Feinberg Says $20B Fund May Fall Short on BP Claims
“The president made it clear he wants full compensation,” Feinberg said today on CNN. “The $20 billion might not be enough, maybe it will. Whatever it takes, these individuals and businesses must get paid.”
The BP well is gushing as much as 60,000 barrels of oil a day, according to a government estimate. The spill, which has washed ashore in four states, was caused by an explosion April 20 on the Deepwater Horizon drilling rig that killed 11 workers.
“We’ve got to accelerate the process” for processing claims by people and businesses damaged by the oil spill, Feinberg said. “For emergency payments, we’ve got to err on the side of the claimants.” He said he plans to meet with BP executives later today and will be on the gulf coast tomorrow.
Under an agreement with the White House June 16, BP agreed to set up a $20 billion escrow fund over a four-year period to pay claims and said it will contribute $100 million to support jobless oil rig workers.
Feinberg said he hopes to replicate his record in administering a similar fund for families of victims of the Sept. 11, 2001, terror attacks by persuading claimants to accept compensation from the fund rather than pursue their own litigation.
While emergency payments will be made to oil-spill claimants without a requirement to give up the right to sue, Feinberg will establish a system for compensating victims for the longer term rather than litigate.
He was in the gulf region last week meeting with the governors of Louisiana and Mississippi and said he plans to return this week to Alabama and Florida.
In the Sept. 11 cases, people bringing 97 percent of all eligible claims decided to draw from the fund rather than go through years of litigation, Feinberg told CNBC today.
“Only 94 people decided to litigate rather than enter a voluntary fund,” he said. “That’s exactly the kind of precedent that I hope to achieve here.”
Determining what types of claims should be honored might be based in part on their potential validity under state law, as was the case in the Sept. 11 fund, he said.
While he aims to improve the efficiency and transparency of the claims process, Feinberg said BP should get credit for paying out more than $100 million so far on its own.
Feinberg rejected U.S. Representative Joe Barton’s description of the $20 billion fund as a “shakedown” of BP, a characterization the Texas Republican retracted hours after making it during a House hearing last week.
“I think it was a voluntary arrangement,” Feinberg told CNBC. “BP saw the wisdom of doing this. I don’t think it’s a shakedown.”