[Senate Hearing 112-433]
[From the U.S. Government Publishing Office]
S. Hrg. 112-433
A YEAR AFTER THE DEEPWATER HORIZON OIL SPILL: THE STATUS OF RECOVERY
EFFORTS IN FLORIDA
=======================================================================
FIELD
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
JULY 11, 2011
__________
Printed for the Committee on Small Business and Entrepreneurship
Available via the World Wide Web: http://www.fdsys.gov
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED TWELFTH CONGRESS
----------
MARY L. LANDRIEU, Louisiana, Chair
OLYMPIA J. SNOWE, Maine, Ranking Member
CARL LEVIN, Michigan DAVID VITTER, Louisiana
TOM HARKIN, Iowa JAMES E. RISCH, Idaho
JOHN F. KERRY, Massachusetts MARCO RUBIO, Florida
JOSEPH I. LIEBERMAN, Connecticut RAND PAUL, Kentucky
MARIA CANTWELL, Washington KELLY AYOTTE, New Hampshire
MARK L. PRYOR, Arkansas MICHAEL B. ENZI, Wyoming
BENJAMIN L. CARDIN, Maryland SCOTT P. BROWN, Massachusetts
JEANNE SHAHEEN, New Hampshire JERRY MORAN, Kansas
KAY R. HAGAN, North Carolina
Donald R. Cravins, Jr., Democratic Staff Director and Chief Counsel
Wallace K. Hsueh, Republican Staff Director
C O N T E N T S
----------
Opening Statements
Page
Rubio, Hon. Marco, a U.S. Senator from Florida................... 1
Broxson, Hon. Douglas V., a Representative in the Florida House
of Representatives............................................. 39
Ingram, Hon. Clay, a Representative in the Florida House of
Representatives................................................ 39
Witnesses
Putnam, Adam H., Commissioner, Florida Department of Agriculture
and Consumer Services.......................................... 4
Zales II, Robert F., President, National Association of
Charterboat Operators.......................................... 16
Gilchrist, Joe, Owner, Flora-Bama Lounge, Package, and Oyster Bar 29
Merrill, Collier, Chairman, Pensacola Chamber of Commerce........ 33
Alphabetical Listing and Appendix Material Submitted
Brigman, Bobbie
Letter....................................................... 62
Broxson, Hon. Douglas V.
Testimony.................................................... 39
Gilchrist, Joe
Testimony.................................................... 29
Prepared statement........................................... 31
Ingram, Hon. Clay
Testimony.................................................... 39
Merrill, Collier
Testimony.................................................... 33
Prepared statement........................................... 36
Nelson, Hon. Bill
Prepared statement........................................... 3
Putnam, Adam H.
Testimony.................................................... 4
Prepared statement........................................... 7
Rubio, Hon. Marco
Testimony.................................................... 1
Zales II, Robert F.
Testimony.................................................... 16
Prepared statement........................................... 19
A YEAR AFTER THE DEEPWATER HORIZON OIL SPILL: THE STATUS OF RECOVERY
EFFORTS IN FLORIDA
----------
MONDAY, JULY 11, 2011
United States Senate,
Committee on Small Business
and Entrepreneurship,
Pensacola, FL.
The Committee met, pursuant to notice, at 9:34 a.m., in the
Amos Performance Studio, Pensacola State College, 1000 College
Boulevard, Pensacola, Florida, Hon. Marco Rubio, presiding.
Present: Senator Rubio.
OPENING STATEMENT OF HON. MARCO RUBIO, A U.S. SENATOR FROM
FLORIDA
Senator Rubio. Good morning. First of all, thank you all
for welcoming me here to Pensacola. It is a pleasure to be
here, despite the serious discussion before us. I would
particularly like to thank the Pensacola State College for
allowing us to use this beautiful studio. The air conditioning
works well--thank you very much--and the staff here has been
immensely helpful in helping us prepare for this event.
And I do want to thank some of the people who were not able
to attend today's field hearing but who made this possible,
Senator Landrieu of Louisiana, who was instrumental in making
this possible, as well as Senator Snowe, and their hard-working
staffs who are here with us today, for allowing me the honor to
conduct this field hearing before the Committee on Small
Business and Entrepreneurship.
I particularly want to single out Senator Landrieu for the
hard work she has done in keeping folks up in Washington
engaged on this much-needed long-term recovery in the Gulf. I
was recently asked about--just a few seconds ago asked about,
well, has the world not moved on? Have people not forgotten
about this? And the answer is, for most of America, this is
something that happened a year ago. But for folks, particularly
in the Gulf region and here in northwest Florida, this is
something that is still happening, and that is why this is so
important that this hearing take place and that we continue to
talk about this.
A little over a year ago, on April 20, approximately 4.1 to
4.9 million barrels of oil began spilling into the Gulf of
Mexico. As a result, the Federal Government closed
approximately 88,500 square miles of Gulf fishing. That
negatively impacted 131,000 jobs supported by a $12.8 billion
year industry.
Subsequently, the tourism industry in Florida, the state's
largest industry, significantly declined as people canceled
their summer vacations in fear of oil-slicked beaches. There is
one study that says that 45,000 jobs linked to tourism in
Florida's counties along the Gulf of Mexico were impacted.
Summer home rentals were down by 80 percent between April 20
and the end of May of 2010. And while the oil-slicked beaches
were never realized, I am certain those of us in this room did
not need statistics to prove the impacts both on the state and
on everyday lives, including the everyday lives of people who
find themselves here with us today.
In some way, each of you have lived daily with the impacts
from this spill. As of July 7, the Gulf Coast Claims Facility
received 184,591 claims and paid over a total of $1.8 billion.
In total, BP has paid $2.133 billion to the State of Florida.
But I think what we are going to hear today is that that is not
enough. While tourism has increased over the past year, there
is still more to be done, and the long-term effects on our
fisheries, an industry vital to both our economy and our
tourism industry, may not be known for decades.
I am here today for one reason and one reason only, and
that is I want to hear from those worst impacted by the spill
on how I can best assist them in my role as the junior Senator
from Florida, and I am here to listen.
I understand that there are still significant frustrations
regarding the claims process, and I would like to understand
specifically what those frustrations are at this point and how
you feel they can be best addressed. I would also like to
understand what impacts continue to be felt throughout the
tourism industry, the seafood industry, and the fishery
community so that I can help guide the Federal discussion on
how best to assist these industries so vital to our state's
economy.
Specifically, I have been working with all of my Gulf state
colleagues on legislation spearheaded by Senators Landrieu and
Shelby that would redirect to the Gulf states the Clean Water
Act funds that BP will likely pay as a result of the oil spill.
And in that, I also want to recognize my senior Senator from
Florida, Senator Nelson, who has been intricately involved in
this conversation, as well. He could not be here today. He had
a prior commitment, but he expresses his desire to have been
with us here today, and I assure you we are working together on
these issues that impact our state.
[The prepared statement of Senator Bill Nelson follows:]
[GRAPHIC] [TIFF OMITTED] 71270.026
There is no doubt in my mind and in his mind, and I think I
can speak for him when I say this, that all this money should
be sent to the Gulf states. There is no doubt that Florida
deserves and must receive their fair share of this recovery
money.
So today, I would like to hear from each of our witnesses
how this money can be best directed to the recovery efforts
that should have started yesterday so that these efforts can
start tomorrow. I am here to listen.
I want to quickly recognize two members of State government
that are with us here today, elected to represent this region,
State Representatives Clay Ingram, who is here--thank you,
Representative Ingram-and Doug Broxson, who is here. Doug,
thank you for being a part of this, as well. I appreciate both
of you being here today, and we are going to open it up after
the second panel of witnesses. I would love to hear your
perspective on this, as well. I think it is important that we
have a strong partnership with our State government officials.
And with that, I segue to someone we are very proud is with
us here today, who is on the leading edges of many of these
issues that we are dealing with, and this is Commissioner
Putnam who joins us here today. Commissioner Putnam has both
more Washington experience and now more Tallahassee experience
than me and he is younger than I am, which is a small group of
people in politics. But he is someone that is uniquely
qualified to speak on these issues. He is doing a phenomenal
job on behalf of the entire State of Florida, but particularly
on behalf of aquaculture, which is a critical part of our
economy.
Commissioner, thank you for being a part of this and for
sharing your input and insight and for being an excellent
partner on these issues with us. Thank you.
STATEMENT OF ADAM H. PUTNAM, COMMISSIONER, FLORIDA DEPARTMENT
OF AGRICULTURE AND CONSUMER SERVICES
Mr. Putnam. Thank you very much, Senator Rubio, and most
importantly, thank you for being here and physically bringing
the attention of the United States Senate to northwest Florida.
As you know, Congress has the attention span of a 20-minute
sitcom. A year out, it is critically important to continue to
remind our Federal policymakers of the damage that continues to
reverberate throughout these Gulf Coast communities. And you
have got a great panel of witnesses here and a great
legislative delegation that is going to share some thoughts on
how Tallahassee has positioned itself and what the continued
harm is to our charter boats, to our hotel and restaurant
industries and tourism in general.
I wanted to focus my remarks on the seafood side. As
Commissioner of Agriculture and leader of the Department of
Agriculture and Consumer Services, we are the lead agency in
the State for food safety. We are also the lead agency for
promoting what we grow and what we raise in the State of
Florida through our ``Fresh From Florida'' campaign. So if I
could, I will just take a few minutes and go over what our role
in that is.
I would like to begin by just thanking the legislative
delegation and Senator Gates, who is also in that northwest
Florida delegation, for passing the Deepwater Horizon Oil Spill
Economic Recovery Act that, in essence, says whatever fines and
settlements do come forward as a result of this horrible
tragedy, 75 percent of that will stay in the most impacted
communities here in northwest Florida. I mean, it is a no-
brainer, but I am glad they codified it in the law, because the
last thing we want is for those fines and settlements and
recovery restoration monies to turn into a slush fund for other
communities that did not have the harm, the real harm, that
these eight counties in northwest Florida had.
The seafood industry for the State of Florida is $600
million of economic impact. Fishing, in general, is $8
billion--$8 billion. And so this is an enormous industry for
our state and it is one of these great examples of where the
health of our environment directly impacts the health of our
economy.
In the aftermath of the spill, seafood sales declined
between 35 and 40 percent, and over 60 percent of all seafood
buyers polled in the immediate aftermath of the spill said that
they had lost confidence in the safety of Gulf seafood. A year
later, we really have not seen that public confidence number
move.
Our responsibility in the Department, and we have
negotiated a settlement with BP for $10 million for additional
food safety testing, and when it is fully ramped up, we will be
testing 200 samples a week--excuse me, 200 samples a month. We
have now run a year out, using existing capacity, we have run
several hundred samples and there has been no indication
whatsoever of any level of oil residue or dispersant residue,
the two things that people are most concerned about, in Florida
seafood. So it is a perception problem, not a substantive
problem. But the brand that our charter boat captains and our
commercial fishermen and our oystermen in Appalachicola and
throughout the State of Florida had built over decades and
generations was destroyed overnight by the spill. And so our
efforts are focused on aggressively ramping up that testing
capacity.
We have a world class laboratory in the State of Florida.
It is one of the few in the nation that is a state lab also
recognized by the U.S. Food and Drug Administration (FDA) and
National Oceanic and Atmospheric Administration (NOAA) for
seafood safety. We are making investments in that equipment and
ramping up the pace of testing, but we have not found any
evidence whatsoever that there is a problem with the quality of
Florida seafood. But that perception, that brand damage,
lingers.
We negotiated a second component to a settlement with BP
that involves $10 million in promoting and marketing to undo
that harm, and as you know, having run an expensive statewide
campaign, that is a--to rebuild a national brand, it is a drop
in the bucket. But that $10 million is targeted toward the
seafood buyers around the country--Philadelphia, New York,
Chicago, the big brokers--and the people who go into
restaurants and the people who travel to the State of Florida
in those key markets.
Many of you have a copy of the latest edition of the Guy
Harvey Magazine. We have partnered with Guy Harvey, who is a
world renown artist, but also a researcher and conservationist,
to highlight the safety of seafood. You will see in regional
publications--Coastal Living, Southern Living, those types of
regional markets--a ramped-up presence of Fresh From Florida
seafood. You are going to hear later from Collier Merrill, who
took a road tour of chefs up to New York to highlight for them,
and I do not want to steal their thunder, but the idea here is
that we work in concert with all the different entities so that
it is not the Department of Agriculture doing one thing and
Visit Florida doing another and the northwest Chamber is doing
another, to bring harmony to that on the marketing piece.
It is our goal to begin to bring those confidence numbers
back up, and part of the challenge and part of the market in
bringing those numbers back up is right here in Florida,
because half of Florida seafood is consumed in Florida. And so
a lot of the story that we have to tell is with our own
Floridians, and the studies have shown that the closer people
are to the water, the higher their confidence in Florida
seafood.
If you look at the polling, the market research, it is
communities like Gainesville, Orlando, places interior, that
have a lower confidence in Florida seafood than coastal
communities like Tampa or Jacksonville, Pensacola, Panama City,
Miami. Those all have higher numbers.
Restoring that confidence is a key part of our effort, but
also having the world class testing facilities so that we can
say with confidence that there is no residue, that it is safe.
It is important, I think, and this is something that Doug
Darling is here from the Governor's Office as his Deputy Chief
of Staff, and I know he has worked real hard on the Natural
Resource Development Assessment (NRDA) process. It is important
that at the end of this saga, at the end of this tragedy, that
whatever has been done, we can look back ten years from now, 15
years from now, and say, this is a permanent benefit to these
communities in northwest Florida. I do not think any of us want
to see a situation where we look back and say, well, we spent a
lot of money on billboards and magazine ads and we do not
really have anything to show for it. There are conversations
out there about real infrastructure investments that will
improve the quality of the fishery, improve our ability to
continue to bring in charter business, commercial business,
continue to do good things with our tourism business and our
seafood business. That more permanent view of how we use those
dollars most wisely is critically important to protect that $8
billion industry and expand it even more.
And so with that, Senator, thanks for letting a House guy
come to a Senate hearing, and thank you for your commitment to
restoring these communities to their pre-spill levels and,
frankly, even using this as an opportunity to make some
improvements. But from our standpoint, we have a great story to
tell. The science is with us. The harm is not there from a
scientific basis. The harm continues to be there, though, from
an economic basis, and that is what these communities and small
businesses have to live with every day, one year out.
[The prepared statement of Mr. Putnam follows:]
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[GRAPHIC] [TIFF OMITTED] 71270.004
[GRAPHIC] [TIFF OMITTED] 71270.005
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Senator Rubio. Well, thank you, Commissioner.
First of all, the Commissioner has a big state to serve and
so he does a lot of driving these days. He drove all the way to
Tallahassee last night and drove all the way over here this
morning. I know he has to drive back and continue the hard
work, but I do have a few questions, Commissioner, that I hope
you can help us with.
One is one you understand very well, and that is that as
Congress begins to consider what to do with the money that
comes from these fines--this is a big pot of money, and as you
can imagine and I know you know well, once there is a big pot
of money available in Washington, people get all kinds of
ideas. So that is the first thing we are going to have to
confront. Obviously, I think there will be consensus in this
room that that money from those fines should be specifically
targeted to those states and those regions that were most
directly impacted by this bill because that is why the fines
happened.
The question I have is, and you have already kind of
alluded to it a little bit, the second part of our conversation
is that once we decide, yes, this money should be designed
specifically for those regions that were impacted by the oil
spill, what kind of projects should we be prioritizing? What
kind of expenditures should we be funding? I think what you are
going to hear is all kinds of arguments, and not necessarily
from our delegation, or from anyone, for that matter, elected,
but extended to its most absurd conclusion, you could argue
anything is economic development if you really wanted to.
So, in essence, where do you think we can get the most bang
for our buck? I read this morning an editorial here locally
that talked about how we should focus on environmental clean-up
issues, that, in fact, the environment is directly linked to
the economy. I think that is a valid point. Others, I think,
will tell us today that there are some economic incentives and
economic development projects that could potentially help to
offset or diversify or balance out some of the losses. I think
you have talked about some of the things that maybe not enough
attention is being paid to, and it is just maybe public
perception, public awareness-type campaigns, where, in fact,
where there is not a problem but people think there is a
problem, that one of the things we should be doing is educating
people to the fact that there is nothing wrong with our
seafood, that there is no reason why you should not be coming
to our beaches.
What is your thought process in terms of what I should be
saying on where we should be prioritizing the type of
projects--the types of projects that we should be prioritizing?
Mr. Putnam. Well, I think that is the key question, and as
you alluded, it is important that the non-affected states, the
non-Gulf states, not have their finger in the cookie jar. We do
not want to see research and development opportunities diverted
to other universities because there is an oceanography
department in Indiana. I mean, that is the classic
Congressional ploy that we have all seen before, where a well-
placed person will use it as their earmark fund, and that
cannot be allowed to happen. Those funds need to come to the
impacted states and the impacted communities within those
states.
I think continued research is critical. Even before the
spill--and I suspect that Captain Zales is going to touch on
this--even before the spill, a lot of our fishermen were under
assault by Federal regulations based on flawed models that had
dramatically curtailed their ability to harvest. And so I think
that there is, frankly, an opportunity and a nexus between the
resource and the harm, the tragedy done by the spill, that
funds go into stock enhancement and development activities,
such as continued reef development.
There have been some ideas floated about locating buoys and
markers a certain number of miles offshore to build the bottom
fishing, to create the artificial reefs, to guarantee that it
takes pressure off some of the more near-shore areas and gives
charter boat captains a place to go. Reef restoration for your
shellfish, for scallops and oysters. A lot of those reef
development opportunities are out there.
Other stock enhancement things include hatcheries, which
other states have been doing for a long time and Florida has
been doing successfully on the fresh water side, but I think a
hatchery-type situation is a permanent gift that keeps on
giving. It continues to build that ecosystem and build that
fishery that draws people here for world class fishing, world
class beaches, world class seafood, and you have all of those
things interconnected and there is a nexus between that gain
and the harm that was done by the spill.
So those types of permanent things, I think, are important.
It is critical for the local communities, the local lawmakers
and commissioners to have some say in that. I think that this
is not a situation where Washington should dictate what all of
these projects are. I think Florida has done a good job
developing a consortium of all of our state universities to
avoid them fighting with one another over research dollars. I
think that that consortium concept has worked fairly well in
terms of channeling the research and development dollars that
have already come and creating a model for future dollars.
So those are some of my thoughts on how we proceed. But I
do think it is important that workforce development and
retraining efforts, the research and development pieces, and
the restoration and stock enhancement pieces of that puzzle be
a part of that final use of those dollars.
Senator Rubio. I think the only issue that I think is--
that, again, has a political dynamic to it, as well--is once
the money, God willing, reaches the State of Florida and that
money begins to be spent through state entities and counties,
et cetera, are some of the regional conflicts that begin to
emerge with regards to how that money should be spent and who
was impacted more and so forth and so on. Kind of the direction
I have been headed in my thought process, and I would be
interested to see your input on it because I am open-minded on
all these things, is that what we need to decide is on the type
of projects you have just outlined, a bunch of them, and let
the money chase the projects as opposed to the money simply
chasing the geography, and I think what you will find if you do
that, if the money goes after the projects rather than just the
geography, you will find that the geographical areas that were
more impacted are going to see themselves being treated fairly.
But that is an issue that has become recurrent and I would
not put the horse too far ahead of the cart here, because I can
assure you that this issue of how the money is going to be
spent is going to be--it has some ways to go in Washington, and
the direction it is headed in some regards has been
interesting, to say the least. It is a crash course for me in
the politics of how money is spent up there.
But just any thoughts about how we manage that once the
money gets here, between regions? When I mean regions, I think
there is general consensus, by the way, in the state, from
everyone I have talked to, that we are talking about the Gulf
region. We are talking about regions within the Gulf region. We
are not talking about people down in Key West thinking they
should be at the table the same way that people in the Gulf
region are with regards to oil spill impact. I am talking about
different counties and different potential projects that may be
competing with each other here in this region for the same
availability of funds.
Mr. Putnam. Well, you know, I think, clearly, this tragedy
did impact the entire state. There were lost bookings
throughout the state and a perception problem throughout the
state. But the bulk of the actual harm is in these eight
counties, and because of the leadership of the legislative
delegation, there is now some certainty that the bulk of the
funds from fines and settlements will come to northwest Florida
and to these eight counties.
The eight counties, and I think your point is well taken,
they need to be wise enough to understand that this is one of
those moments for regionalism. This is not the time for the
Panama City versus Destin versus Pensacola fight. I mean, this
is what do we do to market our region? What do we do to repair
our region? What do we do to build our resources that are the
reason why people come to our region? And I know that that is
easier said than done with a lot of impacted parties and a lot
of sub-units of government.
But this is one of those times when all of us need to step
up as a region and say, this is what we need to do for
northwest Florida and all of us will benefit if we have
something that channels our energy in the same direction
instead of splintering off, because if we splintered off, in
five or ten years from now, we are going to look back and say
the State of Florida got over $100 million and what do we have
to show for it? Do we have new pilings at the marina? Do we
have waitresses and waiters who were given $8,000 to $15,000
that was a shot in the arm in the economy for a short period of
time, but we have not done anything to fundamentally strengthen
our economy and build on the pillars that we have with seafood
and tourism and the military to really build that generational
difference, and that is why we have got to think regionally on
this one.
Senator Rubio. Commissioner, I appreciate your time. I know
how busy you are. As we told you at the outset, you are welcome
to stay the whole hearing. I know you have other commitments
and places you need to go, so we are just grateful you made the
drive to be a part of this day and we look forward to continue
to work with your office on these issues.
Mr. Putnam. Thank you for the great work you are doing for
the State of Florida in Washington, and more power to you.
[Laughter.]
Senator Rubio. Better me than you, right?
[Laughter.]
Thank you.
Mr. Putnam. I appreciate it.
[Applause.]
Senator Rubio. We are going to call our second panel now
and I will introduce them.
First is Mr. Collier Merrill. All of you know him well. He
is the Chairman of the Pensacola Chamber of Commerce. We have
Mr. Joe Gilchrist, who is the owner of the Flora-Bama Lounge,
Package, and Oyster Bar, and Captain Robert Zales is the
President of the National Association of Charterboat Operators.
They are going to take their seats up here and----
[Pause.]
Captain, why do we not start with you. Are you ready?
STATEMENT OF ROBERT F. ZALES II, PRESIDENT, NATIONAL
ASSOCIATION OF CHARTERBOAT OPERATORS AND PANAMA CITY BOATMEN
ASSOCIATION
Mr. Zales. That is all right with me. I am ready. Thank you
very much.
Senator Rubio. All right. Thank you for being a part of
this.
Mr. Zales. Thank you. Senator Rubio, my name is Robert F.
Zales II. I am appearing today on behalf of the National
Association of Charterboat Operators and the Panama City
Boatmen Association. NACO and PCBA thank you and the committee
for your kind invitation to present testimony on the critical
issue of the impact of the Deepwater Horizon oil spill and
status recovery efforts in Florida.
NACO is a nonprofit 501(c)(6) association representing
charterboat owners and operators across the United States, with
a substantial number in Florida. PCBA is a local association
representing the local charterboat fleet in Panama City. I also
wish to point out that I am a simple charterboat operator and
not accustomed to providing formal testimony such as this, so
please pardon my rambles in what I provide.
Charter, commercial, and saltwater recreational fishing is
extremely important to Florida and the Gulf of Mexico, both
economically and socially. In 2008, there were 90,000
Floridians directly employed in recreational fishing-related
businesses. Florida alone accounts for 40 percent of all marine
recreational fishing nationally, with $9.7 billion in total
sales from recreational fishing in 2008.
As a result of the blowout, charter fishing customers began
canceling their trips and family vacations. This began the end
of the fishing season, which had begun as a promising season
after the last two years of overly restrictive Federal
regulations and sour economies. The Gulf Coast Claims Facility
(GCCF) was established to provide those affected by the impacts
of the spill with their economic losses. To many of us, the
GCCF has been a massive failure, as our claims are either still
in review or ridiculous offers have been made. We see recent
reports from commercial and recreational fishermen of harvested
fish being seen with several health issues, and according to
the National Marine Fisheries Service (NMFS), possibly infected
with Vibrio vulnificus, very harmful to humans. More important,
more studies are now underway to determine the extent of this
issue and to attempt to discover the cause. This year, Mother
Nature has provided great weather. Our waters appear to be
clean and free from oil in areas we can see. Our fishing, with
the exception of the sick fish, has been as good as ever and
business has been good for most. Still, we live in fear of the
future.
Millions of gallons are still unaccounted for and located
somewhere. The fish we see harvested are from year classes
prior to the blowout. The 2010 year class for many of the prime
species is highly questionable. Contrary to a report produced
by Mr. Kenneth Feinberg released on January 31, 2011, stating
harvest levels will return to normal by the end of 2012,
several renown fishery biologists say it will be a minimum of
three and could be five years or longer before we have any real
knowledge of the impact of these species.
Our future needs: It is imperative that the fines that will
be assessed as per the Clean Water Act (CWA) for this disaster
in the Gulf are dedicated to the Gulf. You will hear from many
organizations, communities, states, and others, all with their
respective hands out for funding. Charterboat owners do not
have organizations with the infrastructure to seek this
funding, so we ask for your assistance to help us. We do not
seek individual economic help from the CWA fines, although we
should--should we find in three to five years that the fish
species we seek are in dire straits, we will certainly need
financial assistance to survive.
Our needs are resource oriented. We must have an ecosystem
that is capable of sustaining our fishery resources. We must
expand funding for cooperative independent research of our fish
which will utilize vessels from the charter fishing fleet. This
data is recommended by the NMFS and can be done through grants
to nonprofits in conjunction with universities and state
wildlife agencies.
Funding for improved and yearly stock assessments should be
provided. In the Gulf, most fish stock assessments are
conducted only every five to seven years. We need adequate
funding to ensure our natural and artificial reefs are clean
and intact. Enhancing our artificial reef system is a priority.
Research funding to further study fish health must also be
a priority. Our prime interest is to ensure that the fish we
harvest are safe to handle and consume. We must know with
reasonable certainty that any fish that appears to be unhealthy
is properly handled and tested so that consumers can have
confidence that are catching and eating quality Gulf seafood.
Many of the fish health issues have never been observed before
the blowout, so it is a must that the cause of any health
issues be known as soon as possible.
Funding from the CWA should also be used to advertise that
the charter fishing fleet is alive, well, and ready to serve
the public. I suggest that a panel of a variety of stakeholders
be created who will be responsible to distribute CWA funds for
the various needs of the gulf. Politics and the buddy system
should be removed from the process. Once the funds are received
and proposals for the various research and renewal projects are
provided, the panel should be charged to make recommendations
that will ensure the most important and effective projects are
funded and activated. There must be stipulations that the
charter fleet will be actively involved in fishery independent
research.
In closing, I wish to state that the Gulf Charter Fleet was
once a viable, productive, and sustainable group of small
business owners. We provide a necessary service to individuals
who want to fish and enjoy our natural resources. Over the last
six years, the fleet has struggled and yet continues to
survive. The impact from the Deepwater Horizon oil spill was
almost the last nail in the coffin. It is imperative that the
CWA fines be dedicated to the Gulf, that they be properly
utilized to ensure the health and safety of our Gulf, and
ensure the sustainability of the charterboat fleet.
The charterboat fleet owners, operators, and crews are the
first responders to any issue on the water. We care for our
Gulf and all things within and around.
Senator, this concludes my testimony. Again, I appreciate
the invitation and opportunity to provide you and the committee
with this information and I will be pleased to answer any
questions.
[The prepared statement of Mr. Zales follows:]
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Senator Rubio. Thank you, Captain.
We will move next to Mr. Gilchrist. Thank you for being
here today and being a part of this field hearing.
STATEMENT OF JOE GILCHRIST, OWNER, FLORA-BAMA LOUNGE, PACKAGE,
AND OYSTER BAR
Mr. Gilchrist. Thank you, Senator Rubio. I wanted to make a
couple of remarks before I got into my prepared statement.
One was I agree with Mr. Putnam that long-term investment
in our communities is critical. At the same time, we have
short-term needs and promotion for the communities to rebuild
the economic and tourism structure and others. Obviously, what
we need long-term is a balance between environmental
investments, including artificial reefs, and shorter-term
promotions of the area.
And I will also say that I went snapper fishing last week
and caught an excellent red snapper to eat. Obviously, I am not
starving.
One of the concerns of our coastal communities--and these
are as relayed to me by my employees and customers and people
that I meet from all over the world--relating to the disastrous
oil spill was, frankly, that poor stewardship by the United
States Government got us here. With all the money that has been
cycled through Federal, State, and local agencies, to have no
one be prepared for something to go wrong is not logical. In
fact, the planning and protection of our society has been a
disappointment to a lot of Americans.
Sadly, also, news media in America. I saw the same picture
on TV of a pelican in Louisiana for 90 straight days. That
pelican survived, but it did not seem to be proper stewardship
of the nation's best interests. I have no problem with accuracy
in news reporting, but it seemed like the only goal of many
people in the news media was to get more people to watch.
BP and the other companies have all created a resolution
process that has been very favorable to some people, and they
are happy. Some people have abused it. But, unfortunately,
there is a residual number of people and businesses that have
not had resolution to this and I do not think that is
successful for our society. I would like to encourage some
outside-the-box thinking to help get some resolution, perhaps
some ombudsman intermediary between Mr. Feinberg's team and the
people that are not able to reach resolution, because it seems
an awful lot of arbitrary decisions are being made by people
that nobody can find, nobody can document, and nobody can hold
accountable.
My business is fairly representative of the coastal
communities, I believe, along the coast from Louisiana through
Florida. We deal with tourists from all over the world and in
our regions, and I think we were looking at a 10- to 15-percent
gross increase in each of 2010 and 2011. We went from being
about 15 percent ahead of prior year's business in April to
where we were 15 percent below in 2010. The net result is that
at this point in time, our businesses and the ones that I
oversee, look at, are only up six to eight percent over 2009,
and since most net income comes from the last 20 or 30 percent
of your gross income, it severely impacted our ability to grow,
pay for ourselves, and, of course, pay for the 50 percent of
our gross that goes to Federal, State, and local governments.
And our real estate, construction, and recreational
communities were and are still struggling with after-effects of
this. I think some more longer-term, medium-range investments
in the coastal communities will probably be helpful. Of course,
this is all in the middle of our current economic challenges
that everyone has across the country.
Finally, we should not forget that BP promised to make our
communities whole, and I think this is a difficult project to
do, but I believe that it requires more time to do so and so I
would encourage us to look at two- to five-year time frames of
periodic investments in the communities.
Finally, I just end up with some questions. As a new storm
season approaches, nobody can predict what will happen and what
the consequences will be of what is in the Gulf. I personally
think it was a mistake not to allow oil to rise to the top, be
skimmed by skimmers that are part of the international oil
community. We did not avail ourselves very effectively of that.
So the longer-term effects of correcting it and trying to keep
oil from rising to the top may be, as many people discern, a
longer--a bigger problem. The fact that there is no solution
that would allow a wellhead to be covered and oil to be
recovered at the top to me makes no sense.
As clear as it is that BP and its partners did not act
responsibility, the Government of the United States has also
failed in some of its responsibilities. So I guess the final
question is, at what point in this process should the average
citizen or business feel like we are moving toward a just
conclusion?
Thank you for your time.
[The prepared statement of Mr. Gilchrist follows:]
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Senator Rubio. Thank you.
Mr. Merrill.
STATEMENT OF COLLIER MERRILL, CHAIRMAN, PENSACOLA CHAMBER OF
COMMERCE
Mr. Merrill. Thank you, Senator Rubio, and I, too, want to
echo I appreciate you being here. I know it is unusual to have
a Senate hearing outside of Washington, but we appreciate you
coming down and doing that and we certainly appreciate
Commissioner Putnam being here.
I am going to jump right in with what Mr. Gilchrist ended
with, on the efforts that happened after the spill. A year ago
today, we were still having two million gallons of oil pump
into our gulf every day and it was disheartening not to know
where that end was. Every day, two million gallons was going
into there, and you touched on it, Senator, at the beginning,
of how many barrels were going, total barrels, five million
barrels. But it came down to two million gallons every day, and
it went on for 85 days.
And there has got to be a way to stop that, whether we have
a--put a billion or two billion into some kind of recovery
vessel that is parked somewhere and takes even a week to get
there. It is better than sitting every day, day after day, and
you see those--when BP finally released the videos a month into
it of the oil spewing out of the bottom of the gulf. And that
was such a damper to people, as I had workers quit and leave,
not knowing when it is going to end, and we have to go home at
night and just watch it continue to spew, and with no recovery
planned. They are going to drill this well down and release
pressure or do whatever.
So I want to echo what Mr. Gilchrist said. If nothing else
comes out of this going into the record of trying to enforce,
there is a lot of oil wells out there across the world and
nation, to put some kind of fund, that they have some kind of
recovery vessel. I have paid a lot of money over the years,
taxes, for fire trucks. I have never used one. Thank God, I
have not. But they are out there and they are ready to go
should something happen, and we need to have some kind of
recovery vessel, I would believe, for offshore, as Mr.
Gilchrist talked about, that can come out there, and I do not
know what they do--I am certainly not a scientist--that can do
something. For that kind of money, somebody could build a ship
that could go down and cover that until the oil was--relief oil
well was drilled and release the pressure or whatever, but
somehow to funnel that oil back to the surface and be able to
pick it up, build the ship, whatever is out there.
Like I said, I am not a scientist and we will leave that to
people that are, but hopefully, so that the next time something
like this happens, and I think it is just going to have to
happen--at some point, it will--there is something there
besides we are trying a test well that hopefully will relieve
the pressure, as we just sat over here in the Panhandle and day
by day watched two million gallons a day, every day, spill into
there.
Second, and everybody has touched upon it on this panel and
the earlier panel, on the fine money, and I, too, want to thank
Senator Gates and our delegation for leading the effort,
getting this Oil Recovery Act passed. We are in a tough time
here in the State of Florida, and to get $10 million a year was
no small feat and I appreciate it, and it is $10 million a year
this year, next year, and the year after. So we have got $30
million that we are going to help diversify our economy with.
Then I heard you, Senator Rubio, ask Commissioner Putnam
about, what are we going to do with this money? Where is it
going to go? You know, we have already got a plan in place that
was passed with this bill, as you said, on the 75 percent of
the fine money will also go to the eight counties affected by
oil. And we ask you, Senator, to try to make that happen at the
Fed level, as well, as money comes in. That is where it needs
to go.
The plan as it stands now, and it is still in the works, of
exactly what this $10 million will go to, and hopefully the
fine money will follow suit, is kind of what was said earlier,
you know, the project. The money will follow the projects. And
the money right now is going to be administered through the
Governor's office, come to the University of West Florida
through the Haas Center, and Dr. Rick Harper and his staff
there will be in charge of vetting these projects out as the
Governor and his department--Grace Wupu is running that, will
be here in a couple weeks and continue to work on how exactly
that system will work.
But there will be procedures in place, and as Senator Gates
very eloquently said, if there is a lot of infighting here in
these eight counties, he will march down to the Senate floor
and take the money back, and he will. So hopefully that process
will be in place. It will knock out any infighting, and it will
be what is best for the eight counties and not individual
counties or cities or anything else. And we are excited about
that.
Senator, in the previous Administration, some of the money
that came in early, last year, was sent to other parts of the
state. Some marketing money came in. There was an ad that came
out somewhere in South Florida, it had somebody covered in
lotion and it said, ``The only oil on our beach is suntan
oil,'' and it was just a direct market against Pensacola, and
that happens. Cities market against each other, but there is a
good chance that that ad was paid for by BP money, because that
money that was supposed to come up to us was sent to other
parts of the state and it is just wrong. It was wrong. Twenty-
five million came in early and it was not handled correctly up
to the eight counties that actually were affected by oil. And I
heard you say loud and clear, I heard Commissioner Putnam, and
I appreciate your efforts on that, that the money that comes in
is spent to the places that need that.
And the last thing I want to touch on briefly is what has
also been said here is the accountability of BP needs some
teeth behind it somewhere, because we continue to hear, and I
am not speaking on behalf of the Chamber or anybody else, but
just from what I hear out there is that they continue to tell
the same story, well, you are going to hear something in 60
days. You are going to hear something in 90 days. And those
things come and go and, well, we did not hear anything. Maybe
later.
The last time--I speak from personal experience--that we
were going to hear something in February, and then in February,
they said, okay, you need to redo all your claims, and we had
several different organizations that had claims in. Redo your
claims and then in 90 days, this new system we have now--90
days from now. I know you are not happy because you waited
since last September, but now redo them all and in 90 days, we
are going to have the fix. That is 140 days ago, and nothing.
If you could at least have somebody to talk to and say,
well, this is where you are and we need these questions
answered, but it is under review, it is under review. Can you
give me somebody to talk to? There is nobody ever to talk to.
And I heard Mr. Feinberg say, ``Well, we were just
overwhelmed by so many claims,'' and we started hearing that a
year ago, how many claims they are overwhelmed by. Well, hire
more people. You know, we told him that last year. We told him
that in December. We told him at the February meeting when he
said he is still overwhelmed by the number of claims that have
come in.
After Katrina, 1,600,000 people filed claims with their
insurance companies. They hired 15,000 adjustors and they came
out and knocked out 98 percent of those claims in a year. You
know, that is what you have got to do, and they come in and
they--nobody wants a hurricane, and everybody is not exactly
happy with the insurance companies, but they come up with a
settlement, they do it, and they get on with their lives. As
Mr. Gilchrist said, this just continues to linger and linger
and linger.
I want to end with, once again, we appreciate you being
here and I am here for questions. Thank you.
[The prepared statement of Mr. Merrill follows:]
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Senator Rubio. Thank you.
I think before we have further questions, and it is kind of
not in the script, but I would like the two members that are
here from the legislative delegation to provide their brief
input. I do not know how we can do that. We have a microphone
here if you guys want to share it, and maybe get an extra chair
because we talked so much about the Oil Spill Recovery Act a
little bit here early on, so I am interested in how that played
out in terms of the view on the $10 million the state is
putting forward.
One of the things, A, I think if there are some projects
that are already in mind and the $10 million acts as seed money
to that, that we can make sure that there are not redundancies.
On the other hand--I guess what I am trying to say is I want to
make sure that whatever we do at the Federal level complements
the intent of the state legislation, not contradicts it or in
some ways duplicates it in an unnecessary way. So thank you for
being a part of this, both of you. You both entered the same
year, did you not, so I do not even know who is senior. Who
wants to go first?
Mr. Ingram. He is better looking. I will let him go first.
[Laughter.]
STATEMENT OF HON. DOUGLAS V. BROXSON, A REPRESENTATIVE IN THE
FLORIDA HOUSE OF REPRESENTATIVES
Mr. Broxson. Senator, thank you very much for being here.
Our delegation has taken a fairly active position in dealing
with the Gulf Coast Claims Facility, and first of all, I want
to applaud BP for stepping up and offering the gulf coast $20
billion. I think they were on a guidepath to pay families and
businesses for their loss. However, it is our strong opinion
when they retained Mr. Ken Feinberg to administer the Gulf
Coast Claims Facility, he created a network of rules and
regulations that virtually shut down the process.
To date, BP has paid about $4 billion of the $16 billion.
Last year, they wrote off $38 billion in losses, considering
the anticipated payout they have not made. And what we would
like to see is that the remaining $16 billion go to a new
claims network of the states and counties represented by the
oil spill to filter this money back to the citizens and
businesses of the area. And I would pray that you do not allow
this money to go back into the coffers of BP, that this money
that they promised us, that should have been paid out, was not
paid out, and we expect them to fulfill their obligation to the
gulf coast.
STATEMENT OF HON. CLAY INGRAM, A REPRESENTATIVE IN THE FLORIDA
HOUSE OF REPRESENTATIVES
Mr. Ingram. Thank you, Representative.
And then, Senator, thank you so much for coming here and
bringing the spotlight of Washington here on this problem. It
means a whole lot to me and I know the rest of the delegation.
There is not a whole lot more I can add than what you have
heard directly from the folks that were affected the most, but
a few things I would like to echo.
First of all, from the delegation's standpoint and State
government's standpoint, we did, I think, what we could do with
the Oil Spill Recovery Act. I think it was a step in the right
direction and the right thing to do. It had support from home,
and then the Governor's office helped. Senator Gates
spearheaded the effort, and I think it was great that we could
do that from the standpoint of State government.
The other two things I would like to echo, and this
piggybacks on what Joe Gilchrist said, is I hope that as you
take this back to Washington, the Federal Government looks at
the nuts and bolts of what happened and can be prepared from
the emergency standpoint. I know Collier alluded to that, too,
comparing this to lessons we learned from other disasters,
hurricanes and things like that. After some of the hurricanes,
President Bush, I know, waived the Davis-Bacon requirements to
allow things to be rebuilt faster. Maybe at the Federal level
the next time--knock on wood, we hope this never happens
again--but being able to waive portions of the Jones Act to
allow foreign vessels to come and aid in cleanup and making
things go faster. If we can look at those nuts and bolts things
we can do to make cleanup happen a lot faster and prevent oil
from getting to the shores, I think that would be tremendous.
And the other aspect, and Representative Broxson alluded to
this, is that the folks who were affected the most, you know,
the fishing boat owners, business owners like these guys
sitting here at the table, if they are not paid by the Federal
Administrator, for some of these folks, it is too late if they
do not have the money in their hand. They have already been
foreclosed on. They cannot eat. Their kids are going without.
So from the standpoint of being a United States Senator and
being able to maybe put pressure on the Administrator to make
those payouts now, because I think there becomes a point where
it is just too late. If you have been foreclosed on or you
cannot feed your family, the promise of getting a payout down
the road does not matter. So for some of these folks, it is too
late, but whatever we can do from this point forward to put
that pressure on the Federal Administrator, I think is very
important.
So thank you.
Senator Rubio. Well, let us--here are some questions that I
have, and I want to break it up into two parts. I mean, let us
close the loop on the claims process because it is still a very
sore subject for obvious reasons.
My perception, based on what I have heard in the past
before coming here today, is that the problem is the process
itself. It takes too long and no one is given a reason--there
is no clear understanding as to why it is taking long. Collier,
you talked about recently where people had submitted claims,
had filled out the paperwork, and then were told, we have
created a new form and a new process. Fill out this form and
that will be done. It will be faster and move quicker than the
other one did. They have done that. They are still waiting.
Is it--and I do not know. In your mind, what is the biggest
problem? Is it just a time frame, the length of time that it is
taking to pay the claims? Is it a combination of that and some
of the people that have been denied, some of the rationales
behind the denials do not make sense? What would you identify
as the two or three real sore points with regard to the
existing claims process?
Mr. Ingram. The thing we hear a lot is that there is fraud
in the system, and I am sure there is, that people try to
make----
Senator Rubio. I am sorry, that you hear a lot----
Mr. Ingram. From BP.
Senator Rubio. Oh, from BP. I beg your pardon.
Mr. Ingram. Collier may be better able to answer that, or--
--
Unidentified Speaker. About the fraud allegations, you
mean?
Unidentified Speaker. Payouts from [indiscernible], I
guess. I mean, I guess what they are on the lookout for are the
fraudulent claims, and that is a legitimate concern----
Senator Rubio. Right.
Unidentified speaker [continuing]. No doubt about it, but
to allow that to hold up all payouts, or most legitimate
payouts, I think is probably something that ought to be looked
at.
Mr. Broxson. I think Collier mentioned that we are equipped
to handle major storms and companies bring in a massive amount
of adjustors. The thing that you have there is you have a
contract. They know what they are supposed to do. The reality
is, the problem with the Gulf Coast Claims Facility is that
there is no contract. One person goes in with one set of
circumstances and gets paid. Another person goes in with the
same circumstances and does not get paid.
If there was a ground of understanding of what their
expectations were, this would help. I have spoken to Mr.
Feinberg two or three times and encouraged him to do that, also
to have someone from the Department of Insurance here in
Florida to shadow his procedure to see that people are being
paid properly and fairly. In some cases, they were paid
unfairly. The concept of paying out $25,000 to a business, if
that business received $10 in compensation that they justified,
they are entitled to $25,000. But a business that has a $1
million loss of income is still entitled to $25,000. That makes
absolutely no sense.
But, frankly, I do not think there is any salvation for Mr.
Feinberg and the GCCF. I believe we have to create a new
entity, and the $14 billion that is left should be reinvested
back into the five States that were impacted. And Florida,
which we are not an oil producing State, we need our
proportionate share that 19 million people bring to the table.
Senator Rubio. In terms of the--one of the things I am
interested in about the claims payments, those are not tax-
exempt, correct? If a claimant receives payment, they pay taxes
on that money, is that correct?
Mr. Broxson. That is correct, both those individuals and
businesses.
Senator Rubio. Right. So I would imagine I know the answer
to this. This is what they call a leading question. Would it be
helpful if those claimants were tax exempt?
Mr. Zales. If I could, and in the last Congress, we tried
to get a bill through Congress to make the payments from not
only that, but the emergency payments that started right after
the spill through the claims and final payments, to have them
tax exempt, and we were unsuccessful in doing that because of
all the issues that you are well aware of.
Senator Rubio. The revenue adjusted----
Mr. Zales. Right, and--but it would be a tremendous help if
something like that could come across and then, you know, you
can make it retroactive to last year and the payments that
people have made on their taxes, which in many cases the money
that they received which got them through the year, they had to
pay back to the Federal Government, and so they are right back
at square one. So that would be a tremendous help, if something
like that could happen.
Senator Rubio. I think that--let us move beyond that. It is
pretty clear, and I think your statement, you all--there are
some people that have been helped by the claims process. They
have gotten their money, obviously not in a tax-exempt way, and
they have moved on. There are many others that have had
denials. They have gone in and basically there are two claims
that are virtually identical or very similar. One gets paid.
One does not. There is no rational explanation for it. Some
people are waiting forever with no clear explanation as to why
it has taken so long to pay them. It sounds like it is a
combination of no clear, at least in the minds of those here,
from the testimony here today, no clear parameters as to how
they are making these decisions. It also sounds like
potentially it is a manpower issue. Have they hired enough
processors on the claims?
Mr. Merrill. I do not know how many they have hired.
Representative Broxson might know. He tried to pay a visit at
their office one time and did not find a lot of people working,
and I will defer to him on how many people they have hired. But
what we hear is, ``We are overwhelmed by the number of
claims,'' and I get that. So hire more people. You know, we
heard that back in August a year ago, back in July a year ago,
and then in August, September, and we just continue on. Then
hire more people.
And then, as Representative Broxson and Representative
Ingram said, they would come up with these different formulas.
All right. We are going to start over. We are going to start
over. So we bought into that a couple of times. Now, here we
are. We were going to start over in February and we are going
to have 90 days. ``We hate telling you that again because we
know you have been waiting,'' is what their response was. Maybe
60, but by 90, you are good. Well, that was, for me personally,
it was 142 days ago that they received my claim, verified they
received my claim, on several different businesses, and we just
cannot tell you what is going on. We do not know.
So I will defer to Representative Broxson on the number of
employees they have.
Mr. Broxson. Well, originally, they had 3,500, and they
had--they went--and I do not want to be a complainer, because
it is really over, but they promised those jobs would be on the
Gulf coast. They were in Ohio, Virginia, and Washington, the
State of Washington.
Senator Rubio, I do want to tell you this. I admire you for
being here. I think it is a great step. However, no matter what
you do or what any other Senator or Governor or Representative
has done, the process and Mr. Feinberg have total immunity from
our criticism. He will tell you, and he probably has told you,
that his boss is the President of the United States and that
when he complains, he will listen. That is a pretty high hurdle
to get over when you are trying to deal with someone to get
them to adjust to a procedure. That is why I believe that we
have to move on beyond that process and establish a new one to
administer the balance of that money.
One of the Justice Department attorneys of the Southeast
did say that he did not think it was fair for that money to go
back into the coffers of BP, and I would strongly pray that you
do not allow that to happen. I mean, they, in fact, have taken
the tax advantage for spending that money that they did not
spend. So whatever influence you can levy from the Congress
would be a great help to us to----
Senator Rubio. Just to be clear, your concern is that BP
after a while will say, ``We reviewed all the claims that are
worthy and we still have money. It did not add up to the total
amount of money we had set aside, and so we are going to
reclaim this money back into our coffers.''
Mr. Broxson. Exactly.
Senator Rubio. Okay. Well, we are going to--all of this
testimony here is on the record and we will, as we move
forward, we are going to talk to some of the other Senators
involved on these issues and figure out how we can try to
influence Mr. Feinberg's boss, and we have some ideas and we
will--yes, I am sorry, Captain.
Mr. Zales. If I could add, because I am one of the people,
I have had a final claim in since February, and as far as I can
see on the Internet, it is still under review. But there are a
lot of people in this same situation, and I was a member of
Governor Crist's Economic Recovery Task Force and Mr. Feinberg
came to us several times. I am glad to hear finally he has a
boss, because he told us at every meeting he did not have one.
He was completely independent, like he was king, which is
essentially how he plays.
So, clearly, some kind of oversight needs to be put there
because there is absolutely no transparency in the process at
all. You cannot find anything out about your claim from
anybody. It is--I do not--it is worse than pulling hen's teeth.
So that is the process that everybody is in, and there is no
rhyme or reason to it. It is like somebody else said here. One
person can go in--you can have two identical sets of records.
One person can go in, they come out and they are taken care of.
The other person will go in and they do not get anything at
all. There is no standard to the process.
Senator Rubio. Well, again, and I do not want to put
something--I am not committing to something, because I have not
thought about it, we have not thought about all the
implications, I have not talked to anybody about this yet, but
one of the things we can consider is whether, if a bill moves
forward, as I anticipate it will, with regards to the fines
under the Clean Water Act, whether this claims process will be
pulled into that legislation and somehow some mechanism be made
a part of that legislation that helps close out the rest of
these cases that are out there and prevents exactly what it is
you are concerned about, which is the money being reabsorbed by
the company.
And again, that is not something I have talked to anybody
about. It is just a spur of the moment thought based on the
testimony I have heard here today and how perhaps this bill
could act as a vehicle to try to address these things and
define, moving forward, how we are going to close out this
process a year and whatever after it has already happened.
So let us move on to the Clean Water Act, and I will
explain to you, frankly, what some of my concerns are. There
are a couple of hurdles to be overcome in a bill in Washington
to take this fine money and assign it to the States.
The first is kind of a philosophical/ideological argument
by some that this money should not be assigned but rather
should be absorbed into the General Treasury of the United
States. I am not sure that is a majority position, but I think
there are some that will have that position and there will be a
debate about that. In what form and in what set-up, I am not
sure, but there will be a debate among some that will argue
that it is not right for this money to be assigned to a special
fund, but rather that the money should go the way the money
would normally go, and that is the General Treasury of the
United States.
So I think it is critically important that the Gulf states
are united in presenting a united front on why it is important
this money be assigned, and the argument is this is not general
revenue. This is not the money that is normally collected. This
is money that is being collected because of a specific
incident. It is a fine related to a specific incident that
occurred, and, therefore, the funds from that specific incident
should go toward the damage caused by that specific incident
and to prevent such incidents from happening in the future.
That would be our argument. Others will argue differently. So
we need to be careful about that.
The second danger is that this huge pot of money is going
to be sitting out there, and I assure you that there are those
who already have designs on it, including those who are far
removed from the spill. There are Senators and Congressmen from
all over the country that see this as an opportunity to fund
something they have had their eye on for a very long time, a
condition of their vote, unfortunately--and I say this--let me
rephrase that. And a condition of their vote may be that
somehow this money, that a portion of that money be made
available to them, to their state, to their project, even
though it is far from home.
And the reason why I put that at the table is because
looking three steps ahead, you can very quickly find yourself
in a situation where our choice may be a bill that has most of
its money to the Gulf region but has other areas of the country
picking at it, getting their piece of the money, because
otherwise they are not going to let the bill move forward, or
no bill at all. And I lay that on the table because there is no
way we are going to avoid that debate. There is just too much
money sitting out there for it not to be attractive, like a
shiny object.
So I want to lay that out there because that conversation,
at some point, could happen, where we are going to have--we may
have to make a decision about whether we do not vote for this
thing at all because we think it is wrong that money that comes
from a BP oil spill in the Gulf is going to fund some project
on a lake, you know, 1,500 miles away that had nothing to do
with the oil spill, or worse, going to fund some new airport
somewhere else in the country.
I know this may sound nonsensical to you. I have been in
Washington six months. I am learning. These things happen,
unfortunately. So I want to lay that on the table because I do
think that you may hear about that, that it may happen. And I
am not committing one way or the other, other than to tell you
that it is disturbing to think that we may have to vote for a
bill that would have that kind of stuff in it when it goes
against all of our principles and where we think that 100
percent of this money is the result of the BP oil spill, 100
percent of the money should go toward that.
Now, that being said, I want to explore a little bit more
how--what kind of projects we should be funding, because I
think that is going to be an important part of how this bill
gets put together, and what I heard today, moving forward, are
three different directions for the money to be spent. And I
think I heard arguments from most of the testimony here today,
and we are going to open it up to the public, but in favor of a
combination of all three.
The first is ecological concerns. There is a bunch of oil
that is still missing. Where is it? What does it mean moving
forward? How can we restore some of these reefs, particularly
the artificial reefs, so that they are productive and attract
people here? So I think that is the first part of it.
I think there is a consensus that there be some ecological
spending. Again, there was an editorial this morning, I
believe, in the Pensacola News Journal that said most, if not
all, of the money should be spent on ecological programs, that
enough has been spent on the economics. I think that is a
debate that will be had, and depending on where you fall on
these environmental issues, there are some that are going to
argue for more money for preservation-type and conservation-
type projects. But I think there is a consensus that at least
some significant portion should be on ecological concerns and
things of that nature.
The other is research, research about things like how to be
prepared and prevent future spills, but also research on things
like fisheries. One of the things we kept hearing about from
the fishermen is how poor the data is, and yet some devastating
decisions on catch limits are made based on this poor data. And
I know Senator Nelson, for example, has worked very hard on
securing funding as part of this for better data, so that if
someone is going to come in and say, you cannot catch any more
after X-date, it is not just because some guy decides some
computer model told him this, but, in fact, it is based on some
real research that is based on some real facts and that you are
not destroying people's livelihoods based on an educated guess,
but rather on data that actually has some substance.
And then the last part that we have heard is some economic
investments, obviously things like promotion, promotional-type
things, because so much of the problem that we are facing in
the region is directly related to perception, whether it is
perception about the safety of the seafood or maybe ongoing
perception about the quality of the beach and the water. There
is a perception issue out there that needs to be overcome.
The sad truth is that last year, a lot of people canceled
their vacations, a fishing trip or a stay on the beach, and
went somewhere else, and maybe they really liked it and they
went back again this year. In essence, they have started
establishing a new tradition. If I am wrong, you are going to
correct me, but just knowing human behavior, you go to the
same--you make a family tradition of going to northwest Florida
year after year for the summer, but one year, you cannot go.
You have to go somewhere else and you end up liking it and all
of a sudden you have got a new family tradition going, and so
we have got to reverse that. And one of the ways you reverse
that is through promotion of the region.
And then, obviously, the possibility of some
diversification. Maybe this is an opportunity to provide some
stability moving forward by finding some new economic
activities and from this bad thing something good can come, in
essence, the birth of a new industry.
That is my sense of kind of the testimony I have gotten
today. I am not sure I touched all the bases or got them all
right, but it sounds to me like the two things that we are
focused on are, one, the BP claims process that is ongoing and
how we can get that closed out, which is basically what
everybody wants. Let us get this closed out. And number two is
moving forward, what to do with this money if and when it
comes, gearing it toward these kinds of projects, ecological
restoration, research on prevention, and other things like the
fish catch limits, et cetera, and, of course, investments in
our future.
Is there anything the panel would like to add to that in
terms of how I have summarized it? I may have missed something
or maybe misstated it.
Mr. Zales. You are very perceptive. I think you hit the
nail on the head with all of it. In the fishery research part
of it, I would encourage a substantial amount to go toward fish
research for the Gulf. Dr. Steve Murawski used to be with the
National Marine Fisheries Service. In a meeting with him about
two months ago about some research they were doing, he made the
statement that if red snapper was in the Bearing Sea, we would
not have a problem with red snapper because of all the money
prior to the time you got to the Senate that used to come to
the State of Alaska and the northwest Pacific. They do yearly
stock assessments on their fish. They have an abundance of data
that is there. And so their fish are--the data on them is
relatively good and they do not have the problems that we have
here.
And so it is like I said in my statement. Generally, stock
assessments here happen every five to seven years in the Gulf.
Forty percent of the recreational fishery in the United States
is in the State of Florida. That is substantial. And so we do
not get near the funding out of Washington for that type of
activity that we deserve because of the effort that is put
here. And so anything that can be done along that line would be
very well liked.
Mr. Gilchrist. Senator, the only thing I would say is that
it appears clear to me that there have been plenty of tools
available to government entities to work with and solve these
problems and plan ahead. The ineptitude of governmental
entities cannot be understated, in my opinion.
[Laughter.]
Senator Rubio. You will find no disagreement.
Do you want to add something, Collier?
Mr. Merrill. Only, Senator, on the first two, ecological
and research, that is certainly a component. You did mention
research on how to prevent that. Hopefully, we will not use our
fine money doing that. I mean, the people that are drilling
should be working on that themselves, and they should----
Senator Rubio. I apologize. What I meant by prevention is
preventing the bad response that existed. I heard--I think you
commented on, and I thought it was a good analogy, you have
been paying for fire trucks all these years, but what I meant
to state was if we never want to see this kind of late response
again, in essence, if this were to ever happen, God forbid, in
the future, we want to make sure that we have in place the
technologies and the mechanisms to prevent the spill from
getting out of control the way this one did, some way to
address it.
Mr. Merrill. Yes, sir, and I think the oil companies need
to pitch in to some fund. As I was referring to, I pay taxes to
buy fire trucks, and they are ready there if we need them. The
oil companies need to pitch in, I do not know how, whatever, to
come up with some kind of emergency vessel, whatever it is. A
couple billion dollars, you can come up with something to
surround this oil spill until they--then they can spend 82 days
drilling a well like they did this last time, but at least two
million gallons are not coming up on our beaches at that point.
So I appreciate that clarification.
And ecological, I will not touch on, but the economic
investments, yes, we do need to diversify and that is what we
are talking about, what we are going to do with the $10 million
a year for three years, and as the fine money comes up here, as
well, we can put it through that same pattern of qualifications
and preventing and fighting and trust you to get as much of it
down here as you can.
Mr. Broxson. Senator, I think your big battle is time. The
longer it goes before you have a resolution in Washington, your
battle is going to be dealing with the memory of the oil spill.
If something does not happen this year, your battle will be
greater next year because this money will filter away. BP spent
over $200 million telling the nation that we had recovered and
we were back to normal, and this would be the battle you will
have with your colleagues, to convince them that we deserve to
have money come back here when the economy has completely, in
the minds of the public, been put back the way it was prior to
the oil spill.
Senator Rubio. Well, just as an update on that, let me
state that I am pleased by the unity and progress that has been
made by numerous members that have been working on this.
Senator Landrieu has taken the lead, along with Senator Vitter,
Senator Shelby, Senator Nelson, myself. All the gulf State
Senators, for the most part, have been working well together.
Now it becomes the bigger battle, and that is going to the rest
of our colleagues and encouraging them to be a part of this
process. In an ideal world, this bill would be written the way
the Gulf state Senators want it and spent that way. My sense is
that it will probably develop differently. Nothing in
Washington moves very quickly, certainly not in the Senate,
which takes great pride in taking a long time to do everything.
But I am just learning it as I go.
I think there is real unity behind the Senators in the
region. I think outside of it, it has yet to be seen how it all
plays out, including the positions I have outlined. There are
some who are going to argue that this money should go to the
General Treasury of the United States, that it should not be
assigned and directed in this way, and others that argue
differently, and then yet others that see this as a big pot of
money that maybe they can dip their beak a little bit in and
get some for themselves and their States. So we will figure out
how this all plays out. It should be interesting.
I wanted to--unless there were any other comments from the
panel, I wanted to--I know we have a--what are we going to do
with the roving microphone? So we have about 40 minutes, and
what I would like to do is take any public input that may be
out there. I know we have a lot of folks that are attending and
have some thoughts. I would encourage you, if you have a
question, there is a question. If you have a statement, make
your statement. If you have both, that is fine, as well. Be
considerate of the other folks who are waiting who may have
something that they want to add, as well, in the next 40
minutes. And, obviously, thank you for being a part of this.
Who wants to go first?
Mr. Dixon. My name is John Dixon [phonetic], Port St. Joe,
Florida. I would like to thank Senator Rubio and everyone for
organizing this. It does seem like this bill has sort of fallen
out of the national limelight and I appreciate your helping to
bring the light back on it.
The way I read this and the way I see it, Thursday, last
week, July 7, BP basically declared war, in a sense, on Florida
tourism. The comments that they provided to the Gulf Coast
Claims Facility (GCCF) attempts to use the Oil Pollution Act
(OPA) '90 as that geography and causation is reason not to pay
those claims. The original saying BP had was ``BP will pay all
legitimate claims.'' They have now changed that as of last
Thursday and it says, ``BP remains committed to paying all
legitimate claims under OPA.''
So we have a corporation--the Alaska pipeline, the Texas
City oil refinery explosions, the Gulf of Mexico--had a
corporate culture that seemed to put profits above human life,
safety, and the environment, and we thought maybe what happened
in the Gulf was a moment for them to turn their corporate
culture around. They met with the President and put money into
the fund and it seemed like, okay, they understand now. They
get it. People, safety, and environment should be before
profits.
Last Thursday, it looks like that progress was lost and
they are now back to profits before people, safety, and the
environment. OPA '90 is Federal legislation that in no way
should be used to not allow Florida tourist business to recover
from the claims. So I would hope, I guess--my prayer is that,
Senator Rubio, you could go back and perhaps whatever loophole
BP is trying to use in OPA '90 to not pay Florida tourists is
closed, very clearly.
Senator Rubio. We talked about that briefly yesterday, and
that is a new development as of last Thursday, I believe,
right? So we are going to--that is now part of the committee's
record and we will delve into that issue as soon as we return
to Washington tonight.
Male speaker. Thank you for coming to our great town of
Pensacola. I was up and visited your office last week and got
to meet with Miss Sarah and we had some issues about what we
are still uncovering in the Gulf of Mexico, and this is one of
my largest concerns.
As of today, as a commercial fisherman--I have been a
lifelong commercial fisherman, ever since I was 16 years old--
they have not cut our quotas and we are catching fish. But it
is like coming into your home and somebody has been there.
Things are out of place. Things are not normal. We are seeing
some disturbing things that we see as a lifelong commercial
fisherman.
I was brought up on the beach. I played in these waters as
a six-year-old kid. My mom used to light the lighthouse at
Pensacola Beach before the Navy Yard told them they had to
leave and move to another place.
So my biggest concern is BP packing up and leaving before
we can prove our losses. As Mr. Zales asked for stock
assessments and money, what if our fishery collapse in two
years, as it did in Alaska? Where am I left then if BP goes,
``Okay, I am going to pay everybody off what you have lost
today,'' and I am not saying BP owes me a bunch of money or
anything at this time. Dr. James Cowan just last week did a
study saying he found lots and lots of dead natural breeds, and
these things are emerging daily.
It is just hard for me to watch BP get on the horse and
take off before we realize the consequences of the spill in the
long term. Yes, my catch register does not ring every day like
some people it does on the beach, and thank you for coming to
our great home town.
Senator Rubio. Just to restate here, because I think it is
actually a very valid point and I think we heard it earlier in
the testimony--I think Mr. Gilchrist talked about this, as
well--is we do not yet--I think the argument is, while we are
glad the oil is not spewing and we are glad that you do not see
it on the surface and we are glad that people are coming back
and fishing is going on and this, that, and the other, we are
concerned that there is a bunch of oil that is still
unaccounted for, and more importantly, we are concerned that
the impacts of the spill is not something that may be fully
felt for years to come.
And what you are saying is, what happens if two or three
years down the road, all of a sudden, we wake up and realize,
my goodness, we are dealing with this new permeation of
something that happened two or three years ago. There are
plenty of precedents, by the way, out there for this happening.
There are plenty of precedents for delayed impacts after a
catastrophe or a cataclysmic event.
What happens if this impact is felt two or three years from
now, but to everyone's mind, it is ancient history and there is
no money on the table to pay for it, and I think that is an
issue that is going to have to be discussed within the context
of the fine bill, because I think you have made a very valid
point, and that is the full impact of the spill, particularly
on those that depend on these waters, may not be known or felt
for years to come. That is a very valid point.
Ms. Esser. My name is Ruth Dupont Esser [phonetic]. I want
to thank you, first of all, for being here today.
Senator Rubio. Thank you for coming.
Ms. Esser. This is clearly an environmental issue. I would
like to ask if you would pay attention to EPA and its role in
its contract with UNEP, United Nations Environmental Program,
and please assure us that you will be watchful that the funds
from BP do not go to EPA in order to commit to an agenda by
UNEP, which is communistic in structure, so it is as anti-
American as it gets. We need these funds to come to our free-
market system, to the people that suffered from the
consequences of this event, and we really need to be protected
so that they do not go to an entity that does not intend to
assist the American way of life.
I believe that we do need environmental clean-up. I do not
by any means think that we do not. We clearly do. But we need
to have the funds in the hands of the free-market system and in
the hands of environmentalists who are not working in
conjunction with the United Nations. Thank you.
Senator Rubio. Thank you. And I have gotten several e-mails
about this topic, and let me just say that I think the
intention of everyone, I hope--there might be a debate about
this in Washington, too, but the purpose of the fine bill is
not to advance any ideological view, but rather to deal with
the fact that a bunch of people have been hurt really bad by
the negligence of an individual company. And the law says that
when you do something like this, you pay a fine for it, and the
argument now is how should that money be spent, and the money
should not be spent, in my opinion, to do anything. I am not
even talking specifically about what you outlined, but in
general, should not be used to make a point behind any
ideological philosophy. The point of this money, my hope is,
will be to address the damage that was caused by the specific
incident, and that is the direction I hope we will head.
Mr. Villmer. My name is Matthew Villmer. I am an attorney
over at Emmanuel Sheppard and Condon out of Pensacola. We
represent about 60 different individuals and businesses in
their claims with the Gulf Coast Claims Facility.
I just want to echo what the panel said today, that the
biggest problem with the Gulf Coast Claims Facility is
disparate treatment. So that would mean that different
claimants with the exact same claims are treated differently.
And I just wanted to figure out if your office can provide any
assistance with shaping Feinberg's opinion or helping with
individual claims that are treated differently underneath the
Gulf Coast Claims Facility's rubric for compensation.
And as a perfect example, our firm represents five
individuals who all worked for the exact same business and have
the exact same position. Last year, we filed a claim on behalf
of all five that were identical, from top to bottom, 200-page
claim packets that were identical. Two were paid, three were
not paid. We then turned around and filed this year interim and
final claims that were, again, identical from top to bottom.
Two were paid, three were not paid and finally denied. The
GCCF's position is that the two that were paid were properly
paid and the three that were not paid were properly denied,
which makes absolutely no sense.
So if there is anything that your office can do to assist
with individual claims in the GCCF claims process, I would like
to know that.
Senator Rubio. And other than what we do already, which is
try to assist claimants who call us, but I think the process
that you are outlining is--I think what we are learning, and
increasingly being confirmed to us, is that the problem here is
we have a flawed process, a process that has no uniformity. So
two different people are viewing, for example, five claimants,
as you have outlined--this is my guess, but it sounds like I am
going to be right--five different people work in the same place
and the exact same thing happened to them. But these five
claims are reviewed by two separate people. Two claims are
reviewed by one guy or gal and three claims are reviewed by
somebody else, and the three get denied because that person has
got a certain mindset and the other two get approved because
the other person has a certain mindset, and that is the
problem. It is a procedural problem that I think lingers.
So I think part of--one of the things that has come from
this hearing is, whether it is the Clean Water Act fine bill or
some other mechanism, I think we are going to have to figure
out a way to close this process out. It cannot continue in this
process where you have a bunch of people out there who feel
like their claims have been denied and would like to appeal
that decision. You have others that are waiting in a backlog. I
think the process of closing out the claims is going to have to
be a part of any discussion moving forward, and what I can
commit to doing is making sure that that happens.
Yes, Collier, I am sorry.
Mr. Merrill. I know there are--I see that I recognize,
representatives in the audience from BP, so maybe they are
taking the right notes and will do something, but do not hold
your breath.
And I say that--you know, in February, the procedure, you
know, we were complaining. There was a group there meeting with
Mr. Feinberg and complaining and he said, ``Well, I am hiring a
group of law firms and each State is going to have some people
representing that you can talk to,'' because I said, we cannot
talk to anybody. You do not know where your claims are. And I
was trying to help some people. Fortunately, we are able to
survive, but I have got employees and other small groups that
were having trouble getting anywhere, and they said, well,
these people, you can talk to. And that is when they told us,
well, refile. It is going to be 90 days.
And so that came and went. I actually talked to this group
here that is representing Florida on Thursday and I said, it
has been 142 days. You said 90. What can you tell me? And they
said, ``Well, all I can tell you is your claim is under
review.'' So, I mean, it is the same thing that I would get
from anybody else. I guess they do not have any authority,
either. I do not know where we go from there, but it is--this
frustration is what I hear every day when I walk around, just
that you do not have any response. I was hoping that this
latest development in February was going to work that, but it
just has not. So I just wanted to echo that, as well.
Senator Rubio. Janice.
Ms. Gilley. Yes, Janice Gilley, University of West Florida.
I think everybody else has said we are so glad that you came to
Pensacola and would have this official hearing here.
I wanted to speak a little bit more about the way the funds
might come back to the states. I definitely agree with the
environmental research and continuing to monitor the impact.
Obviously, economic diversification for the region. But I would
hope that we would also consider endowing some of those funds,
because once they are spent, they are gone forever. Obviously,
as everyone else has said, God forbid we ever have this type of
situation ever happen again. But I think that we do need to be
good stewards of those funds if--if--and when they are made
available to our region and they are endowed so that we can
continue for the decades, monitor these situations and have
resources or have an opportunity for resources to continue the
research and the diversification.
Because my fear is that the funds may come, and, like you
said, from a policy perspective, they are divided up
nationally. If they are maybe somehow endowed, then you could
only qualify for those funds if you are in the region, and it
could potentially be in perpetuity. So that would be one of my
concerns about the funds and maybe how they could be managed. I
know that is a pipe dream, maybe, from D.C., but----
Senator Rubio. No, no, it is not. It is a good suggestion.
Have you worked in government before, Janice, or----
[Laughter.]
Mr. Diep. Good morning, Senator.
Senator Rubio. Good morning.
Mr. Diep. My name is Lan Diep. I am an Equal Justice Works
AmeriCorps Legal Fellow working at the Mississippi Center for
Justice. We are part of a five-state consortium from Texas to
Florida that provides free legal assistance for folks who want
legal advice dealing with the oil spill and dealing with the
GCCF.
In following the panel's discussion this morning about the
GCCF, many of the issues raised, I feel, are important, but
really have only scratched the surface. Our consortium has
handled or in the process of handling about 3,000 or so claims.
I, myself, have handled about 50 or so claims.
And I think in terms of small businesses--the list goes on
and on, but in terms of small businesses, specific points of
contention with the Claims Facility right now are their loss of
income calculations. Small business claims get discounted by
what Feinberg calls a loss of income percentage, and what that
percentage says is basically because you are not selling as
much, you do not have to buy as much inventory, so you are
actually saving money. So your claim is discounted. And that
percentage, as far as I can tell, is somewhat arbitrary.
People can provide specific numbers on their taxes, but
then industry numbers are used. Very broad strokes are used.
People are not really getting the full amount----
Senator Rubio. I am sorry to interrupt. I want to clarify
that in my mind. So the way it reads is, so I own a store that
sells whatever and since I do not have as many customers, I do
not have to have as much inventory. Therefore, I do not need as
much money. That is the----
Mr. Diep. Right. So that is kind of their thinking. So they
discount all your claims by--it is an arbitrary number, and the
number is hard to calculate. That is one thing.
Two, the GCCF distinguishes you as a business or a small
business from an individual claim by looking at your taxes and
seeing whether you have a Schedule C. But recently, what we
have encountered is that if on the Schedule C, which qualifies
you as a business and guarantees you a $25,000 minimum payout--
--
Senator Rubio. Right.
Mr. Diep [continuing]. They are going back and they are
looking. If you did not file individualized expenses, itemized
expenses, they are going back and they are moving a lot of
these folks back into individual as claimants. So if you did
not file--if you just filed a Schedule C Easy, they might put
you back as an individual claim. And so there are these sole
proprietors and individuals, or deckhands, fishermen, who are
getting put back in the wrong bucket.
Senator Rubio. But are not--they are in, like, contract
labor type situations, folks are--is that what you are--or is
it----
Mr. Diep. Right, like small business owners, cleaners----
Senator Rubio. Right.
Mr. Diep [continuing] Or sole proprietorships. They have a
Schedule C which qualifies them as a business----
Senator Rubio. Right.
Mr. Diep [continuing] But because they did not file under
taxes itemized expenses, the GCCF is right now going back and
considering----
Senator Rubio. Reclassifying them as individuals?
Mr. Diep. Reclassifying them----
Senator Rubio. Right.
Mr. Diep [continuing]. And kind of denying them their
$25,000 minimum.
Senator Rubio. Even though they are not anyone's employee,
per se, they are basically----
Mr. Diep. Right. Right. Yes. There are problems with start-
up businesses, businesses that started right before the oil
spill, January 2010, that do not have the 2008, 2009 documents
to fit in their formula are having trouble navigating the
process. So there is no real system to deal with those
individuals.
One problem that is of particular concern to me that might
the cause of a lot of the delays that people are facing is that
Feinberg, because he is overly cautious of fraud, is using some
of the money, or I am not sure which of the $20 billion, but he
is hiring private investigators to investigate claims of fraud,
and I am not entirely sure that that is his place. He might
refer those that they are suspicious about to the FBI or
whoever. But I am not sure it is the GCCF's place to be
investigating claims of fraud. Furthermore, he is not providing
notice to the individuals being investigated, which might have
some, you know, Fourth Amendment type concerns.
Senator Rubio. Right.
Mr. Diep. Finally--or not finally--the 90 days everyone
keeps talking about, the 90 days comes from OPA. You have 90
days to review. But from Feinberg's perspective, it is 90 days
from when the claim is substantiated, which means you can turn
in all your documents, but the 90 days does not start counting
until they feel that they have everything that they need to sit
down and review your claim. So you do not know when to start
counting the 90 days. The standard review that they are using
is a lot higher than you might even find in a court of law.
And finally, just as to the point in your opening comments,
you said that the GCCF has about 190,000-something unique
claims. The number is, as of July 8, 520,386 unique claims, but
only 196,644 have been paid. But what is of concern is that of
that amount that has been paid, 118,314 are quick pays, which
means they are the kind that just say, ``Fine, I give up. I
want to take the money and just move on with my life.'' So I
feel that because of the time delay, a lot of individuals are
waiving their rights against BP and the other defendants----
Senator Rubio. Because they need the money.
Mr. Diep [continuing]. Because they need the money. So,
thank you.
Senator Rubio. The gentlemen standing next to you there is
Captain Tande, who runs our office here. It sounds like you--I
do not know if you wrote all that down during the hearing or if
you have--but I would love to get something like that, not just
for the record of the committee, but for our office if, indeed,
we get involved in--as I expect we will--in some sort of
reforms to the claims process, be they wholesale or partial. I
would like to be able to point to some of the real world--I
mean, it sounds like you have a wealth of knowledge, so if you
could somehow communicate with us to get us a memo or something
that outlines these points, that would be very helpful.
Mr. Tande. He has my card.
Senator Rubio. Oh, he does. Okay. Good.
Mr. Kugelmann. Good morning, Senator. My name is Robert
Kugelmann [phonetic]. I was an oil spill volunteer for Escambia
County and also for the National Park Service.
I wanted to encourage you in Washington to take what steps
you can to review through oversight the effectiveness of our
natural energy regulatory mechanisms. I think that public
citizens have not been able to maintain confidence, not only
based on the Gulf Coast oil spill, but also what has happened
in West Virginia in the coal mining industry and the fact that
it turned out here in the Gulf Coast that many of the plans
that were submitted as part of the permitting process, many of
the emergency plans were really not serious efforts. They
talked about wildlife that was common in Alaska, but
nonexistent in the Gulf.
So we do want to encourage you and your colleagues up there
to take a strong look to enforce accountability, and not only
among public corporations that seem to need a heavy hand to
comply with the spirit and letter of the law, but also with the
Federal career service that is paid to review and to exercise
oversight in these critical areas.
So thank you all for being here today.
Senator Rubio. Thank you.
Ms. Dubis. Hello and thank you again for coming to
Pensacola to see firsthand how we feel about what is going on.
We appreciate it, Senator.
Senator Rubio. Thank you.
Ms. Dukes. My name is Dottie Dubis [phonetic]. I am a local
resident and I do not own a small business, but since that is
the focus for which this hearing was called, I want to call to
your attention that there are a lot of small businesses that do
not really fit into the tourism, fishery categories that you
have spoken of but who were gravely impacted, and, in fact,
many of whom have closed their doors and moved out.
In the particular building with which I am associated, we
had a manufacturing organization that manufactured windows and
doors and aluminum items which survived between hurricane
seasons by doing refurbishing for beach houses. Unfortunately,
with the impact of the Horizon, no one wanted to redo their
beach house because they could not even conceive that they
might be renting them out for several months. And so this
business has folded. The five positions that were there are
gone. And if you look at the population base of Pensacola, it
has depreciated since the Horizon impact.
I was wondering if you might be able to somehow capture the
funds that you do eventually end up with and assign them in a
sort of a HUBZone, if you will, but maybe a Horizon Zone for
the eight areas of Florida that were directly impacted, that
that would be where a business would have to come and bring
itself in order to benefit from it, rather than saying, we will
spread it out and let it go elsewhere. If there is a company
that is successful in Arkansas or Missouri or whatever that
sees that they have an opportunity to do something that would
impact positively, come and do it here. If you could somehow
create an incentive program similar to the HUB and Empowerment
Zones, but have it be a Horizon Zone, it might help.
Senator Rubio. And it is a concept that we had discussed
during the campaign. It was part of one of my ideas that we
outlined. You have touched on one of the difficulties of this
issue, and that is that you are absolutely right. There are
the--and we are not discounting, because that is where the
first wave of pain was inflicted, the hotels, the tourism
industry, the fisheries, and all those sorts of things. But
then from that, there is a spin-off effect. I mean, the bottom
line is if one of your fishermen is making half as much money
as they made a year ago, they have a lot less money to spend in
the local economy, which ultimately impacts everybody. The
trickle effect of it is very real.
The challenges politically, as you can imagine, in creating
that chain and justifying it become harder, but I think what
you have touched upon is some sort of a regional incentive
program that will hopefully attract, the way that the oil spill
may have detracted people from coming here, maybe reverse
course on that. I do not--I think that that is something worth
having a conversation, maybe outside the framework of the fine
bill, but one that should be discussed.
Ms. Kraft. Good morning. My name is Bethany Kraft
[phonetic]. I am the Director of the Alabama Coastal Foundation
and I am here today on behalf of our Florida members. We share
an incredible resource in the Perdido area and I thank you all
for taking the time today to solicit input from your citizens.
Just a couple of really quick comments specifically related
to the Clean Water Act fine money. First, regarding your
anticipation, Senator, of other members of Congress seeing the
bright shiny object of fine money and trying to get a piece of
that for their own constituents, I would really like to
encourage you and your fellow Senators as you work on
legislation and a bill reaching out on a regular basis to the
nonprofit community who have extensive networks across the
country and help us help you encourage citizens across the
United States to continue to understand how important the gulf
is to their life and how important it is for that money to come
here for restoration.
In the wake of the oil spill, just my organization and two
others in Alabama alone received over 10,000 calls from
citizens across the country looking to make a connection to the
Gulf of Mexico. We still communicate on a weekly basis with
those 10,000 citizens, letting them know what is happening here
and why their input is still so important. So I encourage you
to keep us involved in the process and let us help put pressure
on those elected officials who might see dollar signs in their
eyes. Their citizens know how important the Gulf of Mexico is
to their own livelihoods and are committed to restoration money
coming here to the Gulf of Mexico.
Senator Rubio. Well, again, your statement actually is a
great example of why these hearings are so important. That is
actually a great strategy. The truth is that my sense is that
many of my colleagues who are committed to conservation and the
environment probably have conservation and environmental
projects in their home state and they see this as an
opportunity to take some money for that. And it would be
great--I am not sure if I am being naive, but it would be great
if the conservation and environmental community outside of
government would tell them, thank you, we appreciate you doing
that, but if this ever happens to us, we would like all that
money to come to us, and since this is happening to them, we as
a community have taken the position that this money should go
to the Gulf region.
I do not know if that is unrealistic. I do not know how
hard it is for people to walk away from that. But that would be
great, if that is the kind of national message that we could
get out to our friends in the Senate and in the House.
Ms. Kraft. Well, we are absolutely ready and willing to
help you with that.
Secondly, just really quickly, I was happy to hear the idea
of the Clean Water Act fine money, the projects driving the
money and not looking at it from a specific geographical
boundary perspective. I think that the Gulf ecosystem as a
whole deserves better and we have a responsibility to take
advantage of what could amount to a huge opportunity for us to
bring the Gulf of Mexico back to a place that will sustain not
only us, but our children and our grandchildren.
Toward that end, I would love to see the final Clean Water
Act bill contain some basic guidelines that will help ensure
that the projects are, first and foremost, in the minds of our
politicians and our citizens and all of our community leaders,
guidelines that look at the root causes of what has caused the
Gulf of Mexico problems in the past five or six decades.
When you are talking about habitat loss, when you are
talking about why your fisheries have declined, which lead to
restrictive regulations which make it more difficult to
increase your catch limits, these are the things that we need
to be looking at and putting that into the legislation, saying
we want to address the root causes of degradation in the Gulf
of Mexico. We do not just want to put band-aids. We want to see
projects that build on each other. We do not want to see
discrete little things that end up amounting to a non-scalable
change.
We have guidelines that we are putting forth in the
environmental community, and I think that you could easily make
the argument to do that on the economic side, as well. But
coming up with some broad priorities at the Federal level
within the bill will help ensure that that money does not just
disappear into small projects that do not bring us forward as a
community. Thank you.
Senator Rubio. Thank you.
We are getting close to wrapping up. We have probably time
for one or two more statements or questions, if there is anyone
left. These lights make it hard to see out into the audience.
Mr. Atardo. Good morning, Senator.
Senator Rubio. Good morning.
Mr. Attardo. I am Lew Attardo and I was formerly the
Director of the Office of Small Business Advocate in the
Florida Small Business Regulatory Advisory Council during the
time of the oil spill. As some of you know, we worked with our
local legislative delegation from northwest Florida on a
strategy for trying to revitalize the regional economy as a
result of this spill, particularly on what we could do for
small and medium-size enterprises that would be adversely
affected.
One of the things that we did was immediately after the
spill is we went on-site to locations along the beaches within
two weeks after the Deepwater Horizon disaster occurred and we
listened to businesses. And as you have heard today, it was not
just fishermen and the bait shops and the property owners that
had rentals, but also everything from janitorial companies that
had contracts for cleaning condos between residents to
manufacturing companies who saw a dip in their business and in
some cases actually folded up because of the loss of business.
What is most important, I think, is the fact that as an
organization, through the Office of Small Business Advocate, we
submitted a report to the legislature in Florida and to both
Governor Crist at the time and then Governor Scott when he came
into office on a strategy that we presented to the EDA team
that was here with the International Economic Development
Council that did the surveys post-disaster about what needed to
be done to transform and recover.
One of the things that we recommended was there needed to
be a long-term strategy, a five-year and a ten-year plan, on
how to diversify the region's economy, how to support small and
medium-size enterprise development, and what would be necessary
for that recovery to take place. Those plans included several
strategies for business retention and expansion, including some
innovative ideas on things like subsidizing the fishing
industry to purchase fish as we do with other food supplies to
put into the public school system, to introduce in the public
schools fish, as an example, as being properly prepared and
properly handled, and that would, first, support the local
businesses immediately, is by putting fish in schools, and
secondly, help to provide a new generation of potential seafood
and fish eaters that might not get it in their homes otherwise.
But beyond that, bigger programs like small business loans
that would be necessary to help with recovery, because we knew
a year ago that the BP funding was not going to be immediate.
It would take time. There is a report on that, and I will be
glad to leave a copy with your staff, on what was recommended
at the time on various strategies for economic recovery and
diversification, what would be necessary to boost and
revitalize the area's economy, and as I think others have
voiced today, is to make sure that those funds that were
committed to supporting this region along the Gulf Coast,
Florida and the other affected states, stays in this region
through some kind of a program that would endow the funds
through foundation or some kind of a regional Gulf Coast
Economic Development Program that would help support the
region's needs over the next five to ten years while we try to
figure out how we recover and how we rebuild the economy after
that disaster.
So thank you very much for coming today.
Senator Rubio. Thank you.
We have time for one more.
Mr. Ellington. Thank you, Senator and distinguished guests.
My name is Ron Ellington. I am with Innisfree Hotels. We have
six hotels, three on Pensacola Beach, three on Orange Beach,
Alabama. We have just filed our final claim with the GCCF for
those six hotels.
One of the things that we addressed in there that
everybody, I am sure, has already spoken to, and I apologize, I
was a little late, so if I am asking a question you have
already addressed, but it is the volume of oil that is still in
the gulf that we are still fearful that we will see again with
any kind of storm that brings it back up on our beaches. And
one of the things we are having to address in this claim,
obviously, is how do we deal with that potential liability and
the fear of that reoccurrence and the cost that that brings
again.
In your bill, or in the bills pending, is there anything in
there that would address finding that oil and remediating it?
Senator Rubio. First of all, the bill has not been fully
vetted yet. It has not even been introduced publicly yet, so we
will know more about that in the next few days.
In the conversations that I have had--and that does not
mean it is not in there, I could be wrong--but in the
conversations that I have had, I have not heard discussion
about that issue. I think it is an issue that I have heard here
today, I will not say for the first time, but certainly in the
most persuasive way possible has been this persistent concern
that the full impacts of the oil spill may not be known until
sometime in the future when either some other event or by
natural process we begin to see some secondary effects that are
dramatic and have real repercussions, and the fear is at that
point--let us say it happens four years from now where we--let
us say two or three years from now, your fishermen are coming
back and reporting some really bizarre things, or worse, we
have a storm and all this oil reemerges and washes up on the
beaches and have these massive kills. What process will be in
place to address it three or four years down the road--two or
three years down the road?
I think the very persuasive argument has been made with
regards to that. How we address it is something we are going to
continue to look for your input. I have not heard it discussed
to the level that it has been discussed here today. That does
not mean it is not being discussed at that level. That does not
mean that some other Senators do not have it on their mind. But
that is why we do these things, because in the midst of all
these issues that are flying around, to really identify some of
these things that would not otherwise emerge, maybe even in a
hearing in Washington, is so critical. It is certainly
something I am going back with as part of our message.
Well, I want to thank all of you for joining me here today.
A couple of things I want to tell you is that if you were
unable to--let us say you have something you wish was on the
record for the committee and it occurred to you afterwards or
just did not have the time today, or we did not have the time
to get to you, you can submit that in writing to be part of the
record of this hearing. That record is going to remain open for
the next two weeks. So for the next two weeks, if you have
something that you want to see made part of the record here
today, you can submit that either through my office or through
the Committee on Small Business and Entrepreneurship.
I want to thank all the members of the panel. We took a lot
of your time and I am grateful to you for being a part of this
and for your input. Hopefully, we will be able to come back to
you in a few weeks or months with an update on the status of
the fine bill and hopefully some progress on the claims
process.
With that, the hearing is adjourned.
[Whereupon, at 11:23 a.m., the committee was adjourned.]
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