The man charged with administering the $20 billion compensation fund to pay oil-spill damage claims began by selling his three-year program in Downtown Washington, D.C. on Monday.
In addition to setting up a series of independent claims facilities to give disenfranchised Gulf residents and small businesses a piece of BP’s $20 billion escrow account, Feinberg is also tasked with convincing distraught Gulf residents that participating in this program is more worthwhile than going to court. He made a vigorous case for this scenario on Monday during an appearance at the Economic Club of Washington, D.C. , saying that that claimants could, of course, file a suit. But, he added, “You’re crazy to do so.”
BP has employed about 1600 claims workers in the Gulf to pay out about $200 million in claims. But Feinberg, who will take over the reins from the oil giant, said that the number of workers, along with BP’s approach to handling claims, will likely change. The first independent claims facility should be open for business in the next two to three weeks, he said.
“I don’t think we will need that many people,” Feinberg declared of the 1600 figure. “Once we streamline the process, you will be able to file a BP claim entirely online if you want to, and never go the claims office. BP didn’t do that—BP was putting band-aids on the problem, as you would expect in an emergency situation.” It’s unclear whether Feinberg will use the same contractors BP is employing. “I’m focused primarily, but not exclusively, on local people,” he said.
Not every individual or business claim will reach his desk, he indicated. “You come up with a methodology for shrimpers, for chowder boats, for motels, for restaurants, and that methodology must be consistent. Once there is a process in place, it becomes relatively easy to resolve these claims.”
Though BP will be responsible for paying all of the eligible claims, the former 9-11 administrative czar says he is very much removed from the government’s handling of the escrow account. “I’m not a custodian of those funds and I don’t have much of a say right now on the conditions of those funds,” Feinberg said. He also says he hasn’t yet dealt with anyone directly at the White House in discussing or setting up this program. So far, the only parties he’s been working with are the attorney general’s office, the Department of Justice, and BP, he said.
The program’s administrative budget is still being decided, he said, and its size will depend on the time frame of the permanent plugging of the broken well. “Until the oil stops, it’s very hard to come up with a budget because we’re not sure how pervasive the spill will be. We’ll get a much better handle on the claims if the oil leak is stopped.”
