Alex Sink is making good use of her final days as Florida's chief financial officer by calling on President Barack Obama and the BP claims fund to speed up payments to victims of the Gulf of Mexico oil spill. Sink wrote to Obama this week after she and Florida Attorney General Bill McCollum appealed to fund administrator Kenneth Feinberg to improve a claims process that has left in the lurch thousands of Floridians seeking compensation. Feinberg has an obligation to weed out fraudulent claims, but he also has a responsibility to settle legitimate cases in a timely manner.
Sink and McCollum pointed out that Feinberg's operation has paid or approved just 44 percent of the 155,000 claims filed by Floridians. The vast majority of claims for lost earnings or property damage related to the spill have either been denied or are still under review. Sink faulted the process as inefficient and said Floridians had no "meaningful" channel of communication with officials deciding their claims. In her letter to Obama, she called on the president to intervene, charging Feinberg's operation had "exacerbated" the economic hardship across the entire gulf.
That may be a bit harsh. Feinberg has a duty to ensure that those who are compensated genuinely deserve it. Yet he has sent mixed messages about who qualifies, and there is frustration among workers and businesses across the gulf with a process that is too often sluggish, arbitrary and nontransparent. Even Feinberg seems to have acknowledged as much. This week, he unveiled a new "Quick Payment" scheme that could move a big number of claimants off the books.
The option provides a fixed payment of $5,000 to individuals and $25,000 to businesses that waive the right to sue or to file a future claim. The option is open to those who previously received emergency payments under BP's claims process, and claimants would not need to provide any further documentation of their losses. Feinberg even offers to cut a check within two weeks.
Many will no doubt jump at the offer, particularly in the midst of the holiday shopping season. But Feinberg's job is to ensure that payments are both speedy and fair — not one or the other. That's the whole point of the claims fund: to settle damages and spare both sides the cost and delays of going to court. And $5,000 seems like a small incentive for walking away when the full environmental and economic impact of the spill may not be known for years. The last thing the claims process should do is undermine a victim's ability to recover for the long term.
Feinberg should instead beef up assistance and outreach efforts. As of Thursday, the fund had paid $2.5 billion to 168,000 claimants; thousands are under review or awaiting additional documentation. With investigators still exploring the full impact of the spill — and BP's responsibility for it — gulf residents will have a hard time assessing what the best course is for them. Feinberg said he will unveil a program soon to provide victims with free legal counsel to explore their options. But he needs to be more creative and aggressive in addressing the backlog.