Feinberg fights back? An answer to his answer to the Strange letter…
So, as I commented two days ago, Alabama Attorney General Luther Strange fired off an angry letter to Ken Feinberg, the BP paid administrator of BP’s compensation fund outlining several objections he had with the process, chief among them being the snail’s pace and meager size of the payments, the lack of transparency in the process, and the stress this is causing to the citizens of his state. Mr. Strange demanded that Ken Feinberg “stop dragging his feet.”
This apparently didn’t sit too well with Mr. Feinberg who promptly wrote a letter of his own, to rebut the charges made by Strange…
Let’s review, shall we?
When it comes to the Quick Pay, Attorney General Strange asserts the reason so many are accepting the quick payments is that claimants are sick of dealing with the GCCF. Feinberg disputes this by writing that claimants take the quick payment because the “claimant cannot prove any further damage.” Maybe, maybe not…many are curious to see if Feinberg is correct in this assumption but its awfully hard tell with so little transparency in the process. Besides, how are we to know if people cannot prove any more damage? Claimants who have accepted quick payments are no longer trying to do so which brings us back to Strange’s assertion, that people choose quick payments out of frustration. One need look only so far as some of the comments being posted by claimants to this website, or the GCCF’s own methodology comments page:
From a business/individual on February 16th, “This methodology is so unfair it now looks good to individuals and business to take the quick pay, you hold all the money and the cards.”
From a business owner on Feb 15th, “Your formula is definitely shaking-down people and businesses that are in a weakened position and are under duress.”
From an individual on Feb 14th, “The thing that really grinds my gears is that you are sitting on 16 billion! You only paid out 3.5 billion to 168,000 claimants…now 1/2 of those are gone because they were desperate and took the quick pay.”
I could continue in this vein, but you get the idea.
Feinberg also combats Strange’s accusation that the GCCF is paying people to go away, that the GCCF is working diligently to protect BP and secure releases for their liability. Feinberg writes how nothing could be further from the truth, that these release are designed to “bring closure to the prospect of endless litigation which is not beneficial either to claimants or the public interest.”
He neglects to mention litigation is also not beneficial to BP.
Nobody likes to go to court Ken, it is a long, drawn out process, but the idea that you are attempting to keep people out of court to give them closure would assume they have otherwise been “made whole.” Seeing how this is far from the case, your suggestion is condescending on two levels: the first being Gulf Coast residents can’t decide for themselves what constitutes closure and the second being people would be so stupid as to not see the waivers as ultimately saving British Petroleum a whole hell of a lot of money.
Next, Strange accused Feinberg of making meager payouts on final claims. Feinberg defends this by once again throwing out large numbers that don’t hold up to some simple math. He says the GCCF has paid $688 million dollars to 28,000 Alabamans. Okay, but this averages out to under $24,000 dollars per claim, a sum Feinberg calls “not an insignificant amount.” I would argue, like Strange, that it is quite insignificant as a large percentage of those claims are not individual claims, but business claims which receive much higher payouts and drive that average up. The future of the Gulf is unknown and the simple idea that these amounts, these averages will compensate for all present and future losses when twenty years after the Exxon Valdez, some industries have yet to rebound is again, laughable.
Feinberg points out that anyone can turn down his offer or appeal it to the Coast Guard. 467 people have tried this and 467 people have been denied, something Feinberg believes shows his process to be fair. Perhaps, or it might also show the Coast Guard is equally stingy and working with the same flawed recovery statistics as the GCCF, recovery statistics that claim the Gulf’s environment will be made whole inside of two years. This is doubtful, as a multitude of independent scientists suggest, and honestly, the Coast Guard has not been a shiny beacon of legitimacy throughout the past year…from Thad Allen’s sweeping pronouncement that they weren’t banning the reporters they were banning, to the way they stated Corexit was no longer being used when it was, to the way they accepted BP’s vastly flawed flow-rates before the well was capped, flow-rates that slowed down the spill response. In fact, I’d be curious to see any example where the Coast Guard didn’t give in to British Petroleum on pretty much anything over the past year, so why would the appeals process be any different? And this doesn’t even touch on the false hope involved in telling claimants if they don’t like the GCCF offer, they can appeal to a different body, a Coast Guard commission that has never ruled in any claimant’s favor.
Ken, isn’t that just kind of rubbing their faces in it?
Next, Strange expressed dismay about Feinberg’s continued inference of fraud being evident in claims made to the GCCF. Feinberg rebuts this by writing the GCCF has sent 1,035 claimants suspected of fraud to the Justice Department, “not an insignificant number.” Actually Ken, it is. Numerous studies have shown that after any major disaster, on average, 10% of claims in any claims process can be considered fraudulent. There have been over 480,000 claims made to the GCCF in total which would make the percentage of suspected fraudulent claims you forwarded to the DOJ ring in at far less than 1%.
Fraud is not a problem in the Gulf Coast claims process, regardless of suggestion by Feinberg, it merely serves as cover to the GCCF’s flaws.
Strange also wonders why Ken Feinberg now omits from his press releases the fact that 310,000 people were denied during the EAP process; the Attorney General further calls this omission another example of the GCCF not being “completely forthcoming.” Well okay, I’ll give that one to Feinberg. He pretty much states these numbers are common knowledge, and they are, so why would he have reason to hide them? The only thing I might consider is that when it comes to framing narratives, and Feinberg is indeed trying to promote the narrative that the GCCF is fair, he probably doesn’t want to start his recitation of final and interim claim numbers by reminding everyone just how many EAP’s the GCCF turned down. 310,000 denials with little to no transparency can cast a long shadow over a conversation on fairness.
Finally, Strange demands more transparency.
He wants Feinberg to release the amount of damages people are claiming versus the amount of damages the GCCF has offered to pay. In response Feinberg writes, “the release of such data would be a useless exercise; indeed it would be counterproductive.”
Useless and counterproductive to who? The GCCF? BP?
He goes on to cite a couple of examples where people have filed ridiculous claims, one person requesting the full $20 billion dollars while another claimant filed damages for $11 billion. Agreed Ken, those claims are ridiculous, but seeing as I can figure that out I’m pretty sure you can trust everybody else to see it as well. You write that people typically file for more damages than they can prove. and this is also true, but what Strange would appear to be looking for is a pattern of low-balling claims, and when your amounts offered are indeed meager, wanting to see this information in order to accurately evaluate your process seems entirely justified.
As I have written before, when it comes to the GCCF, full transparency is warranted. Transparency demonstrates a commitment to justice, to confidence, to credibility, but your credibility has been shown time and time again to be lacking, especially when Judge Barbier ruled you are not “independent” of BP as you so loudly trumpeted for months to anyone within ear shot of the Gulf Coast.
In fact, Barbier ruled you to be a “hybrid entity” of BP, and your claims to transparency are also a hybrid of the real thing, kind of…but not really.
The time where you could be taken at face value, where you could decide what is in the “public interest,” or how the release of information would be nothing more than a “useless exercise” are over. In fact, one could argue, as Strange does in a roundabout way, the only “useless exercise” going on in the Gulf is when you base any pro-GCCF arguments on your word.
Again, from the GCCF comments section come these words from an e-mail sent to you on Feb 14th, “I believe you should revert to the old BP calculations, they seemed fair and well thought out.” Now that is an impressive feat. Ken, once you were a self proclaimed savior to the Gulf Coast, but your Gulf Coast Claims Facility is so backwards, one claimant actually feels BP was the fair one, all along…
Methinks Strange is correct in his words.
Your’s are just one more empty harangue intended to deflect the reponsibility of failing the Gulf Coast.
Have a nice day.