How to Give Away $5 Billion

We received more than 1 million claims from the Gulf spill and have paid out about $5.3 billion to more than 200,000 claimants. When you’re dealing with that kind of volume, you need speed and fairness and consistency. The first challenge is to determine who’s eligible. It’s one thing for a fisherman whose livelihood depends on Gulf shrimp to be eligible; it’s another for a restaurant in Tennessee. Even then you need to calculate what damage is related to the spill and not to the recession or a poor business decision. The most difficult cases involve claims where there’s little or no documentation. You can’t just pay people because you think they’ve been affected. You need to help them find a way to document their loss. It’s different when you’re managing a fund with a $20 billion pledge from BP, as opposed to working through the legal system. A court might not recognize the validity of some claims, but you need to consider them carefully. You try to err on the side of being generous without being Santa Claus. Anyone can give money away. You learn to live with the potshots and the criticism.

These programs should be the exception rather than the rule. Bad things happen to good people every day, but I didn’t see a program after Katrina or Joplin. Policymakers need to be wary about doing an end run around the traditional way of resolving disputes in this country.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE