Nov 19 2010

Press-Register: Ken Feinberg promises to add transparency to oil spill claims process

Mobile Press-Register

Following a Thursday night meeting with both of Alabama’s U.S. senators, oil spill claims czar Ken Feinberg vowed to fix problems with the reimbursement process by creating a new task force and introducing more transparency.

Feinberg said he would address the matter quickly and review individual claims himself before the task force hits the ground.

“I’ve learned over the years that it is wise to listen to Sen. Shelby and Sen. Sessions,” Feinberg said after the closed-door meeting on Capitol Hill.

“I’ve got the message,” Feinberg added.

Sen. Richard Shelby, R-Tuscaloosa, said he called the meeting with Feinberg to voice the anger, frustration and confusion that coastal residents participating in the claims process are feeling.

“We think the payment system has got to change,” Shelby said, standing alongside Feinberg and Sen. Jeff Sessions, R-Mobile.

In a news release, Shelby added that Feinberg’s Gulf Coast Claims Facility was “not acting with appropriate urgency.”

That was mild compared to a Thursday morning announcement by outgoing Alabama Attorney General Troy King.

King issued a “consumer alert” — a designation the attorney general’s office often reserves for cases of ongoing criminal fraud — about Feinberg’s claims process, saying the claims administrator “works for BP” and has been misleading oil spill victims.

The alert cautioned Alabamians considering joining the claims process rather than suing BP PLC and other parties responsible for the massive summer oil spill.

Feinberg said it was King’s news release that was misleading. Spill victims are eligible to receive interim payments for three years without giving up their rights to sue, he said.

“I think that the attorney general’s consumer alert is a disservice to the citizens of Alabama,” Feinberg said.

Feinberg was much more receptive to concerns voiced by Shelby and Sessions. The senators said they would make sure Feinberg follows through.

“It’s not an easy matter, but what we’re saying is, we’ve got some people that are in crisis now, and they need help now,” Sessions said.

“I’ll let Mr. Feinberg say how he feels like he can meet that challenge, but I do appreciate him assuring us that he will do it,” Sessions said, “and we will insist that he do.”

Feinberg said his new task force will consist of accountants, who will meet with businesses and review claims to ensure that spill victims are properly compensated.

“If they are adequately documented, ... I will bend over backwards to pay these businesses,” Feinberg said. “The task force will be in Alabama shortly after Thanksgiving.”

Feinberg has encouraged those affected by the spill to join the claims process.

But in the attorney general’s alert, King said Feinberg has been paid an $850,000 monthly fee by BP and is therefore not the neutral arbiter he claims to be.

Other consumer alerts issued recently by the Attorney General’s Office include warnings about scams to obtain Alabamians’ personal financial information and attempts to trick residents into sending checks to pay “taxes and fees” for fictitious lottery winnings.

Chris Bence, King’s chief of staff, declined to say whether he would classify Feinberg’s leadership of the claims process as fraudulent.

“I wouldn’t classify it at all,” Bence said. He added, “I think I’ve classified it just by putting it into the category of practices that are misleading and could cause financial harm to our citizens.”

Feinberg said that in the last 11 weeks, his Claims Facility has paid $375 million to Alabamians.

As he left Shelby’s office Thursday night, Feinberg discussed with congressional staffers the calls for him to be fired.

“Would anybody else want this job?” he asked.