“Give Away $5 Billion”
By J.D. Neeson, President
Letter to the editor of Bloomberg Businessweek, October 2011, as shown at the bottom of this entry.
I enjoyed your section on “How To …” a few weeks ago. It was quite fun.
However, as a claimant in the Gulf spill, I believe the section written by Kenneth Feinberg, “How to give away $5 billion,” was grossly mis-titled.
The claim process was a disaster in its own right. We went through five different sub-contracted claim processing companies and innumerable “claim representatives,” none of which were able to explain the process or even state where the claim was in the process. There was no accountability, or even a consistent method on how the claim was to be presented or what information was required.
We eventually had to enlist Senator Collins’ office and it wasn’t until they repeatedly asked for an update on our claim that there was a settlement payment. The payment was about two-thirds of our actual loss, but after a year of contention and frustration, we took the money and ran.
Marine Parts Express supports commercial and pleasure boat owners and has a relatively sophisticated computer system that allowed us to supply supporting documentation down to the Zip Code level, by state, by day and across the years! Whenever we were asked for new documentation in yet another, different format we were able to comply.
I suspect many smaller businesses would be unable to meet these ridiculous demands and probably just gave up. I firmly believe that the process was set up to encourage people to give up.
And this is my final point; Mr. Feinberg doesn’t seem to understand what his function was supposed to be. He wasn’t appointed to keep settlements down, but to make sure that the $20 billion that BP was forced to set aside was equitably distributed. Mr. Feinberg seems to be so proud that he kept the settlements down to $5.3 billion and saved BP so much money.
The people whose lives have been so disrupted by BP’s shameful and destructive behavior deserved a better champion than one who writes, “You try to err on the side of being generous without being Santa Claus. Anyone can give money away.”
J.D. Neeson, President, Marine Parts Express
Taken from Bloomberg Businessweek, October 2011:
GIVE AWAY $5 BILLION
We received more than 1 million claims from the Gulf spill and have paid out about $5.3 billion to more than 200,000 claimants. When you’re dealing with that kind of volume, you need speed and fairness and consistency. The first challenge is to determine who’s eligible. It’s one thing for a fisherman whose livelihood depends on Gulf shrimp to be eligible; it’s another for a restaurant in Tennessee. Even then you need to calculate what damage is related to the spill and not to the recession or a poor business decision. The most difficult cases involve claims where there’s little or no documentation. You can’t just pay people because you think they’ve been affected. You need to help them find a way to document their loss. It’s different when you’re managing a fund with a $20 billion pledge from BP, as opposed to working through the legal system. A court might not recognize the validity of some claims, but you need to consider them carefully. You try to err on the side of being generous without being Santa Claus. Anyone can give money away. You learn to live with the potshots and the criticism.
These programs should be the exception rather than the rule. Bad things happen to good people every day, but I didn’t see a program after Katrina or Joplin. Policymakers need to be wary about doing an end run around the traditional way of resolving disputes in this country.
*Feinberg oversaw the September 11th Victim Compensation Fund and administers the BP Deepwater Horizon Disaster Victim Compensation Fund.
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October 14, 2011 / JD Neeson / 0
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