Stresses his independence, advises participation, and calls on community for collaboration

On July 15th, Kenneth Feinberg used three Louisiana town hall gatherings – in Houma, Port Sulphur, and Lafitte – to explain how the Gulf Coast Claims Facility (GCCF) will work. Animated and lively, with a little Bostonian humor, Feinberg held the attention of each overflowing crowd for approximately 30 minutes, followed by 20 minutes of questions from the audience.

By coming to Louisiana and dealing with victims directly, at the invitation of Governor Jindal, Feinberg hoped to demonstrate his independence and concern for locals as lead administrator. “I’m working for you,” he repeated, and he called for local collaboration. “It’s not going to work from DC. It’s got to be from here, particularly if we are to weed out fraud… which could undermine the entire process.”

As Feinberg explained, the compensation plan includes two components: a no-obligation six month payment and a terminal payment with acceptance of release for BP. All victims can apply for the six month payment, up until three months after BP manages to contain the leak (which may end up being from the day of his town hall gatherings). However, if claimants choose to accept the second and final GCCF offer, they wave any right to bring further court proceedings against BP.

If victims do not consider the offer sufficient, they may turn it down and pursue higher payments through the courts. However, Feinberg views the lack of court proceedings associated with his facility as a win-win for both sides. “Everyone should come in,” and the matter will be over with in a matter of weeks or months, rather than years. To drive home his point, he mentioned other oil spills that still have ongoing litigation regarding compensation, decades after the event.

To further encourage participation, Feinberg assured confidentiality of all claims. While overall statistics of the process will become public, the GCCF will not share any of that information so as to connect it with any one individual or business. He even showed surprising flexibility by encouraging cash-only workers to apply, with whatever form of evidence they could use to verify such an income. Even those who may not be direct victims of the spill, such as manufacturers of oil industry parts and local fishing lodge owners were encouraged to apply for compensation for lost business.

While he defended the work of BP thus far, he was willing to acknowledge that the company had been less reliable at handling business claims. This failure became evident during the question-and-answer period. Two business attendees, including Mitchell Mark, President of SNEE Chemical Company, voiced frustration at not having their claims handled. Mark has 25 workers depending on him, and yet he has been waiting for two months to see any compensation.

Most audience questions revolved around the level of compensation, although one man, overcome with frustration, simply wanted to know whether the process was going to improve. “It’s going to get better,” Feinberg reassured the audience.

Many claimed that this was to be a bumper summer catch. Therefore, averages from the past few years may not be accurate, along with varying prices. “Show me!” Feinberg responded repeatedly. “I’m not going to deal in speculation – we can’t just do this on a handshake – but if you have evidence to justify such a claim, let’s see what you have.”

These questions brought forth many of the challenges associated with handling compensation, including whether the income is taxable and whether alternative employment ought to be deducted from payments. While Feinberg did respond to these questions, some points remained unclear. Still, the facility is being set up, and Feinberg estimates that it will be ready to go in the first or second week of August.

Although no one in the audience addressed Feinberg on the matter of fraudulent claims, he did mention it as a grave concern. When interviewed afterwards, he explained that the Department of Justice’s Criminal Fraud Division would “examine any suspicious claims.” Additionally, “built into the process of the claims procedure, [will be] our own experts and consultants examining these claims for fraud.” However, he is yet to appoint a leader for or arrange such a unit within the GCCF.

Fergus Hodgson is the capitol bureau reporter with the Pelican Institute for Public Policy. He can be contacted at, and one can follow him on twitter.