Feds: Oil spill claims process needs transparency

NEW ORLEANS (AP) — The Justice Department is urging the administrator of the $20 billion fund for Gulf oil spill claims to show greater transparency about the process so the victims can feel they are being treated fairly.

Associate Attorney General Thomas J. Perrelli said in a letter to Ken Feinberg on Friday night that this is a critical time for the claims fund as it transitions from initial emergency payments to paying interim and final claims.

Perrelli said he continues to have concerns about the pace of the claims process. He said many of the people and businesses who have claims under review don’t have the means to get by while they wait for their claims to be processed.

“While you have indicated that poor documentation has made it difficult to address some claims quickly, over the past two weeks the number of claims requiring additional documentation has actually gone down — while the number of claims under review has increased significantly,” Perrelli wrote to Feinberg.

Feinberg told The Associated Press on Saturday he has paid out roughly $2 billion already to some 125,000 claimants. He estimated the total draw on the fund to date at $6 billion, which he said includes government and cleanup claims. An official with the Deepwater Horizon Oil Spill Trust could not immediately be reached to verify that figure. Feinberg described the payments to individuals and businesses as generous, but agrees there is room for improvement.

“I think it’s always wise to listen carefully to constructive criticism from the Department of Justice,” Feinberg said. “They want me to improve transparency, and I plan to do so.”

On the transparency issue, Perrelli said more information should be provided to victims about the principles being used to decide claims. He said there is very little reason not to do so.

BP PLC agreed to pay Feinberg’s law firm $850,000 a month to administer the fund. Feinberg also oversaw the $7 billion government fund for families of victims of the Sept. 11, 2001, terrorist attacks.

When the oil spill claims fund was announced in June, officials said the fund could be used to pay all claims, including environmental damages and state and local response costs, with the exception of fines and penalties.

Money left over likely goes back to BP. The Justice Department verified that leftover money would go back to BP, but said the money would first be held in escrow for a number of years to make sure all claims are settled.

“I don’t really worry about that because if there’s money left over from the $20 billion, so be it, as long as anyone eligible has gotten paid,” Feinberg said.

An offshore oil rig being leased by BP exploded in the Gulf of Mexico off Louisiana on April 20, leading to more than 200 million gallons of oil spewing from BP’s undersea well. Eleven workers on the rig were killed.

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