Spill Claims to U.S. Coast Guard Rise With Feinberg Rejections

The U.S. Coast Guard has received 136 claims seeking a total of $28 million in compensation for damages from BP Plc’s oil spill, up from 10 that had been filed as of September, according to a letter from Senator Tom Carper.

Individuals and businesses can apply to the Coast Guard’s National Pollution Funds Center after their claims were rejected by the Gulf Coast Claims Facility, which draws on a separate $20 billion fund set up by BP, or if they haven’t received compensation within 90 days of applying for help.

Carper, in a letter sent to Craig Bennett, director of the Coast Guard’s center, questions what the increase in claims to the government may say about the efficacy of the BP fund administered by Washington attorney Kenneth Feinberg.

“I want to ensure that the taxpayers are not being asked to pay for the costs of this spill unnecessarily,” the Delaware Democrat said today in a statement.

Gulf Coast residents and policy makers have criticized Feinberg for not providing fair compensation and for not ruling on claims quickly enough.

Early returns suggest the government hasn’t judged claims differently than Feinberg. The Coast Guard has denied each of the 16 cases it has reviewed, according to Carper’s letter.

Carper, who is the chairman of the Senate Governmental Affairs Committee’s federal financial management subcommittee, also asked Bennett to provide additional information on why the claims were rejected. He asked Bennett to respond by Dec. 10.

Petroleum Tax

The Oil Pollution Act was passed in 1990 after the Exxon Valdez spill in Alaska. It authorized an ongoing spill account paid for with an 8-cents-a-barrel tax on petroleum.

The National Pollution Funds Center draws on the Oil Spill Liability Trust Fund. The government fund is capped at $1 billion. As of October, it had paid out $518 million to states and federal agencies for spill clean-up and other costs.

While individuals and businesses also can apply, the government fund only compensates victims for damage that has occurred. Claimants can’t seek compensation for future losses, as they can from Feinberg’s fund.

As of Dec. 2, more than 454,000 claims had been filed to the Gulf Coast Claims Facility, according to its website. More than 152,800 had been paid, totaling almost $2.2 billion. About 113,000 claims needed additional documentation, and almost 104,000 claims had been denied, according to the website.

The deadline to apply for an emergency payment ended Nov. 23. Claimants can seek interim checks every three months or accept a final lump-sum payment, which requires them to waive their rights to sue BP or other companies involved in the spill.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net.

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.