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Feinberg to Meet U.S. Senator as Complaints Mount Over BP Claims

Kenneth Feinberg BP Oil Spill Administrator
Kenneth Feinberg, administrator of the $20 billion fund for victims of BP Plc's Gulf of Mexico oil spill. Photographer: Jay Mallin/Bloomberg

Sept. 28 (Bloomberg) -- Kenneth Feinberg, in charge of paying victims of BP Plc’s oil spill, will meet Senator Tom Carper this week and may face a congressional hearing as the claims process draws criticism from residents and policy makers.

The Gulf Coast Claims Facility that Feinberg runs has been faulted for the slow pace of payments and size of the checks. Carper said yesterday he will speak to Feinberg, seeking assurance compensation will be quick and fair. Senator Patrick Leahy, chairman of the Judiciary Committee, may hold hearings if the process “does not improve,” Erica Chabot, a committee spokeswoman, said yesterday in an e-mail.

Feinberg, who took over on Aug. 23, pledged to be faster and more generous than BP in writing checks to individuals and businesses hurt by the largest U.S. spill. He has failed to meet a 48-hour goal to write individual checks, drawing criticism after winning praise for accepting the job paying claims from the $20 billion fund set up by BP.

“I look forward to speaking with Mr. Feinberg about the ongoing claims process and how he is ensuring that payments are made quickly, fairly, and don’t end up leaving the federal government’s Oil Spill Liability Trust Fund vulnerable,” Carper said in an e-mail statement.

Feinberg testified before four congressional panels, including Carper’s Homeland Security and Government Affairs subcommittee on July 22, after agreeing to manage the claims facility.

Carper, a Delaware Democrat, said Feinberg, a Washington lawyer who handled the Sept. 11 claims fund, is among the nation’s “great arbiters” and qualified to run the new claims process.

Eligibility Decisions

Carper is focusing on how Feinberg determines eligibility for payments. Individuals and businesses rejected by Feinberg remain eligible to seek reimbursement from a separate government trust fund set up for oil spills.

Thomas Perrelli, the associate U.S. attorney general who led negotiations with BP to set up the claims facility fund, said on Sept. 17 that the present pace of payments is “unacceptable.”

The claims facility “needs to devote whatever additional resources -- or make whatever administrative changes -- are necessary in order to speed up this process,” Perrelli wrote to Feinberg.

Responding to Perrelli, Feinberg said claims will be grouped by industry “so they are easier to compare for payment.”

“We have heard and we understand the criticisms, and we are responding,” he said. “We will be sending out more generous checks more quickly.”

Realtors, Restaurants

Feinberg has been flexible in resolving complaints since taking over from BP. He set aside $60 million for Gulf Coast Realtor groups after agents and brokers complained of lost commissions and sales.

Feinberg told the Florida Restaurant and Lodging Association on Sept. 14 that he may ease a requirement that tied eligibility for payments to coastal proximity. Representative Kathy Castor, a Florida Democrat, called the announcement a positive sign.

The claims facility has received more than 75,000 claims, and paid more than 35,000. An estimated 27,000 claims required additional documentation as of yesterday, according to the most recent update. Feinberg rejected about 640 claims and 1,400 have been deemed ineligible, according to the facility.

Castor said her constituents worry that Feinberg will reject requests from businesses claiming losses as vacationers stayed away even though oil never washed ashore.

“I’m going to press him to visit this area,” Castor said in a telephone interview. “A lot of business owners here are just trying to make it through another day.”

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.

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