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Some Gulf Spill Claimants Waiting for Months: Feinberg Blames Tricky Policy Decisions

Some claimants from the Gulf oil spill have been waiting for months without a decision, and claims czar Ken Feinberg says the problem is in deciding, ‘What should we do with that claim?’

Since Gulf spill claims czar Kenneth Feinberg took over from BP in late August, many claimants have reported that their applications have remained under review for months and that they have not yet received decisions.

Roughly 71,000 claims are currently under review, according to statistics from Feinberg's operation (PDF). Feinberg's program does not provide statistics on how long claimants have been waiting. But ProPublica and the Washington Independent have both spoken to numerous claimants who say their applications have been in limbo for over a month.

In an interview with ProPublica, Feinberg said that some of these long delays were caused by claims that created difficult policy judgments for his operation.

"There are some claims where we sit on that claim trying to figure out under the Oil Pollution Act, or under our guidelines, whether or not to pay," Feinberg said, referring the 1990 federal law that guides the claims process. "We don't want to deny it; on the other hand we can't grant it. And we're trying to figure out internally what to do."

Examples of such complex claims, Feinberg said, could include a furniture store or beer distributor on the beach, where the link between the claimant's losses and the spill is difficult to assess.

Feinberg's spokeswoman, Amy Weiss, said in an e-mail that there is no fixed timeframe for resolving those claims but that the "overwhelming number of pending claims were filed after Oct. 1." Last month, Weiss told the Washington Independent that about 8,000 claims had been under review for more than two weeks. She did not provide a more recent figure in response to our inquiries on Monday.

"Most policy issues are resolved in a matter of days," Weiss said. "But we may put a few ‘on hold' to figure out the consequences in terms of impact and consistency."

So far, Feinberg's operation has received about 385,000 claims overall, and roughly 114,000 have been approved for payment. Feinberg said that the most common reason for claims to stall was insufficient documentation by applicants. There are currently about 143,000 claims that require more documentation, more than twice as many as the amount that are under review.

Linda Smith has been waiting since Aug. 25 without a decision on her claim. Smith's restaurant, the Alligator Creole Café, is in Houston, Texas, far from where the oil washed ashore. But she said that her top-selling dishes were seafood from the Gulf and that she had to close her doors this summer when she could no longer get supplies.

"I'm a little mom and pop establishment," Smith said. "I would sell 13 or 14 catfish plates a day."

She said that in the months that her claim has been under review, she has had to sell her restaurant's refrigerator, freezer and china in order to be able to pay rent on the property.

Feinberg's eligibility criteria state that his program will evaluate claims based on "geographic proximity to the Spill, the nature of the claimant's job or business, and the extent to which the claimant's job or business is dependent upon injured property or natural resources." But the guidelines do not specify how these factors will be weighed.

Feinberg said that delays in cases like Smith's were based on the tough decisions they required rather than mishandling or a lack of capacity. "That's not a mechanical problem," Feinberg said. "That's a problem of, ‘What should we do with that claim?' And that's the reason for the delay."

Delays and partial payments on claims have been a source of frustration for businesses in particular. Last week, Gov. Bob Riley of Alabama denounced Feinberg's claims process as "extortion" -- final payments from Feinberg require claimants to forgo their right to sue -- and wrote Feinberg a letter demanding additional information about how he was responding to business claims.

Feinberg told ProPublica that about 85 percent of businesses that had been found to be eligible for compensation had been paid in full, a statistic that was previously not disclosed by his operation.

"Be careful in making the assumption that it is inefficiency or incompetence that lies at the heart of delayed business claims," Feinberg said. "I don't buy it, I don't believe it, and we have paid in full thousands and thousands of business claims."

But for claimants like Smith, the reason for the delays matters less than the check that has not arrived.

"If you know how to pay the fisherman, why can't you pay us?" Smith said.

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