Facing South

Gulf spill paymaster defends progress while weighing changes

Facing South
Facing South
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By Sasha Chavkin, ProPublica

Kenneth Feinberg, the
independent paymaster who took over managing Gulf spill damage claims
from BP just over three weeks ago, has faced growing frustration from
many claimants who have yet to see a check.

Although his Gulf Coast Claims Facility has approved payments of more than $150 million to date, participants in our BP Claims Project have reported delays, technical glitches and a lack of transparency in the review process for their claims.

We
spoke with Feinberg on Tuesday about some of the most widespread
problems we've been hearing about from claimants, as well as some of our
own questions about how his operation works. Feinberg said he was
considering creating an ombudsman to increase transparency for
claimants, and his spokeswoman Amy Weiss later provided us with more comprehensive claims data (PDF) that showed that nearly a quarter of applications have been found to have insufficient documentation to be processed.

We've divided our conversation with Feinberg into the main subjects that we covered.

Delays on pending claims

For many participants in our BP claims project, delayed responses to
their applications are becoming an increasingly urgent problem.
Claimants have reported falling behind on their bills and having to
close down their businesses. In two cases, claimants have told us that
they are in danger of eviction. The latest statistics
(PDF) from the Gulf Coast Claims Facility indicate that 15,844 of
55,708 emergency payment claims have been paid, meaning that nearly
40,000 claims -- about 70 percent of the claims filed -- are still
pending. Feinberg's operation approves between 1,000 and 1,500 claims
per day, which has raised concerns that it could take a month or more
before each claim can be reviewed.

But on Tuesday, Feinberg told us that significantly fewer than 40,000
claims include complete documentation. "Do not assume that all claims
that are supposedly pending are ready to be processed," he said.
Feinberg said that thousands of claims are insufficiently documented,
ineligible, duplicative or "suspicious," and that the wait for claims
that are fully documented and under review would be closer to two weeks.
His office later released new statistics that indicated that 14,365
claims, slightly under a quarter of all claims submitted to date, do not
have enough documentation to be processed, while 29,636 claims are
currently under review.

These statistics indicate that two weeks is a feasible but highly
optimistic timeline for processing fully documented claims. For claims
with insufficient documentation, Feinberg said that his office was in
the process of sending out letters to these claimants requesting further
information. He did not commit to a timeline for how quickly a claimant
could expect to receive notification if their claim was not fully
documented.

Staffing of Feinberg's operation

Last week, the Mobile Press-Register reported that Feinberg's operation has 25 employees based in Washington, D.C.,
who review each claim and approve a total of 1,000 claims per day. The
report raised concerns that Feinberg's organization was not adequately
staffed, and that the Washington office was creating a bottleneck that
delayed payments on claims.

Feinberg told us that he has kept the roughly 1,500 adjusters working in the Gulf from the Worley company
(which was initially contracted by BP), but that he had added a final
stop that claims must pass through before approval. "The last stop on
the claims process is in Washington, D.C.," Feinberg said. "All claims
must go through this hub to ensure consistency. There are 25 employees
in my office reviewing and finalizing claims."

Feinberg said that adding more employees in Washington would
result in less consistency in payments, and that he was not considering
hiring more there. If anything, Feinberg said that he would decrease the
number of adjusters he has working in the Gulf as the volume of claims
eases. "I'm comfortable with the staffing situation," Feinberg said. "I've concluded that you reach a point of diminishing returns. I'm
trying to improve efficiency."

Increasing transparency for claimants

One of the most widespread problems that claimants have described is a
lack of transparency in the claims review process. Applicants say that
they are unable to speak with adjusters who have direct knowledge or
decision power over their claims, and that telephone operators in
Feinberg's organization have no more information than is available on
the claims website.

On Tuesday, Feinberg told us that he was considering changes to
address this considerable source of frustration for applicants. "We are
reconsidering how we can provide more transparency and more information
to the claimant," Feinberg said. "I'm thinking of providing a
coordinator in each state who will be an ombudsman to help the
claimant."

We at ProPublica will continue to follow up on whether this and other
measures to improve transparency and customer service are put in place.

Claims facility performance

In the three weeks that he has managed the claims process, Feinberg
has faced criticism for his operation's performance -- notably for making and then retreating from a pledge to process fully documented claims within two days for individuals and one week for businesses.

On Tuesday, Feinberg issued a sweeping defense of his organization's
work, saying that he considers his program to be a success and noting
that he is sending out money at a faster rate than BP. (Feinberg has
paid out about $151 million in claims in a little over three weeks,
while BP paid out approximately $400 million in about three and a half
months.)

As he has in the past, Feinberg said that "I share blame" for the
delays that have occurred, but said that the general picture was
positive. "I want to emphasize that I think that overall the program is a
success," Feinberg said. "We are being more generous than BP ever was,
and we are getting the money out faster than BP ever got it out."

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