Obama Administration Criticizes Slow Payments by Gulf Spill Claims Czar
The pace of BP claims payments is called unacceptably slow, and the official in charge promises new procedures to speed up the program.
In an unusual rebuke to the White House's hand-picked candidate for managing damage claims from the Gulf oil spill, the associate U.S. attorney general wrote a strongly worded letter to claims czar Kenneth Feinberg describing the pace of his payments as "unacceptable" and demanding that he improve his operation.
"Many of these individuals and businesses simply do not have the resources to get by while they await processing by the Gulf Coast Claims Facility," Associate AG Thomas J. Perrelli wrote on Sept. 17. "As the present pace is unacceptable, the GCCF needs to devote whatever additional resources -- or make whatever administrative changes -- are necessary in order to speed up this process."
Since Perrelli's letter, Feinberg has announced changes in the way he will process business claims. On Sept. 25, he said that he would cluster business claims by industry and apply the same formula to each industry group, leading to bigger checks for tourism companies that depend on summer income.
"I have heard from the people of the Gulf, elected officials, and others that payments remain too slow and not generous enough," Feinberg said in a statement. "I am implementing new procedures that will make this program more efficient, more accelerated and more generous."
Over the weekend, payments from Feinberg's operation eclipsed the amount disbursed by BP, reaching $477 million (PDF) in emergency advance claims just over a month after he assumed control of the process. BP paid out $399 million over about three and a half months.
These statistics, and the most recent changes promised by Feinberg, did little to ease the distress of Anthony Kennon, the mayor of the hard-hit tourist town of Orange Beach, Ala.
"These are all mom-and-pop shops. We are devastated," Kennon told the AP. "They feel despair, they feel helpless, they feel abandoned."
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