Bloomberg News

BP’s Spill Fund Paid $5.5 Billion in Claims, Feinberg Says

October 27, 2011

(Updates with comment from lawmaker in third paragraph.)

Oct. 27 (Bloomberg) -- The fund set up for victims of BP Plc’s oil spill has paid $5.5 billion to more than 213,000 claimants in every U.S. state and 38 nations, according to Kenneth Feinberg, who runs the compensation program.

The Gulf Coast Claims Facility receives about 2,270 submissions a week, Feinberg said today in testimony to the House Natural Resources Committee. The fund is “achieving its objective” and the number of new applicants is “proof positive that we are doing something right,” Feinberg said. The totals are current as of Oct. 21.

Representative Doc Hastings, a Washington Republican and chairman of the panel, said there has been a “large hole” in oversight and accountability of the claims facility, which started writing checks in 2010. State officials and residents along the Gulf of Mexico have called the fund inefficient and the payments too low.

BP set aside $20 billion for the fund last year and named Feinberg as manager after negotiations with the Obama administration over damages to homes and businesses from the April 2010 spill, which spewed crude into the Gulf for 87 days.

About one million applications have been received from about 500,000 claimants seeking temporary payments to cover immediate losses or lump-sum final checks that bar victims from suing BP and other companies for the spill.

No Decisions Overturned

Claims have been filed by fishermen, shrimpers, hotel owners, real estate agents, dentists, veterinarians and chiropractors as well as businesses based thousands of miles from the spill, Feinberg said. About 95 percent of the applications have been processed.

The facility has settled 213,000 claims, or 60 percent of the total non-emergency filings seeking final checks or interim payments, which don’t require victims to waive their legal rights, he said.

The Federal Oil Pollution Control Act lets claimants appeal any decision to the U.S. Coast Guard, which has so far rejected all 1,359 requests it has reviewed, Feinberg said.

Lawmakers from Gulf-coast states complain that the number of paid claims “is simply unacceptable to the people whose livelihoods were disrupted by this disaster,” Hastings said.

Only 39 percent of the total 500,000 claimants that have sought payment received emergency, interim or final checks, Hastings said.

‘Great Inconsistency’

Representative Jo Bonner, an Alabama Republican, said the process was flawed by “great inconsistency” in how claims were judged. Bonner, who isn’t on the committee, sat in as a guest at the hearing.

Democrats led by Representative Edward Markey of Massachusetts defended Feinberg and the claims facility.

The fund “kept families and businesses afloat,” Markey said. BP did the right thing in setting up the panel, said Markey, who has criticized the London-based company for the spill.

Feinberg said he expects to announce new terms for shrimpers in the next two weeks that will to lead larger final payments.

Now, shrimpers and most other businesses are eligible for final checks equal to twice their losses in 2010 or actual documented losses from the spill, whichever figure is larger.

Workers in the oyster industry, including harvesters and processors, are eligible for payments equal to four times 2010 losses in an effort to forecast future losses until conditions improve. Feinberg originally said he thought shrimp would recover more quickly than oysters.

Feinberg said the facility has agreed to a Justice Department request for an independent audit.

--Editors: Judy Pasternak, Steve Geimann

To contact the reporter on this story: Jim Snyder in Washington at

To contact the editor responsible for this story: Larry Liebert at

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