Ken Feinberg Playing Financial and Emotional Hardball
All affected by the BP Oil Spill Catastraphuk have a quickly approaching deadline to face.
Tomorrow, November 24th is the last day to file for emergency payments from British Petroleum’s $20 billion dollar escrow. Beginning Thursday the choices they face become much more difficult and the rhetoric from the “neutral” arbitrator, Ken Feinberg appears designed to increase the pressure in an already pressurized situation.
Originally, when this account opened the people of the Gulf Coast affected by the spill were told they would have emergency payments within 24 hours and business, inside of a week. The payments were promised to be fast and fair and after November 24th, people had two options, they could waive the right to sue and accept a final payment from Feinberg which he promised would be more generous than any court, or they could turn down the final payment and sue BP for damages. In the past six months a few changes have been made to the process. Now, people also have the option to continue applying for damages every three months without waiving their right to sue up until August of 2013 whereupon all payments end and they will have to accept a final payment from the escrow to cover future potential damages or they will have to sue BP.
On the face of it, this could be considered reasonable, until you understand that not only has Feinberg turned out to be about as efficient as the DMV, but his rhetoric is becoming more and more reminiscent of Monty Hall, playing “Let’s Make a Deal” with people’s lives while British Petroleum waits in the background ready to reclaim whatever remains in the account once this is all said and done.
Of the $20 billion dollar account, only $2 billion has been paid out so far. 400,000 claims have been filed and about 122,000 have been paid or approved for payment. 60,000 have been denied and 147,000 are under review. These are overwhelming numbers, but when Feinberg rode into town he made a lot of promises: he would take the reigns from BP and get this done, he was going to set this financial shipwreck right, he was the people’s crusader who was going to get them back to their previous lives of solvency, promising to be more generous that any court, more generous than anyone could ever dream, but you know what they say about promises that are too good to be true.
Yeah, get in line and wait.
Of the 250,000 claims still in waiting, while Feinberg accepts some responsibility for this and has upped his workforce, he is putting most of the blame on the people of the Gulf Coast for not having enough documentation and some, for committing outright fraud. The payments that are being made, many consider them to be low and some are starting to believe these payments are being kept low and under review with the coercive purpose of getting people to accept a final payment offer.
Keith Ladner, a Mississippi seafood processor who has been out of business since the spill said, “If he keeps everybody hungry, they’re going to have to take any kind of settlement…we’ll have to take whatever he offers.”
Feinberg denies this, but with every passing day he keeps the people waiting, his credibility diminishes and while he gets to set his own timetable, claimants don’t have this luxury. Their bills need to be paid. Their houses are slipping into foreclosure. Utilities are being turned off and businesses are going bankrupt. The situation in the Gulf has become so pressurized, even the Justice Department has asked Feinberg to speed it up and be more transparent in how the claims process works.
Even worse, Feinberg appears to understand this and is taking advantage. He warns that if they choose not to accept a final payment now, to instead keep applying for interim payments while they decide if they want to sue, “they’ll have to show prospective damage,” and going even further, “But my offer may not be available to them a year from now if everything is back to normal.” In other words, by not accepting a final payment now and retaining the right to sue BP, they will have to prove their losses and the final settlement offer may get smaller by the day.
This is your neutral arbitrator.
This is the man whose firm has been paid $3.5 million dollars in fees by British Petroleum so far to administer the account.
This is the man whose stated goal all along has been to keep people out of the courts, making promises of generosity.
That’s all great if you are trusted, but when the perceptions change and you are now seen as a part of the problem rather than the solution to it, you become just one more affliction on a region who’s already suffered too many, a region that never asked for any of this.
So Feinberg, tone down the rhetoric and do your job, transparently, fairly…and not fair to BP, but to the residents that BP screwed. As a neutral arbiter you are there to help reduce pressure, not increase it.
In other words, quiet down and do your job as promised. If you are no longer perceived as generous or timely and the entity that would benefit from you being neither is the same corporation that pays your bills and unleashed this disaster, the whole claims process would appear to be a sham.
You don’t want this and neither do the people of the Gulf Coast.
Unfortunately, people are depending on you.
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Have a nice day.