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Many Spill Claims Remain Unpaid as BP Debates Escrow Account

Businesses in the Gulf region are still reporting delays and unresponsive bureaucracy when they submit claims to BP.

BP spokesman David Nicholas told the Los Angeles Times that “more than 20,000 of the 42,000 claims submitted have been paid” – suggesting that about half of claimants have not received a check.

Nicholas said that no documented claims have been rejected, and the report did not specify how many claims had been denied.

Some of the toughest struggles for compensation are faced by businesses outside the fishing industry; fishermen and others who could document immediate, direct losses received initial checks of $2,500 to $5,000. From the LA Times:

 

Hotels, restaurants, machine shops, bars and tour companies all became collateral damage when the Gulf of Mexico, one of the nation's most important fisheries and tourist destinations, became an industrial cleanup site. The people whose lives depend on those businesses complain about ignored claims, unanswered phone calls and lost paperwork.

 

The Obama administration has stated that it finds BP’s claims process inadequate and has demanded that the company open an escrow account to pay spill damages, which would be administered by a third-party monitor. BP’s board will hold an emergency meeting today to consider starting the escrow account.

Should the company hesitate, White House spokesman Robert Gibbs said this weekend that President Barack Obama will seek to “use his legal authority to compel them” to take this step.

"It's not clear to us that there's the right of transparency involved concerning the data, how long it takes to pay claims,” Adm. Thad Allen, President Obama’s designated chief of the federal response, told CBS on Sunday. “We'll be talking about an independent third party that can administer a fund to make sure it happens quicker."

BP has repeatedly stated its commitment to pay all “legitimate” claims for damages from the spill, but it appears to have reservations about the administration’s demands. So far, the company has paid out $53 million in claims. Senate Democrats have proposed a figure of $20 billion for the escrow account.

"BP will not hand over a blank check to anyone, whether it's the administration or an independent mediator," said a source described by The Washington Post as “familiar with senior BP executives' thinking.”