Claims czar to outline methodology for paying spill victims

Under pressure from Gulf Coast lawmakers, the administrator of BP’s $20 billion oil spill compensation fund will release his methodology for distributing payments to spill victims.

Kenneth Feinberg, the independent administrator in charge of the fund, said Thursday that he will release the methodology Feb. 2. The methodology will outline the requirements that must be met in order to receive final and interim payments. Stakeholders will have two weeks to comment on the methodology.

Feinberg, a Washington lawyer who headed up the September 11th Victim Compensation Fund, had previously been reluctant to outline the specific methodology for distributing money to the many Gulf Coast residents affected by the spill. Instead, he released two “protocols,” laying out broad criteria for the payments.

At a Senate hearing Thursday on the oil spill claims process, Sen. Richard Shelby (R-Ala.) said it is “unacceptable” that Feinberg has not yet released the methodology. Shelby said Feinberg agreed more than a month ago to release the methodology after discussions with Shelby and other Gulf lawmakers.

“It’s taken me longer than I had hoped to gather that information together,” Feinberg said at the hearing of a subcommittee of the Homeland Security Committee. He said it has been difficult to determine the long-term effects of the oil spill, a key factor in making payments.

Feinberg started the second phase of the three-year oil spill compensation process at the end of November. Previously, victims applied for emergency payments meant to hold them over until they could assess the full extent of their damages.

This second phase focuses on final payments. So far, Feinberg has only distributed money to those victims applying for a one-time “quick-pay” payment of $5,000 for individuals and $25,000 for businesses.

The new protocol will apply to interim payments or lump-sum final payments based on victims' losses. Feinberg told The Hill in December that he would hold final payments to a higher standard than emergency payments.

Feinberg’s Gulf Coast Claims Facility, which processes claims, has doled out more than $3.3 billion since its inception in August of last year, according to the latest statistics from the facility.