Oil Spill Fund Chief Says He is 'Beholden' to Victims

Kenneth R. Feinberg, who was recently appointed by President Barack Obama as the Independent Administrator of the Gulf Claims Facility for the $20 billion BP Deepwater Horizon oil spill compensation fund, speaks at the Economics Club in Washington, 19 Jul 2010

Kenneth Feinberg, the administrator of a $20 billion compensation fund for the massive oil spill in the Gulf of Mexico, says he is independent of President Barack Obama and the energy company BP who agreed to put him in charge.  Feinberg appeared before the House of Representatives Judiciary Committee on Wednesday.

Kenneth Feinberg is the man responsible for making sure fair compensation is provided to those affected by the explosion of the BP-leased Deepwater Horizon oil rig on April 20th that killed 11 workers and triggered the largest oil spill in U.S. history.

"I am in charge of an independent Gulf Coast claims facility," said Feinberg.  "Under the arrangement entered into between the administration and BP, I am designing and administering an independent facility.  I am beholden to neither the administration nor BP.  I am really beholden to the people who live in the Gulf [of Mexico]."

Feinberg acknowledged that BP is paying his salary and the salaries of those working for him.

Republican and Democratic members of the House panel lavished praise on Feinberg for his fairness and service to the nation in administering compensation funds for the 2001 terrorist attacks, Agent Orange victims of the Vietnam War and victims of the Virginia Tech University massacre three years ago.

Feinberg said the Gulf Coast claims fund will be operating in August, and he told those harmed by the oil spill that the fund will be more generous with them than any court might be.  Feinberg explained that claimants can receive initial emergency payments for six months without giving up their right to sue.  After that, claimants can decide whether they want to accept a lump sum payment for all future damages, or decline it and retain the right to sue for damages in court.  Feinberg said there is no need for victims to hire an attorney because his facility will have attorneys on staff to provide legal services to individuals free of charge.

Feinberg told the House panel that many claims will be easy for the facility to decide, such as fishermen and oystermen who have lost income due to the oil spill, and that victims can be compensated for lost health insurance or tourism revenue and not only damages directly related to the spill.

In this photo provided by the U.S. Coast Guard, Ronnie Rouse, of T&T Marine Salvage, a company contracted to clean tar balls off of Galveston beaches, left, and Petty Officer 3rd Class Andrew Garcia from Marine Safety Unit of Galveston, discuss how to dispose of a tar ball on East Beach in Galveston, Texas 6 Jul 2010

But Feinberg said other claims would be more difficult to decide, citing this hypothetical case:

"I own a hotel 20 miles for the beach, am I eligible?  I have lost 30 percent of my guests because of the spill.  I don't use the beach; I don't fish.  But my tourism is down.  Is that an eligible claim?" he asked.

Several lawmakers asked questions about homeowners along the Gulf of Mexico who cannot sell or rent their properties, and real estate agents who have lost business, and whether they would be eligible for compensation.  Feinberg said they probably would have a difficult time winning in a court of law.  But he said he wants to be just and that he will try to develop a solution for them.

BP has been criticized for delays in processing claims.  Feinberg made clear that his facility will take over all claims from BP in August and will operate for three years.