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The Associated Press September 15, 2010, 8:05AM ET

BP claim czar 'skeptical' of claims far from spill

The administrator of the $20 billion compensation fund for victims of the Gulf oil spill said Tuesday he is "skeptical" of claims that are not in close proximity to the BP disaster but is becoming more flexible on the issue.

Ken Feinberg told members of the Florida Restaurant and Lodging Association that emergency relief was not likely in most cases far from the spill, a problem for many businesses -- especially those in the Sunshine State -- that have suffered in large part because of the perception oil has washed ashore on all the beaches.

He urged business owners to fill out claims, speak with lawyers and then he would review the claims and work to find a solution without clogging courtrooms.

"I was skeptical of the eligibility of lodging and restaurants far from the spill. I still am skeptical," Feinberg said. "But I must say, that having spent a good deal of time chatting ... I'm trying to help. I'm walking a tight rope.

"If I say no, what have I done but drive you into the court system? That is something the center is designed to avoid. I make no promises. ... I am troubled by this. I just want you to understand that, in theory, if proximity is totally irrelevant, that it has no bearing at all, I will be inundated with claims from 50 states."

Businesses aren't the only ones upset over the claims process.

Florida Gov. Charlie Crist and Democratic nominee for governor Alex Sink co-signed a letter to Feinberg on Tuesday, pleading with him to process claims more quickly. They said the process was moving too slowly and some businesses might not survive without emergency relief.

"This is just not right," Sink said.

Feinberg said the fund has paid out $175 million since he took over processing claims three weeks ago. Before that, BP PLC was in charge of paying out claims, and it paid nearly $400 million.

He said businesses not in the immediate proximity and without clear documentation that they lost money because of the spill will not be paid. Those qualifications have become major obstacles for Florida businesses -- many far from the spill -- since the April 20 rig explosion killed 11 workers and led to 206 million gallons of oil spewing into the Gulf of Mexico.

Aside from the western Florida panhandle, where tar balls and small patches of oil have hit beaches, the Sunshine State was largely spared from the crude. However, many businesses around the state have been hurt by the perception that their beaches also were ruined, said Keith Overton, chairman of the Florida Restaurant and Lodging Association.

"Our season was damaged," Overton said. "Our cash flow was taken away. We are going now into months where we actually lose money. So to think that we're not going to have some of that cash replaced or replenished going into these times forces us to make decisions that are not in the best interest of our businesses."

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