Vitter slams Feinberg over compensation from BP

Feinberg, a Washington lawyer who previously administered the 9/11 Victim Compensation Fund, and his law firm negotiated a contract with BP to be paid $850,000 a month for overseeing the Gulf Coast Claims Facility, which doles out compensation to victims of the oil spill. That salary comes up for review every three months, Vitter said.

“It would be like a judge not only being paid by one of the parties to a lawsuit before that judge, but having the judge’s salary subject to a negotiation between the judge and that party every three months at exactly the same time as that judge hears and decides the case,” Vitter said in the letter.

He also said the $850,000 a month salary “seems staggering, particularly in that it's not tied in any way to any certain number of hours worked by any certain number of people.”

Vitter proposed two “constructive suggestions” for fixing what he called a conflict of interest. First, an independent party, not BP or Feinberg, should decide on Feinberg’s compensation. Second, Vitter asked to see an itemized list of the hours Feinberg and staff at his law firm worked on the claims process."
 


Here is the full letter:

February 24, 2011
 
VIA ELECTRONIC MAIL AND OVERNIGHT DELIVERY
IMMEDIATE ATTENTION REQUESTED
 
Ken Feinberg
Managing Partner, Feinberg Rozen, LLP
1455 Pennsylvania Avenue, NW
Suite 390
Washington, DC 20004
 
Lamar Mckay,
Chairman and President BP America, Inc.
501 Westlake Park Court
Houston, TX 77079
 
Gentlemen:
 
I write to express my strong objection to Mr. Feinberg's compensation arrangement with BP and to suggest a better alternative.
 
As I understand it, BP has agreed to pay Mr. Feinberg and his firm $850,000 per month for claims administration from funds BP has set aside internally for claims-related matters.  However, this amount comes up for reconsideration/renegotiation every three months.
 
First, I think it is a clear and profound conflict of interest for Mr. Feinberg to be regularly negotiating his compensation with BP at the same time as he is deciding BP's liability to Louisiana claimants and others.  This conflict is completely unacceptable. 
 
It would be like a judge not only being paid by one of the parties to a lawsuit before that judge, but having the judge’s salary subject to a negotiation between the judge and that party every three months at exactly the same time as that judge hears and decides the case.
 
Would you want to be that other party to the case?  That's the position Louisiana claimants and others are in.
 
Second, an 850,000 per month flat fee seems staggering, particularly in that it's not tied in any way to any certain number of hours worked by any certain number of people.  Given this arrangement, it does not surprise me when inquiries and other matters are not adequately dealt with by the Feinberg firm but instead fall through the cracks.
 
To correct all this, I have two constructive suggestions.
 
First, these serious problems including the fundamental conflict of interest would largely be avoided if Mr. Feinberg and BP agreed on a qualified arbitrator and charged her with setting the compensation of the Feinberg firm at the end of each month.  Compensation would be based on hours billed for specific, itemized tasks outlined on hourly billing sheets at reasonable hourly rates, with some appropriate overall cap (different rates for different personnel involved--Mr. Feinberg, other attorneys, paralegals, other staff, etc).  I ask you to adopt this arrangement and agree on a qualified arbitrator.
 
Second and as background, I would like to see a time/billing report for personnel at the Feinberg firm and their work on claims matters during January 2011.  I would also like to know what each individual's normal hourly billing rate is to non-BP corporate clients.
 
I think all of these points and requests are very reasonable.  They go to the fundamental question of fairness to Louisiana claimants and others, particularly in light of other calls on BP resources (like Feinberg pay).
 
I look forward to your responses to these points as soon as you can provide them.  Thank you.
 
Sincerely,
 
David VitterDavid VitterGOP pressures Kerry on Russia's use of Iranian airbase Louisiana needs Caroline Fayard as its new senator Louisiana Republicans: This isn’t like Sandy MORE
United States Senator
 
Cc:       President Barack ObamaBarack ObamaLong-running US efforts on the ballot with Colombian peace vote What Trump and Obama have in common Donald Trump will make our economy great again MORE
Admiral Robert J. Papp
Senator Mary Landreiu
Senator Kay Bailey Hutchison
Senator John CornynJohn CornynHow the White House got rolled on the Saudi-9/11 bill GOP leaders express reservations a day after 9/11 veto override McConnell opens door to changing 9/11 bill MORE
Senator Thad CochranThad CochranMomentum builds for Clyburn poverty plan 'Hardball' Pentagon memo creates firestorm Insiders dominate year of the outsider MORE
Senator Roger WickerRoger WickerTo protect taxpayers, the Hyde Amendment must be permanent GOP pressures Kerry on Russia's use of Iranian airbase GOP to Obama: Sanction Chinese entities to get to North Korea MORE
Senator Jeff SessionsJeff Sessions3 ways the next president can succeed on immigration reform Funding bill rejected as shutdown nears Trump, Clinton discuss counterterrorism with Egyptian president MORE
Senator Richard Shelby
Senator Bill NelsonBill NelsonElection-year politics: Senate Dems shun GOP vulnerables Overnight Finance: Senate rejects funding bill as shutdown looms | Labor Dept. to probe Wells Fargo | Fed to ease stress test rules for small banks Overnight Energy: Judges scrutinize Obama climate rule MORE
Senator Marco RubioMarco RubioWar over the estate tax returns Clinton’s strategy: Get under Trump’s skin Rubio, Heck help out at car crash scene MORE
Senator Barbara BoxerBarbara BoxerDems gain upper hand on budget Overnight Finance: Senate rejects funding bill as shutdown looms | Labor Dept. to probe Wells Fargo | Fed to ease stress test rules for small banks Funding bill rejected as shutdown nears MORE
Senator James InhofeJames InhofeFunding bill rejected as shutdown nears Senate Dems: Add Flint aid to spending deal Shutdown risk grows over Flint MORE
Congressman John Mica
Congressman Nick RahallNick RahallWest Virginia is no longer Clinton country Solution needed: Rail congestion is stifling economic growth Lobbying World MORE, II