BP spill victims struggle with restrictions on payouts

13th June 2011   ·   1 Comment

By Susan Buchanan
The Louisiana Weekly

Gulf residents and businesses hurt by the BP spill are frustrated by red tape, low payouts and pressure not to sue the oil giant, along with Gulf Coast Claims Facility office closures this month. And that’s just a short list of their grievances about the claims bureaucracy.

GCCF administrator Ken Feinberg runs a $20 billion claims fund with money from BP. But so far only a fraction of it, about $4.4 billion, has been distributed.

Spill victims in tight financial straits are giving up their rights to sue BP in exchange for quick money to pay bills. In Pointe a la Hache in Plaquemines Parish, Byron Encalade, president of the Louisiana Oystermen Association, said BP claims compensation to local fishermen has been too low, starving and pushing them to sign final releases. A final release is an agreement to drop spill-related claims against the GCCF and BP.

In the GCCF labyrinth, claimants can apply for various types of compensation, including “interim payments,” available quarterly until the expiration of the facility in August 2013; “quick payments” for individuals and businesses that received earlier, “emergency advance payments,” covering six months of losses.

Claimants can apply for final, full payments based on 2010 losses. And quick-payment final claims give individuals, who agree to release rights to sue, $5,000 within two weeks, with no need to submit more paperwork or endure more claims reviews. Businesses giving up their rights can get $25,000 in a final, quick pays.

So far the GCCF’s payouts to individuals and businesses have mainly been the final, quick type.

Kim Chauvin, who runs fisheries operations in Terrebonne Parish, said fishermen and seafood processors were on the front lines of the spill, and Ken Feinberg pledged to help them immediately. “But we’ve seen little of the claims money,” she said. “I’m still waiting for payment on our Mariah Jade Shrimp Co. seafood dock and our A.J. Horizon shrimp vessel. I’ve sent in full tax, sales, and profit-and-loss records, and all the necessary documents to the GCCF ten times over, and have even handed copies of them to Ken Feinberg.”

She said “we’ve spoken with four investigators, and spent three to four hours with each of them but still haven’t been paid for Mariah Jade Shrimp and A.J. Horizon, and were only paid small percentages of claims on our other two companies. No one has told us whether we’re any closer to getting an emergency payment.”

Chauvin added “our seafood dock business is suffering from no money, no capitalization.”

In industry categories paid by the GCCF to date, fisheries trail well behind retail sales and services and food, beverages and lodging. And Louisiana, the state most heavy oiled by the spill, is running second to Florida in GCCF payments, with Alabama coming in third.

Joel Waltzer, an environmental attorney with Waltzer & Wiygul in Harvey, La., said “Florida claims tend to be tied to tourism, while Louisiana claims tend to be tied to actual oil and damaged fisheries. Occupancy rates are easy to measure but damage to fisheries takes science and time.”

In Belle Chasse, non-profit Seedco’s Fisheries Assistance Center has helped hundreds of oystermen, shrimpers and others navigate the GCCF claims process. Mark Maher, New Orleans-based managing director of Seedco Financial Service’s Louisiana office, said “we know that many fishermen are accepting quick payments because they will receive reimbursements significantly faster, but in doing so they may not receive adequate compensation for their losses and will lose all future rights to claims. Many fishermen continue to express frustration about the lack of transparency, clarity and consistency in the claims process.”

Waltzer explained the financial realities for claimants. He said “the GCCF forces people into quick-pay final deals by refusing to pay interim damages as required by law. Less than 10 percent of interim claims have ever been paid, while more than 95 percent of final, quick claims are done.”

Waltzer continued, saying “now a new twist is added to the sales pitch—get your quick-pay money before the door closes in 2013. When you study GCCF’s statistics and talk to those who took the money, you see desperate people just giving up.”

Some fishermen continue to press for more money, however. Maher at Seedco said “we continue to see an increase in demand for GCCF claims assistance at our center as many fishermen have indicated that they intend to file interim payment claims, subsistence claims and final payment claims.” But, he noted, “in our conversations with fishermen, we hear concerns that, with the June closure of some GCCF offices and reduced hours at others, their access to information and claims submissions will be restricted.”

The Grand Isle, Lafitte and Morgan City offices were for the most part closed this month, but will be open one day a week and will see visitors by appointment. Several GCCF offices in Florida and one in Alabama were also shut.

Amy Weiss, Washington, D.C.-based assistant to Ken Feinberg, said “consolidation of these offices continues the effort of the GCCF to provide the most efficient way to assist claimants by reassigning our most knowledgeable staff to the busiest claims offices.” All personnel at sites that are closing have been shifted to nearby GCCF offices, she said.

Fishermen aren’t the only ones stymied by the GCCF payments process. At Casamento’s restaurant in New Orleans, co-owner C.J. Gerdes, said “70 percent of everything we sell is oysters and 95 percent of our business is seafood. I sent 130 pages of bills to the GCCF, showing what I lost in September, October and November of last year, and they came back and told me that I hadn’t proved my business was down that much as a result of the oil spill.”

Casamento’s, which has served raw and fried oysters on the same Magazine St. spot since 1919, closes every summer and reopens in the second week of September. Last September, Gerdes had trouble finding enough Louisiana oysters, which his restaurant usually gets from two local suppliers.

He said “the GCCF turned me down, but I heard they gave Popeyes’ employees all kinds of money.”

Popeyes has a franchise restaurant down the street from Casamento’s. AFC Enterprises, Inc., the operator of Popeyes, did not file any GCCF claims, according to Karlie Lahm, company spokeswoman. “Individual franchise owners may have filed claims, but we don’t have any knowledge or information about those claims,” she said.

Meanwhile, Feinberg raised eyebrows last week when he said at a GCCF oversight hearing in Baton Rouge on June 6 that he hadn’t seen any claims suggesting that the spill cleanup caused illnesses. GCCF has so far paid out over $391,000 in physical injury and death claims to date.

Last week, Feinberg told The Louisiana Weekly that “we have not yet concluded whether medical documentation of a spill-related problem justifies a claims payment.” When asked if someone with medical bills from, say, a rash related to the oil spill would be compensated, Feinberg said “they would have to have documentation proving the rash was caused by the spill, and they would have to seek GCCF claims compensation outside of what their health insurance covered.” He didn’t recall ever seeing a claim submitted for a rash to his fund.

William Loiry, chairman of the Gulf Coast Leadership Forum, said an April summit organized by the forum in New Orleans included sessions on health, and he noted “numerous Gulf Coast residents spoke about their medical difficulties arising from the oil spill and dispersants, and told Feinberg in the concluding, general session about their health problems.” Feinberg was a keynote speaker at the summit.

Loiry continued, saying “medical evidence from Florida to Texas indicates that at least 100,000 Americans are suffering health problems as a result of the oil spill and the toxic dispersants.” The GCLF is working with the U.S. Dept. of Health and Human Services to provide training to doctors and medical facilities along the Gulf to respond to oil-related, medical crises. “And we are working with Silicon Valley to develop a database to track individual medical cases related to the oil and dispersants,” he said.

Meanwhile, in Terrebonne Parish, Chauvin said she resented being continually asked by GCCF for more paperwork and seeing few results. “At every meeting that Mr. Feinberg held in our parish, he always promised to look into our claims personally, but many of us are still not paid. I have called into the Ohio office, spent time in the Houma office, spoken with Feinberg and the GCCF adjustors, and have received almost nothing.”

She added “the GCCF is causing people so much stress, anxiety and frustration. How much longer does Feinberg think we should wait?” And she said “shame on BP for getting away with these antics because, after all, Feinberg is working for BP.” Salaries of Feinberg and his staff are paid by BP, outside of the $20 billion GCCF fund.

In Plaquemines Parish, Byron Encalade heads the GO FISH Coalition, or Gulf Organized Fisheries in Solidarity & Hope—representing fishing groups across five Gulf states. The group is helping fishermen get back to work after the BP spill.

May Nguyen, strategist for GO FISH, said “Gulf-wide fishing communities of diverse backgrounds have two major demands. First, that BP issue immediate and fair interim payments and insert a clause in the GCCF waiver-and-release form that confirms BP’s responsibility to pay if a claimant suffers greater-than-expected losses from the spill.”

She continued “second, we’re demanding that BP commit to a billion-dollar, subsistence-use fund to pay for damages BP caused to a lost Gulf way of life and use of the fisheries.”

GO FISH’s requests will be submitted in a petition letter to President Barack Obama and U.S. Senators and Representatives in July. “We have gathered over a thousand signatures on www.thepetitionsite.com and are still collecting them,” Nguyen said. “Fishermen or anyone can sign it.”

This story originally published in the June 13, 2011 print edition of The Louisiana Weekly newspaper.