Ken Feinberg has been getting a lot of flack from people in the Gulf Coast regarding his claims process. The accusations are flying a mile a minute, some of them coming from various members of Congress, the Justice Department and the Attorneys General of Alabama and Mississippi. Apparently having had enough of this, Feinberg wrote an editorial in last Sunday’s Press Register, where he took to task his critics and specifically the various Alabama politicians, and their claims regarding his handling of the claims process…
“Both public officials have every right to their opinions but no right to distort the facts…”
Whereupon Ken begins to do precisely that.
Shall we review?
He reports the GCCF has distributed some $4 billion dollars to 200,000 individuals and businesses in the Gulf region.
He doesn’t report $16 billion dollars is remaining in the fund, nor that he has estimated he will be giving half of it back to British Petroleum when this is all said and done. He doesn’t mention getting to this point has taken over eight months…while needy families and business wait, struggling, nor does he mention that a District Court Judge has ruled he is not independent of British Petroleum, but is more of a “hybrid” entity, thus making all of his claims handling suspect…or, would you be inclined, after a doctor hits you with his car, to have that same doctor do your medical evaluation and determine if you were healthy or needed compensation and if so, how much you should get?
He reports the GCCF has not been “tight-fisted” when it comes to paying claims and cites as proof the fact that 660 people have appealed his offers to the Coast Guard who has agreed with the GCCF’s decision every time.
He doesn’t report that he wrote the rules, or methodology to determine payment of these claims, which bases the payment scheme on the Gulf being back to normal by 2013, despite the fact that Prince William Sound still isn’t back to normal as a result of the much smaller Exxon Valdez spill, even 20 years later. He doesn’t report that of the 3000 comments received during the public comment period regarding this methodology, about ten thought the methodology was good, made sense, was fair…and who knows how many of those ten were written by executives of British Petroleum. He also doesn’t report that in those appeals to the Coast Guard, they are all for claim offers under $250,000 dollars, which means the people doing the appealing maybe aren’t the most wealthy of the people involved in this process who again, are fighting against the stacked deck that is the GCCF methodology.
He continues to report the many individuals who have taken quick payments did not do so under coercion, but because they have decided the already received an adequate EAP payment or cannot document anymore damage from the spill, citing as proof there has been no groundswell of complaint from the people who have taken said payments heard by the GCCF.
He doesn’t report that, again, these people have been waiting since last August when he took over and really needed the money. Now agreed, some people go for the quick pay because they have no way to document more damage, but I would argue more people have taken the quick pay out of financial desperation, trying to pay rent one more month or clear some bills because the GCCF process is taking so damned long…intentionally? Depends on who you ask. As far as a groundswell of complaint about the quick payments…apparently Feinberg never read the public comments on his methodology because the complaints are there. He must also never read the Times Picayune, the Press Register, the New York Times or any of the comments sections on ProPublica, or this and many other blogs.
Ken, if you go out of your way to ignore the groundswell and it would appear you have, you ain’t gonna find it…
And Ken also reports on the charge of GCCF delays in making payments by saying his critics fail to mention that more than 80 percent of the 283,000 claims filed for final, interim and quick payments — including 35,753 from Alabama — have already been processed.
Processed, yes, but beyond the quick payments…
Not many at all.
Ken reports the $20 billion fund would be exhausted in a week if the GCCF paid claimants with no documentation solely because the claimant asked the GCCF: “Trust me.”
What Ken doesn’t report is due to the lack of transparency regarding these claims, “Trust me,” is precisely what Ken is asking the Gulf Coast to do, while he is being paid by British Petroleum.
Finally, Ken decides to kiss a little ass: “I join Congressman Bonner in wholeheartedly praising “Alabama’s sugar-white sandy beaches” and “world-famous seafood.”
Whereupon he decides to quickly concede the standard: “…the GCCF must be more transparent and consistent in rendering its decisions. The GCCF has been far from perfect — the inevitable result of receiving almost 1 million claims from all 50 states in less than one year of operation!”
What Ken doesn’t report while kissing a little ass is that he has been promising transparency for months to every elected official he can find, but doing very little about it. He has also promised to be more consistent for months, and isn’t, and like always, he stresses how big this job has been, huge, enormous…I mean holy shit! Who could have ever foreseen how absolutely gigantic this would be?
Which is a nice, attempted distraction from a more accurate representation:
Hey, I kind of screwed up a lot of people on this one because I didn’t accurately gauge the size of the project I decided to undertake, and rather than admit my lack of foresight, preparedness, and the fallacy of all those promises I made early on to the people of the Gulf Coast, you remember…about how fast and generous I was going to be, well I’ve just decided to keep throwing claim statistics at you while I duck out the side door, just in time for British Petroleum to give me a raise.
Now, let’s take a look at the current statistics from the GCCF website:
Total Quick Payments:
113,763 total quick pay claims filed. 109,955 claims paid. Percentage of claim paid: 96%
Total Interim Payments:
75,471 total interim claims filed. 9,112 interim claims paid. Percentage of claims paid: 12%
Total Final Claims:
105,709 total final claims filed. 21,261 final claims paid or indicated they would accept. Percentage of claims paid: 20%
So what can a reasonable person deduce from these numbers?
1. Of all the claims filed, the percentage of interim claims paid is lowest. Seeing as how the interim claims are the only claims one can accept while retaining the right to sue British Petroleum, Feinberg’s employer, this can lead a reasonable person to believe that perhaps these claims are being stalled. After all it is in British Petroleum’s interest to have those rights waived, and to get claimants into one of the categories where they don;t have to continue to pay out money.
2. Of all the claims filed, the percentage of quick pay claims paid is far, far higher than the other two types. This could certainly be because they are the easiest claims to audit, because there is no further documentation needed (although in the fine print could be a call from Guidepost Solutions, the investigative arm of the GCCF, checking you out for fraud despite the fact these claims were supposed to be paid out with no questions asked for people who previously received EAP’s). Nonetheless, at $5,000 dollars for individuals and $25,000 dollars for businesses, these claims are also the cheapest to resolve, and with a signature on a waiver, releasing your right to sue British Petroleum, resolving these claims is by far in the best interest of British Petroleum and therefore, the GCCF and Ken Feinberg.
3. When it comes to the final claims, which also requires one to waive the right to sue British Petroleum, the GCCF website states that of the 105,709 final claims filed, the GCCF has reviewed 84,767 of them, already paid 17,000 and have made offers on an additional 15,000, of which 4,000 have indicated they would accept. If only 21.000 have accepted a final payment out of over a hundred thousand claims filed, these are also moving extraordinarily slow and if they are so generous, what is the hold up for the 11,000 claimants who have received final offers and not as yet accepted?
4. It is this writer’s opinion that claimants are being stalled into filing quick payments as they are the only ones being paid with any sense of urgency. As people grow increasingly desperate, financially in the Gulf, the quick payment becomes increasingly attractive, like buying the rent-a-wreck because its your only way to work, and your running late. In the end, these payments have a far higher chance of leaving a claimant financially screwed.
Lastly, let’s take a look at the statistics from the GCCF website regarding the amounts of the claims paid out.
Everybody knows the quick payment, which is $5,000 dollars for individuals and $25,000 dollars for businesses. The interim payments made average out to $6700 dollars for an individual and $28,000 for businesses. The final payments accepted average out to $9200 dollars for individuals and $55,000 for businesses.
Keeping in mind that for the vast majority of these claims, this is meant to cover all damages from the spill in their entirety.
A year after the oil spilled, some industries are beginning their recovery, yet there is a deep skepticism on the safety of the seafood across the country and many, many people remain out of work or have been forced to leave the Gulf Coast to look for work elsewhere…all the while there are increasing sicknesses occurring that many are blaming on the toxicity of the oil and dispersants. The health of the Gulf is still very much in doubt, as is the sustainability of the sea life living there.
So, in a nutshell, what Feinberg calls generous…I call getting screwed. It would appear to me the only person British Petroleum is being generous to in the Gulf Coast is Ken Feinberg.
Nonetheless, Feinberg writes:
At the end of the day, neither Jo Bonner, Luther Strange nor Kenneth Feinberg will determine the ultimate “legacy” of the GCCF. That is a decision that will be made by the citizens of Alabama and those residing throughout the Gulf.
Ken can write whatever he likes in his editorial, glossing over certain facts and figures available on his website, but It would appear to me BP and Ken Feinberg are doing their best to write this legacy.
And from what I can tell, that legacy is awful.
Have a nice day.