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Louisiana Official: Oil Spill Claims Process ‘Cumbersome, Complicated’

November 24, 2010 at 5:17 PM EST
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The window for short-term compensation claims to BP's $20 billion oil spill disaster fund closed on Tuesday. Jeffrey Brown speaks with John Young, president of Jefferson Parish, Louisiana, about how Gulf Coast residents and businesses are coping with how the claims process is being handled by fund administrator Ken Feinberg.
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JEFFREY BROWN: And we turn to the aftermath of the Gulf of Mexico oil spill.

In the four months since oil stopped gushing from BP’s Macondo well, the environmental damage and economic costs have continued to be weighed, and claims for financial losses have come by the hundreds of thousands.

Under pressure from the Obama administration, BP set up a $20 billion compensation fund administered by Ken Feinberg, who made a series of visits to the Gulf to hear the stories of spill victims.

MAN: Is it possible for us to be compensated for our lost commissions?

JEFFREY BROWN: To date, more than $2 billion in emergency relief has been paid to 125,000 people and businesses across the Gulf region. Yesterday marked the deadline for filing such short-term claims.

Today, Feinberg announced rules for phase two: processing what he hopes will be final payments to those who suffered long-term damage. Claimants will have two options. If damages are proven, they can get a lump sum final payment, but must give up the right to sue BP and other companies involved in the spill. Or they can continue to receive interim payments on a quarterly basis, without giving up the right to sue.

WALTON KRAVER, resident, Gulf Coast: We’re running out of money quick, OK? And we have — we have already closed one business, OK?

JEFFREY BROWN: Even as emergency payments have continued, Feinberg has faced complaints from local citizens and government officials over the size and pace of payments, the question of who qualifies, and much more.

For example, this fisherman, who had temporarily worked for BP during the cleanup, complained when Feinberg said he would deduct those wages from any future claims for damages.

MARK STUART, commercial fisherman: In no way, shape or form is me wearing my boat out, working every day to clean up their mess, that is not, no way, compensation for my loss of my livelihood for years to come.

JEFFREY BROWN: Earlier this month, Alabama Governor Bob Riley criticized the oil spill claims process, saying, “If you have the capacity to turn them down with no explanation and make them sign away their right to sue, that’s extortion.”

With the latest phase now under way, money from the BP fund will be paid out between now and 2013.

And now: the claims, the process, and the continuing costs in the Gulf. We hear first from John Young, president of Jefferson Parish in Louisiana. I spoke with him this afternoon.

John Young, welcome to you. So — so, what are your concerns about the claims process so far?

JOHN YOUNG, president, Jefferson Parish, Louisiana: Well, it’s been very cumbersome, complicated. A lot of people are complaining that some people who don’t deserve to have been compensated have been, and those who deserve to be compensated haven’t been.

Some of the smaller claims have been paid, but some of the larger, more complex claims have not. I have been in contact with Mr. Feinberg in trying to get him down to Grand Isle and Lafitte, Louisiana, which is part of Jefferson Parish, to have a town hall meeting in early to mid-December, so we can air out some of these problems.

JEFFREY BROWN: Who is getting the money so far?

JOHN YOUNG: Well, you are having — you have bartenders in New Orleans, Louisiana, who are getting money. You’re having some boat owners are getting some money. But the big commercial losses are not being paid.

And now that it’s moving into a different phase, and they have to sign these releases, it’s causing a lot of difficulties, and a lot of people aren’t going to do that, and it’s going to push a lot of people into litigation.

JEFFREY BROWN: Well, explain that a little bit more for us, because that is the new phase that Mr. Feinberg has brought out today, where people will have to decide about taking lump sums, but waiving their rights to sue, right?

JOHN YOUNG: Correct.

JEFFREY BROWN: So, you’re saying that’s causing some concerns there or questions?

JOHN YOUNG: Oh, absolutely, because this is going to be a marathon, not a sprint. And in terms of future damages, a lot of people aren’t in a position, even with professional help, to assess what their future damages may be.

And to require them to sign a waiver of all future rights, they’re not in a position to do that. Their losses aren’t going to be fully known for maybe a year or two. But, in the interim, they have suffered some serious short-term losses.

Now, there is going to be an interim situation where they can continue to get quarterly payments for past losses, but, in terms of future losses, Jeffrey, they’re being left with very little alternatives, other than to retain council and pursue litigation, because, at this point in time, I would advise them not to sign a full release, because they’re — they’re — they’re — the extent of their future damages are unknown.

JEFFREY BROWN: So, you’re advising people, you would advise them, not to sign…

JOHN YOUNG: I would, yes.

JEFFREY BROWN: … not to sign right now?

So, what would you like? You and the people in the community, what would you like from Mr. Feinberg and this fund at this point, not to go this far this soon? Is that what you’re saying?

JOHN YOUNG: Correct. And I think one approach — and, again, I’m just throwing this out off the top of my head, being a lawyer myself — one approach would be to pay these people and allow them to collect some moneys, and use it as a credit toward any potential damages they may have down the road against BP.

And by allowing them to have a credit, I think you could process a lot more claims and avoid litigation down the road, instead of making them sign a full release, when they don’t know the extent of their damages, because, when somebody is confronted with that release, most of them are going to go consult with a lawyer, and a good lawyer is going to tell them not to sign it.

JEFFREY BROWN: And just give us — before I let you go here, briefly, give us an update on the situation there in terms of the continuing impact in your community, environmentally and economically.

JOHN YOUNG: Right. We’re still — we’re still removed from, obviously, the response phase of the recovery, but we’re still finding oil in patches in the marshes, bays, wetlands, and estuaries. We’re finding oil six inches to two feet below the beach level of sand.

And we’re continuing to fight with BP about removal of anchors that they have left in the waterways, which pose a hazard to navigation. We’re continuing, at the parish level, municipal level, to continue to fight with BP for reimbursement.

I do want to say that our seafood is the best in the world, and it’s now the safest, because it’s been the most tested. And I want to get out the word that it’s safe to eat Louisiana seafood, and it’s still the best-tasting in the world. And I for one haven’t stopped eating it from day one. I have been eating it since April 20, when the well blew.

So, we are recovering, but it — again, it’s going to be a marathon, not a sprint. And — and there’s still a lot of work to be done.

JEFFREY BROWN: All right. John Young is the president of Jefferson Parish in Louisiana. Thanks so much for joining us.

JOHN YOUNG: Thank you, Jeffrey. I appreciate it. Happy Thanksgiving to you.

JEFFREY BROWN: And to you.