a spike in gas prices and record cold spring — to set a baseline for his normal tourist business.

At Northeast Marine, owner Michael Konczal says commercial fishermen and crabbers make up three quarters of his business. When the BP spill kept their boats out of the gulf, his repair work dried up. He can't understand why other marine sales and service shops got payments, but his $35,350 claim was turned down.

"Within a five-mile radius of here, two marine service facilities received money,'' Konczal said.

Kenneth Feinberg, appointed by President Barack Obama to administer the $20 billion fund paid for by BP, acknowledges that claim reviewers may have made some mistakes in a system that handled 470,000 claims in four months.

"There may be some limited, but real, inconsistent treatment,'' he said in an interview Wednesday.

But in many cases the difference came down to better documentation. Some businesses provided several years worth of tax returns and pay stubs compared with "the other guy who didn't," he said. More than 150,000 claims arrived with no supporting documents, just a form.

An obstacle for many businesses: showing that the oil spill directly contributed to their financial losses. Fishermen banned from fouled waters were a no-brainer. Ditto for hotels with oil on their beaches.

But when it comes to businesses that lost money because the spill damaged their customers, the call isn't so clear-cut.

"What evidence of loss from the spill is there, as opposed to the recession or the death of your general manager?'' Feinberg said. It's usually a claim reviewer's judgment call.

The deadline for emergency claims was Nov. 23. People and businesses denied the first time can file to recover their losses as an interim claim and get a fresh review, Feinberg said.

Jolly Trolley executive director Robert Longenecker still thinks the agency bungled the shuttle service's initial $58,480 claim.

True, ridership was well above 2009 levels through the summer. That resulted from a deal with the county bus system to accept each other's passes, he said.

Tourism numbers were trending up in April. So, the trolley's ridership would have grown even more, Longenecker contends, if not for the Deep Water Horizon disaster, which began April 20 and spilled millions of barrels of oil into the gulf until it was capped in July.

"To deny we have been financially impacted . . . is to say that tourism wasn't impacted: outrageous!'' he wrote in a Dec. 27 letter to the claims agency requesting a $25,000 lump sum settlement. "We have lost thousands of fare-paying passengers.''

At the Bilmar Beach Resort on Treasure Island, general manager Clyde Smith can't understand why other beach hotels got BP money but not his property.

He filed the required three years of profit and loss statements. Smith also sent e-mails solicited from customers — including a Christian youth group from Savannah that had stayed since 2007 — explaining the oil spill made them change plans last summer.

When the denial form letter arrived at the 164-room hotel last month, Smith was shocked. "Our documentation was as good or better than others,'' he said.

A top official told him Monday that the claims agency would take another look at the Bilmar's request for just over $100,000.

Steve Huettel can be reached at or (727) 893-8128.

It could happen again

Presidential panel investigating the BP blowout says the oil industry and government must make reforms. 2A

Businesses left to wonder why oil spill claims were denied 01/05/11 [Last modified: Wednesday, January 5, 2011 10:39pm]
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