Þ Third in a series
In less than a year, a staggering $3.8 billion has been paid by BP to tens of thousands of businesses and people along the Gulf Coast for economic damages caused by the Deepwater Horizon explosion. Yet that does not begin to cover all of the losses from this catastrophe or reflect the devastation to lives and local economies. The process for distributing damage awards has been at times too slow, too arbitrary and too inscrutable. Kenneth Feinberg, the administrator of the Gulf Coast Claims facility, took on an enormous job and has responded to criticism with reasonable changes, but there is more to be done for thousands still waiting for help.
When Feinberg took over the chaotic BP claims process in August 2010, he was charged with establishing eligibility rules and expanding operations while paying emergency claims as quickly as possible. Feinberg processed 470,000 emergency compensation claims in four months and sent payments to 170,000 claimants. Those denied were deemed ineligible or had inadequately documented their losses, including many thousands who did little more than file the compensation form without any proof of loss.
But Feinberg's initial system lacked transparency, and he was too slow to consider eligibility to businesses in places such as Tampa Bay where no oil washed ashore but the perception of soiled beaches caused great economic harm. Claimants were left waiting for too long, and some were arbitrarily denied payment with no specific explanation for their claim's rejection.
Feinberg promised to do better in the second stage of the fund's operation in which people and businesses are awarded interim and final claim payments. And while issues remain, it seems to be working better. Florida Attorney General Pam Bondi, who met with Feinberg to discuss needed improvements, says some helpful changes have occurred. U.S. Rep. Kathy Castor, D-Tampa, and Pinellas hotel executive Keith Overton also played pivotal roles in pressing the case for Floridians. Now Florida has more paid claims than any other state. In Pinellas County, more than $64 million has been paid to 6,000 claimants.
Feinberg has added more staff to local claims offices. People looking for help in preparing their submission are provided with lists of local accountants, and the cost of the accountant is included in paid claims. Claimants also are given more details about what documentation they are missing, which can be added to a resubmitted claim. On the fairness issue, Feinberg's office notes that none of the 574 claimants who have asked for an independent review of their claim by an office within the U.S. Coast Guard have received a finding of money owed.
But there are still unacceptable delays getting claims processed. Feinberg gives his agency 90 days to process interim and final payment claims, which is too long. Meanwhile, claimants only have to wait 14 days if they choose a quick payment option, leading to complaints that Feinberg is coercing desperate claimants to sign away their rights to future claims. The quick option gives individuals $5,000 and businesses $25,000 if they qualified for an emergency payment. That makes sense for those without significant losses or enough proof of them, but no one should be pressured into it.
Feinberg should speed up claims processing and provide more individualized determinations, so claimants know precisely their claim's deficiencies and how any payment was calculated. It would also be helpful if an independent auditor reviewed the decisions, to ensure fairness and accountability, an idea floated by Bondi. But in broad strokes Feinberg's efforts are going reasonably well. He brought some order to chaos, and he should ensure that those still awaiting compensation a year after the explosion changed their lives do not wait forever.