$20 Billion BP Spill Fund Finalized, But 40,000 Claims Still Ignored


Photo: The U.S. Army, Flickr, Creative Commons BY 2.0

The $20 billion escrow fund that Obama negotiated with BP is now being finalized, and BP is preparing to deposit the first $3 billion into it. The fund will help pay for the many claims being filed by Gulf residents who have suffered personal damage, lost their jobs, or had their businesses ruined by the BP spill. But the process, predictably, isn't going so smoothly for everyone. Out of the 145,000 claims filed so far, BP has yet to respond to nearly 40,000 of them -- leaving thousands of businesses and livelihoods in the balance. The AP has the story:

BP said Monday it had received 145,000 claims from residents and business owners like Lindsay citing lost income because of the massive spill in the Gulf of Mexico, and had paid out $324 million without denying a single claim.

That sounds pretty good, until frustrated residents and officials point out that 39,000 claims are in limbo - some of them, including Lindsay's, have been there for months. Some that have been paid are only partial payments, and many of those people are still fighting for more money.

So why the delay? Many believe that the culprit is politics. In many of the less straightforward cases, like the woman profiled in the AP piece who runs a wedding planning business that now faces bankruptcy due to a spate of cancellations, it seems like BP is punting the obligation down the line. Instead of making any calls, and risking public relations damage, the oil giant is believed to be intentionally leaving many of the claims in limbo:
"Therein lies the problem," Mississippi Attorney General Jim Hood said recently. "They don't deny them. They just hold them open forever."

Hood speculated that BP PLC would rather wait for Kenneth Feinberg, the federally appointed administrator of the $20 billion compensation fund BP established at the behest of the White House, to take over the claims process this month. That way, if a claim is denied, "he's the bad guy" instead of BP, Hood said.

Which would explain why wedding planners, folks in the tourism industry, and so forth are having a tougher time than others getting their claims filed -- it's hard to deny a claim to a fishermen who can no longer fish, for example. BP, for its part, denies that this is the case, and says that it's still evaluating 26,000 cases. Either way, a better system needs to be implemented, and fast -- 40,000 lives and/or businesses are counting on it.

More on the BP Gulf Spill
The BP Gulf Oil Spill By the Numbers
Angry Fishermen Take On BP at Town Hall Meeting (Video)
BP Rage (Video News)

Tags: Economics | Gulf Oil Spill | Oil | Oil Spill | United States

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