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Judge Orders BP’s Feinberg To Be More Transparent

Judge Orders BP’s Feinberg To Be More Transparent

When appointed to oversee payouts of BP’s $20 billion compensation fund for victims of the Gulf of Mexico oil spill, Kenneth Feinberg promised coastal residents knew he would operate as an “independent” or “neutral” entity, dispensing funds quickly and objectively.

Louisiana District Judge Carl Barbier recently ruled that Feinberg is not independent and BP must refrain from referring to him as “neutral” as he dispenses compensation to victims of the Gulf of Mexico disaster, the worst oil spill in U.S. history (Reuters).

Exerpt from the full ruling (viewable here):

While BP may have delegated to Mr. Feinberg and the GCCF independence in the evaluation and payment of individual claims, many other facts support a finding that the GCCF and Mr. Feinberg are not completely “neutral”or independent from BP. For example, Mr. Feinberg was appointed by BP, without input from opposing claimants or the Plaintiffs’ Steering Committee (“PSC”), and without an order from the Court. Mr. Feinberg is not a true third-party neutral such as a mediator, arbitrator, or court- appointed special master.

Additionally, Barbier ruled that BP must disclose in all communications that the Gulf Coast Claims Facility (GCCF) run by Feinberg is acting on behalf of BP in fulfilling its legal obligations under the Oil Pollution Act (Reuters).

Since taking command of the compensation fund in June 2010, Feinberg has faced continual criticism about the speed and efficacy of the compensation process from Gulf Coast residents.

U.S. Sen. Bill Nelson (D-FL) has demanded a White House investigation into Feinberg’s process:

“Mr. President, last summer, while in my state at the U.S. Coast Guard station in Panama City, you said this fund would be run independent of those who caused the spill ‘so that people can trust that they’ll get a fair shake,’” Nelson wrote in a letter to Obama las week. “The claimants in Florida, and the rest of the Gulf coast, deserve no less.

“I respectfully request that your administration initiate a review of all administrative operations of the claims fund,” Nelson wrote.  “Given the court ruling and other news accounts, there’s clearly a need to assure more accountability and transparency.”

In his recent post, Care2′s Scott James points out why neutrality is so important when it comes to dispensing claims money:

“Mr. Feinberg argues that those who agree to a settlement will receive more money and get it faster than those who join one of the claims pending in Federal court. On the other hand, those who agree to a settlement also agree to not take their claims to court in the future.

Around 87,000 people have accepted a settlement from Feinberg, rather than taking their claim to Federal court, and so far the fund has handed out $3.5 billion.

While this ruling does not say that all previous settlements should be revisited, it opens the door to question the integrity of how BP is dealing with their settlement fund.”

Related Reading:
Environment Beyond BP: Politics, Policy and Power
BP Oil Dispersants Drifted, But Didn’t Degrade
BP Funding Tea Party Favorites

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Image Credit: Flickr - dsb nola

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38 comments

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2:42AM PST on Feb 12, 2011

A petition needs to be started to help and protect the people affected by this blatant bad policy of dispersing the funds. An investigation needs to be done on Feinberg. This is a totally disgusting process that as usual is designed to protect BP. We have to keep at them to be responsible.

2:59PM PST on Feb 11, 2011

Does anyone out there realize that Pres. Obama is the one that put him in charge? As for elected officials, President Obama made it perfectly clear that the government will not be held responsible almost in the same sentence that he said BP would not be responsible for dispersing the funds. Feinberg has a verbal contract with BP...no records kept? Gee..how nice is that for him? I do think our gov. officials should step out their protective comfort zone and do something as an individual.
President Obama has washed his hands of us. He never mentions or shows any compassion in any way, shape or form. He is the President, isn't he?

2:58PM PST on Feb 11, 2011

Does anyone out there realize that Pres. Obama is the one that put him in charge? As for elected officials, President Obama made it perfectly clear that the government will not be held responsible almost in the same sentence that he said BP would not be responsible for dispersing the funds. Feinberg has a verbal contract with BP...no records kept? Gee..how nice is that for him? I do think our gov. officials should step out their protective comfort zone and do something as an individual.
President Obama has washed his hands of us. He never mentions or shows any compassion in any way, shape or form. He is the President, isn't he?

12:11PM PST on Feb 11, 2011

Shut BP down...liquidate then do the payouts.

12:03PM PST on Feb 11, 2011

Feinberg should be out and a totally independent panel and overseer set up to handle these claims.(Just noticed that Sound Mind already posted this statement...oops) BP seems to think they are above the law.I just feel so sorry for all the people who's livelyhoods were taken away from them so suddenly. I hope they got decent pay outs!

8:06AM PST on Feb 11, 2011

Crap I just read @ Mary P that Feinberg gets $850,000 a month. Are you kidding me? Although that is for his whole law firm, it's still a huge pile of money for such slow results.

Why is it necessary to pay someone $10 million a year to administer this? Seems to me BP would only agree to someone they felt would represent their best interests to be paying that kind of money. Sounds an awful lot like Stephen Helmsley, CEO of United Healthcare, who makes around $13 million a year, and a lot of that money is generated by denying treatment to sick people submitting claims. Granted that compensation is for Helmsley alone and this is for the law firm, but still there's a nasty parallel.

How dare Feinberg say he doesn't think he will need all the money to pay claims when he hasn't even received all the applications yet? And especially when he is taking a not insignificant percentage of the money for his firm/personal salary.

7:53AM PST on Feb 11, 2011

87,000 people have received $3.5 billion. That comes out to an average of about $40,000 per person. While that might be OK for people who missed just one season of work, does anyone really believe that everything will be hunky dory, back to business as usual next summer? There's a lot of crap in the water column still, including dispersants and tiny particles of the oil.

It will be years before that region recovers. Prince WIlliam Sound is still suffering from oil that is just below the surface of the soil, over 20 years after the Exxon Valdez spill.

These amounts seem totally inadequate to me. But as usual they have people between a rock and a hard place - wait for their case to go to court and starve in the meantime, or take an inadequate compensation now and starve down the road a bit.

2:32AM PST on Feb 11, 2011

These people's lives will be negatively affected for many years to come. How can you put a price tag on that?
I wouldn't trust any of BP's flunkies to be the least bit transparent.

11:49PM PST on Feb 10, 2011

Jay P.
I am a Democrat living in Pensacola, Florida. Mr. Feinberg has done a totally reprehensible job of overseeing the funds from BP! There is absolutely no transparency on the payments or lack of payments. If you are turned down, there is no reason given except you are denied because you don't qualify .What are the qualifications? No one can find out. 2 people work for the same company, one gets paid, the other not.
We were recently told all outstanding claims were purged before the November change. That meant we could only sue or get a final payment and sign our rights away.The first claim paid after ($10 MILLION) was because BP stepped in for one of their own.That is an insult to everyone in this area and should be an insult even to you.
And when you hear that the forms aren't filled out correctly or the paperwork is not complete, that is a lie in many instances. We have been told they haven't received the forms, then get a denial almost immediately.Or we send the forms certified with return receipts and still are told we haven't. We take them into their offices and even send them online, to no avail.
This disaster was created by BP and all the $20 billion should be handed out. Not one cent should be returned to BP even though Mr. Feinberg doesn't feel he needs that much and has said so .And since he gets $850,000 per month, that should also be an insult to you.
The damage to the people and the waters has been enormous and will affect us for years.

7:52PM PST on Feb 10, 2011

Yeh there definitely needs to be greater transparency!

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