[Senate Hearing 112-41]
[From the U.S. Government Publishing Office]
S. Hrg. 112-41
GULF COAST RECOVERY:
AN EXAMINATION OF CLAIMS AND SOCIAL
SERVICES IN THE AFTERMATH OF THE DEEPWATER HORIZON OIL SPILL
=======================================================================
HEARING
before the
AD HOC SUBCOMMITTEE ON DISASTER RECOVERY
of the
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
JANUARY 27, 2011
__________
Available via the World Wide Web: http://www.fdsys.gov/
Printed for the use of the Committee on Homeland Security
and Governmental Affairs
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana GEORGE V. VOINOVICH, Ohio
CLAIRE McCASKILL, Missouri JOHN ENSIGN, Nevada
JON TESTER, Montana LINDSEY GRAHAM, South Carolina
CHRISTOPHER COONS, Delaware MARK KIRK, Illinois
Michael L. Alexander, Staff Director
Brandon L. Milhorn, Minority Staff Director and Chief Counsel
Trina Driessnack Tyrer, Chief Clerk
Joyce Ward Publications Clerk and GPO Detailee
AD HOC SUBCOMMITTEE ON DISASTER RECOVERY
MARY L. LANDRIEU, Louisiana, Chairman
CLAIRE McCASKILL, Missouri LINDSAY GRAHAM, South Carolina
SCOTT P. BROWN, Massachusetts
Ben Billings, Staff Director
Andy Olson, Minority Staff Director
Kelsey Stroud, Chief Clerk
C O N T E N T S
------
Opening statement:
Page
Senator Landrieu............................................. 1
Senator Shelby............................................... 4
Senator Vitter............................................... 5
Prepared statements:
Senator Landrieu............................................. 37
Senator Shelby............................................... 40
WITNESSES
Thursday, January 27, 2011
Kenneth R. Feinberg, Administrator, Gulf Coast Claims Facility... 7
Craig Bennett, Director, National Pollution Funds Center, U.S.
Coast Guard.................................................... 9
Ve Nguyen, Member, United Louisiana Vietnamese American
Fisherfolks.................................................... 10
Rear Admiral Eric B. Broderick, D.D.S., M.P.H., Deputy
Administrator, Substance Abuse and Mental Health Services
Administration, U.S. Department of Health and Human Services... 24
Albert L. Keller, Executive Vice President, Gulf Coast
Restoration Organization, BP America, Inc...................... 28
Tom Costanza, Executive Director, Office of Justice and Peace,
Catholic Charities, Archdiocese of New Orleans................. 29
Lori R. West, Director, of International Relief and Development
and Current Chairman, South Mississippi Voluntary Organizations
Active in Disasters............................................ 31
Alphabetical List of Witnesses
Bennett, Craig:
Testimony.................................................... 9
Broderick, Rear Admiral Eric B.:
Testimony.................................................... 24
Prepared statement........................................... 53
Costanza, Tom:
Testimony.................................................... 29
Prepared statement with an attachment........................ 63
Feinberg, Kenneth R.:
Testimony.................................................... 7
Prepared statement........................................... 42
Keller, Albert L.:
Testimony.................................................... 28
Prepared statement........................................... 59
Nguyen, Ve:
Testimony.................................................... 10
Prepared statement........................................... 51
West, Lori R.:
Testimony.................................................... 31
Prepared statement........................................... 81
APPENDIX
Additional statements and information submitted for the record:
Photos submitted by Senator Landrieu......................... 85
Letter submitted by Senator Landrieu to Bob Dudley on Mental
Health Oil Spill........................................... 89
Letter submitted by Senator Landrieu to Mr. Feinberg......... 91
Letter referenced by Senator Landrieu........................ 94
Mental Health Dollars Chart.................................. 96
Technical Assistance Network Chart........................... 97
Appeals Threshold Chart...................................... 98
GCCF Data Chart.............................................. 99
GCCF Organization Chart...................................... 100
Gulf Coast Claims Facility Denial Letter..................... 101
Proposal Letter from State of Louisiana...................... 102
Congressman Scalise letter to Mr. Feinberg................... 128
Feeding America Letter....................................... 130
Louisiana Association of Nonprofit Organization Letter....... 136
Questions and responses submitted for the record from:
Mr. Feinberg................................................. 145
Mr. Bennett.................................................. 163
Mr. Broderick................................................ 165
Ms. Harkavy on behalf of Mr. Keller with attachments......... 166
GULF COAST RECOVERY: AN EXAMINATION OF CLAIMS AND SOCIAL SERVICES IN
THE AFTERMATH OF THE DEEPWATER HORIZON OIL SPILL
----------
THURSDAY, JANUARY 27, 2011
U.S. Senate,
Ad Hoc Subcommittee on Disaster Recovery,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 1:45 p.m., in
room SD-342, Dirksen Senate Office Building, Hon. Mary L.
Landrieu, Chairman of the Subcommittee, presiding.
Present: Senators Landrieu, Carper, Nelson, Shelby, and
Vitter.
OPENING STATEMENT OF SENATOR LANDRIEU
Senator Landrieu. The Subcommittee on Disaster Recovery
will come to order. I am pleased to be joined by my colleague,
Senator Shelby from Alabama, and we are hoping to be joined by
several other colleagues. I am expecting Senator Vitter,
Senator Bill Nelson and Senator Carper to join us as the
afternoon goes on.
I want to thank our witnesses, in particular for making the
special effort to be here today because of the challenges with
weather and transportation, so I really thank you, because we
did not want to cancel this important hearing and I am very
pleased that we can proceed as scheduled.
Let me go ahead and quickly begin with an opening statement
and then turn it over to Senator Shelby, and as other Members
come, they will also be allowed to make a brief opening
statement, and we want to get right into our witness
presentations.
I again thank all the witnesses for making a special effort
in these weather conditions to join us for this important
hearing.
As you all will note or know, last week, the Graham-Reilly
Oil Spill Commission released its report on the technological
and regulatory failures that caused the Macondo well to explode
on April 20th last year, taking the lives of 11 men and
creating one of the largest environmental catastrophes in
American history. It is important that we thoroughly review
this accident and implement new measures to ensure a robust and
competitive offshore energy industry that operates as safely as
possible. But there are some other obligations that we have, as
well.
This particular report, nor was this Commission charged
with this task, and so they did not examine claims payments and
the human side of this tragedy. They are focused on the
technological and the general business side of offshore oil and
gas drilling. But there is another side that we are here to
examine today, and that is the human side of this disaster.
Four-hundred-and-eighty-three thousand people in the Gulf
have filed claims so far for lost wages and revenues. They are
currently experiencing severe challenges getting timely
payments or accurate information in some cases about their
claims. Roughly 194,000 of these claimants are located in
Louisiana, 162,000 are in Florida, 68,000 are in Alabama,
52,000 in Mississippi, and 10,000 in Texas. So these claimants
are located across the entire Gulf Coast.
The Commission report does not address these claims but to
say that after everything is over, we should do an after action
report. But right now, this Subcommittee is today and has been
for a while focused on this human side, the claims process,
helping make people as whole as possible from the harm they
have suffered as a result of this catastrophe.
Fishermen, deck hands, and restaurant workers put out of
work by the oil spill, small business owners whose businesses
have been threatened, many of them still struggling to make
payroll to keep their doors open, are each entitled to just
compensation under the law, but the system is not yet working,
in my view, as well as it should be. Thousands of Gulf Coast
residents have lost their jobs and are fighting to feed their
families, keep their homes, and preserve their way of life. For
a while, clean-up jobs and emergency payments made this
situation tolerable, but the clean-up jobs--the well is now
capped--are diminishing or substantially diminishing, and the
seafood and tourism markets have not yet recovered to their
pre-spill levels.
Today, we are here to discuss the payment system
established by Mr. Feinberg under the authority of the White
House and British Petroleum (BP) to compensate people for lost
earnings, property damage, and subsistence losses resulting
from the spill. We will also learn about work that nonprofit
organizations are doing along the Gulf and the continued
challenges they face in providing assistance to spill-affected
communities.
Frequent visits, and I have made many, to coastal
communities and dozens of conversations with constituents and
briefings with local leaders lead me to believe that the claims
determinations have not been as consistent as they need to be
or as transparent as they could be. People have struggled to
obtain information about their claim on a timely basis.
In my view, non-governmental organizations (NGOs) have also
been somewhat marginalized and under-resourced throughout this
recovery process, and it seems like we are making a similar
mistake that we made in the aftermath of Hurricanes Katrina,
Rita, Gustav, and Ike by underestimating the power and the
effectiveness of community-based NGOs to help the Vietnamese
community, for instance, or the Hispanic community, for
instance, or a certain group of elderly people in a community
from submitting and accessing information about their rightful
claims.
Mental health issues, including domestic violence and
suicide, are on the rise, and they are becoming an increasing
challenge for the region. A study released last July by Ochsner
Clinic revealed that 30 percent of interviewees in Louisiana,
Mississippi, Alabama, and Florida suffered from serious
psychological distress and cited disproportionate impacts among
children and low-income households.
Today, we are going to hear a very heartwarming story with
a sad ending, from a Vietnamese oysterman who successfully
piloted a boat of refugees out of Vietnam many years ago, made
a new life for himself fishing off the waters of the Louisiana
coast for decades, until suddenly this oil spill caused him to
lose his business and his livelihood. He represents a great and
growing number of Vietnamese American fishermen. Over 80
percent of the Vietnamese Americans in the Gulf region are
connected to the seafood industry. We are going to hear from a
member of their community today.
We also want to hear from NGO representatives that were
asked by BP to present social service proposals last summer and
have never received a response, despite backing from 53
organizations in the State of Louisiana and another 32
organizations in Mississippi.
And finally, BP has made a pledge of $20 billion to cover
legitimate claims and placed a portion of those funds in escrow
under Mr. Feinberg's control. He is here with us today, and I
appreciate him being here to give us an update.
The function of the Gulf Coast Claims Facility (GCCF) is to
compensate people fairly for their losses, to discharge BP's
fiduciary obligations under the Oil Pollution Act (OPA) of 1990
with regard to those claims, and to offer a simpler, speedier
alternative to prolonged litigation, which continued for 20
years after the Exxon Valdez oil spill. We are hoping it will
not take 20 years to compensate people fairly in the aftermath
of this spill.
The Gulf Coast Claims Facility took over individual
business and claims from BP on August 23. From May to August,
BP was directly managing all claims. And so far, the Gulf Coast
Claims Facility has paid out $3.3 billion to 168,000 claimants.
That is what our records show. If that information is not up to
date, we will get the new numbers today.
Mr. Feinberg has traveled extensively to the Gulf. Senator
Shelby, I am sure you have seen him or been with him in
Alabama. I have attended several of the town hall meetings in
Louisiana. You have made some commendable program changes along
the way and I want to acknowledge that you have been flexible
when things have been brought to your attention, first, by
agreeing not to subtract vessel of opportunity earnings to use
local firms to provide people with information about their
claims, to provide interim payments, and other important
changes along the way. So we are very grateful for those
program changes.
But on the other side, there are many challenges that
remain. One of the things we are going to explore today is that
while BP did provide $1 million to Louisiana charities for
emergency relief and $52 million for mental health services
along the Gulf. But without case management, financial
counseling, claims assistance, and direct aid for food, rent,
and mortgages, many families are still struggling.
So in conclusion, I am pleased to be joined today, as I
said, by several colleagues. I want to thank Feeding America
and the Louisiana Association of Nonprofit Organizations (LANO)
for submitting written testimony for this hearing. I would also
like to acknowledge the White House staff that is in
attendance. Congressman Steve Scalise for his continued efforts
to improve the claims process on behalf of his constituents. I
want to recognize Darryl Tate with the United Methodist Church
in Louisiana and everyone else that has joined us for this
important hearing.
We have a great deal of business to cover, so let me turn
it over to Senator Shelby for his opening statement and then we
will get right into our first panel of witnesses. Senator.
OPENING STATEMENT OF SENATOR SHELBY
Senator Shelby. Thank you, Madam Chairman, for letting me
join your Subcommittee here today.
While the Deepwater Horizon rig has been capped, the boom
recalled and the media on to the next story, many may think
this disaster is over, but this is not true. Like many
Alabamians, I remain extremely concerned regarding both the
short- and the long-term effects that the oil will have on the
Gulf Coast's economy and the ecosystem. Alabama's Gulf Coast
region may take decades to recuperate and downstream effects
could cripple the region for years to come.
Since the oil started pouring into the Gulf last April,
Alabama has seen a nearly 50 percent drop in tourism-generated
dollars and a substantial loss of jobs. Tourism revenues lost
to Alabama's coastal economies as a direct result of the oil
spill are estimated at between $850 million and $1 billion, a
figure that does not include the additional losses to the
fishing industry and the shipyard repair and maintenance
operations.
The federally mandated fishery closures have resulted in a
significant loss of income for the entire seafood industry,
fishermen, shrimpers, bait and tackle shops, and processors.
Alabama's fishing industry represent one of the largest
economic engines in the State, accounting for more than $800
million in sales annually and nearly 18,000 jobs. The economic
impact on the commercial and recreational fishing industry
already is severe and extensive. I think we must ensure that
individuals and businesses are compensated now, but also put in
place mechanisms to assist them with rebuilding and restoring
efforts as the Gulf continues to recover from the disaster.
I have met with Mr. Feinberg, who is with us today, several
times since the Gulf Coast Claims Facility was created, yet I
continue to have serious concerns regarding the claims
determinations made by this organization. Like the entire Gulf
Coast, Alabama is at a critical juncture. The Gulf Coast Claims
Facility is not acting with appropriate urgency as I thought
they would. Nine months since the oil spill, 57 percent of
claims in Alabama remain unpaid. This amounts to 38,605
individual and business claims that have not received one penny
in funding. That is a startling statistic to me.
Further, from January 12 to January 24 in Baldwin County,
the hardest-hit region in Alabama, only 28 claims were
processed. That is less than three claims a day. Let me
reiterate, Alabama has 38,604 outstanding claims and the Gulf
Coast Claims Facility is currently only processing three
Alabama claims a day. Moreover, there is no distinction given
by the Gulf Coast Claims Facility in their statistics between
how many claims were paid and how many claims were underpaid. I
am sure that this is not an insignificant figure.
When Mr. Feinberg and I met in both November and December,
I relayed these issues to him, and one of the largest issues
that needed to be addressed was the lack of a clear formula on
how a claim is determined. Filers, I believe, deserve
clarification as to why their claims were denied, if they are
denied, or why their payments were less than expected, if that
be the case.
On December 16, Mr. Feinberg told me here at the Capitol
that the formula for claim payments would be made publicly
available on the Gulf Coast Claims Facility website. Six weeks
later, this information is still not available and I believe
this is unacceptable, Madam Chairman. Those affected by the
spill need to know that there is transparency, clarity, and
consistency in the payment process.
Finally, as we continue with the recovery efforts along the
Gulf Coast, Congress needs to swiftly address the allocation of
the Clean Water Act fines from the BP oil spill. The entire
Gulf Coast faces an enormous ecological and economic disaster
with an estimated impact of as much as $3 billion in my State
of Alabama alone. Under the Act, BP could be liable for
penalties up to $20 billion. Congress, I believe, needs to
ensure that all five affected Gulf States are treated equitably
when these fines are disbursed. Each State should have the
ability to use these funds how they see fit to restore the
economic and ecological damage caused by the spill. The impact
to each State is unique and there needs to be flexibility in
spending the Clean Water fines in the matter which best meets
their needs.
And while the national press has moved on, the Gulf Coast
continues to face the challenges from one of the largest
disasters in our Nation's history. The damages caused by the
oil spill could last years. Our residents and businesses are
severely hurting, and we need a commitment by all stakeholders
to the Gulf Coast's full recovery. In particular, it is my
expectation that the Gulf Coast Claims Facility will uphold and
follow through on its obligation to the people of the Gulf
Coast. Mr. Feinberg has assured me of that. He has been a man
of his word in the past.
Thank you very much, Madam Chairman.
Senator Landrieu. Thank you, Senator Shelby, and you can
rest assured that this Senator will continue to focus on those
issues, and I thank you for your help and support.
Senator Vitter, we would be happy to take opening
statements now if you want to do that, or wait a minute----
OPENING STATEMENT OF SENATOR VITTER
Senator Vitter. Thank you, Madam Chairman. I will be
relatively brief.
First of all, thanks for your leadership and for this
hearing. Thanks to all the witnesses and for your work.
I just wanted to stress three points in my opening
statement, and then I will follow up on all of these points in
questions.
First of all, Mr. Feinberg, thanks for your continuing
work. It is obviously very important for all of our area. But I
just wanted to stress a concern and urge you not to declare a
victory quite yet based on the numbers and statistics that you
always present, and I apologize if I missed any of your
comments, but normally when we meet or when we are in public
settings, you certainly cite the three-plus billion dollars
issued and the tens of thousands of claimants paid. My concern
is I really do not think that is an accurate or full snapshot
picture and I would urge us to look at other metrics and make
sure we all stay in it for the long haul.
In particular, I think there has been a big emphasis on the
quick claims. I believe over 50 percent of claims are quick
claims. In Louisiana, I think it is over 57 percent, the sort
of $5,000 payments. And in fact, that means that the folks most
impacted, most hurt, most directly impacted by the spill are
not taking those quick claims because their claims are more
complicated and bigger and so they are still waiting or
standing in line.
Just as an example, a huge percentage of the quick claims
have gone in Louisiana to tourism industry-type people, and
they have losses--I am not arguing against that--and a tiny
percentage, maybe 5 percent, to fisheries people. And obviously
the fisheries folks are the ones most impacted and first
impacted. So I would caution all of us to make sure we are in
it for the long haul and use full metrics and make sure we get
to the right outcome over time.
Related to that, there have been some suggestions,
including from some of our colleagues from New York, that you
be appointed to this new 9/11 project coming out of the First
Responders bill. Please take this as a compliment and nothing
else, but I do not think you can possibly take on another job
until this is fully closed out, and I invite you to say that
publicly. [Laughter.]
Third and finally, and this is not your bailiwick, we
continue to struggle with the economic devastation of the spill
and the resulting moratorium, including the continuing de facto
moratorium. Now, this story has left the front pages of the
national papers. Evidence of that, the President,
unfortunately, did not even mention this in the State of the
Union. But economically, the Gulf Coast continues to be hit
hard by all of this, and it is not the spill directly, it is
the de facto moratorium which continues. And this would be
tragic whenever it happened. Coming in the middle of a serious
recession, it is triply tragic.
Just as an example, our State, Louisiana, before this
month, which was a slight and welcome uptick, we have had eight
straight months of increasing unemployment. That is not a
coincidence with the spill and the moratorium. That is a direct
result of the drilling moratorium, including the de facto
moratorium, eight straight months of increasing unemployment
catching up to the national average, and we need to end that,
and coincidentally, we need domestic energy production from the
Nation. So certainly, I will continue to work with my two
colleagues here on that.
Thank you, and I look forward to your testimony and
questions.
Senator Landrieu. Thank you, Senator Vitter, for those
observations and comments.
Let me quickly introduce the panel, and I am going to
shorten these introductions.
Mr. Feinberg has been introduced before. He is the
Administrator of the Gulf Coast Claims Facility. He has
testified before this Subcommittee and others. Prior to taking
on this challenge, he handled claims for the family members of
9/11 victims, Agent Orange, and the Virgina Tech shooting
incident, so he comes to this job with decades, literally, of
experience, and he is going to need all of that to get this
right. We are looking forward to hearing from him today.
Craig Bennett is our second witness. He serves as Director
of the U.S. Coast Guard National Pollution Funds Center. The
National Pollution Funds Center (NPFC) was established by the
Oil Pollution Act of 1990. They manage the Oil Spill Liability
Trust Fund (OSLTF) and review claims decisions by the
responsible party under the law. We are looking forward to
hearing from you on that. He has been with the Coast Guard for
22 years.
Mr. Nguyen is the witness I referred to in my opening
statement. He piloted a refugee boat out of Vietnam and fled
for his freedom with his family, got to the shores of South
Louisiana, where many South Vietnamese were relocated, along
the Gulf Coast--Mr. Shelby, I am certain in Alabama, as well--
and managed to get through all of that, only to be shut down
with this oil spill and is now on the verge of losing his
business. And he, like many fishermen, and particularly in the
Vietnamese community where subsistence fishing is common, is
having a very difficult time specifically navigating this
claims process.
So, Mr. Feinberg, let us begin with you. I think we have 5-
minutes for each witness to offer their testimony and then we
will proceed to questions.
TESTIMONY OF KENNETH R. FEINBERG,\1\ ADMINISTRATOR, GULF COAST
CLAIMS FACILITY
Mr. Feinberg. Thank you very much, Madam Chairman. I am
testifying today before three Senators who I have known for a
while and who have been among my most vigorous supporters in
trying to get this program to work right and have been,
thankfully, some of my most constructive critics in pointing
out in good faith how we can improve the program, and I am
grateful for that criticism.
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\1\ The prepared statement of Mr. Feinberg appears in the appendix
on page 42.
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The program--just as Senator Vitter predicted, I go right
away to the statistics--the program is working. We have paid
out in 5 months almost $3.5 billion to 170,000 people,
businesses, individuals in the Gulf region. Baldwin County, I
believe is the second county in the Gulf that has received the
most funds from the Gulf Coast Claims Facility, due in part, I
guess, to Senator Shelby's insistence that we focus on Baldwin
County, which we are doing.
Also, it is true that in the last 5 weeks, as Senator
Vitter has pointed out, 85,000 people and businesses have
accepted the quick payment option. We have paid out in the last
5 weeks about $700 million to individuals and businesses who
either have already been compensated and feel that this is
additional compensation that they will accept in return for
releasing their claim or cannot document any additional damage.
I do not know which, but 85,000 people have taken the quick
payment option.
Now, transparency, a big point with the three Senators
today. We are taking steps on this. First, on Tuesday, February
2, about a month later than I promised, Senator Shelby, but on
February 2, we will post publicly the criteria and the
methodologies being used to calculate final payments and
interim payments. We are going to give a 2-week public comment
period for any business or any individual before we implement
it. Before we start making these final payments and interim
payments, everybody in the Gulf will have an opportunity, as
will the Senators, to comment on what we propose to do. And if
there are comments that we should change it before we implement
it, but the final payments and the interim payments, I assure
the Senators, will commence in February to about 90,000
businesses and individuals requesting a final payment and about
40,000 businesses and individuals requesting an interim
payment.
And, Senator Shelby, the reason it took longer than I had
promised you, I have to get this right. The Final Payment
Program requires a lump sum payment for all present and future
damage, and I am trying, talking with all the experts, with the
citizens of Alabama, with the businesses in the Gulf, to find
out from them, what are the long-term implications of this
bill. Nobody knows for sure. And it has taken me longer than I
had hoped to gather that information together. But it will be
announced on Tuesday. It will be a 2-week public comment
period. And at the end of that period, we will finalize that
program and begin to commence to make those payments.
I also want to pick up on a point. Senator Landrieu advised
me to do this 3 months ago. We have now put in place in
Alabama, in Louisiana, Florida, and elsewhere local people,
live bodies in the claims facility offices to meet with
claimants, to answer their questions. They are not representing
them in a court of law. They are not offering legal advice. But
instead of people being frustrated by calling 1-800 numbers or
not getting answers or getting inconsistent answers, we are
trying to deal with that by hiring local people who will
address local individuals with local problems.
We have received in the last 5 months--the Coast Guard has
been fabulous. We have been working with the Coast Guard since
day one. Craig is here. I acknowledge their support for this.
The Gulf Coast Claims Facility has received about 500,000
claims. I have to get back to Senator Shelby in writing. When
he says we have only processed X percent or three claims, he--
you take what Senator Shelby says with a good deal of
credibility. I have to check this. It does not ring true,
except it is coming from Senator Shelby. I will get an answer
to you in writing on this, Senator.
Senator Landrieu. Thirty seconds, if you could.
Mr. Feinberg. So, in sum, just as an opening comment, we
are taking steps to deal with transparency. We are dealing
closely with Catholic Charities, Madam Chairman, and those
other nonprofit service providers. We have no authority under
the facility to pay them. That is a BP obligation, if anybody
has that obligation. And I look very much forward to the
questions where we can get into some of this in more detail.
Thank you, Madam Chairman.
Senator Landrieu. Thank you. We are going to go to Mr.
Bennett, but I want to clarify something. You said, in the last
5 weeks you did what? What was the number you threw out?
Mr. Feinberg. We have paid out in the last 5 weeks about
85,000 quick payments totaling almost $700 million.
Senator Landrieu. OK. Thank you. I wanted to get that
clear.
All right, Mr. Bennet. And we have been joined by Senator
Nelson from Florida and he will join us in our round of
questioning. Senator Bennett. I mean, Mr. Bennett.
TESTIMONY OF CRAIG BENNETT, DIRECTOR, NATIONAL POLLUTION FUNDS
CENTER, U.S. COAST GUARD
Mr. Bennett. Good afternoon, Madam Chairman. I appreciate--
--
Senator Landrieu. You have been here long enough. We are
going to have to promote you. Twenty-two years.
Mr. Bennett. Thank you. Good afternoon, Madam Chairman and
other Members of the Subcommittee. I am grateful for this
opportunity to testify today about the role the National
Pollution Funds Center, which I have headed for these past 2
years, plays in implementing the liability and compensation
provisions of the Oil Pollution Act of 1990, particularly as
they relate to the Deepwater Horizon oil spill.
Let me start by saying that I have a deep appreciation for
the people and environment of the Gulf. I graduated from high
school in Louisiana. I met my wife and got married in Houston,
Texas. And I spent time raising my two children in St.
Petersburg, Florida. So I remain mindful of my Gulf Coast
heritage as I serve the NPFC.
The National Pollution Funds Center serves a number of
functions with respect to the funding of oil spills. First, it
provides funding for Federal oil spill response through the Oil
Spill Liability Trust Fund, which this office administers. The
fund was authorized in 1990 with the passage of OPA to ensure
no delay in the Federal response to a spill and for those
spills where there was not a viable responsible party. Fund
revenue sources include a per barrel tax on oil, cost recovery
from responsible parties, interest income, and Clean Water Act
(CWA) fines and penalties. The NPFC also ensures that the
responsible party is advertising its availability to pay claims
for removal costs and damages. If the responsible party denies
a claim or does not settle it within 90 days, the claimant may
present the claim to the fund. Finally, the NPFC recovers
Federal response costs and any claims that are paid out of the
fund from any and all responsible parties.
As of January 24, the fund had obligated or expended $684
million for the Federal response to the Deepwater Horizon oil
spill. That was the removal actions of the clean-up. These
costs included Federal agency oil removal costs as well as
funds provided to the Natural Resource Damage (NRD) Trustees to
initiate assessments.
A key policy of OPA is that the polluter pays, not the
taxpayer. The Federal Government has consistently billed
responsible parties for reimbursement of costs paid out of the
fund. To date, nine bills have been sent to responsible parties
for the Deepwater Horizon expenses, of which the first eight,
totaling $606 million, have been paid by BP. The ninth bill,
for $26 million, was presented on January 11 and I anticipate
it being paid soon.
OPA requires that I ensure that responsible parties are
advertising for and receiving claims. They should also
advertise that if not settled in 90 days or denied, the
claimant may come to the fund or file an action in court. The
NPFC only receives claims which a responsible party has not
settled to the satisfaction of the claimant, in this case BP,
which has delegated the claims process for personal and
business claims to the GCCF, and the NPFC process provides a
venue to adjudicate any claims that were denied or were not
acted on through that normal process.
Information about the NPFC claims process is available on
our website. It is also on the BP, the Gulf Coast Claims
Facility, and the Restore the Gulf websites, as well. This
information includes a claimant's guide in English, Spanish,
Vietnamese, and Cambodian, as well as a list of frequently
asked questions. Recognizing that not everyone is on the web,
claimants are also informed of our claims option by the GCCF
Claims Center and their call center. Eighty percent of the
claimant inquiries that we have to our call center at the NPFC
tell us that they were referred to us by the Gulf Coast Claims
Facility.
Denial letters to claimants for final claims will also
include notification of the claimant's right to submit a claim
to the NPFC or to pursue litigation. The reasons for denial are
generally due to insufficient documentation to support the
claim, or the documentation showed the claim was not payable
under OPA, or the responsible party had already paid the claim.
Again, claimants who are denied by the NPFC have 60 days in
which to submit additional information for reconsideration.
In conclusion, individuals, communities, and businesses
have suffered as a result of this spill. The National Pollution
Funds Center is working to ensure a robust Federal response,
that those damaged from this spill are compensated, and that
the polluter pays. The Department and the Administration are
working to ensure a full recovery throughout the affected
States.
Thank you for the opportunity to testify today and I look
forward to your questions.
Senator Landrieu. Thank you, Mr. Bennett.
Our next witness is Ve Nguyen. As I said, he is a resident
of Plaquemines Parish, a commercial fisherman. He has worked in
the waters of the Gulf for over 29 years. He has been directly
impacted by this spill, and we have a translator from the State
Department here with him. Mr. Nguyen.
TESTIMONY OF VE NGUYEN,\1\ MEMBER, UNITED LOUISIANA VIETNAMESE
AMERICAN FISHERFOLKS
Mr. Nguyen. [Speaking through interpreter.] Members of the
Subcommittee and honored guests, my name is Ve Nguyen. I have
been harvesting oysters in the Gulf of Mexico for 29 years.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Nguyen appears in the appendix on
page 51.
---------------------------------------------------------------------------
[Mr. Nguyen speaking in Vietnamese.]
Senator Landrieu. OK. Let her translate. Just a minute. Go
ahead.
Mr. Nguyen. [Speaking through interpreter.] On behalf of
the United Louisiana Vietnamese American Fisherfolks, thank
you, Senator Landrieu, for calling this hearing and special
thanks for your staff for inviting me today.
I would like to take this opportunity to do three things:
To share my story, to present to the Subcommittee a request,
and to ask Mr. Feinberg a question.
Senator, if I may, my story is a common story in the
Louisiana Vietnamese American fishing community. As of the
spring of 2010, approximately 30 to 50 percent of all
commercial fishers living in the Gulf of Mexico region are
Vietnamese American, while more than half of every other
Vietnamese American in the region are connected to the seafood
industry. In my neighborhood of Plaquemines Parish, 100 percent
of the Vietnamese households are fishermen. Louisiana fishermen
of all ethnic backgrounds are independent and hard-working
people.
As refugees to the United States after the end of the
Vietnam War, we all chose to build our lives anew in these
fertile waters of the Gulf Coast and carry on the fishing
tradition and customs of our ancestors. I was raised on my
father's fishing boat in Vietnam. During the Vietnam War, I
used my naval skills to help the South Vietnamese Democratic
Government defy communism----
Senator Landrieu. Thank you. Go ahead.
Mr. Nguyen. [Speaking through interpreter.] At the end of
the war, I carried dozens of people on my boat to escape the
communist regime. In the United States, our people carry on the
fishing tradition of our ancestors despite the hate crimes from
the Ku Klux Klan. I taught our children the love of the water
and appreciate its creatures. My daughter is a marine biologist
and my son helps me on the boats.
After I was forced to flee my country to the United States
and the United States took me in, I pledged an allegiance to
the United States that includes paying my taxes. Unless I have
no other choices, I do not seek government assistance. But with
the oil spill, like many of my fellow fishermen, I have had to
stand in line for handouts and Food Stamps.
Before the BP Deepwater Horizon oil spill, my wife and I
would be out on the sea by 6 a.m. and return in the late
evening. Like all of the other fishermen in Louisiana, we
typically hold back a portion of our catch, 5 or 10 percent, to
bring home for personal consumption in the family, to
contribute to community events, and to barter with other
fishermen for other seafood.
I face many challenges in the Gulf Coast Claims Facility
process, but I would like to take this opportunity to highlight
one in particular. Mr. Kenneth Feinberg received over 16,000
emergency payment claims for subsistence use, including mine,
and Mr. Feinberg only paid one claim of $3,000. Mary Queen of
Vietnam Community Development Corporation (MQVNCDC), a
Louisiana contracted technical assistance provider, helped me
packaging my subsistence use claim. Mr. Feinberg denied my
neighbor's emergency payments, loss of subsistence use claim
almost that was identical to mine.
I, therefore, would like to make our request to members of
the Senate today, the United Louisiana Vietnamese American
Fisherfolks, in solidarity with 14 other organizations request
that the Members of this Subcommittee to clarify, reaffirm the
definition of subsistence use in the OPA of 1990, fully
acknowledging and recognizing the local non-taxable practice of
bartering community gifts and family consumption of commercial
fishing communities of all ethnic backgrounds. The definition
is clearly intended by Congress in 1990 and comports fully with
the Department of Wildlife and Fisheries (WLF) definition.
Moreover, the calculation of emergency compensation for
loss of subsistence use should be based on the quantity of the
food that commercial fishermen subsisted on before the spill
multiplied by the current retail value of the seafood. This
formula has been summarized and defended by the White Paper
submitted by the United Louisiana----
Senator Landrieu. Thirty seconds, please.
Mr. Nguyen. [Speaking through interpreter.] Finally, I have
a question for Mr. Feinberg. On behalf of the 14 grassroots
organizations, I would like to ask Mr. Feinberg why only the
people with $250,000 minimum payment can claim. Why do not low-
income people have the right to appeal to the panel?
Senator Landrieu. That is an excellent question, and first
of all, thank you for your testimony, Mr. Nguyen. We really
appreciate it.
Why do we not start with that question, Mr. Feinberg, if
you do not mind starting with that, and we are going to go
through a 5-minute question round. Go right ahead.
Mr. Feinberg. Thank you very much, Madam Chairman. Anybody
can appeal, regardless of any amount. In fact, you can appeal
to the Coast Guard if you have no amount and were denied any
amount. So nobody at all, nobody who files a lost income or
lost wage claim with the GCCF, nobody is foreclosed from an
appeal to the U.S. Coast Guard, and Mr. Bennett can give you
the statistics on that.
It is true that I did establish in the GCCF an additional
limited right to appeal for claimants receiving over $250,000
or my awarding the claimant over $500,000. I decided that an
additional claim right should be awarded to those high-impact
claimants. But any claimant can appeal to the Coast Guard from
my determination, and the reason I did not have a broader
appeal right, I am worried very much about slowing down the
process, which I am getting criticized about. Having appeals
and more appeals is an inefficient way to get money out the
door and that is why I limited it. But everybody has a right to
appeal.
Senator Landrieu. But just to be clear, anyone at any
amount can appeal to the Coast Guard.
Mr. Bennett, you run that program, so is that your
understanding?
Mr. Bennett. Yes, Senator.
Senator Landrieu. OK. So if anybody gets a denial letter,
whether they have asked for $3,000 or $5,000 or $500,000 or $5
million, they get a denial letter, or if they are compensated
$1 million with no explanation and they thought they deserved
$5 million, they could go to you.
All right. Let me start with my line of questioning. First,
I want to acknowledge for the record that in the 5 months that
BP managed this claims process, and, of course, they had to
stand it up very quickly and it was unprecedented, they only
distributed $359 million Gulf-wide. In the 5 months that Ken
Feinberg has been on the job, you have distributed $3.3
billion, so you should be commended for that.
However, one of my first questions is that people in my
State, now I do not know about Florida or Mississippi or
Alabama, but in Louisiana, Mr. Feinberg, they go to the
centers. They try to get an update on their claim, and all they
are told is, quote, ``Your claim is under review.'' They cannot
get access to the status of that review. Is it the beginning,
the middle, or the end? They cannot get a confirmation that
their documentation is either in order or completely
disorganized. And I think that is a real problem with the
system and I would like you to respond.
And also on this subject, one of the things I think many of
us had asked you to do in the beginning is to have these
offices staffed with people who the communities knew, local
workers, and people who had knowledge or at least access to the
computer database to give people some update. So would you
please respond, and what are you going to do to correct it?
Mr. Feinberg. As I said in my opening statement, A, it is a
fair criticism. B, there are 500,000 claims that have come in
since August 23. We have picked up on your suggestion, which
was made for the first time months ago, we have expanded our
local people in these 35 claims offices so that individuals
will be not as frustrated in trying to get an answer about
deniability or the calculation of award----
Senator Landrieu. But do these employees in some of these
law firms that have been, although they are not there for legal
purposes but for advocacy purposes, do they have access to the
database, because the Worley employees who were there who are--
you could define as local, it is a local company, most
certainly, in Hammond, Louisiana. I am sure people work for
their company from all over the country, but many from the Gulf
Coast. But I want you to testify, do they have access to the
database, because they tell me no, and are the other firms that
you are bringing in going to have access so people can get an
update when they need one?
Mr. Feinberg. The answer is yes. I will not say they have
access to the confidential database. They will have access to
the----
Senator Landrieu. To the status?
Mr. Feinberg. That is correct, to give status as to
eligibility, status as to denials, status as to the amount of
the money that has been calculated.
Senator Landrieu. OK. We are going to follow that up. This
is similar, along the same lines. Claimants receive a denial
letter. I do not have a copy of one with me, but I am going to
ask the staff, if they do, to give it to me before the hearing
is over, and if not, it will be up on our website. When claims
are denied or awards are lower than expected, people are not
receiving any commentary or detail. We know you requested
$10,000. Here is a check for $2,000. The reason you did not get
the additional $8,000 is because of X, Y, and Z. There does not
seem to be any explanation, and people then get very
frustrated. They do not even know where to begin. Should they
completely refile? What did they not understand? This is a real
problem.
Mr. Feinberg. It is a problem. Now, I must say, the great
majority of people do not have this problem. But I agree with
you. If even a few people have this problem, it is a big
problem.
Senator Landrieu. OK. So you are testifying that denial
letters or letters accompanying reduced award amounts include
detailed explanations, because that is not our understanding.
Mr. Feinberg. No, I am not suggesting that. I am suggesting
that, for the most part, when people get a denial letter, even
if there is not an explanation, they understand why there has
been a denial. The number of people--the critics are a
relatively small number, but it is too many. I agree, it is too
many.
Senator Landrieu. All right----
Mr. Feinberg. But we are dealing with this problem, as I
said, by putting people in these local offices that have the
ability to come up with live answers to help these people
understand.
Senator Landrieu. OK. Senator Shelby.
Senator Shelby. Thank you. Senator Landrieu, thank you very
much for bringing forth this meeting. It is timely.
Mr. Feinberg, I want to reiterate again, it has been 9
months since the oil spill. I will give these numbers to you
again. Fifty-seven percent of claims in my State of Alabama
remain unpaid. This amounts to 38,604 individual and business
claims that have not received one penny in funding. Further,
from January 12 to January 24 in Baldwin County, Alabama, this
year, the hardest hit region in Alabama, as you referenced,
only 28 claims were processed. That is less than three claims a
day. You mentioned the numbers earlier. All the claims and the
statistics that I referenced here came from your website. They
are from your people. If they are wrong, correct them for the
website and correct them for the record. We are relying on your
numbers.
Now, having said that, how many of the paid claims were
paid in full? How many of the claims that you paid were paid in
full, and if you do not have this, can you get this for the
record----
Mr. Feinberg. I will have to get that for the record.
Senator Shelby. A lot of people have complained, especially
in Baldwin County, about partial claims, and they are desperate
for the money. I know you are trying to expedite a lot of this
and I know you are acting in good faith.
The claims process has surely slowed down. Why is that,
could you tell us for the record?
Mr. Feinberg. It has slowed down, briefly. Now, it has not
slowed down in terms of 85,000 people in Alabama and elsewhere
who have accepted the quick payment. The problem I have run
into, and it is about to be solved by next Tuesday, I want to
make sure before setting out a public methodology for
processing final payments that we take into account, as you
pointed out, Senator, the future of the Gulf. And it has taken
me an extra month to gather together all of that expert
information, and next Tuesday, I will announce, as I promised
you I would, a final payment methodology and criteria.
Senator Shelby. Mr. Feinberg, we have known each other a
long time and we have dealt in good faith, and I believe you
are dealing in good faith. I appreciate the times you have gone
to the Gulf Coast, not just my State of Alabama but the whole
Gulf Coast. I know you have a very difficult situation. I know
that. It is complex. But to our constituents that are
frustrated, especially my area of Alabama, they have seasonal
economy. The winter is here. They lost a lot back in the
summer. They are not sure if they can make it until the spring.
And we have talked about this before and a lot of your people
have.
So if you can process those claims--only bona fide claims.
I would never want you to pay one cent that was not
meritorious. But I would want you to pay the meritorious
claims. And by now, you should have some methodology to
differentiate between the real and the apparent, so to speak.
That is all I am asking you, and I think that is all my
constituents in Alabama want, is they want to be compensated
for bona fide things and they are not all getting it and that
is why I am here today.
Mr. Feinberg. And you have my word, Senator, that I am
diligent in understanding that concern.
Senator Shelby. Thank you a lot.
Senator Landrieu. Senator Vitter.
Senator Vitter. Thank you, Madam Chairman, and Mr.
Feinberg, again, thanks for your continuing work. I know it is
not easy.
Let me go back to some of the points in my opening
statement. Will you publicly state that you will not take the
9/11 First Responder job or any other big public project until
this Claims Facility is fully closed down?
Mr. Feinberg. Senator, I do not see how I can. I do not
want to publicly state absolutely I will not, because, first of
all, nobody has asked me. There has been no inquiry whatsoever
that I do this. I am just reluctant, before the President of
the United States or the Attorney General of the Department of
Justice (DOJ) or whatever, I am reluctant to make that
commitment before I know anything about it. But I assure you
that my wife agrees with you, Senator. Absolutely. [Laughter.]
Senator Vitter. Well, I am disappointed with your response.
It would be flattering and perhaps appropriate for you to be
asked, but, of course, you have to decide the answer, and I
would suggest, given that this is a big unfinished job, that
the answer should be public and unequivocal that you will not
do that and would not do anything like that until this facility
is completely closed down.
Mr. Feinberg. I take that criticism as valuable. Let us see
what unfolds over the next few weeks.
Senator Vitter. OK. Well, I am a little surprised and very
disappointed with the response.
Is the compensation package of you and your firm for this
work public information?
Mr. Feinberg. Yes. It is public and it has been public for
the last 3 or 4 months.
Senator Vitter. OK. Great.
Mr. Feinberg. It is on the website, I think, but it is
certainly public.
Senator Vitter. OK. I have not seen it, and that is only my
fault, apparently, if it is public. If you could just get us
that detailed information, I would appreciate it.
I talked about these quick payments. Of the 124,000
claimants who have been paid, do you know what percentage are
quick payments?
Mr. Feinberg. I can say this. We paid 168,000, as Senator
Landrieu pointed out, 168,000 emergency payments. Since that
time, since those 168,000 were paid, we have paid an additional
85,000, approximately, quick payments in the last 5 weeks. So
we have made 168,000 emergency payments plus 85,000 quick
payments.
Senator Vitter. OK. We may be using slightly different
terms. My understanding is that of all payments to claimants,
over half are quick payments, and in Louisiana, it is over 57
percent. Does that sound like it is roughly accurate?
Mr. Feinberg. No, I do not think so. I mean, it may be. I
would have to go back and do the math. The 85,000 quick
payments have all been made in the last 5 weeks as supplemental
payments. I would have to go back and do the math and give you
those statistics.
Senator Vitter. OK, again, that is the statistics I have,
and the general point is that a huge percentage of claimants
paid are quick payments.
Mr. Feinberg. That is true.
Senator Vitter. My understanding is over half. Again, in
Louisiana, my understanding is over 57 percent.
If you look at those quick payments, my understanding is
that 92 percent go to retail, service, restaurant-type folks.
Mr. Feinberg. I do not know how anybody has that
information. I can check and see. I doubt that is true.
Senator Vitter. OK. And my understanding, that compared to
that, about 5 percent go to seafood-related folks. Now, there
are a lot less seafood-related folks than the other category. I
understand that. But I think there is something else at work,
which is that a lot of the payments, a lot of the success, a
lot of the numbers that you cite, and it is appropriate to cite
it, is essentially the low-hanging fruit. It is essentially the
easiest cases to do. And my concern is that the folks most
impacted, most hit, and sometimes in most dire straits are not
the low-hanging fruit and are still waiting and in dire
straits. Do you have a general response to that?
Mr. Feinberg. I do not--I would characterize it
differently. I would say that those who have accepted the quick
payment are either individuals who feel that they have been
adequately compensated and here is additional compensation that
is available simply by signing a release or individuals who
cannot document any further damage and therefore see the wisdom
of accepting these payments.
I agree completely with you, Senator, that fishermen and
shrimpers and commercial businesses dependent on Gulf resources
are waiting impatiently for the Final Payment and the Interim
Payment Program, which will be announced next week, because
they are the ones with long-term decisions to make about
whether to take the money and issue a release or wait and see
over time how the future will develop in the Gulf.
Senator Vitter. OK. Well, again, let me just state my
conclusion, and people can reach different conclusions. I think
these numbers, which are strong in dollar figures, in claimants
paid, in many ways, do represent the easiest cases, and my
concern is that the folks most hard hit are by definition
generally not in that category.
Mr. Feinberg. Senator, I just want to make one other point,
which is it is a very interesting point you are making. I get
criticized for the opposite. I get criticized that people who
take the quick payment are desperate. I do not believe this
myself, but this is the argument I hear. It is the exact
opposite of your argument. It is, Mr. Feinberg, people who take
the quick payment cannot afford to wait. They are tempted. They
are desperate, so they take the quick payment because they need
it desperately.
You are making a different argument, which I tend to share,
and that is that people, commercial fishermen, shrimpers,
people who have a long-term view of the Gulf, are in desperate
need--Senator Shelby says it has been delayed too long--for
these final payments and interim payments. So I am basically in
agreement with you that I have to get these final payments out
to these people, these fishermen who really need this.
Senator Vitter. Can you come back to me? I have some more
questions.
Senator Landrieu. Yes, I can come back to you. Let me get
Senator Nelson and then I will come right back to you. Go
ahead.
Senator Nelson. Thank you for your service. I just want to
underscore what that chart says. You see that the number of
claims, even though the spill was closer to the other three
States than it was to Florida, nevertheless, there are almost
800 miles of Gulf Coast coastline in our State and that has
spawned 162,000 claimants, compared, for example, where the
spill was right next to Louisiana, 194,000. And it is simply
that a spill far away is still affecting a State like Florida.
And our people are frustrated and I want to bring those
frustrations to you, Mr. Feinberg, respectfully.
Take, for example, a lady named Susan that was in the
process of renting vacation homes. That is how she made her
living. She put in a claim. Obviously, she was impacted because
vacationers did not come, and her claim was denied. Or take
Theresa, who was selling advertising in directories and
vacation guides for tourists. When the tourists did not come
because they thought there was oil on the beaches--she is a
disabled woman, that is her only source of income, and her
claim was denied.
And so I want to ask five questions, and if I cannot get to
it, since I did not have an opening statement, I am down to
three-and-a-quarter minutes----
Senator Landrieu. Go ahead.
Senator Nelson. Let me just say, first of all, your
structuring of the claims process. Are the folks that are
processing the claims given some sort of worksheet or
instructions how to determine when all of the required
documentation is complete, and is that instruction sheet there
in order to determine how much the compensation should be?
Mr. Feinberg. Yes----
Senator Nelson. In other words, I am looking for
uniformity.
Mr. Feinberg. Yes. There is an instruction sheet. They have
been trained. The claims intake people in Florida do not
calculate the amount, but they make sure with their instruction
sheet that all the necessary documentation to process the claim
is there, is available, and is submitted.
Senator Nelson. OK. As in any big organization, somewhere
it has broken down with, for example, the two I just mentioned.
All right. Question number two, we have seen with similar
documentation different outcomes. So in what ways do you
oversee that the claims are processed so as to try to get as
much consistency as possible?
Mr. Feinberg. In a small number of cases, relatively
speaking, there is inconsistency. You are absolutely right. It
is inevitable. There are 500,000 claims, Senator, that we have
processed in 5 months. I agree with you, there is
inconsistency. We are trying to deal with it in our facility
here in Washington. Where we see inconsistency, we flag it. We
correct it.
I went down to Alabama and Florida and met with people who
claimed inconsistency and we fixed some of them, but not
enough. And I agree with you, we have to do a better job of
uniformity. I agree completely.
Senator Nelson. OK. Now, there is a need for an expedited
review when there are folks that are desperate--electricity
shut off, foreclosure, cannot afford the basic necessities of
life. Is there an expedited review?
Mr. Feinberg. Senator, I think the answer to that is
categorically yes. We have paid 168,000 people, including in
Florida 160,000 emergency benefits in 90 days without requiring
any release or anything. Now, there may be some people, Susan
or Theresa or others, who for whatever the reason. But when
those claims have been brought to my attention, we have done
what we have to do to try and accelerate those claims. I am
mindful of this criticism.
Senator Landrieu. Go ahead and take another minute,
Senator.
Senator Nelson. People are hurting. When you have your
electricity shut off, they are hurting.
All right. Now, you, your organization has said they are
going to release the formula in February.
Mr. Feinberg. February 2, Tuesday.
Senator Nelson. All right. Would it not have been a wise
thing to do, to be beneficial to the people that are making the
claim, to know how those claims were going to be evaluated
before they submitted those claims?
Mr. Feinberg. Absolutely. On February 2, next Tuesday, we
are going to release for a 2-week public comment period the
opportunity for claimants, experts, whoever, to comment before
we start processing the claims next month, the final payments,
to review the methodology, review the criteria for people like
Susan and Theresa, and decide what they think before we process
that claim, if they like the approach we are going to take.
Senator Nelson. That is a step in the right direction. And
then I will just say that you all said that there is an appeal
process to the Coast Guard?
Senator Landrieu. Yes.
Senator Nelson. Where is there not an appeal process to
your facility?
Mr. Feinberg. There is. We are implementing a very
limited----
Senator Landrieu. Thirty seconds.
Mr. Feinberg [continuing]. Appeals process, a very limited
appeals process for high-end claims. There are so many claims,
Senator Nelson. I do not want to bog down the processing of the
claims with what could be thousands of appeals. Those
individuals who are denied or who do not get what they want can
immediately appeal to the Coast Guard and that is a separate
appeal opportunity for any claimant.
Senator Landrieu. OK. We have to move to the second panel,
but every member will get another 2 minutes on this round, and
I know, Senator Vitter, you had another question or two.
Senator Vitter. Thank you very much, Madam Chairman.
Let me pick up where I left off. My concern is that, in
terms of the payments that have been made, a lot of which are
quick payments, that has not hit the seafood and seafood
processing community significantly. And so the seafood sector
remains unaddressed compared to other sectors, and that is a
big and important sector, very hard hit in Louisiana.
Let me give you some examples. You came to Louisiana for
some town hall meetings in January. Thank you for that. You
were presented with a lot of cases that folks that were not
resolved, were not being adequately dealt with from their point
of view. Tracy and Mike Roberts from Barataria were at the
Lafitte town hall and they brought up their claim. Michelle
Chauncey [phonetic], also from Barataria, she was at the same
meeting. Rudy Carmandell [phonetic] from Crown Point, he was a
fisherman. He explained that his paperwork was not straight and
the Claims Facility said, well, the problem was he needed to
get something signed off by the boat captain. That really
frustrated him, because guess what, he is the boat captain.
In all of those cases, you said, ``I am going to look into
it. We are going to get back to you.'' My information is that
in all of those cases, they have not heard anything, nothing
new, nothing at all from the Claims Facility since that town
hall meeting. Do you want to respond to that, and how can we
fix that and address that?
Mr. Feinberg. I do not believe--if I have not responded to
individuals who handed me a claim in a visit to Louisiana,
shame on me. I would like to know, Senator, through your staff,
the names of those individuals or their claim numbers and I
will be back to you and your staff forthwith.
Senator Vitter. OK. We will give you those three. Can I ask
you, in those three Louisiana town hall meetings, by
definition, there are obviously a limited number of people who
could stand up, could you all also report to us who is on that
list and what has happened to those people since those
meetings?
Mr. Feinberg. Yes.
Senator Vitter. Great.
Senator Landrieu. Senator Shelby, and then I will get
Senator Carper.
Senator Shelby. Thank you, Madam Chairman. I will be brief.
Mr. Feinberg, I know you have a very difficult task. I
understand that. As I said, I have known you a long time and I
know you are working to resolve this. It is not easy. It is
complex. But I think my people in Alabama, just like Florida,
Louisiana, Mississippi, Texas, and others, they are interested
in a fair process, a process that can be expedited, because
time is everything to them right now, to try to get over the
winter into the spring and praying and hoping that they can get
another season.
You have been to Alabama several times and I appreciate
that, just like the others. You have been involved and we want
you to continue to do this. We know you cannot process every
claim yourself, that you rely on your staff and so forth. And
you have made a lot of people happy. I am not saying whole. I
do not know that. But we have a long way to go and that is what
my people want you to do, is to finish the job, finish it as
expeditiously as you can, and do the right thing.
Mr. Feinberg Thank you, Senator.
Senator Shelby. That is all I ask you.
Mr. Feinberg. Thank you.
Senator Landrieu. Senator Carper.
Senator Carper. Thanks. Welcome, one and all. It is very
nice to see you. Mr. Feinberg, thank you for taking this on.
Sometimes I think you almost need the wisdom of Solomon to be
able to do this fair and square, so we appreciate your efforts
and those of Mr. Bennett, too, to be fair.
I understand, and this is really a question both to Mr.
Bennett and to Mr. Feinberg, but I understand that under
current law, if a claim is denied or if it is not handled, by
the responsible party within, I think it is 90 days, then that
claim can be presented to the Coast Guard for adjudication for
payment out of the Oil Spill Liability Trust Fund. Is that
correct?
Mr. Feinberg. That is correct, Senator.
Senator Carper. OK. Mr. Feinberg, I think you called this
sort of a built-in appeals process. I think that is what--is
that what you call it?
Mr. Feinberg. There are two appeals processes. There is the
one that you have just described and then there is an
additional appeals process that the Gulf Coast Claims Facility
has created independent of the Coast Guard.
Senator Carper. OK. Mr. Bennett, I am told that over 500
claims have been received by your office thus far, but of those
reviewed, none have been paid. Let me just ask, what do you
believe the chances are that this will continue? That is my
first question. What do you believe the chances are that this
will continue? And secondly, is your office able to handle what
I understand are an ever-increasing number of claims that are
being submitted to your office every month?
Mr. Bennett. Thank you, Senator. That is a good question.
You are correct. My office has received to date 507 claims that
have all been presented previously to the Gulf Coast Claims
Facility and either denied, or in some cases paid before we got
to it, or the payment did not meet the claimant's satisfaction,
so they brought it to us. So that is 507 out of the hundreds of
thousands that are on there. We have finished adjudicating----
Senator Carper. So in a case where they submit their claim
to Mr. Feinberg's folks for like, say, $200, they got $100, but
they are not satisfied. So they come to you for the second
$100? Is that right?
Mr. Bennett. That is correct, Senator. They can bring it to
us. It is not really an appeal of his decision because it is
sort of an arm's length relationship between the two of us. But
we are an alternate source for adjudicating. So as long as it
has been properly presented to the responsible party, in this
case the Gulf Coast Claims Facility, if after 90 days or
denial, then they can bring it to us and we will take a re-look
at it. We have an arm's length relationship, so we try to
understand what it was that they did. We want to make sure they
have not already paid it, which we found in about 10 percent of
the cases the claimant has been paid, so we end up sending a
denial. And then we adjudicate it in our own process and get
back to the claimants.
We have adjudicated 200 and all of those have been denials
to date. I cannot predict that it will continue to go at that
rate. I think that is primarily an indication of the fact that
the protocols that are out there that BP and GCCF have been
able to do have actually been more inclusive than OPA requires.
They can pay for personal injury. They can pay emergency
advance payments. I cannot pay advance payments. Their final
claims protocol will include prospective losses. I cannot pay
for speculative losses. So there are a lot of reasons why when
they----
Senator Carper. Let me just ask you this. Stop right there.
I want to go back to my second question. Is your office able to
handle what I understand to be an increasing claims load
demand? Are you able to handle it?
Mr. Bennett. Senator, that has been a concern of mine for
the last 7 months, is what happens if we get a deluge, and so
far, we have not seen that deluge. So far, we have been able to
scale up. I have stood up a separate staff just for Deepwater
Horizon claims and we have been able to keep up with the calls
and the claims that have come in. I cannot--it depends on what
happens in the future. We will continue to scale as we need to,
using the resources that we have. But for right now, we have
been able to stay up.
Mr. Feinber Senator, I just want to say one thing about
this. Mr. Bennett has made two--from my perspective, he has
made my day. First, the Coast Guard has acknowledged in this
testimony that the GCCF is more generous and more open in
finding eligibility than OPA requires. I have said that from
day one. And second, the Coast Guard has publicly stated today
at this hearing that it has received 507 appeals from the GCCF,
and about half of those, we have adjudicated and affirmed the
decision without exception of the GCCF.
Senator Carper. Good. Thank you. Last question, if I may.
Mr. Feinberg, how are you ensuring that you do not deny a claim
the government might pay or that no claims fall through the
cracks? If the Coast Guard did pay a claim that you missed,
would we be able to be reimbursed for those funds?
Mr. Feinberg. I do not understand the question.
Senator Carper. I will say it again.
Mr. Bennett. Can I answer that?
Senator Carper. Please.
Mr. Bennett. Senator, if I pay a claim that he denied, the
responsible party is liable for that expense because it comes
out of the trust fund. So I would then bill BP for any and all
claims that we pay and we would be reimbursed by BP.
Senator Landrieu. And they would probably bill him. He has
the $20 billion.
Mr. Bennett. They would work that out between themselves.
Yes, ma'am, that would probably come out of the escrow account.
Senator Carper. All right. OK. Thanks, Madam Chairman.
Senator Landrieu. Senator Carper, good question. Senator
Nelson.
Senator Nelson. Thank you, Madam Chairman, and I want to
thank you for doing this. I want to thank you, Mr. Feinberg,
for coming several times to the Gulf Coast.
Now, I want to go back to your last question. You do not
want the appeals process to bog down your process of paying
claims, but we would have to worry about that over in the Coast
Guard, as well, and we would have to worry about the courts
getting clogged. And so if you will go back and reevaluate
that, because at the end of the day, what we are trying to do
is help people. And so there is some breakdown there. Now,
there is some breakdown also--for example, I have seen our
staff in my Florida offices work miracles.
Mr. Feinberg. That is right.
Senator Nelson. People have come to us. They have a claim
that is bogged down. We get in touch with your facility and
they work it out. But more recently, maybe it is the holidays,
the middle of December, I sent to the Facility 40 cases, and it
is well over a month and 10 days later. And so I followed up
with another letter just recently. If you would attend to that,
I sure would appreciate it.
Mr. Feinberg. I think I have an answer for that. You are
right. I will attend to that. I think the reason those 40
claims are sitting, waiting to be processed, is because of the
delay that I imposed in the methodology for finalizing
payments, final payments in Florida. And as I said, Senator, we
are accelerating that. We are going to announce that
methodology next Tuesday, and a 2-week public comment period,
and then we will be paying all 40 of those claims, and I will
keep your staff posted on that.
Senator Nelson. Thank you, Madam Chairman.
Senator Landrieu. We are going to wrap this panel, but I
want to put a couple of things in the record.
One, 194,000 claimants have filed claims to date in
Louisiana. Forty-four percent have been paid. One-hundred-
sixty-two thousand in Florida. Sixty percent have been paid.
Sixty-eight thousand in Alabama. Sixty percent have been paid.
Fifty-two thousand in Mississippi. Forty-two percent have been
paid. Texas, 10,000. Thirty percent have been paid. Now, these
are quick payments, emergency payments, interim payments. I am
not sure that we have even yet to see the final settlements,
and we do not have those complete numbers. But it just gives us
a rough snapshot.
But Senator Vitter is absolutely correct that these
percentages, while they do tell a part of the story, it is the
easier claims, the smaller claims being paid, and some of the
businesses that were most affected, particularly in the
fisheries and fishing and seafood sector that were the hardest
hit have yet to be paid. So I think, Mr. Feinberg and also Mr.
Bennett, we should keep our mind on that.
Second, we did go find a claims letter, and I want to read
it for the record because, to me, this is insufficient. I am
not going to read the whole letter, but the operative is, you
are denied. Your claim has been denied. You did not provide
sufficient documentation. In this form letter, there is no
comment about what documentation you failed to provide. It does
not say, you did not provide your birth certificate, or you
failed to provide a copy of your fishing license, or you failed
to provide the address of your business. No specifics about
documentation. And then it says, and if you have questions
about your denial, you can call this toll-free number.
So what I am going to do before the next hearing, because I
am going to call another one, is I personally, with my staff,
am going to get 20 people that have these denial letters, four
from each State. That would be 20, is that correct? Four times
five? We are going to do 20, four from each State. And I am
going to call this number, Mr. Feinberg, and I am going to hope
to get on the other end someone that is going to pull up their
account and say, Ms. Jones or Mr. Jones, your claim was denied
because, your address was bogus, or because you said you were
in the restaurant business, but you are actually in the dry
cleaning business and we found out about it and we are not
paying you, or something.
And then, Mr. Feinberg, I will tell you, the next hearing I
have, I am going to have your Chief Operating Officers (COOs)
in front of this panel, because you have a good big picture and
I think you have a really good handle on the philosophy and
strategic elements of this, but I am convinced, getting more
and more convinced, unfortunately, that there is something lost
between your vision and actually what is happening on the
ground. And we just--this is getting to be now fairly desperate
for some of our businesses and some of our people.
So let us end this panel on a positive note, but I am going
to do another review here in several weeks and give everybody
time to recoup. I want to go to the second panel.
And I am also going to submit two other things for the
record. Our State submitted industry-specific compensation
models for your review, Mr. Feinberg, and they have not
received a response, and that is an official submittal from a
very high office, maybe not from the Governor himself, but from
someone at a very high office. And from the State of Florida,
your Chief Financial Officer, Jeff Atwater, sent a letter from
Florida to you.\1\ They have not been given a response. So we
do need--I know you postponed some things, but this February 2
announcement, of course, is an important one. Florida and
Louisiana have submitted some specifics to you. So let us
please get on that, and we will see you all back here in about
4 weeks, OK?
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\1\ Item referenced by Senator Landrieu appears in the appendix on
page 94.
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Mr. Feinberg. Thank you, Senator.
Senator Landrieu. All right. Thank you.
And if the second panel will come forward, I am going to
ask Admiral Broderick to go first. I know he has a tight flight
schedule and I am sorry this has been delayed slightly. I
really appreciate you all making the effort to be here given
the weather conditions outside.
Admiral Broderick is from the Substance Abuse and Mental
Health Services Administration (SAMHSA), where he serves as
Deputy Administrator. He has served for 34 years with the
Department. He is a Commissioned Officer in the U.S. Public
Health Service. He has extensive experience as a Clinician and
he is here to testify about the oil spill's impacts on the
mental health of some of these communities and the stress that
has been placed on individuals, families, and businesses
throughout the Gulf.
So, Admiral, why don't we start with you and then I will
introduce the other panelists in a moment.
TESTIMONY OF REAR ADMIRAL ERIC B. BRODERICK,\1\ D.D.S., M.P.H.,
DEPUTY ADMINISTRATOR, SUBSTANCE ABUSE AND MENTAL HEALTH
SERVICES ADMINISTRATION, U.S. DEPARTMENT OF HEALTH AND HUMAN
SERVICES
Admiral Broderick. Thank you, Madam Chairman. Thank you for
indulging my schedule. If you do have questions of me, if the
Subcommittee has questions of me, I would be happy to answer
them for the record afterwards.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Broderick appears in the appendix
on page 53.
---------------------------------------------------------------------------
I am pleased to have this time to share with you a few
highlights of SAMHSA's efforts in the Deepwater Horizon oil
spill recovery and response. I am joining you today on behalf
of SAMHSA's Administrator, Pamela Hyde, who was unable to
attend the hearing, yet she has been very involved with
SAMHSA's role in the oil spill response.
As part of SAMHSA's mission to reduce the impact of
substance abuse and mental illness on American communities,
behavioral health is an essential part of health. We know that
prevention works, that treatment is effective, and that people
recover from mental health and substance use disorders.
Traumatic events, such as the Deepwater Horizon oil spill,
placed a heavy burden on individuals, families, and communities
and create challenges for public institutions and service
systems, especially the behavioral health system.
SAMHSA and the behavioral health community know that
disasters often precipitate mental and substance use disorders,
which can be triggered when hope seems gone, security is
threatened, and lives and property are lost. Addressing these
behavioral health needs is critical to the recovery for
individuals, families, and communities affected by the
Deepwater Horizon oil spill and efforts will be necessary for
years to come. With appropriate support and intervention,
people can overcome adversity and move forward.
As part of the coordinated Department of Health and Human
Services (HHS) response, we at SAMHSA worked to help ensure
that the immediate behavioral health needs of affected
individuals were addressed in the immediate aftermath of the
oil spill and we will continue to address these evolving needs
over time.
State reports show increased behavioral health needs in the
Gulf region in the wake of the oil spill. These reports
document an increase in incidents of psychiatric disorders,
anxiety and depression, increase in the incidence of substance
use, and higher risks of suicide. The rate of family breakdown,
including domestic violence, are also on the rise. These
outcomes, while troubling, were not unexpected. These increased
behavioral health needs are similar to those observed after
Hurricane Katrina as well as after the Exxon Valdez oil spill
in 1989.
The current situation in the Gulf is exacerbated by the
fact that it occurs in the same region impacted by Hurricanes
Rita and Katrina in 2005. We know that when multiple events
happen over the course of time, individuals in those regions
are at heightened risk for behavioral health disorders.
SAMHSA has been engaged in supporting the impacted States
since the day after the oil spill. We have provided technical
support and assistance to the States to assess and meet the
mental health and related substance abuse needs concerning the
affected communities. SAMHSA has been in contact with State
officials assessing needs and helping States formulate response
plans, including the development of a shared template to gather
information and address the emergent needs and provide
technical assistance to States in their request for funds from
BP for behavioral health services.
In addition, SAMHSA immediately began making relevant and
useful information available on our website. There are
comprehensive resources and information available on behavioral
health and the Deepwater Horizon oil spill. An online annotated
bibliography continues to provide an extensive list of sources
of information. SAMHSA's website also provides links to dozens
of other Federal agencies and organizations involved in the
response.
At the request of Secretary Sebelius at HHS, Administrator
Hyde at SAMHSA, and multiple Gulf States, BP provided $52
million to fund mental health and substance abuse support
services. Funds went to SAMHSA and to four States affected most
in the region, Louisiana, Mississippi, Alabama, and Florida. Of
this $52 million, SAMHSA received $10 million to launch a toll-
free crisis counseling hotline for residents of the affected
States, to develop behavioral health educational materials for
public health information, and to conduct surveillance of
ongoing behavioral health needs for individuals affected by the
spill.
SAMHSA created and successfully launched the Oil Spill
Distress Helpline, 1-800-985-5990. This toll-free helpline
provides information, support, and counseling for those
affected by the Deepwater Horizon disaster. SAMHSA has also
undertaken extensive regional public education campaigns to
raise awareness of the potential behavioral health impacts of
the spill and to connect those in need with available services.
SAMHSA has assisted in the coordination of local and regional
outreach activities to promote awareness of the hotline number.
We have also disseminated public education and outreach
materials on behavioral health among the residents of the
affected communities. We have also developed and distributed
television, radio, and print announcements to the public.
In addition, the $10 million that BP provided to us also
provided funds that we have used in coordination with our
Federal partners to do surveillance of the mental health and
substance abuse needs of the community. This includes
collaboration with the Centers for Disease Control (CDC), who
is in the process now of conducting a telephone survey in the
Gulf. That survey began on the 15th of December and will
continue for a year.
We also recently announced the provision of about $650,000
in grants to the four States. They amount to about $162,000 per
State to provide States funds to monitor the mental health and
substance abuse services being provided to the people that they
encounter in those communities. SAMHSA's efforts represent only
a part of the Federal Government's comprehensive response to
the Deepwater spill.
Despite many hardships, people of the Gulf are doing their
best to stay connected with friends of family, take care of
themselves and their neighbors. I have to tell you, Senator,
the resilience of the folks in your jurisdictions are truly
phenomenal. They are very, very resilient people given what
they have encountered over the last decade. It is truly amazing
to us to see that.
History tells us, however, that the emotional impact of the
devastation is going to continue and we need to be very
vigilant of that and monitor carefully how those communities
are doing. As such, the Oil Spill Distress Line will be
operational through 2011. Public Service Announcements (PSAs)
and information on our websites will continue to be updated and
disseminated. Surveillance will continue. And coordination with
State and voluntary providers will persist until such time as
the indicators signal that they are no longer needed.
Senator Landrieu. Would you wrap up, if you would, please.
Admiral Broderick. Sure. Now that the immediate response
phase has come to an end, we are shifting our focus to the
long-term recovery efforts for the Gulf Coast residents and to
help them rebuild their lives.
It has been my pleasure to be here, Madam Chairman, and I
would be happy to, as I said, answer any questions for the
record that you might have.
Senator Landrieu. Thank you, Admiral.
I do have one question, then we will excuse you because I
know of your flight, and then we will go to the rest of the
panel.
Admiral Broderick. OK.
Senator Landrieu. Under the total amount of $52 million
that BP contributed, and they did this voluntarily----
Admiral Broderick. Correct.
Senator Landrieu [continuing]. Because I want to say for
the record, there is no law requiring them to contribute in any
way to social services, mental health. It was not contemplated
in the Oil Pollution Act. It is being, of course, thought about
now since the repercussions are so clear and widespread.
But SAMHSA was provided $10 million by BP. Did you have any
money on hand as an agency prior to the $10 million given to
you by this BP contribution to respond as an agency?
Admiral Broderick. We have authority, Madam Chairman, to do
SAMHSA Emergency Response Grants, and this was a bit different
in that there was no Stafford Act declaration.
Senator Landrieu. Right.
Admiral Broderick. So FEMA funds were not available. And in
those instances when----
Senator Landrieu. So what was available?
Admiral Broderick. What was available is SAMHSA's general
appropriation. And so while we have the authority to provide
funds to communities in response to disasters. We do not have a
specific budget line item for that, so we would shift funds
around in those instances----
Senator Landrieu. And how much did you shift around to
accommodate this situation?
Admiral Broderick. We did not. The $650,000 that we
provided to the four States came out of the $10 million that BP
provided us.
Senator Landrieu. And what did you do with the other----
Admiral Broderick. The rest of the $10 million?
Senator Landrieu. The rest of the $10 million.
Admiral Broderick. Six million goes to surveillance. A
hundred-and----
Senator Landrieu. Surveillance? What does that mean?
Admiral Broderick. Epidemiologic surveillance, monitoring
the substance abuse and mental health conditions of Gulf Coast
residents----
Senator Landrieu. So just reporting it, but not treating
it?
Admiral Broderick. Correct. It goes to monitoring----
Senator Landrieu. Identifying it, reporting it, but not
treating it.
Admiral Broderick. Right. Epidemiologic----
Senator Landrieu. So of the $10 million that went to you,
only $650,000 went for----
Admiral Broderick. Correct. The responsibility for
treatment is the responsibility of the States. In these kinds
of situations, our mission is to coordinate a response and to
do things that cut across the entire region. The $42 million of
the $52 million that was provided was provided to those States,
and those States then were the ones that provided treatment to
people.
Senator Landrieu. OK. And was that agreed to between SAMHSA
and the States, that you all would do all of the identification
and reporting so that they could use 100 percent of their money
for treatment? Do you know if that was ever----
Admiral Broderick. Actually, the Administrator convened all
five States in Atlanta in June, and I mentioned the development
of a common template. Essentially what that was a common format
for a claim, if you will, by each of the States to BP. And so
we submitted our claim for the things that States would not do,
the things that cut across the whole region. For instance, that
telephone number is available to anybody in the region. The
surveillance occurs across the entire region. The Public
Service Announcements occur across the entire region. And the
States then submitted their requests, which totaled $42
million, that BP then paid to the States specifically for
treatment. We did agree that we would--our request would cover
the things that cut across the region and the States would
request funds for treatment.
Senator Landrieu. Because I am going to be asking each
State to give this Subcommittee a very detailed report of how
they spent, in Louisiana, 15, in Mississippi, 12, Alabama, 12,
and Florida, approximately 2.4, and we are going to ask you for
detail on your $10 million, and then $1 million went to
Catholic Charities.
I know that you have to leave, so let me go ahead and
excuse you now and thank you for your testimony.
Admiral Broderick. Thank you.
Senator Landrieu. Mr. Keller, if we can first go to you, I
guess, and then we will come back to Mr. Costanza and Ms. West.
Thank you again, Admiral. I appreciate it.
Mr. Keller, go ahead and outline what BP felt under its--
you do not have a legal obligation, but you all have made a
fairly significant commitment here. There are still some great
needs and we will discuss that as you go on, but go ahead and
proceed. You have 5 minutes.
TESTIMONY OF ALBERT L. KELLER,\1\ EXECUTIVE VICE PRESIDENT,
GULF COAST RESTORATION ORGANIZATION, BP AMERICA, INC.
Mr. Keller. Thank you, Chairman Landrieu. I am Luke Keller,
Executive Vice President for BP America's Gulf Coast
Restoration Organization (GCRO). I welcome your invitation to
share information with you about the process for addressing
State and local government claims relating to the Deepwater
Horizon accident and BP's contributions to various social
services providers.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Keller appears in the appendix on
page 59.
---------------------------------------------------------------------------
The Deepwater Horizon accident has profoundly affected all
of us. We have deep sorrow for the lives lost, the injuries
sustained, and the impacts to the Gulf Coast communities.
The GCRO was formed in the summer of 2010 and manages all
aspects of the response to the Deepwater Horizon accident in
the Gulf of Mexico. We have offices and dedicated local teams
in Louisiana, Mississippi, Alabama, Florida, and Texas. We
essentially oversee four functions: Spill response and removal,
economic restoration, environmental restoration, and restoring
trust.
Within days of the incident, we established a robust claims
process to address claims by individuals, businesses, and
government entities. Our central focus has been and remains the
fair and proper resolution of all legitimate claims. In the
GCRO, we work closely with State and local governments to
ensure we meet our commitments to the people of the Gulf Coast.
And at the request of State Government leaders, BP has
provided advances to cover anticipated response and removal
costs even before they were incurred, approximately $291
million to Louisiana, $75 million to Mississippi, $56 million
to Alabama, and $50 million to Florida. Advances were also made
to governments for alleged losses of tax revenue.
BP has a Government Claims Group within the GCRO that is
dedicated full-time to addressing claims filed by government
entities. We provide regular public reporting on our government
claims process and also send periodic newsletters to government
claimants.
Senator Landrieu. Mr. Keller, let me just interrupt you
just a minute, and you may want to regroup. We had asked you
specifically to come and talk about the mental health,
community outreach piece. So you can submit the rest in
writing, but we were very, very clear about the subject of this
hearing. So why do you not think about what you might want to
say about that and I am going to go to Mr. Costanza and Ms.
West now and then we will come back to you and you can add some
thoughts to what BP is observing in the area about community
stress or strain, how the process is impacting people, not so
much--I mean, everybody is fairly aware of what you all have
set up and we are grateful for what you all have done so far,
but we want to really stay focused on the human aspect of this.
Mr. Costanza, let me introduce you so people know who you
are. I do, but Tom is the Executive Director of the Office of
Justice and Peace for Catholic Charities. He is also the Chair
of the Greater New Orleans Disaster Recovery Partnership that
has been working, unfortunately, too hard and overtime since
Hurricanes Katrina, Rita, Gustav, Ike, and now the BP spill. I
just want to compliment you and Catholic Charities for taking a
leadership role through all of these storms and disasters with
so many different religious organizations and community-based
organizations to try to help our people through some difficult
times.
So we will start with you, and let me also introduce Ms.
West, and then we will go right to you. She serves as Chair of
the South Mississippi Voluntary Organizations Active in
Disasters. You all have been working very closely together.
International Relief and Development (IRD) and the U.S. Gulf
Coast Community Resource Center have assisted over 10,000
clients with hurricane recovery and long-term needs since 2005.
So, Mr. Costanza, let us start with you.
TESTIMONY OF TOM COSTANZA,\1\ EXECUTIVE DIRECTOR, OFFICE OF
JUSTICE AND PEACE, CATHOLIC CHARITIES, ARCHDIOCESE OF NEW
ORLEANS
Mr. Costanza. Good afternoon, Chairman Landrieu, and thank
you for your leadership in all these disasters. We do try to
work together as NGOs in partnership and we feel that is the
best way to help people effectively recover.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Costanza appears in the appendix
on page 63.
---------------------------------------------------------------------------
My name is Tom Costanza with Catholic Charities in the
Archdiocese of New Orleans (CCANO) and I would like to begin by
remembering the families that lost loved ones and for the
families impacted by this current disaster.
The anxiety level is high and getting higher in our
communities across Southeast Louisiana, and much of this is
due, unfortunately, to the claims process and structure.
Although the process has paid claims, there is much confusion
about its inconsistent methodology, fairness, lack of access to
information, lack of local decisionmaking, and lack of
concrete, useful information as to why claims were denied and
what they can do to correct it.
A real issue right now is a total of 4,230 fishing sector
claims have been denied for insufficient documentation at the
end of the emergency phase. Some are losing homes and vehicles.
There is increased stress and anxiety because of frustration
with the claims process and reduced incomes. Many are having
difficulty finding other employment. Oystermen are concerned
about the long-term loss of the oyster beds, and shrimpers are
concerned over price and production levels.
However, the nonprofit sector is responding. Along with
many other NGOs, five local Catholic Charities and Second
Harvest Food Bank agencies along the Gulf Coast have provided
food, relief, and recovery services to people impacted by the
disaster.
A simple story is recently one of our case managers helped
a fisherman with food, room, assistance, and counseling until
he can find some temporary work because he cannot fish anymore.
This shows you a human side of this recovery where a case
manager is critical and important to develop that relationship
and recovery.
We are very grateful to BP for the initial direct
assistance and mental health funds which we are using, but
without the proven holistic approach to family recovery,
including case management, direct assistance, financial
counseling, the recovery simply is less effective.
Responding Catholic Charities agencies report a collective
total of nearly $2.7 million in resources we have raised and
delivered to the oil spill-impacted population. We are asking
both the Gulf Coast Claims Facility and the Gulf Coast
Restoration Organization staff to sit down with the nonprofit
and faith-based organizations and work together in service to
the common good of the residents in our coastal communities.
In addition, we recommend the following. We need to
absolutely fast track and resolve the 4,200 fishing industry
claims that were denied. This is critical. These are the
vulnerable families. These are the families that need immediate
assistance and cannot wait until the interim claim process is
ironed out. We need to restructure the claims process for the
fishing community using knowledge and protocols developed by
industry experts with special cultural sensitivity to the
highly impacted Asian Pacific population. And we must fund the
NGO Technical Assistance Providers Network proposal to increase
the claims quality and approval rates.
In order to stabilize our families during this critical
period, we would like to get the Family Stabilization Grant
funded, because this would directly help people with rent,
utilities, counseling, job development, so they can make it
through this tough time.
We need to be aware of health care and monitoring of toxic
exposure, especially for children and the oil spill cleanup
workers, and provide primary health care access and services in
these coastal communities.
We should pay subsistence claims, fund food banks, and
streamline the Food Stamp application to the two-page Disaster
Food Stamp Form to alleviate food insecurity.
And in terms of long term, we have brought that up, should
dedicate some of the fines from the Clean Water Act to human
recovery, to look at the tax policy relative to spreading their
final claims over a period of years, and as you mentioned
before, to revise the Oil Spill Pollution Act to include human
recovery.
We welcome the opportunity to continue to work together
with BP and the Gulf Coast Restoration Organization. We have
worked successfully with the Feinberg team in D.C. on some
special critical cases and we look forward to building on that
relationship.
I would like to end with a quote from Archbishop Aymond.
``Many of these same families have rebuilt their lives after
Hurricane Katrina and are a sign of hope for us all. They are a
vibrant people.'' Thank you.
Senator Landrieu. Thank you, Tom. Ms. West.
TESTIMONY OF LORI R. WEST,\1\ CHAIRMAN, SOUTH MISSISSIPPI
VOLUNTARY ORGANIZATIONS ACTIVE IN DISASTERS
Ms. West. Madam Chairman, I am honored to be here today to
provide you testimony to this prestigious Subcommittee on
behalf of South Mississippi VOAD, Voluntary Organizations
Active in Disasters (SMVOAD), and International Relief and
Development.
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\1\ The prepared statement of Ms. West appears in the appendix on
page 81.
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Since 2005, the members of SMVOAD have been working
together to address the effects of Hurricane Katrina, the
Nation's largest natural disaster. Members of SMVOAD include
the American Red Cross, Catholic Charities, Hope CDA,
Interfaith Disaster Task Force, International Relief and
Development, Lutheran-Episcopal Services of Mississippi,
Salvation Army, STEPS Coalition, the United Way of South
Mississippi, and I have attached a complete list to this
testimony.
Since June 2010 and continuing through January 2011, SMVOAD
and IRD have held frequent meetings with British Petroleum to
try and address the effects of the Deepwater Horizon oil spill
on the residents of the Gulf Coast. We have submitted multiple
humanitarian proposals to BP and have revised the proposals in
response to BP's feedback. The time and effort expended by
SMVOAD members on this issue has been significant because we
believe the problems faced by the people of Mississippi and
those along the Gulf Coast are considerable.
I would like to draw your attention to an August 2010 study
by the National Center for Disaster Preparedness (NCDP) at
Columbia University's Mailman School of Public Health. I
believe this study is important because it has identified some
of the key findings which clearly show the impact the spill has
had on our local populations. More specifically, the study
states the following.
More than 40 percent of the population living within 10
miles of the coast have experienced some direct exposure to the
spill. One in five households has seen their income decrease as
a result of the spill, and 8 percent have lost jobs. More than
one-quarter of the coastal residents think they may have to
move from the area because of the spill. The oil spill had the
greatest impact on those with the fewest economic resources,
much like Hurricane Katrina. Coastal residents earning less
than $25,000 a year were more likely to report having an income
loss than those earning more.
In the summer of 2010, the United Way of South Mississippi
and the United Way of Jackson and George Counties, the Gulf
Coast Business Council, and the Mississippi Center for
Nonprofits conducted a survey of health, education, employment,
finances, arts, and tourism to measure the impact of the oil
spill on the residents. The survey found that the top six
issues facing residents were stress, loss of job or income,
increased need for food assistance, problems meeting car, rent,
or mortgage payments, problems purchasing prescription drugs,
and loss of health insurance or other benefits.
Also, nearly 70 percent of the nonprofit organizations that
reported a decrease in fundraising since May 1, 2010, indicated
that the oil spill was a significant or moderate reason for
that decrease. More than 80 percent of all the nonprofits
surveyed expected a decrease in fundraising for the next 90
days.
Despite these negative impacts on our community and the
heroic efforts put forth by SMVOAD and other nonprofit
agencies, BP has not yet provided the funding necessary to
address the multiple social service needs of the Gulf Coast
residents. I have been asked by our members to provide a copy
of our major VOAD proposals, including proposals to address the
various aspects of the spill's impact on our community,
including housing, finances, job and vocational training, and
livelihood means. Our members believe that ongoing
conversations with BP have provided some feedback regarding the
proposals, but BP has stated that any funding of these types of
urgent programs will indicate culpability or indirect or
tertiary effects of the oil spill, and thus, they seem to have
made a decision not to fund these critical programs.
There was some hope among SMVOAD members when BP agreed to
award $52 million for mental health services to the Gulf Coast
residents in 2010. SMVOAD worked with several agencies to
present BP with a comprehensive program to address both mental
health and basic social service needs for at least 1,300
residents affected by the spill. It remains unclear to our
members why the bulk of the proposal was not funded, and no
funds were allocated for victims with urgent social service or
real day-to-day needs, such as food, rent, transportation, and
other critical financial needs. Based on our members'
experience serving tens of thousands of Hurricane Katrina
victims, SMVOAD and IRD member organizations can say with
confidence that offering mental health and case management
services without also providing critical housing and vocational
needs is largely ineffective.
We would like the Subcommittee Members to note that many
organizations have expended their own resources to assess and
address the impact of the spill on low- to moderate-income
families. Between May and September 2010, my organization, IRD,
enrolled 976 clients into its case management and direct
services program, compared to 266 clients the previous year.
Requests for rental assistance also increased, from 236 during
the first 4 months of 2010 to 678 in the 5 months between May
and September 2010. And in addition, IRD's YouthBuild program,
a program that provides job training and GED preparation to at-
risk youth in the Gulf area, saw its applicant pool rise from
142 in 2009 to 314 in 2010, immediately after the spill.
IRD and members of SMVOAD are addressing the needs of those
affected by the spill through a range of direct referral
services.
Senator Landrieu. Wrap up, if you can.
Ms. West. OK. In closing, I know the Subcommittee
recognizes that many nonprofit organizations in the Gulf Coast
region need additional resources to deliver effective services
that will help the residents who have been affected by the oil
spill recover, both in the short- and long-term. But today, I
am also representing South Mississippi VOAD to ask for more
direct support and engagement on this critical issue with BP
and its various representatives. Thank you.
Senator Landrieu. Thank you.
Let me begin with you, Mr. Costanza and Ms. West, to just
try to get a handle on the money that has been allocated and
how it has been spent. Of the $15 million that went to
Louisiana and the $12 million that went to Mississippi, did any
of that portion go to the networks that each of you represent,
and if so, how much?
Mr. Costanza. Of the $15 million, $6.7 went to Catholic
Charities and other organizations that are developing the model
implementing the comprehensive--it is a comprehensive outreach,
treatment, and community resiliency model.
Senator Landrieu. And so do we know where the other non----
Mr. Costanza. The State had the remainder.
Senator Landrieu. OK.
Mr. Costanza. The State had the remainder.
Senator Landrieu. So about $6 million went to the network
of organizations, and then we will find out about the
remainder.
And how about with you, Ms. West----
Ms. West. It was a similar percentage. The majority went to
the State and then a smaller percentage went to local
organizations, mental health specific.
Senator Landrieu. OK. Mr. Keller, several of the witnesses
directly said or indicated that, potentially, BP feels that if
you compensate along these lines, that you think that puts you
in either a disadvantage in a case that you would be
responsible for all of these mental health issues or social
service challenges. Is that true, and did that come into your
thinking, and if so, why, and if not, what has prevented you
from maybe stepping up and helping a little more?
Mr. Keller. Senator, I am unaware of any statement like
that has been made, and in fact, we have encouraged our staff
on the ground to bring any proposals or requests that come to
us forward so we can take a look at those and evaluate them on
their merits.
Senator Landrieu. OK, because I am aware and have been for
months, and it is part of why we wanted you all to come, I
think the Catholic Charities has asked BP several times. There
are 53 Louisiana NGOs that have come together to talk about a
second tranche, if you will, for some direct services, because
as you can tell from the testimony in the previous panel, we
are going to be at this for another 6 months, a year, or a year
and a half--I hope not much longer than that--until all of
these claims are paid and settled, but who knows. As I said, 40
percent, 60 percent of claims have been paid, but those have
been the low-hanging fruit, the easier claims. Some of these
are more difficult claims, so who knows how long this is going
to go on and the need is immediate.
So there have been, I understand, several proposals from
Louisiana, Mississippi, and potentially other States. Will you
consider them? Is there something that we should know in your
corporate governance that prevents you from at least
considering their request, and if not, will you consider them?
Mr. Keller. We will consider those, and I do not believe
there is anything that prevents us from doing that.
Senator Landrieu. OK. Now, I know there is nothing that
requires you to do it. I am clear about the law, and I want the
petitioners here to understand that BP is under no legal
obligation.
Now, in addition, BP was not under any legal obligation to
set up any fund of relief for rig workers put out of work
because of the moratorium. You are not responsible, in my view
and many people's view, for people put out of work by the
moratorium. The government is. But yet, BP stepped up and you
made a special arrangement and we are very grateful, to help
with some of those rig workers.
And I am thinking that perhaps, because this need is as
immediate and as clear as that, in this case, this is directly
related to the spill, these families, not necessarily related
to any indirect, like the slow down or shutdown of some of the
work related to oil and gas in the Gulf, but more so fisheries
and people who really saw their livelihoods curtailed. So if
you could look at that, it would be very, very helpful. I know
that $52 million sounds like a lot of money, but as these
numbers are going, it is $20 billion-plus for claims. It does
not seem like a lot of money when you think about it relative
to all the other money that is being spent, and it is such an
important need.
Let me, Tom, just ask you to just hit again how you all are
working together, because I know you are fairly organized in
Louisiana and Mississippi, but what about Alabama? What about
Florida? Do you all have any communications with the social
groups on the ground there?
Mr. Costanza. I am aware of Catholic Charities' disaster
response is for the Catholic Charities USA (CCUSA) having
conference calls with Mobile in Alabama, but we could do a
better job of coordinating a Gulf region response.
Senator Landrieu. Ms. West.
Ms. West. We have called together the regional VOADs and
New Orleans VOAD has joined in a meeting, Louisiana VOAD has
come together with South Mississippi VOAD, Mobile VOAD, Baldwin
County VOAD, and Alabama VOAD, and we have all come together
and have experienced similar situations requesting for this
direct assistance and not prevailing.
Senator Landrieu. Well, it is clear to me, and we are going
to have to wrap up in a minute, that the law is deficient and
can be and hopefully will be corrected so that the next time
there is an environmental spill of a significant magnitude
where there are impacts, not just environmental, not just
economic, but community impacts or human service impacts, that
the polluter, the violator in this case be held accountable.
But in the meantime, I think BP would show a great deal of
faith to the community, and as has been stated in many of your
hundreds of advertisements, that you are going to really meet
your obligations to really consider these proposals. I know
that officials from the State of Louisiana have written to Bob
Dudley, and that letter was sent on November 18. I am assuming
some of the other leaders of the other States have also weighed
in. And, of course, I met with Lamar McKay; who I do not see
him here, but he was with me to discuss this some weeks ago and
I gave him a copy of the State's letter and Catholic Charities
proposal. So again, you are under no obligation, but it clearly
is a need in the aftermath of a disaster to try to provide some
direct assistance for social services.
But I will say this, because BP has stepped up in many
ways. I am dismayed the Federal Government itself did not have
any monies readily available to respond through our own
agencies, and I am going to be asking the States in the Gulf
Coast what emergency funds they have established in advance so
we are not having to scramble for funds just to respond to
people's immediate needs every time there is a major natural
disaster, or in this case a manmade pollution event. And
sometimes, we get there too late and it is tragic.
Do you all want to end--Mr. Keller, I would like maybe one
more minute from you each as we end. We will start with you and
we will close out the panel.
Mr. Keller. So I will be very brief. Again, thank you for
having me here. I apologize for the misunderstanding, I was
under the understanding you wanted me to talk about both our
government claims process as well as social services.
In a brief minute, I would just close out by saying that we
have taken our responsibility very seriously. I understand and
appreciate the distinction you make between those things we are
obligated to do and those things that we do voluntarily.
Just a nugget of information I would add is that, including
the rig workers' fund, and other things, such as the $52
million, in behavioral health grants and other contributions;
of the total of a little over $1 billion that we have paid into
the individual States in response to removal costs, lost
revenue, and that sort, we have also, over and above our
obligation, for every dollar spent there, have spent somewhere
on the order of 30 cents in voluntary contributions.
Senator Landrieu. We appreciate that, and just continue to
in my view, I would encourage you to live up to your public
statements that you are going to make the region whole. There
are clearly some gaps, particularly in this area.
Mr. Keller. And we take these things very seriously and
will certainly look at that.
Senator Landrieu. Thank you. Mr. Costanza.
Mr. Costanza. Well, first of all, thank you, Senator
Landrieu, for your leadership in bringing this human side of
this tragedy to the forefront once again. It is critical for
our people to recover and our communities will then recover.
Simply, the simple task would be to continue to dialogue
with BP and engage in conversation with NGOs, VOADs. We bring
expertise, compassion. We leverage resources. We are effective.
We can bring in the private dollar leverage with the other
dollars. We, unfortunately, know how to do this well because of
Hurricane Katrina, but we have developed relationships with
other NGOs. We know each other. We work well. And we really
think we could work together. We will really help people at
this critical time so that they can recover and get on with
their lives.
Senator Landrieu. Thank you. Ms. West.
Ms. West. Thank you, Senator Landrieu. I want to bring it
to Mr. Keller's attention that when resources are limited,
folks go to their local community organizations for assistance.
And so the requests are demanding right now and our resources
are limited. So we would appreciate the opportunity to continue
engaging in conversation and take another look at these
proposals. So thank you for the opportunity.
Senator Landrieu. Good. And thank you all. And as you all
know, we are drafting a piece of legislation to address some of
these issues for future events, so we look forward to your
input and we appreciate what you have already given us. And if
anyone has any additional information or suggestions, please
get that to us in the next couple of weeks.
With that, the meeting is adjourned. Thank you.
[Whereupon, at 3:48 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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