[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]





                         GULF COAST RECOVERY:
                         PRESIDENT OBAMA'S BP
                          COMPENSATION FUND:
                          HOW IS IT WORKING?

=======================================================================

                           OVERSIGHT HEARING

                               before the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                       Thursday, October 27, 2011

                               __________

                           Serial No. 112-77

                               __________

       Printed for the use of the Committee on Natural Resources




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                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
             EDWARD J. MARKEY, MA, Ranking Democrat Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F.H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush D. Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Mike Coffman, CO                     Jim Costa, CA
Tom McClintock, CA                   Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Jeff Denham, CA                          CNMI
Dan Benishek, MI                     Martin Heinrich, NM
David Rivera, FL                     Ben Ray Lujan, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Scott R. Tipton, CO                  Betty Sutton, OH
Paul A. Gosar, AZ                    Niki Tsongas, MA
Raul R. Labrador, ID                 Pedro R. Pierluisi, PR
Kristi L. Noem, SD                   John Garamendi, CA
Steve Southerland II, FL             Colleen W. Hanabusa, HI
Bill Flores, TX                      Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
PJon Runyan, NJ
Bill Johnson, OH
Mark Amodei, NV

                       Todd Young, Chief of Staff
                      Lisa Pittman, Chief Counsel
                Jeffrey Duncan, Democrat Staff Director
                 David Watkins, Democrat Chief Counsel
                                 ------                                




















                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, October 27, 2011.......................     1

Statement of Members:
    Hastings, Hon. Doc, a Representative in Congress from the 
      State of Washington........................................     1
        Prepared statement of....................................     3
    Markey, Hon. Edward J., a Representative in Congress from the 
      State of Massachusetts.....................................     3
        Prepared statement of....................................     5

Statement of Witnesses:
     Feinberg, Kenneth R., Gulf Coast Claims Facility 
      Administrator..............................................     6
        Prepared statement of....................................     8
        Response to questions submitted for the record...........    13

                                     


 
 OVERSIGHT HEARING TITLED ``GULF COAST RECOVERY: PRESIDENT OBAMA'S BP 
                COMPENSATION FUND: HOW IS IT WORKING?''

                              ----------                              


                       Thursday, October 27, 2011

                     U.S. House of Representatives

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Committee met, pursuant to call, at 9:30 a.m. in Room 
1324, Longworth House Office Building, Hon. Doc Hastings 
[Chairman of the Committee] presiding.
    Present: Representatives Hastings, Thompson, Wittman, 
Fleming, Flores, Runyan, Duncan of South Carolina, Lamborn, 
Landry, McClintock, Southerland, Markey, Holt and Grijalva.
    Also present: Representatives Bonner, Miller of Florida, 
Palazzo, Scalise and Jackson Lee.
    Mr. Hastings. The Committee will come to order, and the 
Chairman notes the presence of a quorum, which under Rule 3[e] 
is two Members.
    The Committee on Natural Resources is meeting today to hold 
an oversight hearing on ``Gulf Coast Recovery: President 
Obama's BP Compensation Fund, How Is It Working?'' Under 
Committee Rule 4[f], opening statements are limited to the 
Chairman and the Ranking Member of the Committee. However, I 
ask unanimous consent that any Member that wished to have an 
opening statement inserted into the record do so before the 
close of business today, and without objection so ordered.
    I also note that several Members of the Gulf Coast that are 
not members of this Committee have requested an opportunity to 
sit on the dais, and ask questions during that timeframe. We 
have requests from Mr. Bonner of Alabama, Mr. Miller of Florida 
and Mr. Palazzo of Mississippi, Mr. Scalise of Louisiana, Ms. 
Jackson Lee of Texas, and without objection those Members will 
be able to sit on the dais and ask questions at the appropriate 
time. Without objection, so ordered.
    I will now recognize myself for my opening statement, and 
hopefully the Ranking Member will be here in a very timely 
manner, and I am sure that his staff is franticly emailing him 
right now in that regard.

 STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF WASHINGTON

    Mr. Hastings. Nearly a year and a half ago, President Obama 
called BP to the White House for a meeting that resulted in the 
President personally announcing an agreement to establish a $20 
billion Presidential-BP Compensation Fund. At the time, the 
President assured those affected by the Deepwater Horizon 
disaster and oil spill that legitimate damages would be paid, 
and I quote, ``quickly, fairly and transparently.''
    When President Obama announced the appointment of Mr. Ken 
Feinberg as Administrator of the Compensation Fund, there was 
no doubt Mr. Feinberg had a difficult task ahead. The impact to 
the Gulf's local economy, as well as the environment, was very 
real and there are certainly many moving pieces involved in 
evaluating real damage to victims filing claims.
    To date, nearly one million claims have been filed by over 
500,000 claimants, while roughly 95 percent of all the claims 
have been processed. Processed means rejected, accepted or 
turned back to the claimant for more information. Processed 
does not mean paid.
    Of the over half a million claimants that have filed claims 
with the Gulf Coast Claims Facility, just a little over 200,000 
have been paid, or around 39 percent. Quite frankly, I have 
heard from many of my colleagues on both sides of the aisle 
from the Gulf states that the number is simply unacceptable to 
the people whose livelihood was disrupted by this disaster.
    During the aftermath of the Deepwater Horizon, we 
constantly heard from President Obama that BP would be held 
fully responsible for the damages in the Gulf, yet that does 
not appear to be the case with the claims filed with the 
Compensation Fund. Under the terms of the agreement agreed to 
and announced at the White House, BP appears to have no 
responsibility further than simply writing a check.
    When President Obama announced the creation of the 
Compensation Fund, he accepted BP's $20 billion, held a press 
conference and exempted the company of responsibility to make 
certain Gulf families and small businesses whole. In announcing 
this Fund, the President specifically heralded that it was an 
independent body accountable to no one, the sole responsibility 
of Mr. Feinberg.
    However, the Congress has an obligation to ensure that this 
Fund is operating properly and fairly so that the people of the 
Gulf are made whole for the harm caused to them and that the 
economy of the Gulf is to get back up and running again. I want 
to note it is not absolutely clear if the Fund is actually 
under the jurisdiction of this or any other Congressional 
Committee, and I as Chairman appreciate the willingness of Mr. 
Feinberg to come and to sit before this Committee today.
    Today there is a large hole in proper oversight and 
accountability to ensure legitimate claims are getting the 
attention they deserve and that the process of administering 
payments is conducted in a timely manner. There is an 
appropriate effort in Congress to direct an open, transparent 
audit of the Fund, and I certainly hope and expect that the 
Fund will comply. And it can be expected that the Committee 
will continue to appropriately conduct oversight into the 
process, payments and operation of the Fund in order to ensure 
that there is a transparent and fair pay system.
    So this hearing then is an opportunity to peer into that 
process that, for the most part, has flown under the radar of 
proper public oversight. We are pleased to have Mr. Feinberg, 
as I stated earlier, as our witness, and I look forward to 
hearing his comments and discovering if there is anything 
Congress can do to help make his job easier and get deserving, 
legitimate claimants their due compensation.
    And with that I yield to the distinguished Ranking Member, 
Mr. Markey.
    [The prepared statement of Mr. Hastings follows:]

          Statement of The Honorable Doc Hastings, Chairman, 
                     Committee on Natural Resources

    Nearly a year and a half ago, President Obama called BP to the 
White House for a meeting that resulted in the President personally 
announcing an agreement to establish the $20 billion Presidential--BP 
Compensation Fund. At the time the President assured those affected by 
the Deepwater Horizon disaster and oil spill that legitimate damages 
would be paid ``quickly, fairly, and transparently.''
    When President Obama announced the appointment of Mr. Ken Feinberg 
as Administrator of the Compensation Fund, there was no doubt Mr. 
Feinberg had a difficult task ahead. The impact to the Gulf's local 
economy, as well as the environment, was very real extensive and there 
are certainly many moving pieces involved in evaluating legitimate 
damage to victims filing claims.
    To date, nearly one million claims have been filed by over 500,000 
claimants and while roughly 95 percent of all claims have been 
processed--which means rejected, accepted, or turned back to the 
claimant for more information--processed does not mean paid.
    Of the over half a million claimants that have filed claims with 
the Gulf Coast Claims Facility, just a little over 200,000 have been 
paid--or almost 39 percent. Quite frankly, I've heard from many of my 
colleagues, on both sides of the aisle, from Gulf states that this 
number is simply unacceptable to the people whose livelihoods were 
disrupted by this disaster.
    During the aftermath of the Deepwater Horizon, we constantly heard 
from President Obama that BP would be held `fully responsible' for the 
damages in the Gulf. Yet, that is not the case with the claims filed 
with the Compensation Fund. Under the terms of the agreement agreed to 
and announced at the White House, BP appears to have no responsibility 
further than writing a check. When President Obama announced creation 
of the Compensation Fund, he accepted BP's $20 billion, held a press 
conference, and exempted the company of responsibility to make certain 
Gulf families and small business were made whole.
    In announcing this Fund, the President specifically heralded that 
it was to be an independent body, accountable to no one--the sole 
responsibility of Mr. Feinberg. However, the Congress has an obligation 
to ensure that this fund is operating properly and fairly so that the 
people of the Gulf are made whole for the harm caused to them and that 
the economy of the Gulf is back up and running.
    It's not absolutely clear if the Fund is actually under the 
jurisdiction of this or any Congressional Committee and as Chairman I 
appreciate the willingness of Mr. Feinberg to come and sit before the 
Committee today.
    Today there is a large hole in proper oversight and accountability 
to ensure legitimate claims are getting the attention they deserve and 
that the process of administering payments is conducted in a timely 
manner. There is an appropriate effort in Congress to direct an open 
and transparent audit of the fund and I certainly hope and expect that 
the Fund will comply. And it can be expected that the Committee will 
continue to appropriately conduct oversight into the process, payments 
and operations of the Fund in order to ensure that there is a 
transparent and fair payment system.
    This hearing is an opportunity to peer into a process that, for the 
most part, has flown under the radar of proper public oversight. We are 
pleased to have Mr. Feinberg as our witness and I look forward to 
hearing his comments and discovering if there is anything Congress can 
do to help make his job easier and get deserving, legitimate claimants 
their due compensation.
                                 ______
                                 

 STATEMENT OF HON. EDWARD MARKEY, A REPRESENTATIVE IN CONGRESS 
                FROM THE STATE OF MASSACHUSETTS

    Mr. Markey. Thank you, Mr. Chairman, very much. The focus 
of today's hearing is to examine the Compensation Fund set up 
for the residents of the Gulf Coast who were harmed by the BP 
spill. However we address that question, I think it would be 
instructive to consider what doesn't work when it comes to 
compensating people affected by an oil spill.
    The 1989 Exxon Valdez ran aground in Prince William Sound 
off of Alaska. The ruptured single hull tanker belched up to 
750,000 barrels of oil into the frigid waters, killing wildlife 
and harming the fishing industry. For the citizens of Alaska 
who lived near the spill, the event itself was just the first 
part of an ongoing nightmare. Commercial fishing businesses 
shuttered. Recreation and tourism dollars were lost.
    Exxon meanwhile immediately entered into a position of 
aggressive litigation rather than financial mitigation for the 
people affected. Exxon fought the initial $5 billion judgment 
by Alaska's courts for years, all the way to the United States 
Supreme Court. In 2008, nearly two decades after the spill, the 
Supreme Court finally held Exxon accountable for about $500 
million in punitive damages to the victims and an additional 
$500 million of interest on those damages.
    The litigation went on for so long that nearly 20 percent 
of the 32,000 victims seeking compensation had passed away 
before the final ruling against Exxon. And to top it all off, 
the first credit default swap ever created stemmed out of the 
Exxon Valdez spill. JPMorgan Chase bankers created the now 
infamous financial mechanism to hedge their own liability after 
staking nearly $5 billion in credit to Exxon to credit the 
company's potential payouts. Subsequent credit default swaps 
went on to play a critical role in igniting the financial 
crisis of 2008.
    Now let us take a look at the BP Compensation Fund. Within 
two months of the start of the spill, President Obama secured a 
commitment from BP to set aside $20 billion to begin 
immediately compensating the American people and businesses 
affected by the spill. Ken Feinberg, who managed the victim 
funds following the September 11, 2001, attacks and the 
Virginia Tech shootings, was asked to take charge of the Fund, 
and he was given complete independence to run it.
    By late August of last year, Mr. Feinberg and his team were 
accepting claims and soon paying for lost wages and other 
economic impacts. Through this Fund, people were compensated in 
timeframes closer to days rather than decades. The Exxon Valdez 
led to the invention of the credit default swaps, but with the 
BP Compensation Fund the only question is how quickly could Mr. 
Feinberg find a way to deal with these issues.
    Unfortunately, there were some who said that this Fund 
accounted to Chicago-style shakedown politics, but at a pivotal 
time in our nation's history when an oil rig sank to the bottom 
of the ocean and oil washed up on our shores, this Fund kept 
families and businesses afloat. More than 200,000 residents and 
businesses have been paid roughly $5.5 billion so far this 
year. Thousands of new claims are still coming in every week as 
people see their neighbors being made whole.
    I have been quite critical of BP for many things associated 
with this spill, but here I believe the company did the right 
thing. And I really would like to thank the work done by Ken 
Feinberg. I think it is a model for how tragedies basically 
bring out the best in people, and, Mr. Feinberg, you 
demonstrated that as you did in creating a climate that brought 
out the best of the people in the Gulf of Mexico in trying to 
resolve these issues as well.
    And finally, I would like to thank the Chairman for 
scheduling the additional day of testimony that I and my fellow 
Democratic Members on the Committee requested on the BP spill 
and the government's Joint Investigative Team Report. The 
Minority has requested that the Committee invite the CEOs of 
the companies involved in the Deepwater Horizon disaster--BP, 
Halliburton, Transocean and Cameron.
    It is imperative that we receive testimony from the top 
executives at these companies as this Committee evaluates the 
findings and recommendations in the government's report, and I 
thank you for working with us, Mr. Chairman.
    [The prepared statement of Mr. Markey follows:]

     Statement of The Honorable Edward J. Markey, Ranking Member, 
                     Committee on Natural Resources

    The focus of today's hearing is to examine the compensation fund 
set up for the residents of the Gulf Coast who were harmed by the BP 
spill. However, before we address that question, I think it would be 
instructive to consider what doesn't work when it comes to compensating 
people affected by an oil spill.
    In 1989, the Exxon Valdez ran aground in Prince William Sound off 
of Alaska. The ruptured, single-hull tanker belched up to 750,000 
barrels of oil into the frigid waters, killing wildlife and harming the 
fishing industry.
    For the citizens of Alaska who lived near the spill, the event 
itself was just the first part of an ongoing nightmare. Commercial 
fishing businesses shuttered. Recreation and tourism dollars were lost.
    Exxon, meanwhile, immediately entered into a position of aggressive 
litigation, rather than financial mitigation for the people affected.
    Exxon fought the initial $5 billion judgment by Alaska's courts for 
years all the way to the United States Supreme Court. In 2008--nearly 
two decades after the spill--the Supreme Court finally held Exxon 
accountable for about $500 million in punitive damages to the victims 
and an additional $500 million of interest on those damages. The 
litigation went on for so long that nearly twenty percent of the 32,000 
victims seeking compensation had passed away before that final ruling 
against Exxon.
    And to top it all off, the first credit default swap ever created 
stemmed out of the Exxon Valdez spill. JP Morgan Chase bankers created 
the now-infamous financial mechanism to hedge their own liability after 
staking nearly $5 billion in credit to Exxon to cover the company's 
potential payouts. Subsequent credit default swaps went on to play a 
critical role in igniting the financial crisis of 2008.
    Now, let's take a look at the BP compensation fund.
    Within two months of the start of the spill, President Obama 
secured a commitment from BP to set aside $20 billion to begin 
immediately compensating the American people and businesses affected by 
the spill.
    Ken Feinberg, who managed the victim funds following the 9-11 
attacks and the Virginia Tech shootings, was asked to take charge of 
the fund. He was given complete independence to run it.
    By late August of last year, Mr. Feinberg and his team were 
accepting claims, and soon paying for lost wages and other economic 
impacts.
    Through this fund, people were compensated in timeframes closer to 
days rather than decades.
    The Exxon Valdez led to the invention of the credit default swap. 
But it is Ken Feinberg who should be given due credit for the work he 
has done with compensating the victims of the BP spill.
    After all, there were some who said last year that the creation of 
this fund amounted to ``Chicago-style shakedown politics.''
    But at a pivotal time in our nation's history, when an oil rig sank 
to the bottom of the ocean, and oil washed up on our shores, this fund 
kept families and businesses afloat.
    More than 200,000 residents and businesses have been paid roughly 
$5.5 billion dollars thus far. Thousands of new claims are still coming 
in every week as people see their neighbors being made whole. I have 
been quite critical of BP for many things associated with this spill, 
but here I believe the company did the right thing.
    Finally, I'd like to thank the Chairman for promptly scheduling the 
additional day of testimony that I and my fellow Democratic Members on 
the committee requested on the BP spill and the government's Joint 
Investigative Team report. The Minority has requested that the 
Committee invite the CEOs of the companies involved in the Deepwater 
Horizon disaster--BP, Halliburton, Transocean and Cameron. It is 
imperative that we receive testimony from the top executives at these 
companies as this Committee evaluates the findings and recommendations 
in the government's report. I look forward to working with you, Mr. 
Chairman, to ensure that this Committee can hear this important 
testimony from these witnesses.
    And with that, I yield back.
                                 ______
                                 
    Mr. Hastings. I thank the gentleman for his opening 
statement.
    We have only one witness today. We have Mr. Ken Feinberg 
here. Mr. Feinberg, you are the Administrator of the Gulf Coast 
Claims Facility. As both of us noted, you have a very difficult 
task, and we look forward to your testimony.
    You have been here before, and you know all of them work 
about the same way. Your full statement will appear in the 
record, but if you could hold your oral arguments to five 
minutes because I know you want to get out of here no later 
than noon. We will probably have votes before then. But the 
green light means you are doing fine. The yellow light means 
that you have one minute. The red light means that the five 
minutes are up.
    Mr. Feinberg, you are recognized for five minutes.

               STATEMENT OF KENNETH R. FEINBERG, 
            GULF COAST CLAIMS FACILITY ADMINISTRATOR

    Mr. Feinberg. Mr. Chairman, thank you, and I thank the 
Ranking Minority Member. I very much appreciate the invitation. 
It took me about two seconds to agree to appear. I think it is 
important that these issues be explored by the Congress and by 
this Committee. So it is about my sixth visit to the House and 
the Senate, and I am glad to be here to talk about the Fund.
    Let me give a few statistics, which I think are very, very 
telling. In the 14 months that we have administered this Fund, 
we have received just about one million claims from 50 states 
and 38 foreign countries. Build it, and they will come. There 
are some very creative claims.
    We have processed 95 percent. You are correct, Mr. 
Chairman. Not paid, but we have processed. We are current. We 
have processed 95 percent of the claims. It takes the initial 
contact to the claimant about 10 days to two weeks in almost 
all cases. We have distributed over $5.5 billion--if you 
include outstanding offers we are waiting to hear from 
claimants, it is closer to $6 billion--in just over one year. 
We have paid over 200,000 people, and we have honored 380,000 
claims from all over the Gulf of Mexico.
    As evidence of the success of this program, we receive 
still every week over 2,000 claims per week still rolling in to 
the Gulf Coast Claims Facility. This on average demonstrates I 
think there is a lot of support in the Gulf by residents who 
see that the program is working and are filing claims.
    In the first three months, and this is important, we paid 
over $2.5 billion in interim emergency claims, no release 
required, no waiver of any rights, a gift--a gift where the 
claimant received compensation and in return could sue, could 
come back to the Fund again and again. This was in the first 
three months during the critical emergency period.
    Since then we have paid another $3 billion to claimants in 
the form of quick payments, interim payments, final payments. 
We give the claimant a choice. One hundred and thirty thousand 
people have chosen a quick payment, 63,000 people a final 
payment, 40,000 an interim payment with no obligation. They can 
keep coming back as long as they can document their damage.
    Any praise about this program or any criticism about this 
program really should be directed at me and me alone. The 
Administration has largely taken a complete hands-off attitude, 
as the Ranking Member points out. BP has in no way interfered 
with my processing of these claims. I am out there on a limb, 
and if it works thank you, and if it fails I bear the brunt of 
that criticism.
    The claims not only in terms of volume, but in terms of 
complexity, are apparent I think to anybody who examines the 
program. Now, why don't we pay every claim? There is an absence 
of documentation with many claims. Never mind no tax returns. 
Not much of anything. We receive thousands of claims, Mr. 
Chairman, with no proof; just a request to be paid.
    Sometimes claims come in from Massachusetts or Minnesota or 
Sweden where there is simply no eligibility. I don't care what 
people attach. They are simply so far removed from the spill 
that the claim is too tangential.
    We cannot pay by agreement with not me; agreement between 
the Administration and BP. We can't pay government claims. I 
have no jurisdiction over government claims. Unfortunately, I 
can't pay moratorium claims. Now, this is unfortunate. We have 
1,600 moratorium claims. I have to send them to a special 
moratorium fund in New Orleans set up by BP. I have nothing to 
do with that, and it is unfortunate, but I can't pay those 
claims.
    In terms of transparency, 1,500 people unhappy with my 
decisions either as to eligibility or damage have gone to the 
United States Coast Guard under the Oil Pollution Control Act 
and asked the Coast Guard to review my claim and make an 
independent determination. In every single case--every one--the 
Coast Guard has agreed with my determination, so I think we are 
doing something right.
    In conclusion, the program is not perfect. Congressman 
Bonner is here, my most constructive, admired critic, and 
Congressman Bonner knows better than most the program is not 
perfect. We are doing our best.
    My final point, and I am done. I want to reiterate what 
Congressman Markey said. There has never been a program like 
the Gulf Coast Claims Facility. I know in my experience of no 
example. President Bush did get the 9/11 Victim Compensation 
Fund enacted, to his credit, but that was public taxpayer 
money. This is the only program I know of in history where an 
Administration succeeded in convincing a corporation to admit 
wrongdoing and put up $20 billion.
    It isn't perfect, but I think overall we are doing our job, 
we are delivering on the President's promise, and I am proud to 
be here today.
    [The prepared statement of Mr. Feinberg follows:]

           Statement of Kenneth R. Feinberg, Administrator, 
                       Gulf Coast Claims Facility

    Mr. Chairman:
    I thank this Committee for the opportunity to testify concerning 
the design, implementation and administration of the Gulf Coast Claims 
Facility (``GCCF''), with a mandate to compensate all eligible claims 
arising out of the oil discharges from the Deepwater Horizon spill on 
April 20, 2010. I have been asked by both the Administration and BP to 
administer the GCCF, which evaluates, processes and decides any and all 
claims from private individuals and businesses impacted by the spill. 
Since its inception on August 23, 2010, the GCCF has received 
approximately one million claims from individuals and businesses 
located not only in the five state Gulf Region, but from all 50 states 
and 38 foreign countries.
    I note, for example, receipt of 303 claims from the State of 
Washington; 166 of these were determined to be eligible and were paid a 
total of $2,704,388. And, the GCCF has received 328 claims from the 
ranking minority member's State of Massachusetts; 51 of these claims 
were determined to be eligible and were paid a total of $723,103.
    The GCCF has processed 95 percent of all claims received, an 
extraordinary accomplishment considering the volume and complexity of 
the claims. As of October 21, 2011, we have paid approximately $5.5 
billion (with an additional $400 million in outstanding offers) to some 
213,068 claimants, honoring approximately 379,611 claims.
    Even though the oil spill occurred some 18 months ago, the GCCF 
continues to receive on average about 2,270 new claims each week, 
convincing statistical evidence that the GCCF is accomplishing its 
mission in providing efficient, fair and generous compensation to the 
victims of the environmental disaster in the Gulf. Whatever 
constructive criticism may be directed at the GCCF, the current filing 
rate is proof positive that we are doing something right. Individuals 
and businesses victimized by the spill clearly are not hesitating in 
filing claims in unprecedented numbers with the GCCF.
    The GCCF remains in place to process any remaining claims that may 
be submitted until August 22, 2013. This was a wise decision; there is 
still plenty of time for claimants to submit a claim to the GCCF.
    As you know, a $20 billion escrow fund was established by BP to pay 
all eligible claims that are submitted to the GCCF. And BP has agreed 
to supplement this escrow fund as needed to assure full and fair 
compensation to all individuals and businesses that are found to be 
eligible for payment. The entire cost of the GCCF is being borne by BP, 
without any cost to the taxpayers or the citizens of the Gulf Region.
    During the initial three-month Emergency Advance Payment phase of 
the GCCF--from August 23, 2010 until November 23, 2010--approximately 
$2.58 billion was paid to some 170,000 eligible individuals and 
businesses to cover up to six months of documented damage. These 
interim payments were made without any requirement that the claimant 
waive any right to litigate or return to the GCCF for additional 
compensation. Since the end of the emergency phase of the Program, the 
GCCF has paid additional claims totaling almost $3 billion to eligible 
claimants.
    All claimants are provided a voluntary choice concerning the nature 
of the payments: a Final Payment for all remaining past, present and 
future documented damage; an Interim Payment for past quarterly 
documented damage; or a Quick Payment requiring no further 
documentation concerning damage for those claimants who received a 
prior payment from the GCCF. Those individual claimants opting for a 
Final or Quick Payment cannot return to the GCCF for additional 
compensation and must sign a release waiving their right to litigate 
against BP and any other defendant companies allegedly involved in the 
oil spill. Those selecting the Interim Payment option are not required 
to sign any release, and may return to the GCCF for subsequent payments 
for ongoing additional documented damage attributable to the spill.
    As of October 21, 2011, 127,313 claimants have opted for the Quick 
Payment option, 63,133 have preferred the Final Payment option and 
29,742 have opted for an Interim Payment. The choice is entirely up to 
the individual claimant; the GCCF does not prefer one option over 
another. The volume of claimants choosing each of these three payment 
options is sound evidence that all three options are readily available 
depending upon the unique circumstances confronting each individual 
claimant.
    All claim determinations are made by the GCCF without any 
interference from either the Administration, BP or any other interested 
parties. My work is monitored by the Department of Justice and BP, but, 
again, there has been absolutely no interference with the discretion of 
the GCCF in the processing of individual claims and making individual 
determinations of eligibility and damage.
    Any praise or criticism concerning the administration of the GCCF 
should be directed to me and me alone.
    To meet the onslaught of claims, the GCCF initially established 35 
regional claims offices throughout the Gulf Region to handle claims and 
assist claimants. (The GCCF has employed as many as 3,200 individuals 
in performing the various functions of the GCCF.) Fifteen full-time 
site offices (and an additional four offices with once-weekly or by 
appointment hours) currently remain in place as in person claim volume 
gradually diminishes, particularly from certain regional offices. 
Claimants may file claims in a number of ways including in person by 
visiting a site office, by U.S. mail, by fax and electronically through 
the GCCF website. During the past eight weeks, only 13.5% of all claims 
filed with the GCCF were submitted through local claims offices; the 
remainder were filed either electronically or by mail.
    I am confident that the GCCF's local presence throughout the Gulf 
Region is more than sufficient to handle all claims inquiries by local 
citizens visiting GCCF offices.
    The GCCF has received an incredibly diverse and complex number of 
claims from both individuals and businesses: death and physical injury 
claims; lost income and lost profit claims; subsistence claims; real 
and personal property damage claims; and removal and cleanup cost 
claims. We have received claims not only from fishermen, shrimpers, 
oyster harvesters, hotels, restaurants, real estate agents and 
developers and retail businesses, but also from builders, contractors, 
developers, dentists, veterinarians, chiropractors, and restaurants and 
businesses located thousands of miles from the site of the spill. All 
are being processed. As already indicated, the GCCF is generally 
current when it comes to notifying claimants about the status of their 
claim: the calculated amount to be paid and why; reasons why the claim 
is denied; or reasons why the claim may yet be eligible for payment but 
lacks the minimum documentation necessary for the GCCF to pay the 
claim. If a claim is deemed deficient, the claimant is invited to work 
with the GCCF in supplementing the individual file in order to make the 
claim payable.
    Claims may be denied for a variety of reasons: no documentation of 
damage or no evidence that the alleged damage is linked to the oil 
spill. (The GCCF recently completed a mass mailing to all denied 
claimants notifying these claimants of the opportunity to re-file a 
claim with the GCCF if they now have the necessary documentation to 
support the damages asserted.) In addition, since its inception in 
August of 2010, the GCCF has lacked jurisdiction to process damage 
claims alleged by local governmental entities; such claims must be 
submitted to BP itself for evaluation and payment. Unfortunately, the 
GCCF also lacks the necessary authority to process and pay any and all 
individual and business claims arising out of the federal government's 
moratorium pertaining to certain oil rig drilling in the Gulf of 
Mexico. BP has established a separate $100 million fund in New Orleans 
to process eligible moratorium claims. I direct all moratorium 
claimants (currently approximately 1,600 claimants) to that Fund for 
consideration of their claims. The GCCF is in no way involved with that 
Fund.
    Pursuant to the Federal Oil Pollution Control Act, the decisions of 
the GCCF are accountable to the United States Coast Guard and a 
Liability Trust Fund. Any claimant dissatisfied with GCCF decisions 
pertaining to eligibility or the calculation of damages has the 
statutory right to ask the Coast Guard to conduct an independent review 
of the GCCF's decision. To date, the Coast Guard has received 1,486 
requests for such an independent review and has completed the review of 
1,359 of these requests; in every single instance the Coast Guard has 
agreed with the ultimate decision rendered by the GCCF. Based upon 
claims volume, the number of claims that continue to be filed with the 
GCCF from thousands of individuals and businesses, the amount of funds 
being distributed by the GCCF, and the independent opinions rendered by 
the United States Coast Guard ratifying GCCF decisions, it is clear to 
me that the GCCF is succeeding in its mission.
    The Program is not perfect and I welcome constructive criticism 
from the distinguished Members of this Committee. With claims volume at 
approximately one million submitted claims, there may be a certain 
inconsistency in the treatment of similarly situated claimants who 
offer similar proof of damage; when we review and discover such 
inconsistencies, we fix the problem by supplementing the payments.
    Much of the criticism directed at the GCCF concerns allegations 
that the procedures used by the GCCF to determine both eligibility and 
compensation are enveloped in mystery, leading to inconsistency and a 
perception that the process is too often arbitrary and capricious. The 
GCCF has taken the following steps designed to deal with this 
criticism:
    a.  We have retained the services of seven local professional 
organizations, including lawyers and claims processing experts in each 
impacted Gulf state, to assist claimants in responding to individual 
inquiries about their respective claims and the reasons underlying GCCF 
eligibility and calculation determinations. Individuals from six of 
these local firms remain in place throughout the Gulf Region. Claimants 
may at any time, or by appointment, visit a site office and meet with 
one of our local liaisons. Claimants now have various options for 
contacting a GCCF representative for assistance with filing a new claim 
or providing information on the status of an existing claim. One of the 
most important improvements in the process is that each claimant is 
provided the name and telephone number of specific claims' 
representatives included in each and every determination, deficiency 
and denial letter sent to all claimants. Claimants may call the toll-
free GCCF helpline or email questions to our information email box and 
receive a written response; claimants may log onto the secure website 
and receive the status of their claims as well as copies of any letters 
and payment information that were sent by the GCCF concerning that 
claim. In addition, we have enhanced the information regarding notices 
and other important information on the GCCF website in order to alert 
claimants about issues regarding the claims process. I believe these 
steps go a long way in alleviating much of the frustration and anger of 
claimants who previously could not get answers to their claims 
questions.
    b.  The GCCF has also become much more open and transparent in 
providing a wealth of information (available in English, Spanish, 
Vietnamese and Khmer) on its website. Among other things, the GCCF 
website currently provides Important Notices and Information, a lengthy 
set of Frequently Asked Questions, posted copies of the GCCF Protocol 
for Interim and Final Claims, a copy of the Final Rules Governing 
Payment Options, Eligibility and Substantiation Criteria; a Summary of 
Options for Filing Claims, the Final Payment Methodology, specific 
information regarding supporting documentation requirements, a list of 
Claims Site Offices, information regarding Free Legal Assistance and 
information on how to report fraud. All claimants have the opportunity 
to file claims electronically and can access information relating to 
their claims, including copies of all letters sent to them by the GCCF, 
the status of their claims, determination letters and payment offer 
explanations. We are also providing more detailed information in all 
correspondence with claimants. This has also improved the process, 
providing claimants with a sense that they are not simply part of an 
``assembly line'' that does not take into account the individual 
characteristics of their claim.
    We have also agreed with the Department of Justice that an 
independent audit should be made of the GCCF, focusing on procedures, 
practices and data, in order to determine just how efficient, 
consistent and successful the GCCF has been in analyzing claims and 
compensating eligible claimants. I am confident that the audit will be 
both truly ``independent'' and focused. I look forward to this audit. I 
am confident it will validate the work of the GCCF and its dedicated 
personnel.
    I also think it important to emphasize the unprecedented nature of 
the GCCF, and the role it has assumed. As an Adjunct Professor of Law, 
having taught Mass Torts at New York University School of Law, Columbia 
University Law School, the University of Pennsylvania Law School and 
Georgetown University Law Center, I know of no other mass disaster in 
which any Administration has worked with a private company in 
establishing a multi-billion dollar private fund to pay all eligible 
victims. The GCCF is unique. It will not easily be replicated in other 
contexts.
    When I was asked by the Bush Administration and Attorney General 
John Ashcroft to design and administer the September 11th Victim 
Compensation Fund enacted by Congress, I knew that all compensation 
paid to the victims of the 9/11 attacks would consist entirely of 
public funds. The GCCF, however, is funded entirely by BP without any 
contribution from the government or other private entities. During the 
33-month history of the 9/11 Fund, I processed a total of just over 
7,500 submitted claims, paying about $7 billion in public taxpayer 
funds to approximately 5,300 families and physically injured victims. 
In administering the GCCF, I have often received over 7,500 submitted 
claims in just one week (!) and, as already indicated, have already 
authorized payment of $5.5 billion in just the first year of the GCCF's 
existence.
    Again, Mr. Chairman, I very much appreciate the opportunity to 
testify before this distinguished Committee and look forward to 
answering any questions that Members may have pertaining to the design, 
implementation and administration of the GCCF. I wish to assure you and 
the Members of this Committee personally of my ongoing efforts to make 
the GCCF process work so as to benefit those individuals and businesses 
most in need. I believe that the GCCF is achieving its objective. I 
will continue to work with you and others to make sure that the GCCF is 
as efficient, effective and fair as possible.
    I am also attaching for the Committee's consideration two documents 
that summarize important statistics pertaining to GCCF submissions, 
processing and payment of claims. I would be pleased and honored to 
answer any questions from you and any other Members of this 
distinguished Committee.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



Response to questions submitted for the record by Kenneth R. Feinberg, 
               Administrator, Gulf Coast Claims Facility

QUESTIONS FROM REPRESENTATIVE LAMBORN (CO-05)
Q.  01: There have been many complaints by claimants that their 
        supporting paperwork has been lost by GCCF or that claims have 
        been unfairly denied or the processing has been unreasonably 
        delayed. Paragraph 63 of the FAQs on the GCCF website states as 
        follows:
    ``63. What if my claim is missing any documents needed to prove my 
        Interim Payment Claim?
    If you fail to submit the required documents to prove your losses 
or injuries, you will not be paid for them in an Interim Payment. The 
GCCF will not send any deficiency notices to you to notify you of any 
documents missing from your file. Instead, your losses will be 
determined solely on the basis of the documents you have submitted.'' 
(Emphasis in original).
        a.)  How is a claimant supposed to know that a `required 
        document' is missing from his claim if the GCCF policy is to 
        refuse to notify the claimant of the deficiency?
        b.)  Doesn't Paragraph 63 violate Section 15 Claimant Bill of 
        Rights, Paragraph 134 which states: '' If the GCCF needs 
        additional information in order to decide your claim, the GCCF 
        will notify you in a timely manner of the request for 
        additional information'' and otherwise run counter to your goal 
        to ``maximize compensation'' as you stated at the hearing?
    A. 01: The assertion that the GCCF has lost ``supporting 
paperwork'' submitted by claimants is overblown and exaggerated. With 
over one million claims having been filed with the GCCF, there may be 
some isolated instances of lost paperwork. Even in such cases, this 
most likely occurred during the months of June, July, August and 
September 2010, when multiple data transfers occurred during the 
transition from the BP claims process to the GCCF. As a general rule, 
there is not an ongoing problem of lost ``supporting paperwork.''
        a)  Deficiency letters sent to claimants by the GCCF beginning 
        February 2011 do inform all claimants as to any documentation 
        that might be missing in order to afford the claimant an 
        opportunity to submit such additional documentation.
        b)  Let me clarify the GCCF policy. If the GCCF needs 
        additional information to determine eligibility for an interim 
        payment, the claimant will receive a deficiency letter. In 
        regard to any missing financial data, the GCCF identifies such 
        missing data in the Attachments to the Determination Letters 
        and calculates the offer on the information provided.
Q.  02: During your opening remarks, you were emphatic in stating that 
        compensation awarded to victims of the BP oil spill under the 
        Emergency Advance Payment Program was ``a gift..a gift'' from 
        BP. How can you possibly characterize these compensatory 
        payments to those who suffered so greatly from the oil spill as 
        ``a gift'' both as a matter law and policy?
    A. 02: The Emergency Advance Payment Program constitutes a ``gift'' 
only in the sense that it does not impose on any claimant the 
obligation to relinquish any right to sue or return to the GCCF for 
additional compensation. It carries with it no obligation whatsoever. 
Only if a claimant returns to the GCCF for a Quick Payment or a Final 
Payment, must the claimant agree not to sue or return to the GCCF for 
additional compensation.
Q.  03: Claimants who elect to receive a final payment from the GCCF 
        are required to sign a release and covenant not to sue not only 
        BP companies, but also approximately 100 other companies that 
        may also be liable to the claimants for their injuries and 
        damages. These companies have not contributed to the BP 
        Settlement Fund, nor have they been found to be ``responsible 
        parties'' under the Oil Pollution Act (OPA) like BP has. Why 
        should claimants forego any claims they may have against these 
        other companies which have not given any consideration to the 
        claimants for agreeing to release them from liability; what is 
        the legal basis for you requiring them to do so; and did BP or 
        the White House approve this release form?
    A. 03: A GCCF Final Payment does require that the claimant release 
not only BP, but all other codefendant companies, from suit. First, the 
claimant's Final Payment is in full satisfaction of all damages, not 
just damages attributable to BP. The purpose of the Final Payment 
Program is to make the claimant ``whole'' when it comes to alleged 
damage. Second, there is no point in providing BP a partial release, if 
other companies can be sued only to then cross claim against BP seeking 
additional compensation. Since the claimant has received 100% of his/
her damage in compensation from the GCCF, a full release is required. 
Neither BP nor the White House had any final authority in approving or 
rejecting the release form.
Q.  04: During the hearing, you stated that your goal is to ``maximize 
        compensation'' to the victims of the oil spill. If that is so, 
        why are claimants required to forego either initiating new or 
        continuing their current litigation against BP and the other 
        companies under federal and state law for compensatory and 
        punitive damages if they elect to receive a final payment from 
        the GCCF? After all, any award by a court greater than the 
        amount you determined the claimant should receive would be 
        reduced or offset by the amount of your award, and thus, a 
        claimant would be in a position to ``maximize'' the 
        compensation.
    A. 04: See my answer in 3 above. Since the claimant has received 
100% of the compensation he/she is entitled, there is no reason to 
continue to permit litigation to recover additional amounts. Also, 
there is no obligation whatsoever that a claimant be required to accept 
a Final Payment. Interim Payments, like Emergency Advance Payments, are 
an alternative, requiring no release and permit the claimant to return 
to the GCCF for additional compensation. Finally, any claimant who is 
dissatisfied with an offer from the GCCF may reject that offer, submit 
their claim to the United States Coast Guard or elect to sue. The 
choice is up to the claimant.
Q.  05: In response to questions from several State Attorneys General 
        regarding your independence from BP, you posted on the GCCF 
        website a letter dated December 28, 2010 from Professor Stephen 
        Gillers from NYU Law School that you requested, which concludes 
        on page 8 that you are not BP's lawyer ``nor are you its 
        agent.''
        a.)  If you are not an agent of BP as Professor Gillers 
        concludes, how does that square with the opening paragraph of 
        the GCCF Release and Covenant Not to Sue form that the ``GCCF 
        and its Claims Administrator, Kenneth R. Feinberg, are acting 
        for and on behalf of BP Exploration & Production, Inc. in 
        fulfilling BP's statutory obligations as a ``responsible 
        party'' under the OPA.'' (Emphasis added)?
    A. 05: a) The language referenced in your question refers to the 
obligation of the GCCF to stand in the shoes of BP when it comes to the 
legal procedures required by the Federal Oil Pollution Control Act. 
Under that Act, claimants must first come to the GCCF before seeking 
independent review of their claims from either the United States Coast 
Guard Liability Trust Fund or the courts. Professor Giller's reference 
makes clear that BP has no control or input into my independent 
decision making when it comes to individual claims. The federal court 
overseeing the OPA litigation against BP has confirmed this.
Q.  06: Considering the $20 billion size of the GCCF, the public 
        notoriety of the BP spill, and the unprecedented nature of the 
        fund, can you explain why your law firm's website Feinberg 
        Rozen fails to mention your work on the GCCF but mentions other 
        projects and cases that you and your firm handled as mediator? 
        Do you have any idea why GCG similarly does not mention its 
        work as a claims processor for the BP fund in its press 
        releases or listing of other cases that it has worked on?
    A. 06: The website of Feinberg Rozen, LLP will be made current by 
referencing--with pride--its work in designing, implementing and 
administering the GCCF.
Q.  07: Mr. Feinberg, I understand that you met with a group of 
        clergymen within the Gulf Coast Region at the Windsor Court 
        hotel over 8 months ago. Members of this group say that you 
        have met, admirably, with its leadership over 15 times within 
        the past year; telling them several times that you would pay 
        the claims within a certain time. Can you provide an update on 
        what the group describes as ``underserved claims''?
    A. 07: The GCCF has paid a few of the claims submitted by claimants 
working with ``a group of clergymen within the Gulf Coast Region.'' 
But, thousands of other claims cannot be paid at this time until and 
unless they are accompanied by the minimal proof necessary to prove the 
claim. The GCCF continues to work with representatives of this group in 
an effort to secure this minimal proof.
Q.  08: The GCCF website has a menu bar that includes a link for 
        ``Appeals Process.'' That link informs claimants that they can 
        appeal any interim or final payment, but only if the claim 
        exceeds $250,000.
         i.  How many and what percentage of all claims that have been 
        filed exceed $250,000, how many have been appealed under this 
        ``Appeal Process'' to a judicial panel, and what were the 
        results.
        ii.  During the hearing and in your testimony you stated that 
        1,486 payment determinations were appealed to the Coast Guard 
        under the Oil Pollution Act, and that every one that has been 
        reviewed were upheld. However, the ``Appeals Process'' link 
        does not provide claimants with information on how to submit 
        such appeals. Will you modify your website to make it clear how 
        claimants, regardless of the amount of their claim, can appeal 
        your determinations to the Coast Guard? Does the Coast Guard 
        review the claims de novo or do they defer to the GCCF's 
        determinations?
    A. 08: i) The ``Appeals Process'' referenced in your question is 
not required by federal law and was included in the protocol of the 
Gulf Coast Claims Facility as an additional option for claimants and BP 
to consider. Federal law (OPA) already provides an option for another 
type of appeal of the GCCF decision by providing dissatisfied claimants 
with the opportunity to submit their claims to the United States Coast 
Guard and approximately 1,700 claimants have exercised that right. The 
GCCF's public reports reflect numbers of claims paid in ranges of 
amounts of payment determinations. To date 1,089 claimants were paid 
$250,000 or more constituting 0.19% of all claimants who submitted 
claims to the GCCF. The amount requested by claimants is not a 
meaningful statistic since the GCCF has received claimant requests for 
$246 billion, $20 billion and more than one claim for $10 billion.
    Only 27 claimants have requested access to the ``Appeals Process.'' 
Of the 27 claims that have been appealed by claimants, all but six have 
been resolved. As to the 1,640 claimants who have sought independent 
review from the Coast Guard, after review the Coast Guard has agreed in 
every single case with the GCCF's determinations.
    ii) The Appeals Process link on the GCCF website that you reference 
explains how claimants can file an appeal of a final determination with 
the GCCF. In addition, the Frequently Asked Questions on the website as 
well as every letter sent to a claimant explains that if a claimant 
disagrees with the GCCF's decision on an Interim Payment or Final 
Payment claim, the claimant has the right to submit the claim to the 
National Pollution Funds Center (``NPFC'') or alternatively to a court. 
The GCCF website as well as all letters to claimants provides claimants 
with the address of the NPFC as well as the NPFC website for further 
information regarding the procedure for filing a claim with the NPFC. 
The Coast Guard reviews the claims de novo.
Q.  09: Attached is also a letter with questions submitted to the 
        Committee on Natural Resources.
November 1, 2011
Mr. Feinberg,
    Our claim # with the GCCF is/was 1185881. We would like a 
definitive answer as to why the GCCF has denied our claim stating that 
there was not a connection between our losses and the BP oil spill. 
This company was founded in 1986 and incorporated in 1995. All we 
manufacture pertains to salt water fishing and to be more specific, 
blue water saltwater fishing. To be clear, blue water is the area off 
shore that is not normally stained from tidal currents. All of the 
products we manufacture are specifically for the blue water fisherman.
    We are a manufacturer. We are not a wholesale or retail store. Our 
business is linked 100% to the Gulf of Mexico and the fishing tackle 
shops and the fishermen therein. We cannot remotely comprehend that the 
GCCF has stated that there is no connection between this company's 
financial losses and the BP oil spill. Nothing could be further from 
the truth.
    Every coastwise fishing tackle store in the Gulf of Mexico sells 
our Patented ``Bandit Buoy, our chum baskets, our chums or our Patented 
``Quick Change'' lead. To make matters even worse, The GCCF has settled 
claims with many of the tackle shops that carry our products. How can 
they say that our losses are not connected when they have settled with 
the very people that sell our products?
    This business is seasonal and temperamental at best with all the 
fluctuations in weather, fuel prices and fishing regulations. It is 
imperative that we make our sales in due season. In 2010 that due 
season was taken from us.
    Our first question to Mr. Feinberg is: How can you state that there 
is no connection to our losses and the BP oil spill when all that we do 
and have done for over 20 years is directly and emphatically tied to 
the Gulf of Mexico? Secondly, question is: Have you even looked at 
anything pertaining to this company? Finally, Can you tell the 
committee just exactly what the business function of the American 
Bandit Corp. is? (claim # 1185881).
    During these already hard times B.P. and the GCCF has driven a nail 
straight into the heart of this company.
John T. Sims
American Bandit Inc.
PO Box 251
Bainbridge, GA 39818
229-248-1010
http://www.americanbandit.com/
    A. 09: American Bandit Inc.--Claim # 1185881
    This claimant--from Bainbridge, Georgia--requests ``a definitive 
answer as to why the GCCF has denied our claim stating that there was 
not a connection between our losses and the BP Oil Spill.'' It also 
inquires as to whether I have ``looked at anything pertaining to this 
Company and whether I know ``exactly what the business function of the 
American Bandit Corp. is?'' As required by the Final Rules Governing 
Payment Options, Eligibility and Substantiation Criteria and Final 
Payment Methodology dated February 18, 2011: Section IV.3.c states the 
following:
        ``The GCCF has received claims from claimants residing outside 
        of the Gulf States, claims from businesses located many miles 
        from the Oil Spill, and claims from businesses that do not 
        appear directly dependent on Gulf resources such as dentists, 
        veterinarians, and chiropractors. Many of these claims comprise 
        business activities that are more dependent on general economic 
        conditions than on tourism or seafood harvesting on the Gulf 
        Coast. In these cases (numbering in the thousands), the most 
        exacting type of proof demonstrating an identifiable link 
        between the asserted damage and the Oil Spill will be required. 
        Claimants in this category may receive compensation by 
        establishing loss, by passing the financial test that analyzes 
        relative financial performance in the immediate pre-Oil Spill 
        and post-Oil Spill periods, and by providing evidence that 
        establishes the link between losses and the Oil Spill. For 
        example, the claimant might provide documentation of cancelled 
        orders for goods or services sold to a Gulf business; 
        consistent sales in the past two years or more to a Gulf 
        business that failed to recur due to the Oil Spill; bad debt 
        written off and associated with failure to pay by a Gulf 
        business; failure of a contractual arrangement involving a Gulf 
        business that results in demonstrable lost sales or income; 
        higher expenses or cost of goods due to having to obtain them 
        from another vendor other than the traditional Gulf business; a 
        specific termination of employment or reduction in wages that 
        an employer confirms was as a result of the Oil Spill, etc. 
        Examples of the type of evidence that may link a claimant's 
        loss to the Oil Spill are described in Attachment A. Providing 
        general financial information about losses sustained in 2010 
        after the Oil Spill will not be sufficient documentation for 
        claimants in this category. Instead, proof will be required 
        specifically linking the sustained loss to the Oil Spill.''
    This claimant was asked to provide the GCCF with the necessary 
documentation demonstrating his customer base was primarily in the Gulf 
area by providing a list of his dealers/customers in the Gulf. The 
claimant did not provide the necessary documentation and consequently 
the claim was denied. On October 28, 2011 we sent the claimant a 
follow-up letter to the denial (a letter the GCCF sends to all 
claimants who were denied payment of an interim or final claim) 
reminding the claimant that if it disagreed with the denial decision it 
could re-file its claim and provide the necessary documentation to 
allow the GCCF to evaluate and determine the claim to be eligible.
Questions submitted on behalf of Gulf Coast constituents by 
        Representative Jo Bonner (AL-01)
    I appreciate the willingness of Chairman Hastings and the Committee 
to allow these questions to be inserted in the official hearing record. 
Additionally, I appreciate Mr. Feinberg's willingness to answer them in 
what I hope will be an honest and straight forward manner. These 
narratives and questions come from constituents along the Gulf Coast 
who have directly experienced the failings of the GCCF, and get at many 
of the systemic problems that have existed since its inception. In the 
past, Mr. Feinberg has attempted to deflect efforts to address these 
problems, and instead has tried to focus on the specifics of an 
individual case saying, ``Get me that information and I'll look into it 
personally.''
    In this case, Mr. Feinberg, I would ask instead that you read and 
absorb what follows, and formulate concrete and truthful answers to the 
questions posed. The people of the Gulf Coast deserve nothing less.
Q.  10: The facts surrounding this situation are really not that 
        complex, but the response and lack of resolution that this 
        situation illustrates clearly demonstrate problems with the 
        operations of the GCCF at all levels. The questions raised by 
        my experience are many and profound when taken in the light of 
        the mandate to the GCCF, the protocol established by the GCCF, 
        and the public impression that Mr. Feinberg continues to 
        communicate on a regular basis about the effective and 
        efficient job the GCCF is doing.
    The story begins with my ownership of three separate businesses 
        that were impacted by the Oil Spill. One is an RV Park located 
        on Mobile Bay and the other two are rental condominiums at the 
        beach. All three businesses are appropriately licensed and are 
        owned by separate LLCs. All three businesses suffered 
        significant losses from the oil spill, have appropriate 
        documentation that was submitted to the GCCF, and all were paid 
        compensation during the emergency payment time frame with BP 
        and with GCCF. Although the emergency payment process was slow, 
        ineffective, and inefficient, the results did finally deliver 
        payment of initial emergency compensation for a portion of my 
        losses for all three businesses by December 2010. In early 
        January 2011, following the protocol established by the GCCF, I 
        filed for final payments for all three businesses. Since that 
        time, my experience has been horrendous, and despite the 
        efforts of myself, Congressman Bonner's office, and Greg Hawley 
        (GCCF), no resolution has been provided by the GCCF. Questions 
        about my claims started to be raised by me in May 2011, and 
        have escalated from the ineffective local GCCF office to your 
        office. I have made over 10 phone calls to the GCCF or its 
        supposed representatives and have sent emails numbering over 12 
        from June 2011 to October 2011. It is my understanding that the 
        highest levels within the GCCF are aware of my claims, and 
        despite agreeing with the solution to my claims, the GCCF has 
        elected to take no action as of today. Based on my experience 
        with the GCCF, and the comparable experiences of many along the 
        Gulf Coast, do you still believe your claims process is 
        effective and efficient?
    A. 10: Yes, I do believe that the GCCF claims process is effective 
and efficient. With over 1 million claims received in just 16 months, 
and payment of $5.9 billion to over 219,000 claimants, and offers 
outstanding to claimants in the amount of $364,191,573 we are doing 
something right. There may be some mistakes made when it comes to 
individual claims, inevitable in light of claims volume. I cannot speak 
to the facts of the individual claims submitted in this question 
without knowing first the name of the claimant and the claim number. 
But I believe there is a ready explanation for the issues posed in this 
question.
Q.  11: My question concerns disparity in your claims process. Why is 
        an individual condo owner offered a Final Payment offer of 
        $25,000 as one business, while we own three condos in the same 
        complex, suffered three times the monetary loss, are required 
        to have three separate business licenses, and are offered a 
        Final Payment offer of $25,000 because we ``filed under one 
        social security number''? This process is flawed and makes no 
        sense. The Quick Pay and the Final Payment are the same, minus 
        the reams of paperwork you required to be filed for a full 
        ``Final Payment Review.'' We were told by the GCCF in Gulf 
        Shores, AL, to file all of our condo units under one social 
        security number. I would like an explanation regarding the 
        justification for how three individual condo owners can be 
        offered $25,000 each for their loss, while we, who own three 
        condos, are offered the same compensation.
    A. 11: There is no deliberate disparity in the claims process. A 
business claim is distinguished from an individual claim based on a 
decision of the claimant to treat the businesses as one or as three 
separate entities. Generally it is dependent upon the tax structure of 
the entity determines whether the claimant is a business, which files a 
Schedule C and deducts the expenses of the business. The quick pay and 
the final payment are not the same, require different proof, and are 
calculated differently. Three individual condo owners have established 
three different businesses while this claimant has decided to own three 
condos under one business and tax filing entity. We follow the decision 
of the owner.
Q.  12: The main question we have is how can one person be paid a claim 
        for a loss and two others with the exact same loss be denied? I 
        would like to give you a little background as to why we feel 
        certain we should be paid by the GCCF. My wife and I, my son, 
        and my daughter and son-in-law all own rental homes at the 
        exact same address. We all have the exact same business renting 
        homes and we all suffered the exact same type of loss. My son 
        and I were turned down for Interim Payments and for a Final 
        Payment by the GCCF; however, my daughter and son-in-law were 
        approved and did indeed receive an Interim Payment and a Final 
        Payment from GCCF.
    We do not see how GCCF/BP can approve one person for a claim and 
        deny two others, doing the exact same business at the exact 
        same location. Can you explain this lack of consistency?
    A. 12: Similarly situated individuals are treated differently based 
upon their documented submissions and the arguments they make about 
eligibility. If we make a mistake in treating similar claimants, we 
will acknowledge the error and true up the claims. I cannot speak to 
the facts of the individual claims submitted in this question without 
knowing first the name of the claimants and the claim numbers. But 
apparent inconsistency may have a ready explanation tied to the nature 
of the proof.
Q.  13: My wife and I own 2 beachfront rental properties on Dauphin 
        Island, AL. The homes are nearly identical in size, location, 
        etc. and have been professionally-managed rental properties for 
        quite a few years. We submitted identical applications to the 
        GCCF on the first day it opened, August 23, 2010. Each claim 
        had the appropriate documentation, including rental history, 
        rental bookings, and rental cancellations, 1099s from previous 
        years, and our income tax returns. Of these two identical 
        claims, one was paid in full, without difficulty or question; 
        the other one, again, nearly identical in all respects, has 
        never been paid. You have been asked to address this 
        discrepancy/failure by my wife and me at numerous public 
        meetings, most recently on February 15, 2011, in Bayou La 
        Batre, AL. You were also asked by a Mobile County Commissioner 
        to meet with us about this. You told us that Jim Walker in your 
        office would ``look into it.'' We have left messages for Mr. 
        Walker, but he has never returned our call.
    I am still waiting for someone in your organization to ``square 
        up'' my claim. Despite your public statements to me that you 
        will ``personally look into this,'' we have yet to hear from 
        you. We have been waiting since February 15, 2011. If two 
        identical claims are handled in such completely opposite ways, 
        what does this say about your organizational and procedural 
        consistency and your organization's ability to process claims 
        generally?
    A. 13: I cannot speak to the facts of the individual claims 
submitted in this question without knowing first the name of the 
claimants and the claim numbers. It may be a mistake or there may be a 
ready explanation which simply does not sit well with the claimant.

Q.  14: I first filed a claim with BP then with the GCCF and have 
received compensation during the emergency claim process that was 
established for my losses. This claim was for a beach rental home that 
I own individually. Subsequently, I submitted a final claim request on 
1/6/2011 for final losses including my rental home losses and income 
losses that I suffered. On 3/22/2011, I was contacted by the GCCF and 
asked to submit additional documents which I completed at that time. No 
action occurred on my claim. I was contacted on 9/23/2011 again 
requesting further documentation. This request was specifically for my 
2010 tax return and my 2011 rental experience. I once again submitted 
these documents and have not received any further communication from 
the GCCF. Why was my claim not paid in the time frame advertised on the 
GCCF website? If the claim was processed and paid by the standards the 
GCCF established, there would not have been a need for an additional 
request for information. Why did my claim not get processed per the 
GCCF protocol? It is now 11 months since my claim was initiated and 
almost a year and half since the disaster. Why has the GCCF not 
performed as they were mandated to provide relief to those affected by 
the disaster in a timely manner? Why is the information regarding my 
claim not accurate and up to date on the GCCF website?

    A. 14: I cannot speak to the facts of the individual claims 
submitted in this question without knowing first the name of the 
claimants and the claim numbers. The way this claimant describes the 
situation, the GCCF has clearly erred. But in my experience over the 
past year there is usually a ready explanation for the apparent 
discrepancy and delay.
Q.  15: Our Chamber of Commerce has lost sponsorship and advertising 
        investments due to the economic disaster caused by the oil 
        spill along the Alabama Gulf Coast. Our organization holds an 
        annual fund-raising campaign and our claim reflected the amount 
        of funds we were down from the previous year. We have received 
        three letters of denial because we were not considered 
        eligible. Our chamber does not have the resources (manpower or 
        funds for CPA's) to pursue the claim. We continue to work 
        extremely hard to recover from the financial loss by cutting 
        back personnel which places additional demands and stress on an 
        already overworked staff. My question is--Where does a not-for-
        profit (501 C6) business development and advocacy organization 
        turn for help?
    A. 15: A not for profit can seek compensation from BP itself, not 
the GCCF. Indeed, BP has just recently provided grants to various non-
profits such as Catholic charities and United Way to assist in oil 
spill recovery efforts. In addition, BP has provided millions of 
dollars in grants throughout the Gulf region to help bring tourism back 
to the Gulf.
Q.  16: I was told to submit my job search and other, spill-related, 
        minor out-of-pocket expenses. Your staff at the time told me, 
        ``No receipts please, just itemize them.'' They overlooked 
        these payments on the first and second interim payments. 
        Yesterday, I was told, ``We now need all the receipts.'' I have 
        lost my home and many of my smaller records are lost. I am on 
        the verge of bankruptcy and living with a friend now because I 
        could not pay the rent since my second quarter interim payment 
        was 4 months overdue. Why have you and your staff lied about 
        weekly changes to your methodologies? Do you believe the GCCF 
        has operated in a consistent and open manner regarding its 
        methodologies and procedures?
    A. 16: Yes, I do believe the GCCF has operated in a consistent and 
transparent manner regarding its methodologies and procedures. I cannot 
speak to the facts of the individual claims submitted in this question 
without knowing first the name of the claimants and the claim numbers.
Q.  17: Your current protocols state that within 90 days of a valid 
        claim being filed for interim payment the interim payment will 
        be made. How many interim claims do you currently have under 
        review beyond the 90-day payment timeframe? What does the 
        claimant do if GCCF does not meet the 90-day payment schedule 
        established by GCCF?
    A. 17: It is a rare case that the GCCF has not responded within 90 
days to an interim claim request. Most interim claims are processed 
within a few weeks. A processed claim is a claim that results in a 
payment, a request for additional information, a denial or a 
calculation of no loss. However, if a claim has been found deficient, 
the GCCF will seek additional documentation or other proof from the 
claimant before denying a claim. This final decision may be delayed 
beyond 90 days if, in fact, the claim remains deficient and we await 
additional proof from the claimant.
Q.  18: If the GCCF has completed its due diligence and fully evaluated 
        a claim for an emergency advance payment, how long will it take 
        GCCF to process and pay his interim payment after it has been 
        filed?
    A. 18: Payments for emergency advance payments have been made to 
169,208 claimants by the GCCF. The EAP program ended last November 23, 
2010. However, a pending claim for ``interim payment'' will be treated 
as an interim claim; payment usually occurs within two weeks after it 
has been processed and found eligible with appropriate documentation. 
The issue is not when the claim is ``filed'' but, rather, when it is 
deemed ready for payment or denial.
Q.  19: Why did it take the direct intervention of the United States 
        Attorney General to get you to agree to an independent audit of 
        the GCCF?
    A. 19: On December 21, 2011, the Department of Justice selected the 
independent auditing firm of BDO to perform an independent evaluation 
of the GCCF.
Q.  20: What compensation is available to property owners that lost 
        their rental properties to foreclosure because they could not 
        rent them during the oil contamination and clean-up periods?
    A. 20: The GCCF will pay compensation to property owners who can 
demonstrate realized losses from the sale of a property by providing 
documentation of pre and post spill contracts. The GCCF reviews all 
received claims and will review any and all documents regarding the 
circumstances of a foreclosure. We will review these on a case by case 
basis.
Q.  21: Why does the GCCF arbitrarily disqualify entire industries from 
        participation in compensation from the GCCF? My business and 
        many other professional businesses have been denied payment 
        from the GCCF based on nothing other than an arbitrary 
        designation of ineligibility due to our area of business. 
        Medical, dental, financial services, insurance services, 
        accounting services, and legal services have all been denied. 
        In Gulf Shores, all businesses were impacted from the oil spill 
        including my business. I submitted claims for emergency as well 
        as final payments and was denied with no explanation. The 
        documents that I submitted included all financial support for 
        my loss and all tax returns. I even applied the financial test 
        referred to in Appendix C of the GCCF final payment protocol 
        that confirmed that my business qualified for reimbursement of 
        losses and was eligible. Despite these documents, multiple 
        meetings with the GCCF and its representatives including Mr. 
        Feinberg, and passing the financial eligibility test referenced 
        in Appendix C, I have been denied compensation from the GCCF. 
        Why?
    A. 21: The GCCF does not arbitrarily disqualify any claimant from 
GCCF compensation. But the critical issue remains--can the claimant 
demonstrate damage due to the oil spill? There are many industries and 
businesses that would never be able to demonstrate such a causal link 
in the courtroom; nevertheless, the GCCF has paid numerous such claims 
in situations where the industry or profession can provide such a link.
Q.  22: How do you measure claims ``processed'' and what does this term 
        mean? In the GCCF process, what does the term ``under review'' 
        mean? What is the total number of claims that have not been 
        paid, and how do you account for the high number? How many 
        claims have been awarded quick payment and how many final 
        payment? Why are there so few payments (other than quick pay)? 
        Why have there been so many refused payments? I have heard that 
        there have been a lot of fraudulent claims. If this is true, 
        how many of these fraudulent claims have been turned over for 
        prosecution and how do these numbers relate back to the total 
        number of claims not paid? Why have your claims left to process 
        numbers risen from around 10,000 at the end of July to now over 
        17,000? How many claims has the GCCF paid in full (at the full 
        requested amount)?
    A. 22: ``Processed'' means that the claim has been filed, has been 
reviewed by the GCCF and is now ready for payment or, alternatively, 
has either been denied as ineligible or deemed deficient as lacking the 
necessary documentation to support the claim. When a claim is being 
considered it is ``under review.'' To date some 13,000 claims have not 
yet been processed; those that have not been paid have been determined 
to be either ineligible for lack of a link to the spill or lack of 
minimal proof to corroborate the requested damage. The GCCF has issued 
129,453 quick payments and 63,585 final payments. Quick payments are 
preferred by some claimants either because they have already been 
sufficiently compensated through the Emergency Payment Program or the 
claimant can no longer provide minimal proof for further payments. The 
GCCF cannot pay claims that lack the bare minimum of proof required. 
There have been approximately 17,000 claims that were determined to be 
potentially fraudulent; after careful review internally by the GCCF 
investigative team, we have forwarded approximately 3,500 of these to 
the Department of Justice for further investigation and, where 
appropriate, formal prosecution. Although the number of claims to be 
processed remains steady, this is directly attributable to the 
advantages of filing with the GCCF. None of these claims currently in 
the queue in recent weeks have been delayed or slowed in processing. 
They will be processed within the 90 day period, probably sooner. 
Finally, the GCCF does not report how many claims are paid at the full 
requested amount (the requested amount is often meaningless; see my 
response to Question 8 above).
Q.  23: Deducting the small amount of claims that GCCF questions that 
        may be fraudulent, what is the total amount of money claimants 
        have requested for their interim payments to date? What was the 
        total amount of money requested for emergency advance payments? 
        What was the total amount of money actually paid to those 
        claimants? What is the total amount of money to date GCCF has 
        paid those claimants? Subtracting all payments made to 
        claimants that have signed releases and those you think might 
        be fraudulent, how much would the GCCF have to pay out if you 
        were to pay in-full the balance of the claimants that have not 
        been paid or signed releases?
    A. 23: The GCCF does not report what claimants request, either in 
interim, full or emergency payment submissions. To date, the GCCF has 
paid $2,583,962, 010 in emergency payments; $1,293 735,000 in quick 
payments; $ 450,838,713 in interim payments; and $1,538,634,927 in 
final payments. The GCCF currently has $385,362,000 outstanding in 
final payment offers.
Q.  24: At what point in this debacle was it determined that if a 
        claimant filed an Interim Claim they could not file a Full 
        Review Final Claim? Where on the website or in the 
        documentation is this explained? In addition, on several 
        occasions representatives at your call center have stated that 
        if we did not want to continue receiving Interim Claims, we 
        could file a Full Review Final Claim. Whether this is or is not 
        the case, representatives are misinforming claimants, which is 
        inevitably affecting their decisions regarding the claims 
        process.
    A. 24: A claimant may file both an interim claim and a final claim. 
Thousands have done so. The information can be found on the GCCF's 
website: www.gulfcoastclaimsfacility.com
Q.  25: I was recently told by the GCCF that you cannot submit another 
        claim until the Determination Letter offer expires. Nowhere in 
        any documentation is this listed as being the case. Was the 
        representative who stated this lying?
    A. 25: A claimant can reject a GCCF determination letter and then 
submit another claim. The claimant, not the GCCF, controls this 
decision.
Q.  26: How many claims have been paid to individuals who were not 
        working at the time of the oil spill?
    A. 26: The GCCF does not track how many individuals who received 
GCCF payments were unemployed at the time of the oil spill.
Q.  27: I am a major claimant and have been as frustrated as everyone 
        else in their process. You have stated previously that if a 
        large claimant wishes to meet with the accountant that is 
        handling his claim, he can request a meeting and the accountant 
        will be glad to meet with the claimant and review his claim and 
        explain to him how his claim will be paid according to your 
        current protocols. Once a request has been made, how long will 
        it take for the claimant to have this meeting with your 
        accountants or auditor?
    A. 27: ``Everyone else'' has not been frustrated by the GCCF 
process. Once a claimant meets with GCCF accountants for tailored 
consideration of the claim, the claim will be paid depending upon how 
long it takes the claimant and the accountant to review the claim and 
provide the necessary information. I cannot speak to the facts of the 
individual claims submitted in this question without knowing first the 
name of the claimants and the claim numbers.
Q.  28: When GCCF has hired an expert to visit a claimant's site and 
        review his operation and provides a report to GCCF, why does 
        GCCF refuse to supply a copy of that report to the claimant? Do 
        you have a procedure for a claimant to obtain a copy of an 
        expert report that was made of his business? If so, please 
        describe that procedure.
    A. 28: A claimant is always entitled to examine any part of his/her 
own claimant file unless, of course, the report pertains to evidence of 
fraud and is part of an ongoing criminal investigation. In such cases, 
the investigative report is sealed unless it is forwarded to the 
Department of Justice. In all other situations, the claimant has 
complete access to the file.
Q.  29: After receiving a report and evaluation of the claimant's 
        business by a GCCF expert and the GCCF paying an emergency 
        advance payment, why does the GCCF not pay the claimant's 
        interim payment within the GCCF 90 day protocol?
    A. 29: The GCCF does pay interim payments within the GCCF 90 day 
protocol period unless, of course, the claim is deemed ineligible or 
deficient after initial ``processing.'' There are other reasons for 
possible delays in payment, including potential fraud, inability to 
verify tax identification numbers, etc., but, as a general rule, it is 
rare for a claimant not to hear from the GCCF within the 90 day period.
Q.  30: As of November 1, 2011, how much money has been placed in your 
        GCCF escrow account? How much of that money has been paid out 
        for cleanup costs or to companies other than for lost wages for 
        individuals and lost profit and income for businesses? How much 
        accessible cash is left in the GCCF escrow account to pay lost 
        wages for individuals and lost profit and income for business 
        claimants as of November 1, 2011?
    A. 30: The question asks the status of GCCF payments as of November 
1, 2011. Included on the GCCF's website is the most current statistical 
information in response to the various questions regarding GCCF 
payments. As of January 18, 2011, $5,925,749,856 has been paid to 
claimants. The bulk of this amount, approximately $5.6 billion, has 
been paid for lost earnings or profits. The remainder has been paid to 
claimants for removal and clean-up costs and other related claims. 
Payments to government entities are also paid by BP from the escrow 
account. According to the latest BP public report, BP has paid out a 
total of $7,843,227,405 ($5,925,749,856 of that amount paid to business 
and individual claimants by the GCCF).
Q.  31: When are the responsible parties scheduled to place additional 
        cash in your GCCF escrow account? How much do you anticipate 
        will be deposited in your GCCF escrow account within the next 6 
        months and within the next year?
    A. 31: Pursuant to the escrow agreement, BP is responsible for 
paying $5 billion per year into the escrow account. BP has also agreed 
to honor any financial obligations imposed by GCCF claims 
determinations over and above the $5 billion.
Q.  32: Do you have enough money in your GCCF escrow account to pay all 
        outstanding claims from individuals for loss of earnings and 
        businesses for lost earnings and profit if you paid them what 
        they have requested? If the answer is no, how much money are 
        you short?
    A. 32: Yes, there are ample funds in the GCCF escrow account to pay 
any and all eligible claims. But, of course, there could not possibly 
be enough funds in the escrow account to pay claimants for ``what they 
have requested.'' (See my response to Question No. 8.) It makes little 
sense to focus on claimant amounts that are ``requested'' when such 
amounts are often all out of proportion to damages actually suffered as 
a result of the oil spill.
Q.  33: Has the GCCF paid a claim in the amount of $10 million without 
        any documentation and at the request of BP?
    A. 33: No. Last fall, the GCCF did pay $10 million with 
documentation and at the request of BP.
Q.  34: Mr. Feinberg stated after claimant comments that every business 
        has ``unique'' elements of damage; however, GCCF methodology 
        does not allow small businesses without attorneys and under 
        $250,000.00 in claims any ``unique'' opportunity to prove their 
        claims.
    A. 34: Untrue. The GCCF Methodology permits small businesses (and 
all other claimants) to prove their individual claims based upon unique 
individual, often idiosyncratic, elements of damage. A large majority 
of business claimants engage in direct communications with the GCCF 
accounting staff during the course of review and evaluation of their 
claims. Any individual claimant is informed of the opportunity to ask 
for a tailored re-review of the claim to offer additional information 
unique to that claim.

Q.  35: We were told in the beginning by both BP claim adjusters and 
GCCF claim adjusters that utilizing 4 years of revenue would not only 
be more accurate but would ensure a quick payment turn-around. Further 
research into forensic accounting methods support the four years of 
data comparisons, discarding the highest and lowest years. If this is 
true, why does GCCF methodology utilize 2009 revenue as the primary 
source of projected revenue? In the case of our ``unique'' 
circumstances, our 2009 revenue was below normal because of eminent 
domain deadlines given to us from FDOT to relocate our business. Our 
attention to sales revenue had to be temporarily sacrificed in order to 
meet those deadlines, yet the GCCF continues to utilize projections 
based on 2009 revenue. What is the GCCF methodology regarding the use 
of revenue over a broader period than just 2009? Has the GCCF 
considered allowing claimants to use revenue from 2011 to justify their 
claim?

    A. 35: The GCCF Methodology permits evaluation and analysis based 
upon other than 2009 revenue. Generally 2008, 2009 and pre-spill 2010 
earnings and revenue are reviewed and evaluated. Depending upon the 
information available and provided by a claimant a ``broader period 
than just 2009'' is evaluated when it will benefit the claimant. The 
GCCF will also consider revenue from 2011 to justify a claim. I cannot 
speak to the facts of the individual claims submitted in this question 
without knowing first the name of the claimants and the claim numbers.
Q.  36: GCCF methodology does not allow for ``unique'' elements of 
        small business income and expenses that are primarily fixed in 
        reality. There is no labor to cut. We have no large sums of 
        cash flows to support recent investments of expansion 
        equipment, land and buildings. Small businesses operate 
        differently than large publicly traded companies who have 
        investors contributing to cash flow or who have large service 
        areas. Our service areas are all local. Therefore, when 
        utilizing a forensic approach in determining loss of income, 
        percent damages should be calculated by using average gross 
        profits added to the percent damage in gross revenue. The only 
        opportunity that I will have to prove this reality is with a 
        judge and jury because Mr. Feinberg is refusing to abide by his 
        own stated words that every business has ``unique'' elements of 
        damage.
    A. 36: This statement fails to ask a question. I would reiterate 
that ``every business has 'unique' elements of damage.''
Q.  37: Failed start up of expansion within old or new businesses is 
        not being given any considerations as damage--at least this is 
        true for our claim. We invested about $100,000.00 dollars in 
        new equipment to expand our business. With zero help from our 
        banking industry, we had no choice but to finance the start-up 
        with cash flow from profits from the existing business 
        operations. Our sales revenue for the first 4 months of 2010 
        was sufficient to support the start-up of this expansion 
        equipment beginning in the summer of 2010. However, the 
        economic damage of the spill created greatly reduced revenue, 
        an inability to confidently project future revenue and 
        insufficient cash flows, we could not start-up the expansion. 
        This created a situation where we lost the client who was to 
        operate the expansion and pay us a lease for the land, 
        buildings and equipment recently purchased. Now we have no 
        choice but to try and sell the equipment at a 65% loss. Why is 
        the GCCF not allowing any consideration for these damages? Is 
        there anyone at the GCCF that actually understands how 
        businesses operate?
    A. 37: The GCCF will allow consideration of any and all damage 
models advanced by individuals and businesses. The GCCF accountants are 
skilled in all areas of accounting including the expertise required in 
responding to claims submitted by startup companies or companies that 
were prepared to expand at the time of the oil spill. We will consider 
damages in these contexts.

Q.  38: I rent a condo in Panama City, Florida, where I work. I sell 
mobile home/manufactured housing. Our business was drastically affected 
by the oil spill for the simple reason that our customers were affected 
by the oil spill. Many customers and/or potential customers lost 
income, which affected their ability to purchase a home. The continued 
loss of income has affected their credit rating which in turn 
eliminates many from qualifying for a loan. When I and others in my 
line of work filed claims with the GCCF, we were told we had to apply 
to a special fund set up thru the real estate association of the state. 
When we contacted the real estate association we were told that the 
fund was only for licensed real estate agents. Mobile Home salespeople 
in Florida or Alabama are not real estate agents and as such we are not 
required to hold a real estate license. Even after sending the GCCF a 
letter from the real estate commission with the explanation why we were 
not eligible to file claims with them, we still received a denial from 
the GCCF stating that we were not eligible to file with the GCCF 
because we were real estate agents. It is also my understanding that 
salespeople who sell time share condos were also similarly 
misclassified. Can you explain this discrepancy and what actions GCCF 
is taking to rectify this misclassification?

    A. 38: Real estate agents and condo rental owners are all eligible 
to file a claim with the GCCF. Initially, all real estate agents were 
directed to special real estate funds that were established in each 
state to pay claims as deemed appropriate by the administrators of 
these local funds. However, at the conclusion of the emergency payment 
program, on November 23, 2010, the GCCF decided to invite all real 
estate agents, condo rental owners, and any other individual or 
business with a valid, eligible claim to file with the GCCF. These 
claims are evaluated under the same eligibility criteria as all other 
claims for lost earnings and profits. I cannot speak to the facts of 
the individual claims submitted in this question without knowing first 
the name of the claimants and the claim numbers.
Q.  39: My husband and I are musicians along the Gulf Coast. We lived 
        in Orange Beach at the time of the oil spill and now reside in 
        Loxley, Alabama. We suffered a major loss in income after the 
        oil spill due to the loss in tourism in our area. We provided 
        the Gulf Coast Claims Facility all information that was asked, 
        including profit/loss statements, gig dates, venues that hired 
        us, etc. We provided income information from previous years 
        proving a clear drop in income after the oil spill. We 
        personally know many other musicians and restaurant workers who 
        were paid by GCCF for their losses. We, on the other hand, were 
        denied.
    We received a letter stating that GCCF could not see a correlation 
        between our losses and the oil spill. This is ridiculous! There 
        is absolutely a correlation. What in the world do we have to do 
        to show a correlation? We make our living by playing music. We 
        have no other jobs. It is what we do, and we are grounded in 
        this area due to our home and family....it is not an option to 
        move, nor would we want to or feel that we should have to. We 
        want answers. We feel that you are holding onto money that 
        should be given to people who were directly and negatively 
        affected by the spill, including us. As far as the phone number 
        to call on the GCCF website for questions regarding our claim, 
        it is nothing but a run around. They could not tell me anymore 
        about the status of my claim than I could find out for myself 
        on the GCCF website. Even after speaking to a manager, no one 
        knew anything.
    This is an injustice to the people of the Gulf Coast. It is wrong 
        and cannot be dismissed. We will not forget and will never give 
        up in the fight for justice--it is imperative that you do what 
        is right. We are not asking for anything more than what our 
        actual loss was compared to other years. We were expecting a 
        big summer in 2010 and instead we were barely able to feed 
        ourselves.
    A. 39: This statement fails to ask a question. I cannot speak to 
the facts of the individual claims submitted in this question without 
knowing first the name of the claimants and the claim numbers. However, 
if this claimant believes that she has proof demonstrating a link 
between her economic damage and the oil spill, she should present it to 
the GCCF and we will evaluate the claim.

Q.  40: The last Saturday of March 2011, I received a call from an 
accountant that was from the GCCF and was told that the amount I was to 
receive was $600,000.00 plus for the interim payment and $400,000.00 
plus for the final payment. Then, suddenly, I was offered a ``Quick 
Payment,'' though I did not submit one. I was told by a GCCF 
representative that the Quick Payment form was faxed in by me, though I 
sent it in later. After that, my interim payment stopped just as 
quickly as the Quick Payment form was received. Twice since April 5, 
2011, this Quick Payment claim was looked at and denied.

    Now some ninety days later, there is still no interim or final 
payment and my question is why? According to Mr. Feinberg, the 
shrimpers are now getting more money. Well, I sold the shrimp that 
these shrimpers caught--shouldn't I get be treated the same as these 
shrimpers? As least most, if not all of them, are back to shrimping, 
while I am sitting here having to live with a friend while awaiting my 
payment. Is the GCCF delaying my interim and final payment claim in the 
hopes that I will settle for much less than what I am owed through a 
Quick Payment?

    A. 40: This statement fails to ask a question. I cannot speak to 
the facts of the individual claims submitted in this question without 
knowing first the name of the claimants and the claim numbers. The GCCF 
does not delay Interim or Final payment requests in order to encourage 
the Quick payment option.
Q.  41: I have a pending claim before the GCCF, and I can tell you from 
        personal experience GCCF's processing delays (deliberate or 
        ineffective effort, it matters not) lead to desperation 
        settlements by claimants, driving down BP's ultimate cost. GCCF 
        never compensates for their delay which has wrecked many 
        businesses' long-standing vendor relationships and individuals' 
        credit. It will be a long time before our region can recover 
        from these economic damages.
    A. 41: This statement fails to ask a question. The GCCF strives to 
make any and all payments that are documented within 90 days. I cannot 
speak to the facts of the individual claims submitted in this question 
without knowing first the name of the claimants and the claim numbers.
Q.  42: I would like to take this opportunity to again ask why you use 
        mixed-math methodology to lessen the claim amounts and to 
        question why you stall claims for months on end to make sure 
        claimants will accept any amount you offer so they can feed 
        their children for a few days. I know your people are very 
        competent and are following a well-orchestrated plan to save BP 
        billions of dollars, which is why you are worth $1.25 million a 
        month to them.
    The Deepwater Horizon oil spill was a disaster to the Gulf Coast 
        states, but the Feinberg plan to make the people who lost their 
        livelihoods ``whole'' has been catastrophic to hundreds of 
        thousands of families in these states. They are not claim 
        numbers to us. To us they are families--husbands, wives, 
        children, mothers and fathers, and friends. The oil spill took 
        their income, but you took their hope, their homes and 
        properties. Some lost their families; all of us have lost our 
        ability to start over because of your tactics to ensure we 
        could never recover. You have declared each family worth a 
        lifetime value of five thousand dollars, and each business that 
        employed many families worth twenty five thousand dollars. My 
        question to you is this, sir--How can you sleep at night, 
        knowing that it is you, your methodology, your stalling 
        tactics, your drive and tenacity that has brought millions of 
        Americans to destitution?
    My claim has been sitting in re-review since July 2011. In June you 
        gave me a meager 1/3 payment for the first quarter interim 
        claim. Ten days later I got a letter from you with no check but 
        with a very low take it or leave it final claim offer. Then you 
        posted 2 interim claim re-reviews on my GCCF web page and have 
        now added my third quarter interim claim to the list as under 
        review. Not a single word from GCCF since July. Incompetence? 
        Five months to re-review is pathetically slow even for experts, 
        or is it just your usual stall tactic to force me to take a 
        pathetic offer and sign away any hope of recovering from the 
        catastrophe that you initiated and orchestrated after the oil 
        spill?
    So many of us could have recovered if we had been able to keep our 
        equipment, insurance, advertising, etc. I am only one of the 16 
        men that lost everything due to the GCCF's incompetent handling 
        of the claims of a growing company that lost its customer base 
        because of the oil spill.
    Is your contract with BP fixed or incentivized? Do you make more 
        money when you save BP money?
    A. 42: I disagree with the substance and tone of the question. The 
GCCF has distributed about $6 billion to well over 219,000 individuals 
and businesses in the Gulf in just the past fifteen months. There are 
no ``stalling tactics'' being imposed by the GCCF. If claims are 
delayed, there are legitimate reasons pertaining to eligibility and 
proof. My contract with BP is fixed. It does not depend at all on the 
number of claims paid or not paid. My compensation is in no way tied to 
claims rate or dollars distributed. I cannot speak to the facts of the 
individual claims submitted in this question without knowing first the 
name of the claimants and the claim numbers.
Q.43: I own a start-up that has been struggling to get back on track. 
        We received a $45,000 emergency payment which helped at the 
        time but was not enough to become whole after so much time and 
        effort. The problem has been the final offer. I spent over 5 
        years preparing to begin my company which I planned to expand 
        across the southeast. We are a unique operation specializing in 
        being the personal buyer for law firms, attorneys, physicians 
        and business professionals in addition to serving the states 
        farmers markets and as a wholesaler focused strictly on Fresh 
        Gulf Shrimp and seafood.
    I didn't just decide to start selling shrimp on the back of my 
        truck, and I have extensive proof of our intent and affidavits 
        for wholesale contracts as well as proof of the business model 
        before and after the spill. We now operate out of a BP service 
        station thru a sister company selling fresh Gulf shrimp cooked 
        and uncooked in addition to their regular menu. We have a video 
        of BP employees eating our seafood well after the spill when we 
        tried to overcome the stigma to being building our business but 
        the time just wasn't right as people were still afraid of the 
        Gulf seafood.
    Two BP employees were on video at my business making jokes about 
        the oil spill while eating our product and it was very 
        insensitive to our customers. We have struggled and tried since 
        the spill to get this all going and will continue until we 
        finally succeed even if it takes another decade. We may be a 
        start-up, but we have built a solid following even with the 
        negative reviews of the Gulf seafood. However, the recent media 
        is starting to become like the Alaska spill and people are real 
        concerned for the safety of Gulf seafood which may be worse now 
        than in the past.
    The problem has been the amount offered and the length of time it 
        has taken to get a response. We finally got an offer far below 
        the value of 1 single contract we had, and they have taken so 
        long that I must take the offer or go completely out of 
        business. I am frustrated we have to take an offer below what 
        we wanted but if we don't I will have to just give up. If there 
        are any options, could you please let us know as we do not want 
        to sign a release as I feel we have been intentionally delayed 
        so they could hope we got so desperate we would have to take 
        their offer? When you do audits please look us up and hopefully 
        this will all get overturned and we can claim the amount we 
        should have received.
    A. 43: I cannot speak to the facts of the individual claims 
submitted in this question without knowing first the name of the 
claimants and the claim numbers. But, the GCCF does offer Interim 
payments to any claimant who does not want to sign a release and would 
rather return to the GCCF for additional compensation until any future 
Gulf Region uncertainty is resolved. There is no reason for any 
claimant to sign a release if he/she would rather wait and accept 
Interim payments on a quarterly basis.
Q.  44: Do you believe GCCF's procedures and methodologies force 
        claimants to accept low final payment offers out of 
        desperation?
    A. 44: No. GCCF procedures and methodologies do not compel 
claimants to accept low final payment offers out of desperation
Q.  45: The charge has often been levied that the GCCF hierarchy is 
        oblivious to the culture and history of the Gulf Coast--it's 
        people, history and industry--and is therefore incapable of 
        adequately servicing their claims. How do you respond to that 
        charge? Why did you not establish the GCCF headquarters on the 
        Gulf Coast?
    A. 45: I have made every effort to return again and again to the 
Gulf Coast--to local communities, town, and Parishes--to better 
understand Gulf Coast culture and the attitudes and values of Gulf 
Coast residents. I have participated in 37 Town Hall meetings 
throughout the Gulf region. In addition, the GCCF has retained a 
substantial number of local lawyers, claims administrators, 
accountants, and other citizens of the Gulf region to help claimants by 
staffing local claims offices. I do agree that there is a history and 
culture unique to the Gulf; but the GCCF has undertaken major strides 
to better understand the region and its citizens.
Q.  46: Can you describe your process for hiring and training auditors 
        at GCCF locations? What are the minimum criteria required to 
        perform that job? With how many outside auditing firms has the 
        GCCF contracted, and where are they located?
    A. 46: The GCCF has staffed local claims offices with claims 
adjusters who assist with the receipt and initial review of submitted 
claims. We have subcontracted with the Worley Company--a respected 
claims adjustment company in Louisiana to help with the claims intake 
process. Individuals employed by Worley and PricewaterhouseCoopers, 
have the necessary background and expertise to evaluate claims and 
calculate damages.
Q.  47: What is the process for adopting a methodology to calculate 
        losses in the seafood industry? How is the process initiated 
        and by whom?
    A. 47: The GCCF only adopts a methodology to calculate losses in 
the seafood industry after it first hears from claimants in the Gulf, 
evaluates and analyzes all available seafood data and statistics, hires 
experts from a variety of related fields--biology, marine, 
environmental and economic--and thereafter develops methodologies 
designed with eligibility and minimal proof requirements in mind. I am 
responsible for initiating the process and overseeing the formulation 
of all methodologies. It is a detailed, carefully crafted process, 
designed to result in credible, convincing methodologies which are more 
generous than existing law when it comes to eligibility, amount of 
compensation and minimal proof requirements.
Q.  48: Are specific goals set with quantifiable metrics? For example, 
        are methodologies evaluated on the basis of their anticipated 
        ability to support the industry, are they evaluated on the 
        basis of their anticipated ability to settle claims, or are 
        they evaluated on the basis of their anticipated cost? If one 
        or more of these (and other metrics) are considered and 
        measured, how are they ranked in evaluating the methodology?
    A. 48: The specific goals in developing our GCCF methodologies 
include: maximizing compensation to all eligible claimants with minimal 
(but necessary) proof requirements. The methodologies are specific to 
each individual claimant; they are not developed to subsidize a 
particular industry, to promote aggregate settlement of claims or with 
administrative costs in mind. All GCCF methodologies are individual 
specific, aimed at compensating all eligible claimants based on their 
own individual submissions and assumptions.
Q.  49: Who makes the final decision on a new methodology? Are 
        representatives of BP involved in the evaluation and decision-
        making process?
    A. 49: As the Administrator of the GCCF, I bear final 
responsibility for approving any GCCF methodology. Both BP (as 
signatory to the Trust Agreement establishing the GCCF) and the 
Department of Justice monitor the development of these methodologies 
and are invited to comment; but they have no authority over the 
ultimate decision making process. I also welcome input from other 
interested Gulf region associations--seafood associations, tourism 
boards, real estate associations, etc.--in order to develop and 
implement methodologies that are credible, generous and fair.
Q.  50: What research is conducted and by whom? Is research conducted 
        in the field? What are the qualifications of the individuals 
        conducting this research, including industry-specific prior 
        experience? Is input solicited from GCCF adjusters and 
        accountants in the field? What level of testing is conducted on 
        a methodology with actual claimant data before its adoption?
    A. 50: Extensive research is done by experts retained by the GCCF 
to determine appropriate methodologies. Research is conducted in the 
field by interviewing and consulting with individuals and industry 
representatives. GCCF experts also examine all available reports, 
statistics, data and other information. The individual experts are 
highly qualified. Input is also solicited by GCCF evaluators and 
accountants in the field. The GCCF reaches out to actual claimants to 
take into account their opinions concerning proposed methodologies.
Q.  51: When did the GCCF first become aware that the brown (spring) 
        shrimp season was problematic in the Gulf of Mexico? What were 
        the problems with the brown shrimp season?
    A. 51: The GCCF continues to promote ongoing discussions with 
individuals and businesses involved in the shrimping industry. The 
scarcity of brown shrimp, the perception that such shrimp are not 
healthy to eat, and the impact of shrimp imports on the domestic 
shrimping industry are well known to the GCCF; representatives of the 
shrimping industry have discussed these problems with the GCCF for the 
past year.
Q.  52: When did the GCCF first become aware that the white shrimp 
        season was problematic in the Gulf of Mexico? What were the 
        problems with the white shrimp season?
    A. 52: See my answer to question 42 above. The same answer pertains 
to the white shrimp season.
Q.  53: When did the GCCF begin formulating a new methodology to 
        compensate the shrimping industry for anticipated future 
        losses? How long is it anticipated that it will take to 
        formulate, test and implement a new methodology to compensate 
        the shrimping industry for anticipated future losses?
    A. 53: The GCCF began formulating a shrimp methodology immediately 
following the end of the Emergency Payment program in November of 2010. 
The 2X factor for future payments was designed at the time with the 
shrimping industry in mind, based upon all of the expert information 
received up to that point. We will announce a new methodology to 
compensate the shrimping industry for anticipated future losses. A 4X 
factor, rather than a 2X factor, will be used in compensating 
commercial shrimpers and processors as well as commercial crabbers and 
crab processors for damage through 2015 (the same as the oyster 
industry). This new shrimp methodology is being in place.
Q.  54: When did the GCCF become aware that 2011 losses in the 
        shrimping industry may exceed those losses in 2010, thus 
        rendering the methodology for calculating anticipated future 
        losses ineffective and obsolete? How did the GCCF become aware 
        of this? What are the channels of communication, beginning in 
        the field offices and ending with Ken Feinberg, for this 
        information to be transmitted?
    A. 54: The new shrimp methodology to be put in place concerns 
itself not so much with 2011 damage versus 2010 damage, as much as the 
problem of ``future risk,'' the concern that the shrimping industry may 
not return to normal as originally hoped for at the end of 2013; 
instead, based on all the expert input we have received, the risk is 
sufficiently problematic so as to extend our ``futures factor'' from 2X 
to 4X, or from 2013 to 2015. The GCCF has continuously monitored events 
in the Gulf, engaging in ongoing discussions with shrimpers and other 
industry representatives. This information has been communicated 
directly to me as Administrator of the GCCF. The GCCF is responding to 
these concerns with a new, more generous shrimp methodology.
Q.  55: Why was my claim denied for lost real estate value? I live in 
        Gulf Shores only 25 yards from the Gulf of Mexico. My back yard 
        is the beach that BP polluted. My properly values have been 
        permanently damaged from the spill. A purchaser of any of my 
        Gulf properties will discount them due to the fact that a huge 
        oil spill has happened in the past and will now more likely 
        happen again in the future. You have paid the County and City 
        for lost property tax revenues; does this not indicate that you 
        in fact agree that property values have declined?
    A. 55: I cannot speak to the facts of the individual claims 
submitted in this question without knowing first the name of the 
claimants and the claim numbers. However, the GCCF will not pay claims 
for lost property value in those cases in which the claimant continues 
to maintain ownership of the property. The property is a valuable asset 
which continues to be owned by the claimant. The GCCF will pay for 
``sunk costs'' associated with maintenance of the property if such sunk 
costs constitute damage related to the oil spill. In regard to claims 
for County and City lost property tax revenues, those claims are not 
under the authority of the GCCF but are handled separately by BP.
Q.  56: Why was my claim denied for damaged property? I had a renter 
        that walked outside of our beach house and got tar on their 
        feet and tracked it into the house. This happened before the 
        deep clean of the sand, and oil remained on the beach for a 
        very long time. If someone steps into a spill at the grocery 
        store and it causes them damage, the grocery store is required 
        to pay for that damage. Why is property damage directly 
        attributable to the oil spill not similarly treated by the 
        GCCF?
    A. 56: I cannot speak to the facts of the individual claims 
submitted in this question without knowing first the name of the 
claimants and the claim numbers. But property damage directly 
attributable to the oil spill is compensable and will be paid by the 
GCCF. The GCCF has paid such claims.
Q.  57: Why was my claim denied for the cost of my fishing license and 
        the fish I catch to eat, as I was not able to use my fishing 
        license and I was not able to keep any fish to eat?
    A. 57: I cannot speak to the facts of the individual claims 
submitted in this question without knowing first the name of the 
claimants and the claim numbers. However, subsistence claims involving 
fishing are compensable by the GCCF. But the claim must be documented; 
the claimant must demonstrate that, because of the closing of fishing 
grounds due to the oil spill, the claimant was unable to fish and live 
off the fish caught. Commercial fisherman and claimants who rely on 
fishing to provide the minimum necessities of life and survival are 
potentially eligible subsistence claimants. FAQ Nos. 108 through 111 
posted on the GCCF website provides more information as to how the GCCF 
handles subsistence claims.
Q.  58: I owned a restaurant in Mobile that specialized in seafood and 
        steaks. When the oil spill happened and seafood became sparse, 
        I made a claim through the GCCF. I chose to do month to month 
        claims, trying to be honest, not knowing what my business would 
        do from one month to the next. I followed all of the rules. As 
        the situation turned out, I should have just picked a figure 
        out of the air for a six-month loss. I made monthly claims with 
        actual losses compared to the previous two years income. My 
        April claim was paid in full, which was a pleasant surprise.
    This is when the bottom fell out. I had three months of claims that 
        they considered all at once and the figure GCCF paid was 
        nowhere near what I claimed: it was about $34,000.00 short. I 
        called asking for an explanation as to how they came up with 
        the figure and no one could explain it to me. The following 
        month I submitted my claim, and that payment was about 
        $21,000.00 short, and again, no one could explain how they 
        arrived at the figure they paid me. Then the last claim I 
        submitted was denied completely, which of course no one could 
        explain. I have now closed my restaurant, because I could not 
        overcome the losses I suffered. I was so disgusted with the 
        whole process that I settled for the final claim, just to be 
        done with them, which I now regret deeply. Mr. Feinberg has 
        stated that people accepted the final settlement because they 
        couldn't prove their losses any further. That statement 
        couldn't be further from the truth. I understand there will be 
        an independent audit of the GCCF. My question is whether we 
        have any recourse on these situations? I am curious: what, if 
        any, recourse I might have after an audit examines the GCCF and 
        determines there were significant shortcomings in their 
        processing of claims. I am still deeply in debt to vendors, 
        etc., and have lost my business.
    A. 58: I cannot speak to the facts of the individual claims 
submitted in this question without knowing first the name of the 
claimants and the claim numbers. Any claimant dissatisfied with his or 
her offer from the GCCF may seek an independent review of GCCF 
determinations by the United States Coast Guard or may submit a claim 
in court. I would note that such review by the Coast Guard has been 
sought by over 1,650 claimants during the past fifteen months; in every 
single instance, the United States Coast Guard--after conducting an 
independent review of GCCF determinations--has ultimately agreed with 
the GCCF.

Q.  59: My deckhand invested $89 into making his living on my charter 
boat and makes between $35k to $45k a year. All he has invested is a 
pair of flip flops and a fillet knife. He was offered $25,000 to settle 
because the GCCF considered him a business and he itemized his taxes. 
My deckhand has no risk in this business. I have $220,000 invested 
along with monthly expenses in a Hatteras boat along with 9 years of 
blood, sweat and labor and I was offered the same $25,000 to settle. 
This is fundamentally wrong, as I have assumed all the investment and 
all of the risks involved. Why all businesses are categorized this way? 
Why is there no formula for settlement based on who assumes the risks 
associated with the business?

    Unlike the oyster men that operate in 6 to 8 feet of water, who can 
quickly see the damage to a bed of oysters, we offshore fishermen 
operate in waters that are up to 6,000 feet deep, and there is 
significant uncertainty for our future. What recourse do we have if the 
fish stocks collapse in the next 4 or 5 years, long after the GCCF and 
BP have pulled up their stakes and left? Should charter and commercial 
fishermen be offered a settlement that takes into consideration the 
uncertainty of the long-term health of the fishery?

    A. 59: I cannot speak to the facts of the individual claims 
submitted in this question without knowing first the name of the 
claimants and the claim numbers. However, in deciding whether a claim 
is submitted by an ``individual'' or a ``business'' the GCCF looks to 
the tax returns of the claimant and categorizes claims based upon such 
prior classification. In other words, the GCCF relies upon the 
claimants own decision as to how his/her livelihood should be 
classified. ``Risks'' associated with the business are factored into 
our damage calculations. Finally, no claimant is required to accept a 
Final Payment designed to make a ``reasonable'' estimate of how long it 
will take for the Gulf to return to normal; over 33,700 individuals and 
businesses have preferred an Interim Payment so they can continue to 
return to the GCCF for additional compensation until the claimant is 
more comfortable with predicting the future. By agreement, the GCCF 
remains in place to process claims until August 2013; thereafter, 
charter and commercial fisherman, as well as other claimants, can 
litigate in court if they believe they have a valid claim and have not 
accepted a Final Payment from the GCCF.
Q.  60: In my Full Review Final Claim documentation, I identified clear 
        discrepancies with the amounts that were calculated by someone 
        at the GCCF. Considering the Calculation Methodology 
        explanations of the amounts offered by GCCF are provided in an 
        approximately one inch by four inch area, it is clear why many 
        wonder where the numbers are coming from. The yearly 
        methodology area is slightly wider in size but still lacks the 
        detail expected in this process. Furthermore, the LOI 
        percentage is explained nowhere in the documentation. For 
        businesses that have expenses whether they operate or not, LOI 
        percentage is not cut and dry. Where are the spreadsheets and 
        numbers similar to what we were asked to provide? I have 
        provided numerous spreadsheets, tax forms, and other requested 
        documentation for my claim and still nothing.
    Being one of the few that has not excessively hounded the GCCF with 
        questions, I feel that as I am trying to find a final 
        resolution with this matter, it is time to demand a more 
        expeditious response. It has been a year and a half since the 
        Deepwater Horizon incident, and claims still are taking an 
        excessive amount of time to process. Representatives in your 
        call center give vague and scripted answers. This is not 
        progress, this is a shame.
    A. 60: I cannot speak to the facts of the individual claims 
submitted in this question without knowing first the name of the 
claimants and the claim numbers. The GCCF maintains files on each 
claimant who submits a claim. Accountant spreadsheets and work product 
are part of the file maintained by the GCCF. I urge this claimant to 
contact me personally to discuss the merits of the claim.

Q.  61: In early June 2011, I submitted a final claim providing or 
having already provided all documents we were requested to provide 
along with our analysis of the data and the amount of the claim. After 
three months I started to query GCCF about the status of the claim. I 
was told that all claims should be processed within 90 days. But all 
they could tell me is that it ``was being processed.'' They told me 
nothing in addition to what I could find for myself on the GCCF 
website. They could provide no estimate of when your processing would 
be finished.

    I continued to query GCCF over the next month and still was 
provided no case status update. After my claim submission surpassed 4 
months, I finally called Feinberg's ``office'' at 1-800-916-4893 and 
still was provided no information on the claim. This may have triggered 
something as some time later I was contacted by ``Will'' at the GCCF 
who said he was processing the claim. At that time he came up with a 
new list of documents required (more than 4 months after the initial 
claim submission) including P&L's that were previously provided. One 
item he requested was tax returns for 2010. Your website says that tax 
returns for 2010 are required only for ``claimants seeking compensation 
for lost earnings for any period after June 30, 2011.'' I informed 
``Will'' that we were not making a claim for 2011 and asked ``Will'' 
where on the GCCF website was this required. He would only say that he 
needed the additional information to process the claim. Are your claims 
adjusters fully aware of the published protocols you have established 
for reviewing claims? Why is additional information requested four 
months after the initial submission? Why is information requested to be 
resubmitted after it has already been submitted?

    A. 61: Our claims evaluators are fully aware of all published 
protocols and rules for reviewing claims. I cannot speak to the facts 
of the individual claims submitted in this question without knowing 
first the name of the claimants and the claim numbers. I can only 
surmise that additional information was requested four months after the 
initial submission in connection with new information brought to the 
attention of the GCCF by the claimant. Information need not be 
resubmitted if it has already been submitted to the GCCF.
Q.  62: Are your claims offices understaffed? If not, why are claims 
        determinations taking in excess of six months in many cases? 
        Why does documentation previously supplied go missing and need 
        to be resubmitted? How many offices have you closed in the last 
        four months? How many of your offices now operate only during 
        limited hours? Why does the GCCF office in Key West, Florida, 
        remain open while offices in Bayou La Batre, Dauphin Island and 
        Foley are now closed and the offices in Mobile and Orange Beach 
        set to close on November 15th?
    A. 62: GCCF claims offices are not understaffed. In fact, because 
of the diminishing number of claims being submitted in recent months to 
the GCCF, I have concluded that it is now appropriate to close certain 
claims offices in the Gulf or reduce certain hours of operation. Claims 
determinations may take ``in excess of six months'' if claims are 
initially deemed deficient or ineligible, and additional documentation 
is requested from the claimant. In such cases, delay is attributable to 
the claimants' inability to submit such additional documentation in a 
timely manner. Documentation that is submitted does not ``go missing'' 
and does not ``need to be resubmitted.'' The GCCF operates six full 
time offices and 9 offices that are open once a week and by 
appointment. There is no claims office open today in Key West, Florida. 
The other offices referenced in this question have been closed or are 
subject to reduced hours because of diminishing claims volume.
Q.  63: The downsizing and closing of several regional offices is a 
        major concern. Many of these offices support claimants that 
        have limited resources and are still incurring documented 
        losses. To be forced to travel additional distance only further 
        exacerbates their already dire situation. Please respond.
    A. 63: The downsizing and closing of several regional claims 
offices is due to just one fact--diminishing claims volume. Over 77% of 
all claims filed (excluding quick pay claims which must be submitted in 
paper format) have been filed electronically through the GCCF website. 
Only a handful of new claims are now being filed as a result of 
claimants making ``live visits'' to certain local claims offices. 
Claims traffic simply cannot justify maintaining these offices on a 
full-time basis. There are a total of 15 claim site offices that remain 
open (6 with full time hours Monday through Friday and 9 open once 
weekly and by appointment).
Q.  64: Why are the best personnel (licensed insurance adjusters) who 
        work in the regional offices, many of whom have ``draft 
        authority'' granted by various insurance carriers, not allowed 
        to process the claims? Does the GCCF adequately utilize the 
        expertise of licensed insurance adjusters in it claims review 
        process?
    A. 64: I made a considered judgment at the outset of the GCCF 
claims process that local GCCF personnel residing in the claims offices 
not be afforded authority to process claims i.e., determine eligibility 
and the calculation of damages. In a program as vast as the GCCF--with 
over 1 million claims received to date--it would be a huge error for 
local personnel to be afforded check cutting authority. This would 
inevitably result in inconsistencies and disparate treatment of similar 
claimants. Nothing can undercut the credibility of the GCCF more than 
inconsistency and allegations of bias and unfairness. Accordingly, only 
a centralized system and authority, receiving claims from various 
claims office and deciding them on a consistent basis, makes sense. 
Fortunately, the GCCF has utilized the expertise of licensed insurance 
adjusters in local claims offices in reviewing claims.
Q.  65: What are the responsibilities of the GCCF's Attorney-Liaisons? 
        What qualifications were evaluated in choosing the GCCF's 
        Attorney-Liaisons? What were the results of those evaluations?
    Why was a State Director appointed for the states of Alabama and 
        Mississippi, and not for Louisiana and Florida? What 
        qualifications were evaluated in choosing the State Director 
        for the states of Alabama and Mississippi? What were the 
        results of that evaluation? What are the qualifications of 
        State Director for the states of Alabama and Mississippi with 
        respect to his liaison responsibilities?
    What metrics have been used to evaluate the performance of the 
        GCCF's Attorney Liaisons and the State Director for the states 
        of Alabama and Mississippi with respect to their liaison 
        responsibilities?
    From whom has input been sought with respect to the efficacy of the 
        GCCF's Attorney Liaisons and the State Director for the states 
        of Alabama and Mississippi? What are the results of those 
        performance evaluations?
    A. 65: The GCCF's attorney-liaisons provide local, face-to-face 
assistance to all claimants requesting a ``live meeting'' with GCCF 
personnel. These local liaisons are residents of Gulf region 
communities and deal with issues raised by claimants e.g. eligibility, 
calculation of damages, status of a claim submitted to the GCCF, etc. 
The liaisons also work with local elected officials in responding to 
various issues posed by such officials. I chose the liaisons based on 
their familiarity with local residents and their understanding of how 
local claimants will respond to the GCCF. I received recommendations 
from various individuals, local trade organizations and elected 
officials concerning who might act as local liaisons. From these 
recommendations, I chose the local liaisons. These local liaisons have 
the same responsibilities, and were evaluated in the same manner, in 
Alabama, Mississippi, Louisiana and Florida. They have been assigned to 
each state. Their performance is evaluated by senior GCCF personnel on 
a regular basis, based upon their credibility and work in assisting 
local claimants.
Q.  66: Does the GCCF solicit direct input from GCCF evaluators, or do 
        you rely on determination from upper level managers who have 
        not worked a claim during the entire process?
    A. 66: The GCCF solicits direct input from GCCF evaluators in the 
field, as well as input from upper level managers.
Q.  67: Who is Camille Biros and what is her role in the GCCF 
        hierarchy? Please provide her curriculum vitae for the record. 
        What are her qualifications to review and issue determinations 
        on claims? Does the GCCF process require her signature on all 
        claims before they are approved? Does it require her approval 
        on claims above a certain threshold? If so, what is that 
        amount? What happens to claims pending her review if she is on 
        vacation or otherwise indisposed? Since August 24, 2010, how 
        many times has she been to the Gulf Coast to meet with 
        claimants, or otherwise? Has she been anywhere on the Gulf 
        Coast outside of New Orleans? If so, where and when?
    A. 67: Ms. Camille Biros is a member of the senior team at Feinberg 
Rozen. She has worked with me since 1979 assisting me in the design 
administration and implementation of claims review programs including 
the: September 11th Victim Compensation Fund, November 2001 through 
June 2004 and the Katrina Gulf Coast ADR Program, December 2005--
Present.
    The GCCF process does not require her signature or any other 
individual's signature on claims before they are approved. Depending 
upon the complexity of the claim--including the amount--I, along with 
various other senior staff working for the GCCF, may review individual 
claims. The claims process does not depend on the day-to-day 
availability of anyone at my law firm.
Q.  68: How do you respond to frustration expressed by many in 
        statements like the following, ``I wish this was like the old 
        BP days, when we could come into the office and sit down and 
        get a check or even straight answers?''
    A. 68: I recognize such frustration. Claimants from the Gulf Coast 
region are innocent victims of an unprecedented environmental tragedy. 
So their frustration is understandable. But the GCCF has worked more 
efficiently, effectively and fairly than the former BP claims process. 
About $6 billion has been distributed to about 250,000 individuals in 
less than 18 months.
Q.  69: Why does the GCCF send claimants generic deficiency letters 
        absent specifics regarding what additional information is 
        required?
    A. 69: The GCCF does not ``send claimants' generic deficiency 
letters...'' Instead, the GCCF sends correspondence to individual 
claimants which include specific information regarding the reasons for 
the deficiency determination and the specific documentation required to 
cure the deficiency.
Q.  70: I am a charter fisherman and presented complete tax returns, 
        general ledger, bank statements, all required licenses, 
        appointment logs and clearly showed the cancellations in 2010, 
        the receipt of Vessels of Opportunity (VOO) income and a 
        personal loan to support my charter fishing business. I had 
        zero charter income in 2010 but was calculated improperly as 
        having no loss, as VOO income and personal loans are to be 
        excluded from business income. Eventually, I had to sell my 
        boat. I have requested a re-review of my claim and, to date, 
        have not received any payment at all. Do you think I have been 
        fairly treated by the GCCF, Mr. Feinberg?
    A. 70: I cannot speak to the facts of the individual claims 
submitted in this question without knowing first the name of the 
claimants and the claim numbers. If what is stated in this question is 
true and verifiable, the claimant has not been ``fairly treated.'' But 
I would need to authorize a review of the file before agreeing with the 
claimant.
Q.  71: Given the events since the BP Oil Spill on 20 April 2010, and 
        putting yourself in my position throughout the following events 
        since the Oil Spill, what would you do in my current position, 
        and what would you say to someone like yourself who repeatedly 
        says that the GCCF claims process has been successful?
    I will summarize the events over the past 18 months considering 
that I have provided hundreds of pages of detailed documentation 
regarding these events to the GCCF, U.S. Congressman Jo Bonner, U.S. 
Senator Jeff Sessions, U.S. Associate Attorney General Perrelli, 
Alabama Attorney General Luther Strange and other interested parties. 
Again, please put yourself in my shoes.
    In late 2007 you commenced business planning for a unique 
construction company. The niche will be in building homes aimed at the 
high end market for second and third vacation homes and affluent 
retirees.
    You commence business operations in March 2008 with yourself and 2 
independent contractors. Considering the state of the economy and the 
housing market in general, you decide to keep all business operations 
as safe and simple as possible. You fund the start-up costs by taking a 
private mortgage on your personal property, which is used to tool up 
with the specialty tools and equipment required specific to the unique 
construction. You choose to operate on a strict time plus expense 
basis, billed weekly, collected weekly, and the employees paid weekly.
    You decide that most of the future business expansion will have to 
be funded from cash flows of the business, an essential requirement 
following the financial meltdown and lack of funding availability. You 
consciously decide that you will market your business through word of 
mouth and referral. The unique building methodology of your projects 
generates a lot of buzz about your company, with sales leads generated 
from your ongoing projects.
    Throughout 2008 you work on the business processes and procedures. 
You refine your workforce and end 2008 with 3 independent contractors. 
The business continues to grow substantially throughout 2009, and from 
April 2009 through November 2009, you increase your workforce from 3 to 
13 men. You are one of the few construction companies in the area 
actually increasing their workforce and growing their business. 2009 
gross revenues for the business grow by 185.9% compared to 2008 gross 
revenues. You have invested in equipment, equipment trailers, 
construction site trailers, tools and equipment required to support the 
work load and keep 13 men productive.
    Your most challenging problem is the logistics of having enough 
trained men in the unique construction techniques and tools and 
equipment to keep growing the business. As your project numbers 
increase, so does your marketing exposure. You have to schedule the 
project starts and manage your resources (men and equipment) 
accordingly. In February 2010, you increase your workforce from 13 to 
15 men in preparation for scheduled project starts commencing in May 
2010.
    By April 2010 the business has grown considerably:
        1.  From 3 to 15 men during the recession and housing crash.
        2.  Your Jan-April 2010 revenues grew by 262.79% from the same 
        period in 2009.
        3.  You went from no equipment or tools in 2008 to 6 trailers, 
        a fork lift, tractor, generators, saws and many required high 
        end specialty tools.
        4.  You are finishing a $875,000 custom home and scheduled to 
        start a $735,000 home on May 4, 2010, with three more custom 
        homes scheduled to start throughout the summer of 2010.
        5.  Your core leadership is fully trained and ready to lead and 
        supervise projects, along with men interviewed and ready for 
        hire.
        6.  All of your projects have been earned by referrals 
        generated from prior projects and with new projects starting 
        during the summer to provide the marketing tools for the 
        upcoming 2011 year.
        7.  Your clients have been from outside the Gulf Coast (states 
        such as California, Hawaii, Washington, and New York) and 
        discovered you during their summer vacation to the area in 2008 
        and 2009. They chose to build a home on the Gulf Coast for the 
        high quality of life and abundant natural resources along the 
        Gulf of Mexico.
    Then on 20 April 2010, the Deepwater Horizon exploded. Your world, 
business and market changed overnight.
    The project scheduled to start on May 4, 2010, was delayed and then 
cancelled outright by the client, causing a 100% loss of 8 to 10 months 
work for you and your men. You're forced to immediately let 12 men go 
with the intention of bringing them back on when the next project was 
scheduled to start in June 2010. Sadly, by the end of May 2010, this 
project is also cancelled by the clients due to the oil spill in the 
Gulf of Mexico. By the end of June 2010 the remaining 2 custom home 
projects have also been cancelled citing the oil spill as the one and 
only reason.
    In early July 2010, you are down to 2 men working ``at cost'' 
finishing an existing custom home project, and as a result of the 
catastrophic loss of work, income and financial stability, you are 
unable to obtain the required performance bonding for a large project 
and forced to pull your otherwise winning bid from consideration. With 
this blow, you take the advice of your county commissioner and submit a 
claim with BP claims for lost profit suffered as a result of the 
Deepwater Horizon Incident.
    As a result of the BP oil spill your business has lost over a 
year's worth of scheduled work. Each cancelled project also included a 
loss of 4 to 6 months worth of planning, engineering and sales time 
leading up to the project start date. The four projects combined 
totaled an estimated value of $2 million, plus the loss of the panel 
job at $1.1 million by itself.
    Your claim for lost profits sits with BP claims until the GCCF 
takes over the claims process on August 24, 2010. In addition to your 
business claim, you are aware that 13 of your 15 former employees have 
also submitted claims to either BP Claims or the GCCF.
    On August 24, 2010, one of my men is approved and issued a check 
from the GCCF for his 6 month Advance Emergency Payment, representing 
54.72% of his requested $31,800. He earned $30.00 per hour from the 
company, or $62,400 per year working 40 hours per week. On September 
13, 2010, he receives a second check from the GCCF bringing his total 
compensation up to 82% of his 6 month request. The GCCF states with 
this check that the GCCF was making adjustments to compensation to more 
accurately reflect his projected losses.
    On September 21, 2010, the GCCF denies your Business Claim for Lost 
Profits, telling U.S. Congressman Jo Bonner's Office, ``The claim was 
ineligible because claimant is a building contractor.''
    Congressman Bonner asks the GCCF what that has to do with anything 
and why the employees claim was eligible but the employer's was not. 
Then-Governor Riley asks the GCCF the same thing, and the Press 
Register runs a front page article on September 25, 2010, asking the 
same question.
    On September 27, 2010, the GCCF reevaluates and approves your 
business claim and issues you a check for 100% of the requested 6 month 
advance emergency payment of $157,100. You were advised by a GCCF 
Claims adjuster to only include lost profit from labor on projects that 
had a start date between May 2010 and the time of submittal to the GCCF 
on August 2010, and you are told that you will file for all actual 
losses at a later date. During the next few weeks the GCCF reevaluates 
and approves your remaining men's claims, some of which had previously 
been denied by the GCCF for the same reason as yours.
    At the end of September 2010, you are required to let your last 2 
men go due to lack of work. You are unable to convince your clients to 
reconsider their projects. You have also lost the entire summer tourist 
sales opportunity as a result of the oil spill. The niche market is 
gone. You are unable to convince prospective clients to take the risk 
and build. You continue reaching out to every contact you have, such as 
architects, designers, builders, inspectors, manufacturers, realtors 
and others to no avail. Everyone is going to wait until they feel 
confident in the condition of the Gulf of Mexico. If they cannot feel 
comfortable about the waters, they refuse to risk their money on a 
project.
    On January 20, 2011, you submit your Interim Payment Claim request 
in full, with all substantiating documentation to the GCCF for losses 
suffered as a result of the oil spill from May 2010 to December 2010.
    On January 29, 2011, the GCCF acknowledges receipt with a generic 
letter stating in part, ``If you have not already done so, you must 
submit documents reflecting your gross earnings as an individual 
claimant or your total revenues and expenses as a business claimant 
from 1 May 2010, through 31 December 2010, or documents proving that 
you did not receive income or earn revenue for any part of that 
period.'' You verified with the GCCF that you had provided all the 
required and requested documentation after receipt of the letter and 
confirmed that the exact same letter was sent to ALL claimants who 
submitted an Interim or Full Review Claim with the GCCF. You are told 
you lack nothing and that you have provided more than enough 
documentation.
    It has been almost 9 months since the first cancelled project when 
you had to let 12 men go. You had been out of work for 5 months prior 
to receiving the Advanced Emergency Payment. You still have no work 
and, worse yet, no prospects or current projects to use as sales tools 
for the upcoming visitor season. You are optimistic that with a timely 
and adequate Interim Payment, and IF the visitors come back for the 
summer season, you may have a chance at constructing an alternate sales 
tool such as a small model home in time for the tourist season in order 
to have a project under construction in the market in order to restart 
the business. Then you wait for the 90 day review period.
    Towards the end of February 2011, you start receiving frantic calls 
from your former men saying they received letters of no loss from the 
GCCF with final offers for the Quick Payment amount of $5,000. Your 
attempts to contact the GCCF and assist the men are fruitless until you 
request the assistance of your federal representatives and after a 
front page article in the Press Register.
    You spend the next 7 months meeting with the GCCF and your former 
employees attempting to help them through the Claims Process. The GCCF 
uses sneaky and underhanded accounting practices to minimize the 
compensation to the men such as using their 1099 amounts from their 
partial 2009 annual earnings as the projected 2010 annual earnings 
amount. You hired 10 men during 2009. These 10 men had been out of work 
prior to being hired by you between April and November 2009. In most of 
the men's cases, their 1099s reflected less than half of a full year's 
earnings. You had provided all of the men with income statements 
detailed to the week as earnings history. The GCCF chose to ignore the 
income statements for the Interim and Full Review calculations. Then 
the GCCF applied an adopted ``Seasonality'' rule to apportion the men's 
``projected'' earnings for the post oil spill period from May 2010 
through December 2010, with the full knowledge that the men were not 
seasonal tourist workers who earned their money during the summer 
months at the beach, but instead, were 40 hour per week construction 
workers.
    The GCCF would also take the actual earnings of the men from 2010 
and apply the ``Seasonality'' rules to apportion the actual earnings to 
May through December 2010, regardless of the fact that the GCCF knew 
when the men earned the revenues according to the provided Income 
Statement. The GCCF Seasonality Rules apportion 80.43% of the annual 
earnings to the loss period May through December and 19.57% to January 
through April. Reality and accuracy are irrelevant to the GCCF 
``experts.'' The GCCF decided that everyone's earnings are based on the 
``Seasonality'' rules that they conjured from thin air.
    As an example: One of your men earned $30.00 per hour worked with 
an average of 40 hours or more per week. From January--April 2010, he 
earned $15,511 from the company according to his income statement. He 
earned $18,298.50 for the entire year of 2010, pre and post oil spill 
periods. The GCCF ``experts'' applied the seasonality rules to his 
actual total 2010 earnings reflected on his 2010 1099 statement of 
$18,298.50, and apportioned 80.43% of the total annual amount to the 
period from May-December 2010, or $14,717.48, and declared that he 
earned this amount post oil spill, and then the GCCF deducted this 
fictitious amount from their projected post oil spill earnings. The 
GCCF experts were fully aware that he ``actually'' earned only 
$2,787.50 from May--December 2010, a difference of $11,929.98. With 
``convenient accounting'' trickery such as this the GCCF was trimming 
claimant's compensation from the top (projected earnings) and from the 
bottom (actual earnings). And the GCCF experts are very, very good at 
covering up the tricky accounting so that most people know they are 
being scammed but cannot identify exactly how they are being scammed.
    You continue trying to get the GCCF to correct their mistakes, but 
before the first meetings can be arranged, three of your men sign the 
release not to sue and accept the Quick Payment amount. They simply 
could not wait any longer; they had been out of work for over 9 months; 
they were losing their cars and homes and had to make the decision in 
order to feed their family now, not later. Five of the remaining men 
who called for assistance fought as long as they could but eventually 
settled for the re-review offer for the Business Quick Payment amount 
of $25,000. The men were all independent contractors and as such should 
have been classified as businesses from the start but were not. The 
GCCF refuses to re-re-review the men's claims.
    The GCCF says it does not matter if the GCCF made mistakes: they 
will not perform another review simply because their policy is to only 
re-review once. The GCCF tells the men that they can submit another 
quarterly Interim Claim if they are not ``satisfied'' with the current 
final offer and wait another 90 plus days for a new determination or 
they can file a suit in court. Take it or leave it. Unlike the lawyers 
at the GCCF, they did not have ANY current income--BP had taken that 
away, as well as all of their savings. They had to decide right now how 
they were going to feed their family this month, and the GCCF was fully 
aware of the plight that had resulted as a result of the oil spill. 
That knowledge was only used as a tool to leverage my men's decisions. 
They decided to feed their families by accepting the inadequate offer 
from the GCCF and not because they felt justly compensated for damages 
suffered as a result of the oil spill.
    On April 4, 2011, you submit your first quarter 2011 Interim 
Payment Claim Request in full and completely documented to the GCCF. 
You are still waiting for the GCCF to process your 2010 Interim Claim 
submitted on 20 Jan 2011, and you are told by the GCCF that ``larger 
claims take longer because there are fewer adjusters qualified to 
review them.'' So you wait.
    As the 90 day window elapses, your first claim is still under 
review. You have verified weekly through your GCCF liaison that your 
claim is complete and not deficient in any documentation and that the 
GCCF does not need any further documentation. You are unable to get any 
further answers from the GCCF. U.S. Senator Jeff Sessions' office 
performs a congressional inquiry into the status of your claim with the 
GCCF. The GCCF responds with false information stating that the GCCF 
had sent you a Deficiency Notice on January 29, 2011, when they had 
not. The ``Deficiency Letter'' referred to is in fact the generic 
letter sent to all claimants who submitted an Interim or Final Review 
Payment Claim. You immediately have a meeting with your GCCF liaison 
who confirms that the letter reference is in fact the same generic 
letter sent to all claimants and that you have never been issued a 
Deficiency Letter or been deficient in documentation. So you wait.
    In early June 2011, a reporter with the Press Register calls you 
for an update on how your business is doing. He is surprised to learn 
that you are still waiting for your first Determination to be issued by 
the GCCF after almost 6 months under review. The reporter inquires with 
Mr. Feinberg who tells him ``off the record'' that the GCCF had sent 
you a Deficiency Letter. And that you had responded to the letter by 
submitting a new Claim on April 4, 2011, thus concluding that the GCCF 
had ``responded'' to your claim within the 90 day time frame and that 
the real cause for the delay was, in fact, yours.
    You immediately act to correct the false information with the 
reporter, the GCCF and the representatives who are working on your 
claim (Senator Sessions, Congressman Bonner and the Alabama Attorney 
General). The GCCF responds to Senator Sessions' inquiry by saying that 
your claim has now been assigned to a specific Accountant Review Team 
and that when it was pulled for Evaluation, it would be evaluated in 
its entirety with both claims being processed.
    On June 28, 2011, the GCCF issues a Determination Letter on your 
2010 Interim Claim. The methodology chosen by the GCCF to calculate 
your projected earnings from May--December 2010 is the average of your 
business revenues from the pre-oil spill period from January--April 
2010 and is using this amount as your projected revenues for each month 
from May to December 2010 even though your business history of earnings 
shows that January--April is the slowest time of the year for your 
business and even though your growth from 2009 over the same period is 
over 262%.
    Not only does the GCCF low-ball the earnings projections, they 
cancel your 2011 1st Quarter Interim Claim by saying that you did not 
provide any Financial Documentation when you submitted the Claim, which 
is also a lie.
    You fight back and request a re-review. You meet with the GCCF 
accountants on July 22, 2011. The accountants admit that they failed to 
factor the steady growth of the business. They finish their 
calculations and submit the claim to Mr. Feinberg's office on August 4, 
2011, for final approval.
    The claim sits in Mr. Feinberg's office until September 7, 2011, 
after he has implemented new eligibility rules on August 16, 2011. The 
GCCF revises the projections and chooses to use the business revenue 
amount from December 2009 as the monthly earnings projection for your 
business. They still fail to factor any growth rate from the business 
history and determine that the business would have earned $62,000 per 
month from May through December 2010, but none after that period, 
determining your business had no losses as a result of the oil spill 
from January 2011 forward.
    You call foul, but the GCCF says they will not re-re-review the 
claim, even though the mistakes and delays were 100% caused by them 
because they had already re-reviewed the claim once already. They give 
you the offer to take their final payment of $159,000, sue in court, or 
appeal to the Coast Guard. Take it or leave it.
    So, in my position, what would you do? Your business has been 
destroyed by the oil spill and the unjustified delays imposed by the 
GCCF. You are out of work; in fact you have now been out of work for 
over a year. Your projects were cancelled over 16 months ago. And you 
have borrowed from every friend and family member you can in order to 
feed your family. Your home is entering foreclosure. Your truck has 
been defaulted on. And you have less than two week's worth of groceries 
in the house to feed your family with, much less the pay utility bills 
and health insurance.
    You want to keep fighting for what was taken from you, your 
business, your family and you're men. But you have no other way to 
provide for your family now. What would you do Mr. Feinberg?
    I signed your release and accepted your criminal offer. Not because 
I felt sufficiently compensated for my losses, but because I must 
provide for my family's shelter, food and basic needs now. I fully 
believe you intended to put me and many others in this position. I 
accepted your offer. But I can assure you I will not stop the fight for 
justice.
    A. 71: I cannot speak to the facts of the individual claims 
submitted in this question without knowing first the name of the 
claimants and the claim numbers. However, if the claimant would 
personally contact me in Washington, DC with the name of the claim and 
the claim number I will review the claim. The claimant has gone to 
great lengths in this question detailing his/her frustration with the 
GCCF claims process. The claimant is entitled to a detailed personal 
response from me as Administrator of the GCCF. Although the claim he 
references has apparently been the subject of much public discussion in 
the press, I need authorization from the claimant before I can publicly 
respond to his inquiry. After I review the claim, I will be in a better 
position to answer the claimant's inquiry: ``What would you do, Mr. 
Feinberg?'' I disagree with the argument that the GCCF has made a 
``criminal offer'' to the claimant and also disagree that the GCCF 
tries to ``low-ball the earnings projections.'' Nor does the GCCF use 
``sneaky and underhanded accounting practices to minimize the 
compensation'' of claimants. Nevertheless, I am prepared to review the 
claim giving rise to this question.
QUESTIONS SUBMITTED FOR THE RECORD BY REP. STEVE SCALISE (LA-01)
    For the purposes of these questions, ``traffic'' refers to the 
count of individuals utilizing a claims office that the GCCF considers 
in determining whether or not an office should remain open full time, 
part time, by appointment, or closed. Regarding GCCF claims offices:
Q.  72: Are there daily traffic reports submitted from each claims 
        office?
   i.  If so, please provide daily traffic reports for claims offices 
        in Louisiana, sorted by each office, for the past three (3) 
        months.
    A. 72: Yes, there are daily traffic reports submitted from each 
claims office. I attach these reports for claims offices in Louisiana 
for the past three months. (See Attachment A)
Q.  73: What do these daily traffic reports contain?
    A. 73: These daily traffic reports contain information pertaining 
to the number of claimant visits.
Q.  74: What determines who GCCF considers as traffic for a claims 
        office?
    A. 74: ``Traffic'' is defined as the number of claimants visiting 
the GCCF Site offices. Daily statistics are kept for each office and 
careful consideration was given to these numbers as well as 
consideration of the proximity of alternative Site Offices. The GCCF 
took steps to maintain office hours once each week and by appointment 
at 9 Site Offices initially slated for closure.
Q.  75: What are the criteria for an individual to be considered 
        ``traffic'' for an office? Example: are individuals who come 
        into the claims office who only file a new claim the only 
        reported traffic for that office?
    i.  Are individuals who are seeking clarification regarding GCCF 
        claims documents, letters, offers, etc., considered traffic?
   ii.  Are individuals who place a phone call to claims offices 
        considered traffic?
  iii.  Are individuals who come into a claims office but do not open a 
        new claim considered traffic?
  iv.  Are multiple individuals who come in together regarding one 
        claim considered ``one'' individual for traffic purposes?
    A. 75: Individual criteria considered as ``traffic'' include claims 
filings and the nature of the request.
          i.  The GCCF tracks visits by Claimants visiting the site 
        offices. Claimants are those individuals who either are 
        visiting the site to file a new claim or visiting the site to 
        ``check the status of their claim.''
         ii.  No
        iii.  Individuals whose visit to the site is unrelated to the 
        filing of a claim or to checking the status of a claim are not 
        tracked
        iv.  Friends and relatives who accompany claimants are not 
        tracked
Q.  76: What are all of the criteria that GCCF uses to determine 
        appropriateness of an office's current operations status (open/
        closed/part-time/by appointment/etc.) and what is taken into 
        consideration when a determination is made affecting the 
        operations status of an office?
    A. 76: The two criteria used to determine the appropriateness of a 
claim's office current operations status are: volume (the frequency of 
claimant visits to a claims office for the purpose of filing a claim or 
requesting information concerning the status of a claim); and 
convenience (is there another claims office conveniently located to a 
claims office that has been closed or downsized). There are a total of 
15 GCCF Gulf area offices that are operational today--six are open 5 
days a week and 9 are open once a week and by appointment.
Q.  77: Are there established thresholds of traffic that determine 
        whether or not an office's operations status?
   i.  If so, what are these thresholds?
    A. 77: There are not fixed ``established thresholds of traffic'' 
that determine whether or not a claims office should remain open, be 
downsized or closed. Again, this depends upon not only claims volume, 
but also factors of convenience concerning the availability of other 
claims offices in the vicinity.
Q.  78: Is there a central GCCF computer system/server?
   i.  If so does the GCCF monitor individual claims offices use of the 
        GCCF claims system? In other words, is the GCCF determining how 
        often the claims offices are utilizing claims offices' 
        computers/servers/etc?
    A. 78: The GCCF reviews each region and considers location, volume 
of traffic and availability and distances of alternative site offices 
in making all decisions to close a site office. We have instituted a 
once weekly and by appointment process for 9 of the offices that do not 
now offer Monday-Friday daily hours
Q.  79: Is it the GCCF's goal to eliminate in-person visits to claims 
        offices in favor of an online process?
    A. 79: No, it is not a goal of the GCCF ``to eliminate in-person 
visits to claims offices in favor of an online process.'' The GCCF 
welcomes both in-person visits and online filings. It does not prefer 
one over the other.
Q.  80: Has the GCCF received complaints about the online claims 
        process?
   i.  If so, what is the GCCF doing to resolve these complaints?
    A. 80: The GCCF has not received many complaints ``about the online 
claims process,'' especially during the past nine months following the 
Emergency Payment period. In fact, 77% of all claims have been received 
electronically via the GCCF website. (This percentage excludes the 
Quickpay Claim forms since those must be submitted in paper form.) 
Complaints received by the GCCF basically relate to questions 
concerning payment and the need for a direct GCCF contact 
representative. During the Interim and Final phase of the GCCF program, 
the GCCF has instituted a more direct line of communication by hiring 
local liaisons and by providing each claimant with a specific name and 
contact telephone number within each determination and deficiency 
letter.
Q.  81: What is the total number of unsettled claims filed with each 
        Louisiana claims office, current or closed?
    A. 81: The total number of unsettled claims filed with each 
Louisiana claims office'' is as follows (Note: I interpret 
``unsettled'' to mean claims that are currently being processed, 
including claims deemed ``deficient''; claims that have been paid or 
denied are assumed to be ``settled.''): As of January 18, 2012:
        Total Interim/Final Claims filed from the State of Louisiana: 
        126,589
        Total Interim/Final Claims Paid: 64,746
        Total Claims requiring additional information: 11,457
        Total Claims with ``0'' Loss: 3,319
        Total Claims Denied: 43,969
        Total Claims Not yet processed: 3,152

QUESTIONS SUBMITTED FOR THE RECORD BY REP. STEVEN PALAZZO (MS-04)
Q.  82: Some Mississippi charter boat operations and commercial 
        fisherman received up to 4 times their annual income as shown 
        on their taxes as an emergency payment during 2010 while others 
        was less than one years' annual income. What is being done 
        going forward to reconcile the difference for those receiving 
        the lesser payment
    A. 82: If the GCCF has erred in providing compensation to eligible 
claimants with documented losses due to the Oil Spill, we will correct 
the error and provide supplemental compensation to the claimant. But, 
it is usually unnecessary ``to reconcile the difference for those 
[claimants] receiving the lesser payment''; this is because the 
``difference'' is most likely attributable to varying degrees of 
documentation and other forms of proof.
Q.  83: The LOI (Loss of Income) percentage for the majority of the 
        Mississippi charter operations is set at 35.05% while some 
        boats have received an LOI of up to 66.14%. Since all the 
        charter boats in Mississippi are nearly identical in their 
        operations; how can this be?
    A. 83: The LOI may vary from claimant to claimant based upon the 
individual documentation submitted by each claimant. The GCCF relies 
upon the proof submitted by each claimant in determining the individual 
LOI percentage.
Q.  84: Many Mississippi charter boat operations have attempted to 
        present documentation supporting an increased LOI percentage 
        but have been denied even though their numbers are very similar 
        to those of other vessels whose LOI has been increased. What is 
        the process used to calculate LOI, what defines fixed and 
        variable expenses, and how was this calculation derived?
    A. 84: The process used to calculate LOI is as follows:
    A claimant's LOI is routinely calculated based on pre-spill (e.g., 
2009) financial information provided by the claimant, such as tax 
returns or Profit and Loss statements. Based on the expense description 
and the analysis of the information provided by the claimant, the GCCF 
determines whether the expense continued (typically fixed expenses such 
as rent, insurance, salaries) or was discontinued (typically variable 
expenses such as cost of goods sold, commissions, direct/hourly 
payroll) during the loss period. LOI is calculated as the sum of the 
claimant's Net Income and continuing expenses, expressed as a 
percentage of historical gross revenues.
    The LOI percentage calculates how much of the businesses' lost 
revenue represents ``out-of-pocket'' loss to the claimant. For example, 
if the sale of a widget is lost (thus never happened), the cost to the 
business for the purchase or manufacture of that widget (i.e., cost of 
goods sold) is never incurred. In this example, the cost of goods sold 
would be considered discontinued or saved and excluded from the LOI 
percentage. Conversely, the claimant continues to incur rent expense 
whether it loses a widget sale or not, therefore this expense would be 
considered continuing and included in the LOI percentage.
Q.  85: Given your belief that the GCCF has been successful, do you 
        think that the GCCF could do a better job than BP itself in 
        settling claims with government jurisdictions?
    A. 85: I believe that the GCCF could be effective and efficient in 
resolving claims submitted by government jurisdictions. I am not 
prepared to opine on whether the GCCF could do better than BP in this 
regard. But, in any event, the issue is moot; the GCCF simply has no 
authority to process government claims.
Q.  86: American Shrimp Processors Association members of Mississippi 
        report that few, if any, have been reimbursed for 2011 losses 
        by your interim claims process. Can you give me an update for 
        complete handling of these interim claims?
    A. 86: The GCCF continues to review claims for shrimp harvesters 
and processors for 2010 and 2011 losses.
    The amounts paid to Mississippi Shrimper Claimants to date are 
shown below:


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




QUESTIONS FOR THE RECORD FROM MISSISSIPPI ATORNEY GENERAL JIM HOOD 
        (and attachments)

                          STATE OF MISSISSIPPI

                                JIM HOOD

                            ATTORNEY GENERAL

October 31, 2011
The Honorable Doc Hastings, Chair
The Honorable Edward J. Markey, Ranking Member
Committee on Natural Resources
United State House of Representatives
United States Capitol
1324 and 1329 Longworth House Office Building
Washington, DC 20001
Dear Chairman Hastings, Ranking Member Markey and Members of the 
        Committee:
    Pursuant to your request during the October 27, 2011, Hearing of 
the Natural Resources Committee, I am submitting additional questions 
to be directed to Kenneth Feinberg for your consideration and use. Of 
particular concern to me is that Mr. Feinberg, acting on BP's behalf, 
has established a claims process that fundamentally violates the 
express provisions of the Oil Pollution Act of 1990 (``OPA''), 
particularly as that Act was amended in 1996. In addition, by closing 
offices and preventing claimants' access to in-person claims 
assistance, Mr. Feinberg and BP are thwarting the ability of claimants 
to satisfy the requirement to first file claims with the responsible 
party (the OPA ``presentment requirement'').
    OPA requires those that have suffered damages resulting from an oil 
spill to first present their claims to the responsible party for 
payment. The responsible party has ninety days to deny or pay the 
claim. If the claim is not fully paid to the satisfaction of the 
claimant within that time, the claimant is free to initiate litigation 
or to file a claim with the Coast Guard's Oil Spill Liability Trust 
Fund. Claimants cannot pursue claims in court or with the Coast Guard 
without first satisfying this presentment requirement.
    Not long after OPA's enactment in 1990, it became apparent that the 
OPA-mandated claims process--with its emphasis on settlement without 
litigation--could be mis-used to exploit the economic duress of oil 
spill victims. Specifically, a responsible party could obtain releases 
from legitimate liability, especially future damages, in exchange for 
inadequate compensation. For this reason, Congress amended OPA in 1996.
    The potential for abuse of the originally enacted OPA-mandated 
claims process was exposed in 1996, after an oil spill from a tanker 
off the coast of Rhode Island. In testimony before the Senate 
Environment and Public Works Committee, Bob Smith, President of the 
Rhode Island Lobstermen's Association, outlined a litany of abuses 
employed in the claims process by the responsible party's guarantor. 
The mistreatment of claimants included: demands for releases in 
exchange for inadequate consideration; denials of legitimate claims 
based on allegations of ``inadequate documentation;'' and refusal by 
the responsible party or its agents to compensate claimants for the 
costs of assessing damages. As a result of these abuses, Congress 
amended OPA in 1996 to provide claimants with protections against the 
potential for abuse by responsible parties through the claims process.
    Perhaps more revealing in explaining the congressional intent and 
effect of the 1996 OPA amendments is the testimony of the insurance 
industry officials who opposed the amendments. The June 4, 1996, 
testimony of Richard H. Hobbie, III, President, Water Quality Insurance 
Syndicate, of the American Institute of Marine Underwriters, to the 
United States Senate Committee on Environment and Public Works, 
explained in vivid detail the basis for industry opposition to the 1996 
amendments to OPA. Mr. Hobbie stated that the overhaul of OPA claims 
provisions--particularly the requirement of interim, partial claim 
payments under any OPA damage category and the prohibition against 
final settlements--would make claims handling ``unwieldy,'' would make 
``virtually every claims payment interim,'' and would prohibit insurers 
from being able to settle claims and ``close the books on a spill.'' 
Despite these objections from the insurance industry, Congress 
proceeded to shift the emphasis of OPA from settlement of claims to 
full compensation of victims' damages for as long as those damages 
continued to be incurred into the future.
    Attached for your consideration are copies of the 1996 OPA 
amendments, and the referenced contemporaneous testimony. I believe 
this record demonstrates that the problems and complaints expressed by 
claimants today can be directly traced to the abject failure of BP and 
its agents, Mr. Feinberg and the Gulf Coast Claims Facility (``GCCF''), 
to conform the claims process to OPA mandates, as amended in 1996. The 
most damaging of these OPA violations is their disregard for the 
prohibition against use of an overly broad release of future claims in 
exchange for less than full compensation for losses incurred.
    Although this ongoing infringement of existing law has been raised 
by my Office, as well as other interested parties, in the BP oil spill 
multidistrict litigation (``MDL'') pending in Louisiana federal 
district court, no action has been taken by that court to date. As a 
consequence, Mr. Feinberg has been permitted to continue to extract 
releases of future damage claims from claimants in exchange for 
payments from the GCCF which may be wholly inadequate to fully 
compensate these individuals and businesses. Further, it is suspected 
that interim claim payments are being denied, delayed, or offered at 
less than true value, in an effort to compel financially desperate 
claimants into giving BP and other responsible parties a release of 
present and future damages to which they are entitled under OPA and 
other applicable laws. However, Mr. Feinberg has refused to provide 
access to the information needed to determine if this is in fact 
occurring, including his failure to comply with a subpoena issued to 
him by my Office under the Mississippi Consumer Protection Act.
    In addition, Mr. Feinberg and BP are thwarting the ability of 
claimants in the Gulf to file claims in person by systematically 
closing claims offices. One of the three Mississippi claims offices has 
been closed and a second one is scheduled to close before the end of 
the year. Mr. Feinberg should not be permitted to unilaterally close 
these offices when damages continue to be incurred and claims continue 
to be filed. Early closure of these offices will impair the ability of 
the most needy Gulf residents harmed by this spill from filing claims 
to satisfy OPA's ``presentment'' requirement, and appears calculated to 
limit BP's liability for damage claims in court. BP has already 
repeatedly raised the alleged failure of litigants to satisfy the 
presentment requirement as ground to dismiss many of the suits now 
pending in the Louisiana MDL.
    As the Committee noted last week, damages from the Deepwater 
Horizon oil spill and its aftermath will continue to be felt for years 
if not decades. The full measure of environmental and health effects 
from this spill and the exposure to these toxins is unknown, and the 
people of the Gulf should not have to gamble on their futures now by 
waiving their right to compensation for prospective damages. The law 
prohibits conditioning payments upon the release of future claims, and 
this practice by the GCCF should be exposed and halted. It is 
imperative that BP not be permitted to extinguish the legal rights of 
those harmed by this spill through the use of the GCCF's unlawful 
release.
    Accordingly, the questions I would request the Committee submit to 
Mr. Feinberg are:
        1.  Doesn't the requirement of a release of future claims in 
        exchange for payments from the GCCF violate the 1996 amendments 
        to OPA? And, if not, why not?
        2.  Why are GCCF claims offices being closed when claims 
        continue to be filed? Provide this Committee the data on how 
        many claims have been and are being filed daily, weekly, and 
        monthly at all claims offices--including those already closed.
    Your continued attention and support to the people and businesses 
of the Gulf Region are greatly appreciated. Further, your assistance in 
exposing and curing the violations of existing federal law by the GCCF 
claims process would aid the recovery of this region tremendously. Only 
by making the claims process fairer, faster, more transparent, and in 
full compliance with OPA can the Gulf Region and its people fully 
recover from this man-made disaster. Please contact me if I can provide 
any additional information to the Committee on this matter.
Sincerely yours,
Jim Hood
Attorney General
                                 ______
                                 
    The 1996 amendments to OPA, provide in relevant part as follows:

            TITLE II--IMPROVEMENT OF RESPONSES TO OIL SPILLS

SEC. 201. ACCESS TO TIMELY SHORT-TERM FINANCIAL ASSISTANCE FOR PERSONS 
        INJURED BY OIL SPILLS.
    (a) DAMAGES FOR LOSS OF PROFITS OR IMPAIRMENT OF EARNING 
CAPACITY.--Section 1002(b)(2)(E) of the Oil Pollution Act of 1990 (33 
U.S.C. 2702(b)(2)(E)) is amended by striking the period at the end and 
inserting the following: ``, in part or in full. Payment or settlement 
of a claim for interim, short-term damages representing less than the 
full amount of damages to which the claimant ultimately may be entitled 
under this subparagraph shall not preclude recovery by the claimant for 
damages not reflected in the paid or settled partial claim.''.
    (b) CLAIMS PROCEDURE.--Section 1013(d) of the Oil Pollution Act of 
1990 (33 U.S.C. 2713(d)) is amended by inserting after ``unavailable'' 
the following: ``including a claim for interim, short-term damages 
representing less than the full amount of damages to which the claimant 
ultimately may be entitled,''.
    (c) ADVERTISEMENT.--Section 1014(b) of the Oil Pollution Act of 
1990 (33 U.S.C. 2714(b)) is amended--
    (1) by striking ``If a responsible party'' and inserting the 
following:
      ``(1) IN GENERAL.--If a responsible party''; and
    (2) by adding at the end the following:
      ``(2) CLAIM FOR INTERIM DAMAGES.--An advertisement under 
paragraph (1) shall state that a claimant may present a claim for 
interim, short-term damages representing less than the full amount of 
damages to which the claimant ultimately may be entitled and payment of 
such a claim shall not preclude recovery for damages not reflected in 
the paid or settled partial claim.''.
    (d) SUBROGATION.--Section 1015(a) of the Oil Pollution Act of 1990 
(33 U.S.C. 2715(a)) is amended--
    (1) by redesignating subsection (b) as subsection 6(c); and
    (2) by inserting after subsection (a) the following:
          ``(b) INTERIM DAMAGES.--
                  ``(1) IN GENERAL.--If a responsible party, a 
                guarantor, or the Fund has made payment to a claimant 
                for interim, short-term damages representing less than 
                the full amount of damages to which the claimant 
                ultimately may be entitled, subrogation under 
                subsection (a) shall apply only with respect to the 
                portion of the claim reflected in the paid interim 
                claim.
                  ``(2) FINAL DAMAGES.--Payment of such a claim shall 
                not foreclose claimant's right to recovery of all 
                damages to which a claimant otherwise is entitled under 
                this title or any other law.''.
                                 ______
                                 
ProQuest Congressional
Copyright 1996 Federal Information Systems Corporation Federal News 
Service
MARCH 27, 1996, WEDNESDAY
SECTION: IN THE NEWS
LENGTH: 5623 words
HEADLINE: PREPARED TESTIMONY OF BOB SMITH,PRESIDENT,RILA BEFORE THE 
SENATE ENVIRONMENT AND PUBLIC WORKS COMMITTEE RE: THE RHODE ISLAND OIL 
SPILL AND IMPLEMENTATION OF THE OPA 90
BODY:
    Mr. Chairman and Members of the Committee: Good morning. The Rhode 
Island Lobstermen's Association thanks you conducting this hearing, 
inviting us to testify, and for demonstrating your concern over how 
small businesses and individuals are faring after the devastating oil 
spill off Point Judith, Rhode Island, on January 19, 1996.Today's 
testimony is presented by Bob Smith, who has been a lobsterman in and 
around Point Judith for 49years and is privileged to be President of 
the Rhode Island Lobstermen's Association(RILA), and by Barry M. 
Hartman, with the law firm of Kirkpatrick & Lockhart in Washington, and 
Counsel to RILA. Our association and over 100 businesses damaged by the 
spill have retained Mr. Hartman and his firm to make sure that our 
rights are protected and that we are properly compensated for our 
losses. Mr. Hartman served as Acting Assistant Attorney General for the 
Environment and Natural Resources Division at the United States 
Department of Justice during the Bush Administration, and is 
experienced in the legal consequences of oil spills, having prosecuted 
the Exxon Valdez case, and having participated in enforcement efforts 
in a number of other spills. He also was the Justice Department's 
representative in connection with the development of the Oil Pollution 
Act, which President Bush signed in 1990.Senator Chafee, you in 
particular have been quite helpful to us. and we know the personal 
anguish you must be going through after this spill, which occurred not 
only in our places of business, but in both of our back yards. For 
years you have been a champion for the environment. We know how 
important this issue is to you. You have spent a great deal of time at 
the site of the spill and we just want to take this opportunity to 
personally thank you for your countless hours of attention to this 
tragic and important issue. You certainly have been a good friend to 
Rhode Island's fishermen. And now, in your position as Chairman of the 
Committee on Environment and Public Works, we are confident you will 
again take the lead in breaking through the bureaucracy of the Federal 
Government to see that Rhode Island's fishermen are compensated for 
their losses as guaranteed under the law. RILA believes that it is both 
necessary and appropriate that the Committee not only consider, but 
propose, certain changes in the Oil Pollution Act, so that issues that 
exist today with respect to the damage compensation system, are not 
repeated the next time there is an oil spill. The problems we are 
outlining have been discovered through actual experience, and might not 
have been anticipated when this law was considered. By convening this 
hearing, you demonstrate your commitment that we all learn from our 
experience. Our concerns may be summarized as follows. We are pleased 
that OPA exists, however:
    (1) it is being used by the barge owner's insurer to pay off claims 
at minimal rates and to effectively discourage claimants from seeking 
legitimate, long-term claims for damages;
    (2) the barge owner's insurer, under the guise of OPA, is demanding 
inappropriate releases from claimants, does not explain what is being 
demanded, and instead waves a few dollars in front of people to force 
them to agree to limitations on their rights;
    (3) claimants are not being allowed meaningful participation in the 
Natural Resource Damage Assessment process even though it could 
directly affect their rights; and
    (4) it appears that the barge owner's insurer and the Coast Guard 
are setting up road blocks that prevent claimants from obtaining full 
recovery for their losses. Our testimony today will describe our 
Association, discuss how we have fared since the spill, and outline 
some of the problems and suggestions for improvement of OPA. The Rhode 
Island Lobstermen's Association (RILA) is a nonprofit association of 
people who are engaged primarily in the business of fishing for 
lobsters. We have almost 100 members, and our businesses represents a 
large portion of the lobstering industry off Point Judith, Rhode 
Island. Through the association, we have put together a group of over 
100 businesses that are jointly developing their damage claims. These 
are not only lobster boat owners, but on-shore processing facilities, 
and other businesses that are part of the fishing industry in the Port 
of Galilee. As you know, Point Judith is the third largest fishing port 
on the East Coast. Until January 19, 1996, we were proud to say that 
our lobsters are world renowned for their quality o in fact--we think 
they were the best quality lobsters caught in this country. In fact the 
fishing industry has contributed greatly to the local and statewide 
economy. Millions of dollars have been pumped back into the economy by 
way of direct and indirect business resulting from the successful 
harvesting of Rhode Island's pristine seafood beds. Many lobstermen 
have been fishing in this area for years. In Bob Smith's case, his 
father started over a half century ago, and he has continued in his 
father's wake. Lobstermen are mostly small businesses--each owns a boat 
or two and each hires a couple of crewmen to help. They love what we 
do. They are independent, self-sufficient and our own bosses. They are 
successful because of their willingness to put in an honest day's hard 
work. On January 19, 1996 the unthinkable happened--a barge spilled 
over 800,000 gallons of home heating oil after running aground off of 
Moonstone Beach.
    The place where Bob Smith has been catching lobsters was directly 
under the barge and the spill. We say this was unthinkable, since no 
one expected it to happen at all. But here is what made it even more 
shocking. We are sure you remember the World Prodigy spill of 1989, in 
Narragansett Bay, which is just a few miles from Point Judith. None of 
us thought this could ever happen again, at least not in our 
neighborhood. But it did. It's sort of like witnessing a horrible 
accident. Most of us never see one. But to be witness to two just 
outside our window is simply not something anyone expects. We are not 
here today to talk about whose fault this was, or how efficient and 
effective the response to the spill was, although quite frankly, the 
response teams basically shut out local efforts to help the cleanup. 
Our interest is simple: we want to get back to work, and we want to 
make sure we are compensated for the losses that we have suffered, are 
suffering, and sadly, are likely to suffer in the future because of 
this spill. The immediate impacts of this spill were incredible. Bob 
Smith walked on the beach where it happened, and saw literally hundreds 
of thousands of dead lobsters. Most were small--2, 3, or 4 years old. 
They were everywhere. At one point in a three square-foot area, he 
counted 730 dead lobsters. Some observers say that there were over a 
million lobsters killed. As a result of the spill, a 250 square-mile 
area has been closed off to fishing and lobstering since January 
19.That included the entire area leading into the Port of Galilee, 
where many seafood processors are located. A map illustrating the 
closed-off area is provided as Attachment A to this testimony. Not only 
could we not catch lobsters in a prime area, but most shellfish catches 
upon which many on-shore facilities rely could not be brought into 
Point Judith to be sold. The buyers, processors, wholesalers and others 
were shut down because they use the waters that were closed down to 
supply feed tanks used to hold the lobsters. And the businesses that 
serve the industry--divers, electricians, plumbers, restaurants, 
operators, suppliers, and repairmen, were in turn shut down. In short, 
Point Judith, which is usually a hub of business activity, was turned 
into a ghost town. Fortunately, fishing areas are gradually being 
reopened. Fin fishing is now allowed in all areas. The shoreside 
facilities may again use the water of Point Judith Pond to handle the 
delivered catches. A very limited amount of lobster fishing is allowed 
off of Newport. But the main area off Point Judith remains closed. 
Please understand, we are not necessarily criticizing the decision to 
keep the area closed. We, like everyone, want to make sure that when it 
is opened, the lobsters are safe for eating. Sooner or later we expect 
lobster fishing to be permitted again. But what about long term 
effects? The hundreds of thousands of lobsters that were washed up dead 
on the beach were young--1, 2, 3,and 4 years old. We are not permitted 
to catch lobsters until they reach their legal size, which occurs 
around age 7. That means these million or more dead lobsters will not 
be available to be caught in1999, 2000, and 200 1, or 2002.In addition, 
many of the dead lobsters were or would have been egg bearing. It could 
be eight to ten years from the time a lobster bears eggs until those 
eggs hatch and grow to the legal size permitted to be caught. So there 
are more years in the future when we will be impacted. Further, the 
death of younger female lobsters, which will never reproduce, will 
reduce populations generally, which is very likely to impact lobstering 
in the future. And, that's where the real economic impact will be felt 
by future generations of Rhode Islanders. Unfortunately, we still do 
not know just how severe the damage has been because of the immense 
devastation of the egg bearing lobsters. And we can't just go somewhere 
else to fish, for a couple of reasons. First, in this area, most of the 
legal size population of lobsters are caught every year. The pie is 
only so big and now it is smaller. That is true even outside the closed 
area. So to move elsewhere would not eliminate our losses, it would 
just spread them around. Second, many of us can't just go somewhere 
else. Fishing indifferent and deeper waters requires different boats, 
additional and more expensive equipment, is much costlier in terms of 
fuel and insurance, and involves more significant risks. Many 
lobstermen can't afford it, or don't want to put themselves at greater 
personal risk, even if it might mean a greater price for our catch. We 
are just plain shut down, with no alternatives. As you consider this 
issue, remember that there are three very distinct types of harms that 
we are suffering:
    (1) actual damage to our property caused by the spill; (2) actual 
losses we suffer because we cannot engage in our livelihood today; and 
(3) losses we are likely to suffer in the future because of the long 
term impact that this spill is likely to have on the lobster 
population. All three types of damages are supposed to be fully 
compensated under OPA. Unfortunately, problems exist with compensation 
for all three. Now to the question at hand: is the Oil Pollution Act 
helping us get compensated for our losses? Yes and no. On the one hand, 
it might be better than what would be the case if there were no law. On 
the other, there are problems--serious problems--that you need to know 
about. Some you may be able to address. Others may be unavoidable 
because of the attitude that the barge owner and its insurer take. In 
some respects the law could result in damaged parties getting less than 
what they would be entitled to if they simply went to court. The 
Insurer Has Been Making Unreasonable Demands as a Condition of Making 
Interim Payments First, it must be understood that just because the law 
creates liability for the responsible party, it does not necessarily 
follow that Eklof Marine or its insurer is willing to accept that 
responsibility. Here is the attitude that the insurer has, as reflected 
in a statement apparently made by one of its adjusters: ``They charge 
you for every little dinky lobster and the fish that could have eaten 
them.''The Providence Sunday Journal, March 24, 1996.With due respect, 
anyone who knows about the lobster industry knows that every so-called 
``dinky'' lobster that we are allowed to catch puts food on our tables. 
To trivialize our claims in this way demonstrates the insensitivity of 
the insurer or our plight. The insurer's insensitive attitude is also 
shown by how it has treated claims. When this first happened, and 
claims started being filed, the insurer tried to use the claims payment 
process to minimize what it had to pay not only now, but in the future. 
For example, one person who allowed his boat to be used in the clean up 
was required to sign a release of all claims he might ever have as a 
result of the spill. A copy of that release is attached to this 
testimony as Attachment B. Others were required to sign releases that 
contained technical legal language limiting their rights, but which was 
not explained to them at all. The claims adjuster's answer? ``We're not 
your lawyer.'' A copy of this language that is being forced on us is 
provided as Attachment C. In other instances, the claims examiners may 
have actually suggested to claimants that they are on our side. Nothing 
could be farther from the truth. Their duty is to the insurer, to pay 
only what they think they absolutely must pay. To suggest to claimants 
that they are on the claimant's side is incorrect, and failing to make 
their positions clear to people having no experience in this process is 
disingenuous at best.
    Regarding actual damages suffered by us, consider the following. 
Many of our members lost equipment such as lobster pots, because they 
were in the area where the spill occurred, and for weeks we could not 
remove them. The insurer is willing to pay something for these, and 
that something is generally the insurer's depreciated value of the pot, 
not its really value--or cost--to us. For example, assume a pot is 5 
years old, and according to the insurer it has a life of 8 to 10 years. 
A new pot costs $40.00 to $55.00. The insurer offers $15.00 per pot. 
That means if a lobsterman lost 500 pots, he gets$7,500 to cover an 
actual replacement cost to him of $20,000.In the real world, lobstermen 
not only cannot afford to replace pots every 5 years, but using their 
own skill and time, often repair pots that have no ``useful life'' so 
that they last well beyond ten years. The insurer apparently gives no 
value for this skill and time. We can't repair pots that are lost in 
the ocean because we aren't permitted to recover them, since the area 
is closed. Now the insurer will probably say that we didn't have new 
pots in the first place, so giving us new pots now puts us in a 
``better'' position that we were in before the spill. To that we say 
the following: Which is fair? Making an injured party pay to put 
himself in the actual position he was in before he was injured, or 
making the responsible party pay a little more so that the injured 
party is in the actual position he was in before the injury occurred? 
In addition to not being fully compensated for actual losses, the 
insurer's efforts to make interim payments for lost income,1/creates a 
more serious problem. Most of the claimants in our group have been 
completely out of work since January 19, 1996. The insurer has offered 
to pay some lost profits based on a calculation it developed. But to 
take this money, we must sign a release that could jeopardize our 
future claims. What's more, a provision of OPA could result in our 
being denied the right to recover for future losses, even if are lease 
tries to preserve those rights. Specifically, section 1015 of OPA 
provides: Any person, including the Fund, who pays compensation 
pursuant to this chapter to any claimant for removal costs or damages 
shall be subrogated to all rights, claims and causes of action that the 
claimant has under any other law. 33 U.S.C. 2715. For example, if I as 
a claimant accept an interim payment from the insurer under this law, 
this provision could be construed to require that I give the insurer 
all my rights to claim damages under any other law, even if I was not 
yet compensated for all my losses. That could mean that once I accept 
money from the insurer, I might lose my rights under state law to sue 
the insurer if I am unhappy with the payment I received under OPA, even 
though OPA would otherwise protect my ability to pursue such a claim. 
We don't think this section was intended to create a mandatory 
subrogation of rights by virtue of the words ``shall be subrogated.''We 
don't think this section was intended to require subrogation of all 
rights under all other laws except OPA, regardless of whether 
compensation was paid for the loss of that right.
    We think it was intended to make sure that only rights to claims 
that have been compensated are subrogated to whoever pays. That is 
fair, and that makes sense. But the language of the statute is less 
than artfully drafted. That leaves our members with three choices. 
First, we can take an interim payment without any protection from this 
section of the law, and hope that the insurer, who says ``trust me, 
that is not what the section means,'' keeps its word and does not try 
to bar a future claim. And we have to hope that the Coast Guard, which 
administers the OPA Trust Fund when the insurer stops paying, agrees to 
do the same. Second, we can delay filing claims for interim payments 
now, and instead wait until we know whether long term claims exist, and 
file all claims at one time. The problem is, many lobstermen cannot 
afford to wait. Third, we can insist on written assurances from the 
Coast Guard and the insurer that they would never assert this 
subrogation provision as a defense to an uncompensated claim. We chose 
the third route, but getting those written assurances was not easy. The 
Coast Guard, after a number of meetings, Recently agreed in writing 
that it would not raise the subrogation as a defense except as to 
rights for which compensation is actually paid (Attachment D). The 
insurer says it will agree to language that recognizes that this 
section is not a bar to a future uncompensated claim.-2/To prevent this 
from happening in the future, Congress should simply add a phrase to 
section 1015 of the law, so that the section reads as follows: Any 
person, including the Fund, who pays compensation pursuant to this 
chapter to any claimant for removal costs or damages shall be 
subrogated to all rights, claims and causes of action that the claimant 
has under any other law, with respect to which compensation has been 
paid 3/Access to Information in File Claims In times like these, the 
federal government needs to partner with the RILA and help rebuild what 
was destroyed. We are talking about hundreds of Rhode Island families 
being dramatically affected not over just the past two months, but well 
into the future. Lobstermen and their families are not looking for 
handouts. We are look for what is provided to us under the law of this 
country. We are reaching out to our government to work with us and not 
shy away from a very traumatic event. As the Committee knows, 
thankfully there have been only three major spills since OPA was 
enacted--one in Tampa Bay, one in San Juan, and the one in Rhode 
Island. Because of where the North Cape spill occurred, it is likely to 
have the most devastating impact on natural resources and the economic 
well being of the area. As we understand it, although many small claims 
were processed immediately in Tampa Bay and San Juan, there were, and 
may still be, delays in determining claims for lost profits and 
impairment of income. To help our members understand what is expected 
when these claims are filed, and what kind of documentation is needed--
particularly for impairment of income claims--we wanted to review past 
claims under OPA. Of course, the insurer does not make these available 
at all.
    Our counsel filed a Freedom of Information Act request with the 
Coast Guard to review their claims files. Again, the purpose was to 
have a full understanding of exactly what type of information is 
provided, and what will be accepted as sufficient. The Coast Guard, 
citing privacy concerns of claimants in other spills, has effectively 
denied our request, except for producing a single claim that it chose 
as ``representative.'' It gave us only its final decision, and declined 
to provide any of the foot thick stack of information that apparently 
led up to its decision, again claiming that to do so would be too 
burdensome for it, since it would have to redact confidential 
information. We did not seek any confidential information. It also told 
us that if we wanted this information, we would have to pay thousands 
of dollars, and wait several months while it reviewed the information. 
Apparently there is not a single claims file anywhere that it would not 
take months and thousands of our dollars to screen and provide to us. 
Again, we are not seeking any private or confidential information, just 
data that will give us insight into how the Coast Guard evaluates these 
claims, and how it reacts to information provided it.4/Withholding 
important information from claimants benefits the Coast Guard, and the 
insurer, and again undermines the ability of claimants to obtain a full 
recovery. So the Coast Guard won't give us important information 
without us paying for it, and no doubt will suggest that if we do pay 
it to give us this information, that payment will not be considered by 
it to be ``reasonable costs incurred by the claimant in assessing the 
damages,'' within the meaning of its regulations. The result: the Trust 
Fund--administered by the Coast Guard--is faced with lower claims. To 
our knowledge, no claimant has ever recovered lost future profits or 
impairment of income under OPA, even though section 1002(2)(E) of OPA 
clearly authorizes such recoveries. Withholding this information from 
claimants will only serve to perpetuate that denial, except for those 
claimants willing to hire--and pay for experts to fight for them. 
Participating in the Natural Resource Damage Assessment Process in 
January of this year, just weeks before the spill, final regulations 
governing Natural Resource Damage Assessments (NRDA) were promulgated. 
See 61 Fed. Reg. 4 (Friday, January 5, 1996)(to be codified at 15 
C.F.R. 990). They were to become effective on February 5, 1996, after 
the spill occurred. It is our understanding that the Federal Government 
contends that these regulations will govern NRDA process arising from 
this spill. Under OPA, the public is given the opportunity to comment 
on plans developed for NRDA process. Under the regulations, a similar 
opportunity for consultation exists. Our concern is a practical one. If 
there is a long term adverse impact on the lobster population, it could 
translate directly into an economic impact on the lobster industry. The 
natural resource damage assessment process will inevitably include 
studies that should demonstrate the extent of that impact. The 
methodology used for these studies will significantly influence the 
results, and it is crucially important that sound science be used. The 
long-term impact of this spill could mean the loss of scores of jobs 
and millions of dollars to the local and statewide economy. Job loss in 
this area could be permanent and that would be devastating to Rhode 
Island. We have retained an expert, and have requested the opportunity 
to participate in the development of the plans that will form the 
foundation for the NRDA process. Both the federal and state trustees 
have made this request too. So far we have not been permitted to 
participate in this process (it is claimed that the process has not yet 
started), but everyone is ``thinking'' about it. We have contacted some 
of the scientists at the University of Rhode Island who are supposed to 
conduct surveys, but so far none of these surveys have been shared with 
us. The point is, while the law currently calls for notice and 
opportunity to comment on NRDA plans, and the regulations do so as 
well, that opportunity must come at a meaningful time--before the plans 
are selected. In fact, to be meaningful, we should be permitted to 
attend all the meetings that are held about that planning process, to 
provide input and insights that might not otherwise be appreciated or 
known. Quite frankly, we think we are being stonewalled by the trustees 
who do not want to be ``burdened'' with claimants' concerns. The 
trustees have many interests that will or could influence the NRDA 
planning process. Interest is sound science. We want to make sure that 
the paramount Taking the federal trustees' word for it, ``Trust us, 
we're the government,'' is not something that our members are 
comfortable doing, particularly when the Federal Trust Fund pays if 
lost income claims based on the NRDA process are filed. It would be 
expensive, unfair, unnecessary, and perhaps impossible to expect our 
members to conduct their own surveys and planning when a perfect 
opportunity exists for them to be involved in this process. We hope the 
Committee will not let this slip by. The Coast Guard is Creating Road 
Blocks to Claimants' Ability to be Fully Compensated by Trying to Deny 
Them Costs Necessary to Prove Their Claim You have asked us to comment 
on how certain policy issues relating to compensation for losses are 
addressed under OPA. One such issue is whether OPA should give everyone 
the ability to recover the costs of proving a claim for damages so that 
they are made whole. Unfortunately, the Coast Guard seems to think that 
everyone except the claimants should recover these costs. This makes no 
sense. OPA does not prohibit the payment of the claimant's costs of 
determining damages. The state and federal government can recover these 
costs, including attorneys' fees. The responsible party gets them 
because its insurers' pays. And as explained below, the only way 
claimants can be assured that they at least have a fighting chance to 
be fully compensated, is if they hire competent experts to help them 
prepare and pursue their claim. Yet the Coast Guard and insurer 
apparently do not want to pay these costs. We believe the law clearly 
does not prohibit, and indeed permits, the payment of claimants' costs 
and fees needed to prove their claim for claimants. However, the Coast 
Guard in its regulations may be arbitrarily and illegally trying to 
exclude these costs and fees from the kinds of damages that a claimant 
may recover in connection with preparing a claim.5/In order to avoid 
the fight that we are likely to have, OPA should be amended, or the 
Coast Guard regulations corrected to address this inequity.
    The fact is, if those sections of the Act authorizing claims for 
impairment of income and lost profits are to have any real meaning, 
that claimants must be permitted, and, indeed, encouraged, to get 
expert help to ensure that they receive what they are entitled to by 
law. They are entitled to be and on a level playing field with the 
insurer and the Coast Guard, both of which have boatloads of lawyers 
and experts. And the responsible party's insurer, or the Trust Fund, 
should pay for it. There are several reasons why these costs should be 
covered as damages. First, claims for lost future income require some 
consideration of long term effects on the lobster population. No single 
lobsterman can afford to undertake such studies, and the insurer knows 
it. But without that backup, claims for lost income would be difficult 
to prove. Instead, the claimants must band together, and counsel and 
experts helps this happen. The government has attorneys and other 
experts develop its claims for natural resource damages, and those 
costs are paid by the insurer. Why shouldn't a small business person 
have the same benefit for its claims? Second, proving lost profits, and 
particularly proving impairment of future income, can be complicated. 
By way of example, we reviewed one lost profit claim processed by the 
Coast Guard in another spill. The Coast Guard tells us that there is 
over a foot of documentation to support a claim for about $40,000. If 
this section of the law is to have any meaning, a claimant must be 
encouraged to hire competent experts to help him navigate through this 
morass and properly prepare a claim. Third, while the law suggests that 
claims are to be processed within 90 days by the insurer, and within 
6months by the Coast Guard, that time period can be delayed 
indefinitely by insurance and Coast Guard lawyers who will say that the 
time period does not run until the claim is fully documented. We think 
that is exactly what has happened in other spills. Claimants need help 
to fight such abuses. Finally, claimants must be advised of how this 
law works, so they do not unwittingly waive their rights. Few know that 
if you file a suit in court, you cannot pursue a claim with the Fund. 
More importantly, it was through counsel that our members were able to 
get written confirmation that they won't be waiving our rights if they 
accept interim payments. Until we hired counsel, no one advised us of 
the consequences of these releases. While promises were made, no one 
would put it in writing. Notwithstanding the policy reasons supporting 
the payment of claimants' costs of proving his damages, and the fact 
that law does not prohibit it, the Coast Guard regulations governing 
the claims process try to severely limit recovery of such costs. The 
regulations provide: (e)ach claim must include at least the following, 
as applicable:. . .(8) The reasonable costs incurred by the claimant in 
assessing the damages claimed. This includes the reasonable costs of 
estimating the damages claimed, but not attorney's fees or other 
administrative costs associated with preparation of the claim.33 C.F.R. 
136.105(e).-6/There is no explanation for allowing one kind of cost, 
but not another, and no justification either, except the desire to 
discourage use of experts to document a claim. It is ironic that the 
Coast Guard? It is particularly disconcerting that these regulations 
are so vague
    Of course if and when an injured party seeks to challenge these 
regulations, the Coast Guard will no doubt say that such challenges are 
barred by section 1017 of OPA, which states that regulations must be 
challenged within 90 days of promulgation. Of course, until a spill 
occurs, no claimant would have a reason to challenge the regulations. 
appears to take this position that its own costs and attorneys' fees 
are recoverable, as are those of every other state and federal agency 
``damaged'' as a result of the spill. See 61 Fed. Reg. 4 (Friday, 
January 5, 1996) (to be codified at 15 C.F.R.990).7-/And the 
responsible party's costs are paid for by the insurer. Without 
qualified experts studying the long-term effects of a spill, any claim 
might well be reduced below its true value. Not surprisingly, insurers 
who want to limit their payouts for claims in order to preserve their 
profits, and the Coast Guard, which wants to preserve the Trust Fund 
for future claims, have no problem with this. In sum, while we believe 
law and policy clearly support the payment of costs needed to prove a 
claim, and the insurer and Coast Guard have the ability to make such 
payments, we frankly expect both it and the Coast Guard to fight us as 
part of their broader strategy to limit claims in general. In summary, 
we offer the following observations about the OPA claims process.
    (1) OPA is being used by insurer to pay off claims at minimal rates 
and to effectively discourage claimants from seeking legitimate long 
term claims for damages.
    (2) The insurer, under the guise of OPA, is demanding inappropriate 
releases from claimants, does not explain what is being demanded, and 
instead waves a few dollars in front of people to force them to agree 
to limitations on their rights.
    (3) Claimants are not being allowed meaningful participation in the 
Natural Resource Damage Assessment process. (4) It appears that the 
barge owner's insurer and the Coast Guard are setting up road blocks 
that prevent claimants from obtaining full recovery for their losses. 
We appreciate and thank you for the opportunity to testify before the 
Committee, and stand ready to answer any questions that you might have.
    1/For example, lost profits from January 19 through today. 2/See 
Attachment E. Curiously, the insurer seems to have agreed to this 
language, but claims it does not understand it. 3/Other related and 
proposed changes are included as Attachment4/There are a variety of 
theories and approaches that may be used to determine lost future 
profits and impairment of income. The OPA is silent regarding which may 
apply. Reviewing state common law with respect to those possible 
theories is helpful, but claimants can hardly be expected to do so 
without the benefit of counsel, a benefit that the Coast Guard 
apparently wants to deny. 5/The insurer, who is plainly not bound by 
this arbitrary position of the Coast Guard, is free to pay costs as 
well. 6/regarding the kinds of costs of assessment of damages that are 
recoverable. They say costs are recoverable, but don't say what those 
costs are. This leaves a claimant in an untenable situation. I hire an 
expert? An accountant? An attorney
    7-/In the single reported decision under OPA, a court allowed the 
Coast Guard and even private claimants to recover attorneys fees 
associated with removal costs, but with respect to damages, did not 
allow attorneys' fees to be recovered. This distinction, applicable to 
claimants but not to federal or state agencies, or to the insurer for 
that matter, is of questionable legal soundness. Avitts v. Amoco 
Production Co., 840 F.Supp. 1116,1118 (S.D. Tex. 1994).END
LOAD-DATE: March 28, 1996
Copyright 1996 FDCHeMedia, Inc. All Rights Reserved. Federal Document 
Clearing House Congressional Testimony June 4, 1996, Tuesday SECTION: 
CAPITOL HILL HEARING TESTIMONY
LENGTH: 2725 words HEADLINE: TESTIMONY June 04, 1996 RICHARD H. HOBBIE, 
III PRESIDENT WATER QUALITY INSURANCE SYNDICATE SENATE ENVIRONMENT OIL 
POLLUTION ACT REVISION
BODY:
 STATEMENT OF THE AMERICAN INSTITUTE OF MARINE UNDERWRITERS AND THE 
        WATER QUALITY INSURANCE SYNDICATE On S.1730, The Oil Spill 
        Prevention And Response Improvement Act before The United 
        States Senate Committee on Environment and Public Works 
        Presented by Richard H. Hobbie, III President, Water Quality 
        Insurance Syndicate
June 4, 1996
 STATEMENT OF THE AMERICAN INSTITUTE OF MARINE UNDERWRITERS AND THE 
        WATER QUALITY INSURANCE SYNDICATE BEFORE THE SENATE ENVIRONMENT 
        AND PUBLIC WORKS COMMITTEE
    The American Institute of Marine Underwriters (``AIMU'') is a non-
profit trade association representing 100 marine insurers in the United 
States. AIMU members underwrite about 90% of the commercial marine 
insurance done in the United States. The American Marine Insurance 
Industry has insured federal statutory pollution liabilities for 
vessels for nearly a quarter of a century. I appear here today on 
behalf of AIMU and the Water Quality Insurance Syndicate (``WQIS''), 
where I serve as President. We are honored to have this opportunity to 
address the Committee on S.1730 and our experiences under the Oil 
Pollution Act of 1990 (``OPA '90''), particularly with respect to the 
NORTH CAPE oil spill.
    The Water Quality Insurance Syndicate was founded in 1971 by 
members of the domestic marine insurance industry in order to provide a 
mechanism to insure liabilities under federal pollution statutes. 
Today, WQIS is a pool of 17 marine insurers from the American market. 
WQIS insures liabilities imposed on vessel owners and operators by OPA 
'90, as well as the Comprehensive Environmental Response, Compensation 
and Liability Act (``CERCLA''). We insure liabilities arising from oil 
or hazardous substance spills for over 39.000 vessels operating 
primarily in the inland and coastal waterways of the United States. As 
the largest domestic insurer of such marine pollution liabilities, WQIS 
provides about one third of the guarantees required for Certificates of 
Financial Responsibility issued by the Coast Guard under OPA '90 and 
under CERCLA. American marine insurers applaud the provisions in S. 
1730 which would provide incentives to owners of single-hull barges to 
convert to double-hulls. The bill would award statutory incentives to 
encourage owners to replace single-hull vessels in their fleets with 
double-hull vessels. If the owner replaced a double-hull vessel at 
least five years prior to its required replacement date, he will be 
entitled to assert his OPA limit of liability even if a violation of an 
applicable federal safety, construction, or operating regulations has 
occurred. We commend the authors of the bill on this incentive 
approach. However, the incentives would be more effective if applied 
more broadly. The proposal does not address the situation where an 
owner wishes to expand his fleet. If the incentives were to become law 
as drafted, some owners might see an advantage to first buying single-
hull barges which are scheduled to be scrapped and then replacing them 
with double-hulls. Such maneuvering would not result in an early, net 
reduction in the number of single hull vessels. As a practical matter, 
all new builds should be eligible for these special incentives.
    The domestic marine insurance market supports safety and prevention 
measures which will contribute to the reduction in the severity and 
frequency of oil-spill incidents. As a practical matter, such measures 
must be commercially sound and technologically feasible. Any other 
approach would simply add more confusion to an already difficult 
situation. The requirement, proposed in S. 1730, that single-hull 
barges over 5,000 gross tons operating in open ocean or coastal waters 
have a crew member on board and an operable anchor is not a workable 
solution. It will not be possible for most tank barges to implement the 
crew provisions. In fact, implementation may put individual crew 
members' lives at risk. Crew quarters may not be placed safely above a 
tank filled with petroleum products. Most tank barges have no space 
which could be used for crew quarters because virtually all of the deck 
space on existing barges is above tank space. Failing to fill some of 
the tanks so as to provide such void space would not be a satisfactory 
solution. Empty tanks could result in serious stability problems and 
more casualties.
    We are unaware of any proven emergency system for retrieval of a 
break-away barge, as provided for 101(b) of the bill, which is 
effective in all circumstances. We urge the Committee to continue to 
study this issue and adopt only those provisions which are both 
feasible and consistent with protecting the safety of the lives of 
those who go to sea, as well as with preventing oil spills and other 
casualties.
    Dredging is a major issue in many U.S. ports today, including New 
York. The bill as drafted is too limited in this regard. Rhode Island 
is not the only state to have problems with dredging. The need for 
dredging is a national problem which can be addressed, in part, by 
assuring that navigational charts are accurate and up-to-date.
    The same can be said of the provisions on under-keel clearances. 
Normally, the establishment of minimum under-keel clearances is based 
on local conditions. A federal attempt to regulate this issue would be 
far too unwieldy and costly. What agency on the federal level has the 
resources to undertake this responsibility effectively? We know of 
none. We suggest that a far better use of federal efforts to improve 
navigational safety will be to provide the National Oceanic and 
Atmospheric Administration (``NOAA'') with sufficient staffing and 
funding so as to bring U.S. navigational charts up-to-date. This would 
contribute far more to the oil spill prevention effort.
    We are very troubled by the drafting of 203(b), which gives the 
federal government the right to seek ``any monies'' paid out. This 
would appear to permit recoveries for any expenditures whatsoever, 
regardless of whether they are for damages as defined in 1002 of OPA. 
The provisions would promote irresponsible and unrelated expenditures 
and must be changed to require that only OPA defined damages may be 
recovered. The purpose of proposed 205 is unclear. Near-term ecological 
injury is not defined in OPA. We believe the existing statute and 
regulations address these issues and that this section is unnecessary.
    Section 206 would impose unworkable restrictions on the cleanup 
process. A response plan can never anticipate every action which should 
be taken in every ecosystem. Experience has shown that each incident 
and spill response is unique. The On Scene Coordinator must retain the 
flexibility to direct the clean-up based on the needs in the local 
area. No response plan can foresee every eventuality. We urge that 1321 
of the Federal Water Pollution Control Act not be amended as proposed. 
Spill response is certain to go awry if blind adherence to a pre-
established plan is mandated. The flexibility permitted under current 
law is more likely to permit environmentally sound spill response 
activities.
    In its 25 years of existence, WQIS has handled thousands of oil 
spills. The January spill in Rhode Island was our first experience with 
an extended closure of fishing grounds. Accordingly, it was the first 
time that a need for partial or interim claims payments arose. In the 
past, in the few spills where there has been closure of the fishing 
grounds, it was only for a day or two in order to allow free access for 
response vessels. As soon as it became apparent that Rhode Island 
lobstermen and fishermen would suffer ongoing loss of income due to the 
closing of the fishing grounds, a specialized team of adjusters was 
flown into Narragansett and Point Judith to respond to their needs. 
Over $178,000 was paid out in claims payments during the first week 
alone. As a result of the program established voluntarily by WQIS, over 
855 interim or partial payments now have been made.
    In our experience, the NORTH CAPE spill was unique because of the 
number of affected lobstermen and fishermen. Underwriters are pleased 
to report again on the partial claims settlement process established in 
Rhode Island. Immediately following the incident, our Oil Spill Claims 
Center was set up along with our toll free telephone number (1-800-995-
4045). Over I 100 claims have been filed since then. Well over half of 
the claims are for fish catch loss or for loss of income. A specialized 
team of adjusters experienced in handling oil spill claims was flown 
into Rhode Island in order to respond immediately. Six to eight 
adjusters have been available on a daily basis to respond to citizens' 
needs and to assist them in getting together the documentation needed 
for their claims.
    WQIS was particularly concerned about the needs of lobstermen and 
fishermen in view of the closure of the fishing grounds. Claims 
settling offices were opened at convenient locations throughout the 
affected area. In addition to the 800 number, notices were published in 
the local newspapers and posted in strategic locations. Claims 
adjusters have conducted an extensive outreach program, visiting 
lobstermen and fishermen on the docks, as well as talking to 
wholesalers and others who can assist in getting the word out that 
partial payments are available to alleviate problems suffered by those 
who have been unable to work during the closure of the fishing grounds. 
Civic organizations have also been contacted and are cooperating with 
us in our efforts to reach all legitimate claimants.
    Because of the special needs of those directly affected by the 
spill and the closure, the adjusters provided guidance on putting 
together documentation. A list of the kinds of documents which assist 
the claims adjusters in providing a basis for payment of a claim has 
been widely circulated. The National Pollution Funds Center, in 
testimony before this Committee, supported our approach. We made it 
clear that anyone who had trouble coming up with documents should not 
hesitate to call. Our adjusters are prepared to work with any and all 
claimants in an effort to put together a foundation for a claim. Our 
efforts to reach out and establish communication with the lobstermen 
and fishermen have resulted in a substantial number of partial claims 
being paid. Once a claim is documented, checks are handed to the 
fishermen and lobstermen, often on the same day.
    As of May 30, 1996, 855 partial or interim claims have been paid. 
The vast majority of these have been partial payments to lobstermen and 
fishermen. Many of the claimants received their third and fourth checks 
as the closure of the fishing grounds continued. Underwriters have paid 
over $2,500,000 in such third-party claims. This is a remarkable 
achievement for a field claims adjusting office. Attorneys representing 
claimants worked with our adjusters to devise a partial settlement form 
which met the needs of both sides. Unfortunately, there was one out-of-
state plaintiffs' attorney who waged a campaign against the interim 
payments program. We believe that was an effort to increase the number 
of claimants they represented. The problem was laid to rest. as the 
success of the claims office became apparent.
    The experience in Rhode Island shows that the massive overhaul of 
OPA claims provisions is not appropriate. The system worked in Rhode 
Island, but if the amendments proposed had been in effect it is 
unlikely the system would have worked. The proposal would make claims 
handling far more unwieldy. It is unnecessary and ill-advised to amend 
1013 to require advertising about partial claims. The vast majority of 
spills do not give rise to a need for partial payments. The Coast Guard 
has the authority to require advertising regarding partial payments 
when appropriate.
    We are particularly concerned about proposed new 1015(c)(2) (Final 
Damages) which would make virtually every claims payment interim. 
Insurers would never be able to close the books on a spill. This 
approach is counterproductive and will impede participation of 
guarantors in OPA financial responsibility programs.
    As drafted, the provisions regarding partial payments in S. 1730 
would throw the claims process under OPA into disarray. It is proposed 
that 1002(f) should be amended to define loss of profits and earning 
capacity to include specifically partial claims. In our view, if any 
amendment is made, this section should suffice. The proposed amendments 
to 1013, 1014 and 1015 are wholly unnecessary and create confusion. 
They appear to permit partial claims in any category of damage claims 
under OPA. If enacted, the claims settlement process would become a 
nightmare. Claims could never be settled. The proposed revisions to 
1015 (Subrogation) appear to prohibit final settlements altogether. One 
of the purposes of OPA '90 was to encourage prompt settlement and 
payment of claims. The net effect of the proposal would make no 
settlement final, a situation no insurer can live with. The 
transactional costs will skyrocket and as a consequence the cost of 
providing financial security will inflate. Guarantors under OPA will be 
precluded from recovering for some partial claims in actions against 
negligent third parties.
    The program developed in Rhode Island to meet the special needs of 
lobstermen and fishermen could serve as a guide in a future oil spill 
where the fishing grounds are closed. We believe that the NORTH CAPE 
claims experience proves that the process under OPA '90 is working 
well. In fact, we understand that the partial claims settlement 
procedures established in Rhode Island are being used as a model for 
the claims process in connection with the SEA EMPRESS spill in Wales. 
The unnecessary amendments proposed would be counter-productive. The 
provision has been drafted without a clear understanding of the claims 
process and of subrogation requirements. The ``overkill'' approach 
adopted in S.1730 could put the entire process at risk.
    The response to the need for a partial claims settlement program in 
Rhode Island is an example of how industry and government can find 
workable solutions to new problems through cooperation. Unfortunately, 
not every problem that has arisen in connection with the implementation 
of OPA '90 at the NORTH CAPE spill has been resolved so successfully. 
American marine insurers were particularly concerned about the delay in 
reopening the fishing grounds. Unnecessarily prolonging the closure of 
the fishing areas imposes undue economic burdens on the lobstermen, 
fishermen and related industries and added costs, borne by maritime 
commercial interests. Some estimated that each day of unnecessary 
closure costs as much as $100,000 or more. The delay in reopening the 
fishing grounds was due to the inability of the various trustees, 
federal and state agencies, and other bureaucracies to agree on a 
protocol for testing.
    Underwriters were frustrated by the bureaucratic morass we have 
encountered in trying to open even some of the fishing grounds. The 
various state and federal agencies are unable to agree on what the 
acceptable criteria should be for testing to permit the reopening of 
the fishing grounds. Even the recent partial reopening of the fishing 
grounds for fin fishing took far too long. The data showing the fishing 
grounds could be reopened for fin fishing was given to state officials 
on February 10, who acted on February 13. The federal government 
received the data on February 16, but it was not until over a month 
later that the area was reopened. When potentially grave financial 
damages are threatened, responsible officials should act expeditiously, 
but a response from federal officials on an expedited basis takes from, 
at a minimum, 10 days to 4 weeks. This is unacceptable. All of those 
involved on the federal and state levels must work cooperatively to 
expedite the reopening of a fishery when the financial implications are 
so substantial. We support the changes proposed in Section 202.
    AIMU and WQIS are grateful for this opportunity to present their 
views on S. 1730. We would be pleased to provide any additional 
information which might be helpful to the Committee.
LOAD-DATE: June 4, 1996

                 Responses to Attorney General Jim Hood

    1. A release of future claims in return for a Final payment does 
not violate the 1996 Amendments to OPA. As the Department of Justice 
has stated:
        ``. . .the OPA does not specify any particular methodology for 
        assessing future damages for final claims and does not address 
        the issue of releases in any detail. From the perspective of 
        the United States, it has been critical that claimants have a 
        true choice: under the GCCF process they can either file 
        interim claims, for which the OPA requires Responsible Parties 
        to provide, receive payments for damages as they accrue, and 
        not sign any release; or they can, with appropriate legal 
        counsel available, finally settle their claims--past and 
        future--by agreeing to an appropriate release. ``
    Statement of United States Regarding the Court's February 2, 2011 
Order (February 18, 2911), In Re: Oil Spill by the Oil Rig ``Deepwater 
Horizon'' (MDL No. 2179), p. 6.
    The GCCF's option to provide claimants a generous Final payment for 
future damage, as well as past and present damage, or the continued 
filing of interim claims, is precisely why the United States Coast 
Guard, in previous Senate testimony concerning the Gulf Coast Claims 
Facility (``GCCF'') has opined that: ``the GCCF is even more generous 
than the Coast Guard would be under OPA.'' The Final payment option--
not part of the OPA statutory scheme--is an innovative way to provide 
claimants with additional compensation without having to return 
periodically to the GCCF. But it is not mandatory. Claimants who wish 
to abide by the OPA law, may voluntarily request Interim payments; no 
release is required.
    2. Certain GCCF claims offices are being closed, or their operating 
hours are being reduced, because of diminishing claims volume over a 
year after the Oil Spill. Other claims offices in each Gulf state 
remain open. In the just the past sixteen months, the GCCF has 
processed over one million claims from fifty states and thirty-seven 
foreign countries. Claims continue to be filed but the GCCF can no 
longer justify maintaining the operation of certain claims offices when 
only a handful of new claims are filed each month. However, when a 
claims office is closed, or its operating hours reduced, the GCCF has 
made sure that other claims offices remain open in other locations to 
service claimants.
                                 ______
                                 
    Mr. Hastings. Thank you very much, Mr. Feinberg, for your 
testimony. I know we are under some time, but we will try to 
get through these questions here.
    I just have a couple of them, and you alluded to this fact, 
but I just want to make sure. There has been no oversight from 
the White House at any time since June 16 when this Fund was 
created and so forth. Is that correct?
    Mr. Feinberg. That is largely correct if you say the White 
House. Now, the Department of Justice monitors what I am doing, 
just like BP monitors it. The Department occasionally has 
suggestions, such as an independent audit and some other 
suggestions. But there is no oversight as to how I decide 
individual claims that appear before me for processing.
    Mr. Hastings. In that regard, and this is probably more 
speculation, but it would be interesting to hear what your 
response is. In hindsight, since hindsight is 20/20 and you 
just said that this is absolutely a unique fund, and let us 
hope that we don't have to go through this with another 
disaster, but is this the proper model?
    Mr. Feinberg. That is for policymakers to decide. I would 
say that at least with the Gulf Coast Claims Facility, Mr. 
Chairman, the United States Coast Guard is at least there under 
the Federal Oil Pollution Control Act to review any one of my 
claims determinations.
    But I think it is relative. This Congress 10 years ago--you 
will recall when it enacted the 9/11 Victim Compensation Fund 
and re-enacted it about six months ago during the lame duck 
session--expressly prohibited any oversight of that Fund, 
expressly said you cannot go to court to review 9/11 
determinations.
    So everything is relevant, but I must say it is problematic 
when one person is delegated this type of authority with 
limited oversight, so I share your concern, but I leave that to 
the policymakers.
    Mr. Hastings. We always have a debate in this country on 
what the definition of a benevolent dictator is, and maybe this 
falls under that category.
    Mr. Feinberg. Maybe.
    Mr. Hastings. You mentioned DOJ, Department of Justice, and 
some interaction. Part of that interaction has been an audit. 
When can we expect to have the results of that audit that you 
have agreed to be made public to us?
    Mr. Feinberg. That independent audit timing should be 
directed to the Department. The Department, not the Gulf Coast 
Claims Facility, is going to determine who that auditor should 
be and how quickly that process will begin.
    But I will say one thing. You can't win on this independent 
audit. I know that on the one hand there is a request from 
Members of Congress and others to get that audit going. 
Correct. I welcome the audit, and we should do it as fast as 
possible.
    On the other hand, as many of you know, there are interest 
groups, elected officials in the Gulf, lawyers, organizations, 
all clamoring for some input into the nature of the audit, the 
scope of the audit, and much of that input has just arrived at 
the Department of Justice this month.
    So on the one hand, speed. On the other hand, a demand on 
the part of interest groups to participate. I think the 
Department is moving as fast as it can considering it doesn't 
want to be accused of delay. On the other hand, it doesn't want 
to be accused of high-handedness. So I think that is something 
that ought to be addressed with the Department.
    Mr. Hastings. Correct me. When exactly was the audit 
requested? Was that July of this year or last year?
    Mr. Feinberg. Oh, no. This year. I think the audit was 
requested for the first time I think around August, a few 
months ago.
    Mr. Hastings. OK. Good. All right. Thank you very much. I 
will recognize the Ranking Member.
    Mr. Markey. Thank you very much. Mr. Feinberg, can you just 
briefly lay out for us what the situation is with people who 
have decided that they would rather litigate than move through 
the Compensation Fund?
    Mr. Feinberg. Everybody has a right to litigate. In fact, 
claimants come to the Fund. If they don't like what they see in 
the way of my determinations or the determinations of the GCCF, 
they have a voluntary choice to opt out and head to court 
through the United States Coast Guard after the Coast Guard 
reviews if they want. They ultimately have a right to go to 
court.
    Now, the first trial arising out of the explosion is 
scheduled for February of 2012. By that time, the GCCF would 
have distributed in the vicinity of slightly over $6 billion. 
And I must say, a first trial in February of 2012 is 
miraculous. I think that what the judge has done in New Orleans 
and what the lawyers have done in accelerating the trial 
schedule is a real tribute to them, frankly. They have pulled 
it off.
    Still, implicit in Congressman Markey's question, we will 
have distributed over $6 billion between the explosion and the 
date of the first trial.
    Mr. Markey. You will have distributed. So how long in 
contrast with going to court, and the first case doesn't begin 
until February of next year. How long does it take for a 
claimant to work through the process with you?
    Mr. Feinberg. On average, a claimant gets an initial 
determination, a response from us, within two weeks. Ten days 
to 14 days. It wasn't like that at the beginning, as 
Congressman Bonner I am sure will remind me, but we have 
greatly accelerated this process.
    So a claimant gets a signal. We have your file. It seems in 
order. We can cut you a check. Here are your options. We need 
more information. But we have greatly shortened the time for an 
initial contact with the claimant.
    Mr. Markey. OK. So earlier this week ABC News returned to 
the Gulf of Mexico to interview shrimpers affected by the BP 
oil spill. When asked about experiencing the worst season in 40 
years in the Gulf, one shrimper said the quality of the shrimp 
isn't there. The abundance isn't there. And when asked about 
what happens to all the boats if there is no shrimp, another 
shrimper just responded there are going to be a lot of boats 
for sale.
    What ability do shrimpers and fishermen who are 
experiencing lingering, ongoing effects from this bill have to 
compensation under the Fund?
    Mr. Feinberg. Assuming that a shrimper or any other 
fisherman can at least give us the minimal documentation that 
we need, those shrimpers and other fishermen will be paid.
    They will have three options. One of those options is a 
hedge against the future. We better continue to take an interim 
payment. We will document our current quarterly damage, but we 
want to keep coming back. Thirty thousand people have taken 
that option. If a shrimper or anybody else wants a final 
payment for what we think will be future damage as best we can 
surmise it at the GCCF that is an option also. It is strictly 
up to the shrimper.
    I want to just say one other thing, Congressman Markey. I 
think that we have to do better by the shrimpers. I was down in 
New Orleans last week, and we are now reviewing ways to make 
the program even more generous for the shrimping industry in 
Louisiana in particular.
    Mr. Markey. OK. So the indications are that this is a real 
catastrophe hitting the shrimpers down there, and it seems to 
be related to the spill. Now, if this continues next year, the 
year after, what happens to these shrimpers? How many times can 
they come back in order to be compensated for what could be 
damage that goes on for years?
    Mr. Feinberg. The GCCF by agreement isn't around for years 
and years and years. It expires automatically in August of 
2013.
    A shrimper, if he wants, or a shrimp company or an 
individual shrimper, can decide, if it seems that the shrimp 
are not going to come back, as you put it, a shrimper can 
decide to file interim claims, take a check from the GCCF, 
waive no rights, keep coming back until the shrimper either has 
a sense that it is OK now or we want a final payment, or the 
shrimper can take a final payment or until the program expires 
and then the shrimper can of course go to court if the program 
isn't extended.
    Mr. Markey. I see. Mr. Chairman, Mr. Feinberg is from 
Brockton, Massachusetts, the home of Rocky Marciano, and while 
he doesn't shy away from a fight, Mr. Feinberg, he actually 
tries his best to find a peaceful resolution for every one of 
the issues that he has been confronted with not just here, but 
in the 9/11 Fund and all of the other very difficult situations 
that he has been tasked with trying to resolve over the course 
of his career.
    Mr. Hastings. Marciano was 49-0, so it sounds like he 
didn't back away from a fight either, as I recall.
    I have been advised that we may have votes as early as 
10:15 and so that being the case, just to kind of figure out 
how we will do this, we will recess and then come back 
immediately after the last series of votes because Mr. Feinberg 
has to leave by noon.
    But I am advised we could have votes as early as 10:15, so 
with that I recognize Mr. Lamborn.
    Mr. Lamborn. Thank you, Mr. Chairman. Thank you for the 
work that you are doing. I will make this very quick because I 
am not from a Gulf Coast state, and I know that they have some 
burning questions.
    Just a procedural question, Mr. Feinberg. I understand from 
your testimony that all claim determinations are made without 
any interference from the Administration or BP. I know the 
Department of Justice has sent several letters making 
suggestions on the administration of the Fund, but does this 
mean that the White House has not contacted you once about the 
Fund since President Obama announced its creation last June?
    Mr. Feinberg. That is correct.
    Mr. Lamborn. And as a follow-up, what do you do with 
suggestions when people send them to you such as from the 
Department of Justice or from whomever?
    Mr. Feinberg. We take very seriously any suggestions from 
the Department of Justice, from Members of Congress, from 
interested citizens. We have made changes based on constructive 
criticism. It is always constructive. We welcome it, and we do 
our best in this difficult assignment to move the process 
forward and improve it day to day to day.
    Mr. Lamborn. OK. Thank you. Mr. Chairman, I yield back.
    Mr. Hastings. Mr. Holt is recognized for five minutes.
    Mr. Holt. Thank you, Mr. Chairman, and thank you, Mr. 
Feinberg. And I appreciate Mr. Markey for clarifying that you 
are from Massachusetts. Who would have guessed? And I thank you 
for doing work that I am sure many days seems thankless.
    You know, we have heard from many that the six-month 
drilling moratorium economic impact was worse than the impact 
of the spill itself, but, Mr. Chairman, I would like to 
introduce in the record a letter from the Baton Rouge Area 
Foundation which administered the $100 million Oil Rig Workers 
Assistance Fund over which Mr. Feinberg I believe has no 
control, no responsibility, no direct association. I would like 
to introduce this into the record.
    Mr. Hastings. Without objection.
    [NOTE: The letter from the Baton Rouge Area Foundation has 
been retained in the Committee's official files.]
    Mr. Holt. The Oil Rig Workers Assistance Fund was set up, 
as you will recall, to help individuals who worked on the 
Deepwater rigs that might have been affected by the moratorium 
and experienced financial losses. To receive the assistance 
under that Baton Rouge Fund, the rig workers had to submit some 
simple documentation: their W-2 forms, paystubs, unemployment 
forms and so forth.
    At the time of the moratorium, the Fund expected that maybe 
9,000 workers from the Deepwater rigs would apply for financial 
assistance. In reality, it was 357. Three hundred and fifty-
seven applications were completed by the rig workers seeking 
financial assistance for a total of $5.3 million in financial 
assistance.
    You know, I am not saying that the oil rig workers' 
financial losses are unimportant. I am just saying that it 
doesn't appear that they are anything like the losses that Mr. 
Markey and others were documenting in the fishing industry and 
the other associated industries.
    Because over $90 million from the Fund was still available, 
the Fund's eligibility was expanded to individuals who were 
indirectly affected or might have been affected by the 
moratorium--support vessels, those that transport food or 
supply ice or supplies or whatever it is--and during this round 
an additional 428 applications for financial assistance were 
completed.
    So if we just look at the numbers of people who have 
applied to Mr. Feinberg, people who have applied to the Baton 
Rouge Area Foundation, it looks pretty clear that the effects 
of the oil spill on tourism, on fisheries are well greater than 
the effect on the oil industry.
    Mr. Landry. Would the gentleman yield?
    Mr. Holt. Am I characterizing this fairly, Mr. Feinberg?
    Mr. Feinberg. I think you are characterizing it fairly, 
Congressman. The problem is I don't know how that Foundation in 
Louisiana is treating non-rig workers, but these other vendors.
    I have 1,600 claims that I am sending to that Foundation in 
New Orleans, and it is not clear to me that the Foundation is 
honoring all of those moratorium claims. Somebody should be 
honoring those claims, and I hope you are right that the 
Foundation is more receptive to claims that I am prohibited 
from paying, but I am not sure that that Foundation is doing as 
well as it should in honoring all those types of moratorium 
claims. I just don't know the answer.
    Mr. Landry. Will the gentleman yield?
    Mr. Holt. Real quickly, Mr. Landry. Just a moment. Is there 
something that we should be doing to see whether that 
Foundation--I mean, I realize it is not a government 
foundation. It is not a government institution. Is there 
something we should be doing to see that they are giving 
sufficient attention to people who might be hurting?
    Mr. Feinberg. You might inquire and find out, as you are 
with the Gulf Coast Claims Facility, just exactly what the 
rules are, what the eligibility criteria area. All I know is I 
am hearing from businesses impacted by the moratorium that they 
can't get paid.
    Mr. Holt. Mr. Chairman, would you care to join me in a 
letter asking for that information? I realize we can't demand 
it. I suppose we could, but----
    Mr. Hastings. Let us work. We are going to have a lot of 
questions that have come out of this hearing, I suspect, and I 
will say this right now instead of at the end of the hearing. 
We will continue to have oversight into this, and if that falls 
into that category I am more than happy to work with the 
gentleman.
    Mr. Holt. OK. Well, it just sounds as if the effect really 
has been on these other industries.
    I am sorry, Mr. Landry.
    Mr. Landry. No.
    Mr. Holt. I intended to yield to you----
    Mr. Landry. Yes.
    Mr. Holt.--but I see my time has expired.
    Mr. Hastings. Time has expired. I recognize the gentleman 
from Louisiana, Mr. Fleming.
    Dr. Fleming. Thank you, Mr. Feinberg. I appreciate your 
willingness to take either the credit or discredit, whichever. 
That is a model for us here in Washington. We generally have it 
50 percent right here. We accept the credit, but not the 
discredit. So we thank you, sir, for being willing to take the 
heat on that.
    Just a couple of quick questions before I get into 
something deeper. Do you have or will you have a metric for 
satisfaction among people compensated?
    Mr. Feinberg. I have said from day one, as with the 9/11 
Victim Compensation Fund, I would hope that at the end of this 
program at least 90 percent of all eligible individuals and 
businesses opt into the program. I think that is sort of an 
objective measurement that I have used over the years in other 
contexts.
    Dr. Fleming. But, I mean, will you have a questionnaire or 
a survey? I mean, obviously somebody might agree to something, 
but not be satisfied. Do you have any way of measuring that?
    Mr. Feinberg. No. Maybe we should measure that at the end 
of the program. I am pretty confident that people who accept 
compensation aren't satisfied.
    Dr. Fleming. OK.
    Mr. Feinberg. I think that is human nature.
    Dr. Fleming. I would ask that you would consider that. 
Again, it is sounding like to me that there may be money left 
over at the end of the day, and that might be reason to go back 
and reopen just a little bit some of these cases.
    You mentioned fraud. Is there any prosecution or do you 
plan to prosecute people who provide fraudulent claims?
    Mr. Feinberg. There certainly is, and it has been pretty 
effective. We have received, out of a million claims, about 
10,000 claims that we think are fraudulent. After we do an 
investigation with our antifraud team if it still appears 
fraudulent, we send it to the Department of Justice, the 
Criminal Division, Lanny Breuer. They have been fabulous 
working with U.S. Attorneys in the Gulf. They have indicted 
people. There have been guilty pleas. There have been 
convictions, I believe.
    I think fraud is an ever present concern. Nothing will 
undercut the credibility of this program more than fraudulent 
payments.
    Dr. Fleming. All right. Thank you sir. OK. What I want to 
turn to in my remaining time is you may well be aware that 
Louisiana has been the biggest oyster production state in the 
Union. Forty percent of the total yield has been from 
Louisiana.
    Washington state is now overtaking us because it appears 
that it wasn't the spill itself, but the downstreaming of 
freshwater that has now changed the salination of the water in 
their beds, which was heretofore perfect for growing oysters.
    And as I understand it, there is a multi-year rebuilding of 
that. You have to reseed the beds. I am not sure if I have all 
the terminology correct. Can you kind of walk through that and 
see where we are? I do think there are some special issues on 
compensation.
    Mr. Feinberg. There clearly are special issues. We treat 
oysters separately from any other industry. Oysters are 
different, and what we have decided is that an oyster claim, if 
somebody wants interim damage or can show their immediate 
damage, we will pay it.
    If somebody wants a final payment, if someone says to us we 
are filing a claim, we want a final payment and we will be 
gone, we give them four times their 2010 damage, and if a 
claimant leases oyster beds--that is, not only harvests 
oysters, but has a lease involving the beds themselves--at the 
bottom of the Gulf, there is a special additional payment that 
we will make. We have tried with oysters to recognize the 
uniqueness that you reference in your question.
    Dr. Fleming. And the four times is a reference to the four 
years, I assume, it takes to build these beds back up and get 
them back.
    This may be a little bit outside of your purview, but is 
there any evidence that the saline content of that area is 
beginning to return to normal?
    Mr. Feinberg. Outside of my bailiwick, I think the 
independent evidence, at least from what I am hearing in terms 
of the oysters being good to eat and urging people to come back 
to the Gulf and eat those oysters, I think the predictions are 
pretty positive.
    But I agree. I agree. Nobody knows for sure. It is an 
uncertain biology, and people who want to wait it out and see 
have every right to do so.
    Dr. Fleming. All right. Just one final question in my time. 
How many lawsuits are out there, or how many do you expect at 
the end of the day?
    Mr. Feinberg. I really don't know. I think as a layman 
reading the newspaper, I think there are about 130,000 lawsuits 
that have been filed, but I haven't checked to see how many of 
those that have been filed have already been paid by us and are 
released. I could get you that information, but I don't have it 
at my fingertips.
    Dr. Fleming. OK. Thank you. I yield back, Mr. Chairman.
    Mr. Hastings. Thank you very much. I recognize the 
gentleman from South Carolina, Mr. Duncan.
    Mr. Duncan of South Carolina. Thank you, Mr. Chairman. Mr. 
Feinberg, thanks for being here and answering these questions 
for us today.
    It was interesting to hear that you can't pay moratorium 
claims because I think that has been a significant impact on 
the Gulf region. With the loss of businesses, the domino 
effect, not just the oil rigs, but the oil field servicing 
industries of welders and pipefitters and people haulers and 
food services, and it just goes on and on as you delve into it.
    I do know that from talking with Mr. Landry, the Baton 
Rouge Foundation actually paid some moratorium claims, but is 
closed now, and the remaining money, because they didn't pay 
out 100 percent, went to another charitable organization versus 
paying folks that were hurt in the moratorium.
    I don't have any specific questions for you, but I want to 
yield the balance of my time to someone that knows this issue, 
Mr. Landry from Louisiana.
    Mr. Landry. Thank you, Mr. Duncan. Mr. Feinberg, how are 
you?
    Mr. Feinberg. Good. Thank you.
    Mr. Landry. I am concerned about the moratorium fund 
because is it not correct, just very short because we have a 
limited amount of time, that the Fund that you administer you 
cannot pay out to companies who were affected by the 
moratorium? Is that not correct?
    Mr. Feinberg. That is correct.
    Mr. Landry. OK. So they have to go to the $100 million 
fund. You have a $20 billion Fund. I think there is some 
disparity in there.
    And I am going to visit with you, Mr. Holt, because I don't 
have a lot of time, but I will tell you how that is a disaster 
as well. I have a guy in a fab yard looking for that.
    The problem I am having, do you know how many claims were 
settled in regard to the shrimping industry that were paid to 
shrimpers who were Louisiana certified commercial fishermen?
    Mr. Feinberg. I can probably get you that number.
    Mr. Landry. OK. Because the concern I have is that once you 
all opened that Fund there was a blue light special on white 
boots, OK, down in Louisiana, and to me that allowed people to 
claim that they were shrimpers, but that were not shrimpers or 
were not traditional commercial shrimpers. Of course, I have 
heard stories where there are shrimpers that got paid very 
little and there are hobbying shrimpers I guess you would call 
them or tourism shrimpers that got paid a lot.
    And to me it is very simple. Wildlife and Fisheries in 
Louisiana certifies our commercial fishermen, but you all are 
not using that in the matrix when you all are paying out, and 
that concerns me because it seems as though when I go back on 
the ground I continue to hear stories of people who really need 
this money, people who have been in the shrimping industry for 
generation after generation, that are not getting the help.
    But the fly by-night people are getting a check, and maybe 
it is not as much as the actual traditional shrimper would be 
eligible for, but a $5,000 and $10,000 and $15,000 check to a 
guy that just puts up a trawl on his boat. That is a concern of 
mine. Can you address that?
    Mr. Feinberg. Yes. I can address it a couple of ways. 
First, we are paying commercial shrimpers, large shrimp 
companies, individual shrimpers. We do not discriminate against 
commercial shrimpers.
    But I want to agree with you, Congressman. I think that if 
there is one area where the Gulf Coast Claims Facility has to 
be more receptive and generous it is with the commercial 
shrimping industry in Louisiana.
    Mr. Landry. OK. So you say that, and you have said that 
this is the second time. I appreciate that. The question is 
what are you going to do about it?
    Mr. Feinberg. Here is what we are doing about it. Within 
the next few weeks--weeks--we hope to announce rules, new rules 
to deal particularly with the Louisiana shrimpers.
    I have been down to New Orleans in the past few weeks to 
meet with a whole group of shrimpers--one of them is here today 
in the audience--and I am listening exactly to the point you 
are making. I hear from them. ``Mr. Feinberg, we don't begrudge 
you are paying people who are shrimpers, but we are the real 
historical shrimping industry in the Gulf and we think that you 
are not paying sufficient attention to our parochial 
concerns.''
    Mr. Landry. Well, let me make this suggestion in the 20 
seconds that I have, because you are a very, very bright lawyer 
I know. You have a great reputation. It is simple. Go to 
Wildlife and Fisheries down in Louisiana. That is your client. 
They have the records.
    You don't need to visit with anyone else other than those 
that are Louisiana certified commercial fishermen. I would 
appreciate it if you took that and built that into your matrix.
    Mr. Feinberg. Will do.
    Mr. Landry. Mr. Chairman, I yield back.
    Mr. Hastings. Thank you very much. The Chair recognizes the 
gentleman from Arizona, Mr. Grijalva.
    Mr. Grijalva. Thank you very much, Mr. Chairman. Mr. 
Feinberg, researchers discovered that there has been 
potentially dangerous changes following the spill in one of the 
most abundant fish marshes of the Gulf, an indicator many 
believe of the health of the ecosystem, which may indicate the 
presence of a much larger problem.
    In fact, researchers concluded that there may be some of 
the same early warning signs that we saw in the years following 
the Exxon Valdez oil spill in Alaska before species like the 
Pacific herring and pink salmon suffered severe population 
declines.
    If in fact there are those ticking environmental time bombs 
in the Gulf that may lead to longer term impacts on fish and 
result in future losses by fishermen and shrimpers, can they be 
compensated in the years to come if this ticking clock goes 
off?
    Mr. Feinberg. Well, that is an excellent question. We are 
around, the Gulf Coast Claims Facility, until August of 2013, 
so alleged damage between now and then caused by this oil, by 
the Horizon explosion, we will compensate. Also, we are daily, 
weekly monitoring what the experts tell us about the impact of 
the spill, as you point out.
    So when we make a final offer, and some 60,000 individuals 
and businesses have accepted the final offer, we are trying to 
factor in what the best experts tell us about the future. If 
somebody doesn't agree, Congressman, with our estimation of 
long-term damage, they don't need to accept a final payment. 
Thirty thousand people have accepted an interim payment for 
immediate damage, and they want to wait and see, as you point 
out, what the future holds and then they can come back at that 
time.
    Once August 2013 expires, there is no more Gulf Coast 
Claims Facility. They will have to go to BP itself.
    Mr. Grijalva. And so after 2013 if there are still impacts 
being felt or impacts that have developed in that interim the 
source of their making themselves whole in some way would be 
with the company?
    Mr. Feinberg. Or a courtroom, I guess.
    Mr. Grijalva. OK. One other point if I may, sir. For those 
people that have been harmed by the spill, isn't it true that 
the documentation requirements in place to receive compensation 
from the Claims Fund are much more inclusive than it would be 
in a court proceeding?
    Mr. Feinberg. When you say inclusive, I think we are much 
more liberal, much more generous in recognizing a valid claim 
than would be the case in court, but that can be argued, I 
suppose.
    I am confident that we are paying claims on a record that 
is much less rigorous than would be required in the courtroom.
    Mr. Grijalva. I appreciate it and yield back.
    Mr. Hastings. The gentleman yields back. Mr. Flores of 
Texas?
    Mr. Flores. Thank you, Mr. Chairman. Mr. Feinberg, thank 
you for joining us today. I am going to yield the first four 
minutes to Mr. Landry and ask him to--is he gone? Never mind. I 
am not going to yield to him.
    In any event, I want to thank you for your candor in the 
buck stops here statements that you made. That is, in the words 
of Mr. Fleming, refreshing to see around Washington, D.C.
    I have a couple of questions. I noticed in going through 
the statistics, the metrics that you included in your 
testimony, that there were 17,000 claims that were final 
settlements that were offered, but weren't accepted. What 
happens with those, and can you tell me roughly? Does that mean 
that the offeree did not accept them or that you rejected them? 
What does that mean?
    Mr. Feinberg. Most of the 17,000 final claims that were not 
accepted they have 90 days to make a decision.
    Mr. Flores. OK.
    Mr. Feinberg. I will bet you the great bulk of those 17,000 
claims are within the 90 day period and the claimant hasn't 
decided yet whether to accept the final offer or not. If they 
don't want the final offer, they don't have to take it. They 
can take in lieu of that an interim payment for their immediate 
damage and come back every quarter and seek additional 
compensation.
    Ultimately, Congressman, if they just can't get 
satisfaction they ultimately always have the right eventually 
to get to court and file a lawsuit as if the GCCF had never 
been established.
    Mr. Flores. Right. And how many of those 17,000 have 
actually already gone to litigation? Do you have a feel for 
that?
    Mr. Feinberg. Very few.
    Mr. Flores. OK.
    Mr. Feinberg. I know that about 1,500 individuals were 
dissatisfied with what we decided and went to the Coast Guard. 
The Coast Guard independently reaffirmed what we have done.
    Now, how many of those people who didn't get satisfaction 
from the Coast Guard then went on to file a lawsuit? I do not 
know the answer to that.
    Mr. Flores. It looks like the process is working, I mean, 
if 1,400 claims that they didn't like went to the Coast Guard 
and 1,300 of those the Coast Guard upheld, so it looks like you 
are doing right.
    I am going to yield the balance of my time to Mr. Landry.
    Mr. Landry. Thank you, Mr. Flores. I think this is 
important because this has come up twice. My question to you is 
if the claim process is dragged out there is a prescriptive 
period by which those claimants would have to file a suit in 
Federal court against BP. That is correct?
    Mr. Feinberg. Yes, but I think that that prescriptive 
period isn't a barrier. I mean, I think many, many people have 
made that filing in court.
    Mr. Landry. How would they make it? I mean, are you saying 
that there are people who have made the application and still 
filed?
    Mr. Feinberg. Oh, I think there are many people, maybe 
thousands of people, who filed with the GCCF and filed in court 
as well.
    Mr. Landry. When do you believe that prescriptive period 
actually ends, because in Louisiana that would be a one year--
that would be a tort claim. Is that correct?
    Mr. Feinberg. Again, the statute of limitations. I don't 
know what the period is in Louisiana.
    Mr. Landry. Well, in Louisiana the target would be one 
year, but my question to you would be in your legal analysis 
would that period have expired already?
    Mr. Feinberg. No.
    Mr. Landry. No?
    Mr. Feinberg. No. I think anybody who comes to the Fund and 
presents their claim, I think under the Oil Pollution Control 
Act, and I am not an expert in this, but I think ultimately 
they preserve their right to file a claim in Federal court.
    Mr. Landry. And so the period when they come to you in the 
Fund, you are saying that the prescriptive period----
    Mr. Feinberg. Will be extended.
    Mr. Landry. The timing is suspended?
    Mr. Feinberg. Either suspended or extended so that they are 
not going to be precluded from filing. But again I want to 
emphasize I am not an expert in how you litigate Federal Oil 
Pollution Control Act cases.
    Mr. Landry. I mean, Mr. Chairman, that is the biggest 
concern is that there are people out there, and as they try to 
navigate their way through both a complex legal system and what 
I think is somewhat of a complex application through the BP 
fund that Mr. Feinberg administers is that there is timing. You 
know, time is moving against them.
    I would hate to see that at the end of the day, and I know 
Mr. Feinberg wouldn't do this, wouldn't set up a system by 
which claimants would just drag on and on and on to a point 
where we get to the point where they lose their right to court, 
but only because they have done what he and BP and a lot of us 
have asked them is to go through that process, and so that is a 
concern of mine.
    Mr. Chairman, I yield back.
    Mr. Hastings. Mr. Flores, you have 22 seconds. Do you yield 
back your time?
    Mr. Flores. I yield the balance of my time.
    Mr. Hastings. OK. When the gavel dropped we had a nonmember 
of the Committee here, and I am going to recognize him, Mr. 
Bonner, for five minutes.
    Mr. Bonner. Thank you, Chairman, for allowing me to be a 
member of the Committee. I have always wanted to be, and I am 
glad to fulfill that promise today.
    For the record, I, as has already been noted, have had an 
opportunity to have a lot of experience with Mr. Feinberg, and 
while there has been effusive praise and at times even sympathy 
for the task he has been assigned, I would remind everyone that 
Mr. Feinberg's firm is paid $1.4 million a month. I believe 
that is correct.
    Mr. Feinberg. No.
    Mr. Bonner. How much?
    Mr. Feinberg. $1.250.
    Mr. Bonner. $1.25. Thank you.
    Mr. Feinberg. I just lopped off $150,000.
    Mr. Bonner. Well, regardless, it is a generous amount of 
money to administer this, and while it is a complicated 
process, and I think Mr. Feinberg has realized that it is even 
more complicated than the 9/11 Fund in many ways with a million 
claimants, it is not a perfect system.
    If anything, it is a very flawed system, and so many 
promises have been made by Mr. Feinberg himself to people who 
live along the Gulf Coast not just in Alabama, but in Louisiana 
and Mississippi and Florida and Texas. So many broken promises, 
unfortunately. So I am grateful for the opportunity to be here, 
but I will obviously have more questions than there will be 
time for.
    And I would like to ask. I mentioned this to the Chairman. 
If Mr. Feinberg has no objection, I would like to invite the 
people who live along the Gulf Coast to take advantage of this 
time where we traditionally have five days to submit additional 
questions for the record that Mr. Feinberg would respond to.
    I would like to give the people who live in Alabama a 
chance who have met with you before at town meetings and who 
were promised certain things and they didn't get those promises 
fulfilled. Would you have any objection to letting us get those 
questions submitted to you?
    Mr. Feinberg. No objection. I would welcome it.
    Mr. Bonner. Good. Thank you. A couple questions. Vice 
President Biden said that $20 billion is a floor, not a 
ceiling. Is that correct?
    Mr. Feinberg. That is correct.
    Mr. Bonner. Let us just round it up. $6 billion. How much 
do you think you will actually before August of 2013, based on 
the trends you have seen thus far? How much do you think you 
will exhaust?
    Mr. Feinberg. I would be reluctant, Congressman, to take an 
estimate of that, but I remind you, as you know, that that $20 
billion is used for purposes other than the Gulf Coast Claims 
Facility. Local cleanup costs come out of the $20 billion. 
Government claims that are being paid in Alabama by BP comes 
out of the $20 billion.
    So I can't venture a guess as to how much the total amount 
will be that will be spent. I would like to think that the $20 
billion would be adequate to compensate eligible claims, but BP 
has made it clear that if $20 billion is not enough they will 
honor all additional financial obligations.
    Mr. Bonner. You also indicated that you were independent of 
BP. Your quote in July in 2010, ``I work for the people of the 
Gulf region. That is who I work for. I am totally 
independent,'' although the Federal judge has now questioned 
that. ``I want to try and maximize as much compensation as I 
can do fairly and consistently to the people I am trying to 
serve down there.'' Do you still stand by that statement?
    Mr. Feinberg. I do indeed.
    Mr. Bonner. But does BP not have the final say on these 
large settlement claims? Do they not have to approve or 
disallow those claims?
    Mr. Feinberg. Absolutely not. Absolutely not. What BP can 
do under the protocol if it so desires for claims that are 
overpaid by the GCCF in amounts in excess of $500,000, they 
have the right to seek to appeal if they want to a three judge 
panel that was set up not by me. It was set up to review the 
claim. BP, to my knowledge, has exercised that right in one 
single case.
    Mr. Bonner. Well, that is inconsistent with information we 
have received, but we will take that up separately.
    You also indicated in answer to an earlier question that 
there is basically one percent of the claims that are 
fraudulent. Is that right?
    Mr. Feinberg. We have received--I think I have this. We 
have received what we think are 14,000 fraudulent claims, and 
we have sent 2,800 to the Department of Justice.
    Mr. Bonner. OK. Regardless, data that we have from your own 
website that an auditor, an accountant, in my district has 
collected every day to compare shows that 116,000 of the 
331,560 claims processed have been refused payment, which would 
mean 35 percent of the claims have been refused payment.
    According to your data, are you stating that 35 percent of 
those that have been refused payment are because of fraud?
    Mr. Feinberg. No, not at all. If we have refused claims it 
can be for a number of reasons: no documentation, insufficient 
documentation, ineligible. It might be a claim from Idaho. I 
don't know. I am just throwing this out.
    Government claims are ineligible. Moratorium claims 
unfortunately are ineligible. There are all sorts of reasons 
that we either deny claims or deem claims to be deficient.
    Mr. Bonner. Thank you again, Mr. Chairman.
    Mr. Hastings. Thank you. The votes have just been called, 
but we will try to get in some further questioning.
    Mr. Thompson of Pennsylvania is recognized.
    Mr. Thompson. Thank you, Chairman. Thank you, Mr. Feinberg.
    My question is you mentioned that because there have been 
approximately one million claims submitted, and in your 
testimony you said that there may be certain inconsistencies in 
the treatment of similarly situated claimants who offer similar 
proof of damage.
    My question is pretty straightforward. What have you been 
doing or what are your thoughts on how can you improve on that 
consistency? I recognize the sheer volume is a huge variable.
    Mr. Feinberg. You are correct. In some weeks we have more 
claims in a week, Congressman, than we received in the entire 
life of the 9/11 Victim Compensation Fund. The sheer magnitude 
of the claims will result in some inconsistency. It is 
inevitable.
    What we do when we find inconsistency--either we find it on 
our own, or the claimant brings it to our attention, or the 
claimant's accountant or lawyers bring it to our attention--we 
will look at it. If we made a mistake, if it is inconsistent, 
we will true it up and pay the difference. We are not looking 
to promote inconsistency. It is a problem that we don't want to 
have magnified.
    Mr. Thompson. Thank you. I would yield the balance of my 
time to Mr. Bonner from Alabama.
    Mr. Bonner. Thank you. I have a few more questions.
    According to data again collected from your website every 
day and analyzed independently by an accountant, medical doctor 
and also a city official in Gulf Shores, Alabama, 95 percent of 
the claims that have been processed and reviewed, 54 percent 
have been processed, issued for final payment, but 46 percent 
have not received final payment. Sixty-nine percent paid of the 
quick pay variety that require no additional documentation to 
process. Thirty percent paid for the final payment.
    I throw those numbers out to you because basically you 
would lead us to believe that this has been a success because 
so many people have continued to apply. I think you said 2,000 
people a week continue to apply.
    And yet is it not true that the burden you have placed on 
many of these individuals and businesses for additional 
requests for information, even when they have submitted their 
claims with certified accountants who have shown the 
documentation, that there has been a great inconsistency in the 
payment process, and in fact that more people have not been 
paid than have been paid?
    Mr. Feinberg. I don't think there has been great 
inconsistency. I mean, that is one reason you are promoting, 
and rightfully so, the notion of the independent audit to get 
some answers to that question.
    I think that people that take the quick payment take the 
quick payment because they don't have any additional 
documentation to show us or have already been adequately paid 
by an interim payment during the emergency payment period.
    I point with pride, frankly, to the fact that overall there 
is almost $6 billion that has gone out in one year, 
Congressman. I think we are doing something right. And when you 
say that people are applying at 2,200 new claims a week----
    Mr. Bonner. Well, you said that.
    Mr. Feinberg.--because they are being tricked or deceived, 
I don't think that is the case at all. I think they see their 
next door neighbor getting paid and they are going to file a 
claim, and they are going to make the same argument and hope 
that they can get paid as well.
    Mr. Bonner. You mentioned audit. I believe I contacted you 
in the spring of last year and asked for you to initiate an 
audit on your own, and I don't believe that the GCCF agreed to 
do that.
    Mr. Chairman, we actually have a provision added to the 
CJS, Commerce, Justice, Science, appropriation bill demanding 
an audit and requiring the Justice Department to do it because 
the Assistant Attorney General, Mr. Perrelli, who came to our 
district, came to the Gulf Coast, realized that this was not 
adding up as it was intending to be, and even the Attorney 
General when he was along the Gulf Coast earlier this year then 
contacted Mr. Feinberg and said an audit is necessary.
    So the Chairman asked you in his question where the audit 
is. The truth is the audit has not even begun yet. They have 
not even named a firm to do the audit. Is that correct?
    Mr. Feinberg. That is correct. Congressman, I just want to 
say I don't speak for the Department on this.
    The Department is going to choose the auditor and move at 
your demand. I only want to point out about that independent 
audit it is my understanding, and I mentioned this earlier, 
that on the one hand there is a demand that the Department move 
forward with great speed to get this going. Overdue, you would 
say. Overdue.
    On the other hand, the Department, as I understand it from 
letters, copies of which I get, there are various public 
interest groups, lawyers, elected officials in the Gulf who 
want input into that process, and some of them have just in the 
last few weeks got to the Department with their suggestions.
    So I think the tension between speed and inclusiveness is 
partly the reason why there has been a delay in your view.
    Mr. Hastings. Thank you. We have less than 10 minutes to 
vote if you look at the timing. If you look at the number that 
haven't voted, we have more time than that.
    So I will recognize Mr. Wittman, and this will probably be 
the last question, and then we will recess. The time of getting 
back here is approximately 11:30. Mr. Feinberg at that point 
would only have a half hour, so for those of you that want to 
engage, please get back here after the last vote.
    Mr. Wittman, you are recognized for five minutes.
    Mr. Wittman. Thank you, Mr. Chairman. Mr. Feinberg, I 
wanted to follow up on Dr. Fleming's assertion about the oyster 
industry there in the State of Louisiana; as you know, the 
largest in the United States. They distribute shell oysters all 
around.
    The oyster industry is interconnected. Processors in one 
state rely on harvesters and dealers in other states to have 
their market needs to be met in those areas. Obviously the 
Middle Atlantic is part of that, and you heard the synopsis 
about the West Coast also.
    In that vein, there are processors out there that have 
these relationships with Gulf producers that have contracts 
that say listen, I have to deliver a certain number of oysters. 
In this realm of you considering claims, is it reasonable to 
consider a claim from somebody that processes oysters in the 
State of Virginia that relies on those oysters from the Gulf as 
a legitimate claim under your process?
    Mr. Feinberg. Absolutely. Absolutely. If there is a direct 
link in your hypothetical between a Virginia oyster processing 
company that depends for its livelihood on Gulf Coast shrimp, 
by all means. I can go back and see, but I am sure we have paid 
some of those claims. I know we have in Maryland.
    Mr. Wittman. OK.
    Mr. Feinberg. In Maryland, we have paid I think there are a 
couple of oyster restaurants that we paid that were totally 
dependent on Gulf shrimp for their livelihood.
    Mr. Wittman. And we see that obviously the seafood industry 
is interconnected both with shrimp and with oysters and in some 
instances even fish, so to make sure that you are keeping in 
mind the impacts, those secondary impacts on states and 
producers I think is absolutely critical.
    Mr. Chairman, I would like to yield the balance of my time 
to Mr. Palazzo.
    Mr. Palazzo. Thank you, Congressman Wittman. Thank you, 
Chairman, for allowing me to sit in here today.
    Mr. Feinberg, I have to share the same frustrations my 
other Gulf states colleagues have expressed from Congressman 
Bonner to Congressman Landry. Of course, I can't put it as 
eloquently as Congressman Landry, but I would have to say we 
are frustrated. We are tired. Many of us feel hopeless in the 
whole process, but we also feel insulted.
    You know, we have some very smart people. We have 
accountants and lawyers that are trying to help people all 
along the Gulf Coast provide claims and support and 
documentation, and as they do it they feel like they are giving 
the best information. They are giving exactly what the Claim 
Center wants, and it is still rejected or there are delays in 
processing.
    So the comment Congressman Landry made, it is like is this 
a stonewalling? Is this to drag it out, to not pay out the $20 
billion, which again was supposed to be the floor, not the 
ceiling, on making those affected by the worst manmade disaster 
in our nation's history whole again?
    But people don't feel like it. They see inconsistencies. I 
mean, a perfect example is Omega Protein, a large company that 
got a $45 million payout in their first year, and when you have 
shrimpers and charter boat captains and others who have made a 
living for generations off the Gulf Coast have yet to receive a 
first payment, or the payments that are being offered are 
insulting.
    They are embarrassing, and it leaves them either with the 
option of take what they can, cut their losses or go to 
litigation. You know, quite honestly, to people in Mississippi 
litigation is the last thing we would really like to go to. So 
some people are adverse to it, but some people will go to it.
    I guess the main thing is I am expressing what South 
Mississippians and probably my colleagues all up along the Gulf 
states, this is what we are seeing. This is what we are 
feeling. Going forward, look. You have $14 billion left.
    I noticed you sent out a mass mail out. If you have been 
denied pay, if you have your paperwork now, come in. Keep 
communicating that to the public. Keep letting people know that 
they can receive reimbursements or they have the right to come 
in and do a claim.
    But also listen to the people who have made a living out of 
the Gulf, have made a living, the fifth and sixth and seventh 
generations of people in South Mississippi. If your methodology 
for reimbursement is not acceptable to them, try to come in and 
find some common ground, find that place, because these are the 
experts.
    I mean, I don't expect you to know how to reimburse a 
shrimper. You probably have an idea now, but if that is not 
what you are doing, and especially in going to the cities and 
municipalities. I know that is supposedly not in your range, 
but you have been on ground zero for a long time. The 
methodologies that are being offered up to our cities and 
municipalities are insulting. The City of Gulfport has been 
offered $79,000. You know, maybe $79 million would be 
acceptable at $1 per resident.
    Again, I share the same concerns as my colleagues. I 
appreciate the Chairman for allowing me to come in. Please take 
that back home and make it right.
    Mr. Feinberg. Thank you.
    Mr. Palazzo. Thank you.
    Mr. Hastings. I thank the gentleman. Yes?
    Mr. Markey. If I may, Mr. Chairman?
    Mr. Hastings. Yes.
    Mr. Markey. I have just one quick question. I am 
sympathetic to Mr. Landry on this shrimping question, on the 
question of how we get with these fishermen. You know, this is 
a huge, unprecedented science experiment that took place at 
BP's hands dumping all the chemicals in with the oil, and now 
we are seeing the worst shrimping year in 40 years.
    If it continues past 2013, my understanding in the law is 
that after 2013 all of this money goes back to BP. So do you 
have a recommendation to us in terms of how we should handle an 
issue like that, given the fact that the science might be 
pointing toward a much longer term economic catastrophe for the 
shrimpers and the funds in 2013 just dissolve? So do you have 
any words of wisdom to us how we should handle it?
    Mr. Feinberg. I would say two things. One is, what happens 
after August 2013? That is a subject the Congress should raise 
directly with BP and, I suppose, the Administration, which is 
part of that escrow agreement.
    But as you pointed out, Congressman, this is a rather 
unprecedented situation. BP, as you pointed out, in putting up 
this $20 billion, it is rather a unique contribution by a 
private corporation to try and create a system that is not 
required by existing law. I think BP deserves some credit, as 
you point out.
    Mr. Markey. No, no. I am giving them credit.
    Mr. Feinberg. And I think----
    Mr. Markey. I did that in the opening statement. It is only 
what happens, given the fact that there is a causal connection 
between what BP did and what could continue to be happening in 
the Gulf in 2013, 2014 and 2015 in terms of ensuring that there 
is some capacity to compensate people if the harm is still 
occurring in a significant way, especially for the fishermen.
    Mr. Feinberg. Again, one option would be if BP wants to 
extend the deadline of the program or whatever past August of 
2013 into some foreseeable future, but that is something that 
Congress might raise directly with BP.
    Mr. Markey. Thank you. Thank you, Mr. Feinberg.
    Mr. Hastings. We are going to break, and I would just 
simply say, and I referenced this in my opening statement, very 
simply this is unprecedented. It has been repeated several 
times. But the fact that the initiative did come from this 
Administration without any semblance of oversight is somewhat 
problematic, and this is maybe an experience, something in 
progress, and we will have to see how it works.
    We are getting very close to votes, so the Committee will 
be in recess. Mr. Feinberg, we anticipate the votes will be 
done approximately 11:30, and we will reconvene at that time.
    The Committee stands in recess.
    [Recess.]
    Dr. Fleming [presiding]. The Chairman notes we have a 
quorum, and we will resume. Thank you, Mr. Feinberg, for 
hanging with us.
    So we are back in session, and I believe, Mr. Southerland, 
you are up next for five minutes.
    Mr. Southerland. All right, Mr. Chairman. Thank you. Mr. 
Feinberg, thank you for coming up, and I also want to thank 
you. I had some questions that I called you several months ago 
and you were kind enough to discuss my concerns on the phone, 
so really some follow-up on the dialogue that you and I--can 
you hear me OK? OK.
    I want to ask. As far as the determining, how do you 
determine loss based on the documentation that you require and 
should require in order to pay a fair claim to restore the 
damage that small businesses have incurred? Talk to me a moment 
about what your examiners look at as far as historical, how far 
you go back.
    If someone has already asked you this question I apologize, 
but address that for a moment for me.
    Mr. Feinberg. We will look, Congressman, to an income 
statement, a wage statement prespill. We will go back and look 
at before the spill, 2009. We will look at the beginning of 
2010 in appropriate cases, 2008.
    We will try and get a composite picture. What was this 
small business doing before the spill? What did the trend look 
like? How were they doing? And what does it look like 
postspill? Now, sometimes a business will say to us gee, be 
careful. That was during Katrina and that is a bad example.
    Mr. Southerland. Right. Right.
    Mr. Feinberg. And we will take that into account. We try to 
come up with a fair picture pre/post.
    Mr. Southerland. If I may, to address that a little deeper, 
in our community, and I live in Panama City, Florida, so Bay 
County, which is one of the larger coastal communities along 
the Gulf Coast. We had a significant event that occurred in the 
history of not just our county, but also our region. We opened 
our brand new airport in Bay County just a month or so prior to 
the oil spill.
    And the reason I bring this up is because that was done in 
2010. The 10 years preceding that was, as you can imagine, an 
incredible effort to get this project done. There has not been 
an airport built from scratch since Denver, so it was a pretty 
big deal.
    Well, we have bounced back, and we have bounced back 
soundly. In 2011, bed taxes were great. Businesses were 
starting to recover, and they really had a wonderful year. So I 
could make an argument that you have to factor in 2009 and 2011 
if you are going to determine what 2010 would have been like 
with that significant event.
    And what we have done in securing other airlines into that 
airport--Delta and Southwest and airlines that we have never 
enjoyed--I can make a pretty good argument that if you just 
look backwards and not forwards then the small businesses that 
will file those claims will not have the benefit of the doubt 
of recovering a fair and equitable amount of money.
    Mr. Feinberg. Two answers. One, these small businesses 
ought to have you representing them. I mean, we welcome that 
type of dialogue.
    Mr. Southerland. I am representing them, by the way.
    Mr. Feinberg. Good. Before the GCCF.
    Mr. Southerland. I understand.
    Mr. Feinberg. To try and get a good, fair composite 
picture. Now, let me just say it sounds to me, and you will 
correct me, that is probably if it is an airport damage claim, 
that is probably a government claim.
    Mr. Southerland. Yes.
    Mr. Feinberg. If the airport can show that it has actually 
lost revenue because of the spill because people didn't fly 
in----
    Mr. Southerland. Right.
    Mr. Feinberg.--because they were in fear of the spill, that 
sounds like a government claim----
    Mr. Southerland. Right.
    Mr. Feinberg.--which I wouldn't handle anyway.
    Mr. Southerland. No. I understand. And we have been meeting 
with the BP representatives regarding governmental claims, and 
that is a whole other effort for our office.
    But I just want to say that if our small businesses can 
have, especially around the geographical area of that airport 
because that airport serves multiple counties. You know, I have 
Walton, I have Okaloosa, and then I have Gulf. And so I am 
pleased to hear you say that.
    Mr. Feinberg. Congressman, if you want to convene that 
group or you want me to meet down there with a group that can 
explain the situation----
    Mr. Southerland. Sure.
    Mr. Feinberg.--make sure we do it the right way, I will of 
course respond immediately to your suggestion.
    Mr. Southerland. Very good. We will do our homework to try 
to gather them, those individuals that have that concern, and 
we will reach out to your office. You gave me your contact 
information, so you will hear from me.
    Mr. Chair, I yield back. Thank you.
    Dr. Fleming. The gentleman yields back. Mr. Holt, you would 
be up next----
    Mr. Southerland. Here he is.
    Dr. Fleming.--if you have any more questions.
    Mr. Holt. Let me yield to Mr. Landry, but retain the----
    Dr. Fleming. OK.
    Mr. Holt.--space.
    Dr. Fleming. Very good. All right. Mr. Landry?
    Mr. Landry. Sure.
    Dr. Fleming. You are up next for five minutes.
    Mr. Landry. Thank you, Mr. Chairman. Mr. Feinberg, I want 
to go back and just clarify a couple of things. I know this 
isn't directly your responsibility, but going back to the 
moratorium fund. That fund has now been closed off. Is that 
correct? You have no----
    Mr. Feinberg. Until I heard this morning the representation 
that it was closed off, I didn't know it was closed off. I 
doubt that it is closed off, but I don't know. I have enough 
problems of my own with the GCCF.
    Mr. Landry. Well, I know, but the problem I am having is 
that actually see, to me it concerns me because I believe that 
oil and gas companies, along with our fishermen and everyone 
else, the moratorium was a direct impact from the spill, you 
see.
    And so there are a lot of businesses both directly tied to 
the oil and gas industry or indirectly tied to the oil and gas 
industry who have been impacted, that were impacted by the 
moratorium, and I am concerned that they are not getting paid 
as well. Recently I visited an oil and gas supply company. 
Their business is down 75 percent, and yet when they sent their 
information over, all of their accounting information, they 
were denied.
    Of course, that folds into or dovetails into what I think 
is another problem that I think Mr. Bonner had alluded to is 
that I am hearing across the Gulf Coast from people who have 
applied to your Fund that when they check in, when a claimant 
checks in and says where are we, they will say listen, we lost 
some paperwork. Could you resubmit this? Could you resend this 
to us?
    And what I am telling you, Mr. Feinberg, is it is just too 
coincidental that the person in Houma, Louisiana, is having the 
same problem as the person in Mobile or the person in Pensacola 
when it comes to the GCCF losing their paperwork. I mean, it 
just doesn't happen that coincidentally.
    Now, I know that you have set up in Louisiana the Long law 
firm to assist people in trying to put their paperwork 
together, and I think that has helped as well, but it just 
seems like the process is taking way, way too long.
    Mr. Feinberg. Three answers. One, there is no 
misunderstanding here. I share your concern about the 
moratorium claims. I wish I could pay those claims. I have no 
jurisdiction over those claims from day one. You are preaching 
to the choir. I think I have 1,600 claims, Congressman, that I 
would like to pay and I can't.
    Mr. Landry. Well, do you move those over to the other Fund?
    Mr. Feinberg. I move them over to the other Fund, but the 
other Fund, as far as I can tell, has shown no inclination in 
paying these claims because they are not rig worker claims or, 
as Congressman Holt pointed out an hour ago, even if the 
moratorium fund will pay some of those claims, as he cited some 
statistics, they haven't broadened it sufficiently.
    Mr. Landry. OK.
    Mr. Feinberg. So I am sharing that view.
    Mr. Landry. OK.
    Mr. Feinberg. Second, we are not losing any paper. Now, 
when we started, Congressman Landry, when we took over for BP 
last summer into the early fall paying the emergency payments, 
transitioning from BP paying the claims over to the GCCF taking 
over, then we did.
    We have processed 95 percent of the claims, over a million 
claims, and the idea that we are losing paper, I just don't buy 
that idea.
    Mr. Landry. Well, I will tell you what. I mean, look. I 
don't believe people down in the district are being 
disingenuous as well, and of course I have seen a lot of times 
where what we are being told up in Washington and maybe what 
you are being told up in Boston is different from what exactly 
goes on to the ground.
    So, Mr. Chairman, I would just ask, put in a request that 
we look for both with Mr. Holt and with Mr. Markey and Chairman 
Hastings, that we try to look to maybe doing a field hearing 
down somewhere in between. Maybe we can go down to Biloxi. You 
know, we will split the difference between Florida and 
Louisiana.
    Mr. Feinberg, if you would be so grateful as to come with 
us, and we could hear directly from--before we put you up, we 
will give you the benefit of the doubt. We will put them up to 
the table, and then we will listen to them and then we will 
bring you on and then somewhere in the middle I guess we will 
find what the truth is.
    Mr. Feinberg. Since we took over last August, I have 
received 60 million pieces of paper. It is conceivable. I would 
suggest, Congressman, if there are particular constituents who 
claim lost documents you just get me their name and their claim 
number. I will personally get back to you with a status report 
on those claimants who claim lost documentation.
    The other thing I just want to mention before you depart. I 
checked during the break, and I have an answer for you. If 
somebody files their claim with the GCCF they are protected by 
the Federal statute of limitations.
    Mr. Landry. Thank you so much. That makes me feel so good. 
Thank you. That is important. Thank you so much. Mr. Chairman, 
I yield back.
    Dr. Fleming. Yes. The gentleman yields back, and next is 
Mr. Holt. You have five minutes.
    Mr. Holt. Thank you, Mr. Chairman. I thank you again for 
the work you are doing, and I think no one here is surprised 
that you are a good witness and very forthcoming. We appreciate 
that.
    To some extent following on what Mr. Landry was talking 
about, or at least a related point, if there is money remaining 
in the Fund that hasn't been expended by 2013 what happens to 
it, and do you happen to know, although it is not your 
responsibility, what about the moratorium relief fund, this 
Baton Rouge Foundation Fund? What happens to that money?
    In your case, does it go back to BP? If so, what are the 
safeguards built into the system to prevent--what would you 
call it--an unintentional tendency not to give it out?
    Mr. Feinberg. Congressman Holt, you ask the same tough 
questions that you did when we were doing the 9/11 Fund, and I 
just want to thank you again for what you did 10 years ago--10 
years ago--to get those New Jersey constituents to understand 
how the 9/11 Fund worked. I'm in your debt for that.
    Now, during the break I checked on this because I wanted to 
make sure I am accurate. In August of 2013 when the GCCF is 
ready to close by agreement between the Administration and BP, 
there are three independent trustees in charge of the overall 
escrow $20 billion. Remember, it is not just me drawing on the 
$20 billion.
    If those trustees conclude that there are more than $1 
billion worth of claims that appear to be outstanding, even 
though they are beyond 2013, they have the power to keep the 
Fund open, and every six months those trustees will review the 
state of the claims. Only if the total claims fall under $1 
billion will that money then revert back to BP. So the 
independent trustees--not me, but the independent trustees--
have some say.
    On the $100 million moratorium fund, it is my understanding 
that money is forever gone from BP's dominion. They have no 
control over it whether $100 million is used or $80 million is 
used or $20 million is used. That money is then going to be 
distributed by the Fund, by the trustees administering that 
Fund. That money will not go back to BP, as I understand it.
    Finally, if anybody in my day-to-day administration, if 
anybody feels that I am not spending the money the way I 
should, that if claimants feel they are not being paid 
adequately, they have the right to take their claim to the 
United States Coast Guard and have the Coast Guard do an 
independent review of how I have ruled on their claim. Fifteen 
hundred people have done that, and the Coast Guard has agreed 
with the GCCF every single time so far.
    Mr. Holt. Yes. Thank you. So just to be clear, BP, to whom 
the money would return if there was money left over less than 
$1 billion and fewer than $1 billion of claims remaining, they 
have no say in how it is administered now, so there is no 
hidden bias for them to hold onto it. OK.
    Mr. Feinberg. That is absolutely correct.
    Mr. Holt. Apart from the trustees ruling on whether there 
are still outstanding billions of dollars of claims, could BP 
voluntarily keep alive your function?
    Mr. Feinberg. I think they could. I think BP would 
technically need the support of the U.S. Government, the 
Administration, to do it, but I think that is up to BP. I must 
say, as Congressman Markey pointed out earlier, whatever 
criticism one wants to level at BP, I know of no case in 
history--I can't think of one--where a company voluntarily put 
up $20 billion to resolve claims.
    I think the criticism ought to be tempered by the fact that 
this is a rather extraordinary step that BP took for whatever 
the reason, and I think the Administration frankly, just as the 
Bush Administration was able to promulgate this 9/11 Victim 
Compensation Fund 10 years ago, I think that the Administration 
in getting BP to do this I think was a major positive step.
    Mr. Holt. Well, thank you. And with the Chair's indulgence 
for 10 or 15 more seconds, the reason I am following this line 
of questions is, as Mr. Markey was saying earlier, the 
shrimping grounds, it looks as if there will be hard times for 
years to come and so we want to make sure that people aren't 
left out, so to speak, in the cold.
    It is a fairly warm climate there, but you get my point. 
The shrimping industry and perhaps others look like they will 
be hard hit for a long, long time. Thank you.
    Dr. Fleming. The gentleman yields back. The Chair notes 
that we are up against a hard time, noon, and it is going to 
work out perfectly because we only have one other questioner, 
my colleague from Louisiana, Mr. Scalise. He has five minutes, 
and that should get us out right on time.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate the 
courtesy of the Committee to allow me to participate, and I 
thank Mr. Feinberg for coming and have a few questions in the 
five minutes.
    When we talk about the trustees, who appointed the two 
trustees? How did they----
    Mr. Feinberg. Again, not part of my--I have enough 
problems, Congressman. I am not sure how those trustees were 
appointed pursuant to the escrow agreement. It was some 
agreement between the Administration and BP.
    Mr. Scalise. OK. We will continue to try to find out 
specifically how that came about.
    When we talk about the agreement between the Administration 
and BP, I think in earlier questioning by Mr. Landry he was 
asking about the issues relating to the permitorium, the people 
that haven't been able to go back to work because of the lack 
of timely issuance of permits, and you said that you can't pay 
those. Is there something in the agreement between BP and the 
Administration that prohibits you from paying them?
    Mr. Feinberg. That is right. I think that when the Gulf 
Coast Claims Facility was established there was an 
understanding entered into.
    I don't know if it is in writing in the escrow agreement or 
an agreement between the Administration and BP or that BP 
unilaterally declared this before bringing me on board, that 
the moratorium claims would not be part of my jurisdiction, nor 
would government claims, as you know, be part of my 
jurisdiction.
    Mr. Scalise. Thanks. A few months ago I had asked you for 
some detailed information broken down in metrics on claims paid 
out, as well as claims rejected. I was able to get some of the 
information on claims paid out, although I didn't get it broken 
down by state and region, and that was one of the things that I 
had requested.
    I would like to ask you about that, and also we were not 
able to get any information on claims that have been rejected.
    Mr. Feinberg. Take a look after we adjourn or have your 
staff, I suggest, take a look at Attachment B of my testimony 
today. Attachment B breaks out the overall statistics by state, 
including Louisiana, and under Louisiana how much has been paid 
out, how much deficient, how many denied, how many accepted, 
how much paid out.
    Mr. Scalise. Do we have that by industry too so if we want 
to go into seafood, let us say, some of our seafood processors, 
because that is my next question I want to ask you about.
    Mr. Feinberg. That is not in Attachment B. I can get you 
that. You don't even have to send me a letter. Have you staff 
email me, and I will get you that information.
    I do know that approximately as of the middle of this month 
$1 billion in the aggregate has been paid to the seafood 
industry.
    Mr. Scalise. OK.
    Mr. Feinberg. But I can get you more information.
    Mr. Scalise. I am sure the email is going out from my staff 
right now. But the specific request that we want to know is 
within the seafood industry how is that broken down by region. 
If you can only give it at the state level, but if possible 
even at the more local level.
    Mr. Feinberg. I will try and get that for you.
    Mr. Scalise. Finally, the complaints that we are getting 
still seem to be some coming from, for example, some shrimpers 
that have processing facilities, some that just brought on more 
people right in advance of the Macondo Well explosion and have 
since had some severe layoffs, still dealing with severe 
problems from the industry not coming back, and yet I think you 
have met with a few of them individually, and they still 
haven't been able to get any kind of answer.
    Can you tell me what the holdup is, especially with shrimp 
processors? Maybe it is just in Southeast Louisiana. Some of my 
other colleagues might be experiencing it along the Gulf Coast 
too.
    Mr. Feinberg. I have two answers. One, we have processed 
and paid plenty of--and I can get you the numbers as you have 
requested--shrimpers, shrimp processors, shrimp harvesters, the 
shrimp industry, but you are absolutely onto something here.
    Earlier I mentioned this. I have been down in the Gulf, as 
you know, and to your district----
    Mr. Scalise. Yes.
    Mr. Feinberg.--on a number of occasions, and it is clear 
that the GCCF does have to be more responsive to the shrimpers.
    Mr. Scalise. Yes.
    Mr. Feinberg. There are a lot of shrimpers that haven't 
filed a claim yet with the GCCF because they are watching and 
waiting to see how the GCCF will treat the shrimp industry.
    You have been very constructive and very vocal with me 
about the need to do something about those shrimpers. We will 
in a matter of weeks take another look at how we deal with the 
shrimpers, but I assure you, Congressman, that your concern 
about the shrimpers is not going unnoticed, and we are going to 
try and find a way to be more generous toward the shrimpers in 
Louisiana.
    Mr. Scalise. Well, thank you. I will continue to work with 
you because there are a few specific shrimp processors who I 
know have filed formal--not a complaint--they filed formal 
paperwork with the GCCF and haven't gotten any answer yet, so I 
will continue to push to make sure we can get those resolved, 
and then that may provoke some others to get involved.
    I only have a couple seconds left. I will give a plug real 
quickly for the RESTORE Act because this is on a separate issue 
not in your shop, but all five Gulf Coast states have now come 
together in the House.
    We filed legislation just a few weeks ago that would 
dedicate at least 80 percent of the fines BP will have to pay 
under Clean Water Act to allow us to restore specific 
environmental and economic damage that is not covered by your 
operation that we know we will have and may have for years to 
come.
    Mr. Feinberg. If you can get me the name of those 
shrimpers, I will look at those. Nobody has been a more 
constructive critic than you, Congressman. I hope to continue 
to work with you. Your people have been very forthright, and I 
appreciate your concerns.
    Mr. Scalise. I appreciate that. That will probably be 
included in the email. There might be a second email, because 
the other one probably already went out.
    But I appreciate you coming before our Committee. I 
appreciate the Chairman and the Members for their discretion in 
allowing me to ask questions. I yield back.
    Dr. Fleming. The gentleman yields back. Mr. Feinberg, we 
have one more Member who has appeared, and in an effort to be 
as fair as possible to both sides if you would indulge us one 
more questioner I would appreciate that.
    So I now recognize Ms. Lee, the gentlelady from Texas.
    Ms. Jackson Lee. I thank the gentleman and the Chairman for 
their indulgence and their kindness, and I will be pointed.
    I thank my colleague. I am an interested neighbor and one 
who has worked with your constituents just because of my role 
on the Homeland Security Committee and my familiarity with the 
original work that Mr. Feinberg was assigned to. I want to 
thank him for that and, however, express that I am likewise a 
Boy Scout serving on the Boy Scout board, having a husband Boy 
Scout and a son Boy Scout, so I am an unhappy camper.
    I would like to ask first how much of the money have you 
spent of the $20 billion?
    Mr. Feinberg. With final offers outstanding, in 14 months 
we have authorized about $6 billion.
    Ms. Jackson Lee. And the life of this Fund is until it is 
spent, or you have a period of time?
    Mr. Feinberg. August 2013.
    Ms. Jackson Lee. I am sort of disappointed at the pace. I 
am going to ask you whether or not you have heard the 
discussion of the shrimpers, and I did not know if I came in 
too late to listen about the oystermen. Have you engaged with 
the oystermen in that area?
    Mr. Feinberg. We certainly have, and we have created a 
methodology designed to take into account oystermen concerns.
    Ms. Jackson Lee. Well, as you well know, I have attempted 
to meet with you. It has been frustrating, and I would like to 
officially make a request to meet with you as soon as possible 
in my office and also in Houston. So who should we reach out to 
get that done?
    Mr. Feinberg. I will get in touch with you, Congressman, in 
the next day or so to set up a date to meet with you here.
    I am going to be in Houston Monday, Tuesday, Wednesday--one 
of those dates--November 28 through 30. I am working with, I 
think, Congressman Green of Houston to try and get community 
leaders together in Houston, and I will be glad to meet with 
you in Houston as well.
    Ms. Jackson Lee. All right. If we can work on that? We 
happen to all be in the same area, but we have different 
jurisdictions.
    There is a group led by, I believe, Dr. E. Faye Williams. I 
would like to ensure that you could meet with that group and 
meet with her. I may ask her to come in to Houston for the 
meeting or how we can arrange that meeting, and so we will work 
together on that.
    Let me just proceed with some line of reasoning. One of the 
points, as you well know, that has maybe plagued the 
shrimpers--I am not sure--but the oyster persons and others is 
all of the documentation questions. That is a very challenging 
question about individuals working in a different kind of work 
and not having the documentation.
    How are you responding to that? They still exist. I don't 
know whether they are restaurants. There is also the issue of 
collateral damage. How are you dealing with that?
    Mr. Feinberg. We work with these claimants to try and come 
up with proof, some proof that their claim is linked to the 
spill and they can show some damage.
    Congresswoman, as you know from my 9/11 work, I don't need 
a full panoply of tax returns and profit and loss statements, 
but I need a minimal amount of documentation, and we will 
continue to work with claimants in trying to get the bare 
minimum that will allow us to pay a damage claim.
    Ms. Jackson Lee. Well, when we have this meeting we will 
meet with some of those who you may be able to give them 
courage or, excuse me, encouragement because you may say that 
what they already have.
    The reason why I know that some communities, and I see Dick 
Gregory and want to acknowledge his presence here, have not 
reached out is because they are intimidated by the process. You 
have $15 billion left. We are talking about 2013. That is a 
long road for somebody to have their doors closed and never 
have hope ever again.
    The reason why I came to this hearing is to indicate that 
my region is impacted by it as well. I have lived through not 
only the BP oil spill, but Hurricane Katrina and Rita. I know 
that is not your responsibility, but compounded there are those 
who can connect their present status to this incident that 
occurred. We want to put people back to work. We want to make 
sure these funds are utilized to rebuild communities.
    So as I close and respect the time that you have to leave, 
I would simply say there are those out there that we need to 
reconstruct or have some of your staff work with these 
community organizations so they can legitimately present to you 
documentation to be compensated.
    Mr. Feinberg. I completely agree.
    Ms. Jackson Lee. Thank you. And I yield back, Mr. Chairman.
    Dr. Fleming. The gentlelady yields back. I thank the 
gentlelady and also thank you so much, Mr. Feinberg, for 
appearing. Thank you so much for holding over. You are 
obviously a very sincere person, very candid and attempting to 
do the best job possible. We certainly appreciate that in 
Louisiana, Texas, Mississippi, Florida, all the states, 
Alabama, that are affected.
    With that, Members of the Committee may have additional 
questions for the record, and I ask that you respond to these 
in writing.
    If there is no further business, without objection the 
Committee stands adjourned.
    [Whereupon, at 12:10 p.m. the Committee was adjourned.]

                                 
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