Claims Fund Chief Says BP Stalling on Payments to Oil Disaster Victims

July 26, 2010

British energy giant BP Plc is holding up payments to economic victims of the Gulf of Mexico oil spill, Kenneth Feinberg, administrator of a $20 billion compensation fund, said Saturday.

“I have a concern that BP is stalling claims. Yes, BP is stalling. I doubt they are stalling for money. It’s not that. I just don’t think they know the answers to the questions (by claimants),” Feinberg told reporters.

Feinberg was speaking on the sidelines of a town hall meeting in southern Alabama at which fishermen and other business owners expressed frustration and anger at what they say is a slow and complex claims process that lacks transparency.

Thousands of businesses in U.S. Gulf Coast states have been crippled by the oil spill, which began with an explosion and fire on a BP deepwater rig in April.

Saturday’s remarks represented the first time that Feinberg, named last month to administer the fund, had accused BP of holding up compensation payments. BP set up the fund in June under pressure from President Barack Obama.

“After today there will be no more business as usual. I learned today the depth of frustration in people here on the coast,” Feinberg told the meeting.


Under the terms of the compensation fund, people have 90 days from when the undersea well is permanently sealed to file claims — a limitation Alabama’s attorney general has said needs to be changed.

Feinberg said he was taking the attorney general’s comments “under advisement” and said the 90-day deadline only applies to emergency funds. “People are getting confused with the emergency checks,” Feinberg said.

There is also confusion about who is qualified to make a claim. Feinberg said he is still tweaking the rules for those who are indirectly affected by the oil spill, such as small businesses in the tourism industry.

Real estate brokers and bankers are also asking to be compensated for lost sales related to the spill. Feinberg said he does not yet know whether they will be included.

Addressing the frustrated crowd in Alabama, Feinberg said when he takes complete control over administering the fund “we will not do anything behind your back.” BP has been managing compensation so far but Feinberg is due to take full control by Aug. 10.

Feinberg, an arbitration lawyer, also oversaw compensation for executives at companies that received federal bailout funds. Feinberg also dispensed hundreds of millions of dollars to victims of the Sept. 11, 2001 attacks on the United States.

(Reporting by Leigh Coleman, writing by Matthew Bigg and Rachelle Younglai, editing by Will Dunham)

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