Gulf Spill Fund Distribution
Posted: Friday, December 31, 2010
by Jack H. Schick
I heard about a small time fisherman who lived in a rundown clapboard house on stilts in a swampy area of the Mississippi River delta downstream from New Orleans. He had a wife and a couple kids about ten- a boy and a girl. They showed the beat up little boat in which he puttered out into the gulf to harvest a marginal living from the sea. A pretty newswoman interviewed them standing in front of his place. He’d survived Katrina, he had faith he would be all right, eventually, but they all looked disheveled and tired. His daughter kept crying.
He was doing okay again, by his standards, when the oil rig blew up last year and the government made him stop fishing for awhile. He figured that would be okay too, since they were going to make British Petroleum pay him for his inconvenience and lost income. The government set up a fund. All he had to do was fill out the paperwork and try to prove how much money he lost. That was harder than he thought (he wasn’t good at keeping records), and the paper work and bureaucracy was complex and confusing. But, finally they gave him money-not as much as he needed, but it was better than nothing. He did managed to sneak in a little fishing in the inlets and bayous while the ban was on, and his family actually liked alligator and snake meat.
They never said how much of BP’s money the government gave him, but most of the people I heard interviewed complained that it was not enough to make up for the losses. The president appointed a Spill Fund Czar, Ken Feinberg, to oversee distribution of the $20 billion BP was ordered to provide (while the administration had their foot on the company’s throat, you may remember), to help compensate people and businesses who lost income when the government shut them down. He is paid very generously for his work, as are all the Czars. Feinberg established the Gulf Coast Claims Facility to administer payments to those who properly filled out the paperwork and provided legitimate proof of loss-there have been too many incidents of fraud with these kind of funds.
Unfortunately, there are some critics who believe that Feinberg might be in BP’s pocket and not really looking out for the little guy. The $20 billion was certainly going to be spent, but, of course, there were arguments as to who should get what money and how much. If the Czar was sympathetic to BP, it could reflect on the government and the president who appointed him. Since Feinberg really had no qualifications to assess the damages (he’s only the administering Czar), he relied on appointed “experts.” When his loyalties were called into question he hired a law professor from New York City, Steven Gillers, to advise him on how to stay out of trouble.
Gillers recently declared, in a written letter, that Feinberg is “independent of the oil company,” that he is “neutral and not subject to BP’s direction or control.” This puts Feinberg in the clear, legally, and allows the government employees at the Facility to continue as they have been, evaluating claims and distributing Fund money to those who can properly prove they suffered a loss.
Because there is an increasing hostility to the administration’s tendency to appoint Czars (a term derived from Caesar), who rule by edict, Gillers has been retained as an adviser in legal matters. His fee is $950 per hour. He is not being paid with taxpayer money, however. He is being paid with BP money. It is important that the people believe that there is no impropriety, that the oil spill fund money is being distributed appropriately-to those who need it- so every cent paid to Mr. Gillers is certainly justified and is just part of the cost of administering the fund.
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Top-level comments on this article: (1 total)$950 an hour! That's a lot of money for somebody who doesn't really know what he's doing, and has to hire a lawyer - who pays for him? I think it's great that BP has to pay, but I wouldn't trust them to be honest about the distribution of that money.It's the lawyer getting the $950/hr to keep the Czar out of trouble. Thanks for readign and commenting, Jennifer.
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