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On Gulf Coast, Frustration At BP Claims Process

The administrator of BP's $20 billion fund to compensate oil spill victims is on the defensive. Claims czar Kenneth Feinberg has paid out nearly $3.5 billion, but is facing criticism about the slow pace and low amount of payments.

Twin sisters Sheila Newman and Sheryl Lindsay are among the critics. They have seen their once-thriving beach-wedding business nearly go under since oil washed ashore in Orange Beach, Ala., last summer. Brides cancelled; few are booking this year. They've lost two-thirds of their business.

"It's hard to put a dollar figure on it because, mentally, we've lost a lot," Newman says.

NPR has been following the sisters' struggle to get paid since last August, when we found them begging a BP claims adjuster to look at their case.

"We're closing our doors," Newman said at the time. "We're losing everything we have within the next week. We need help today."

BP never paid. The wedding planners closed their storefront and operated from home. Both took on second jobs to pay the bills. When Feinberg took over managing the claims process, they were hopeful they would recoup the $240,000 they had lost.

Six weeks later, the check came: It was for $7,700 — a fraction of their claim. Newman says there was no explanation of how Feinberg came up with that figure.

"I think he's just trying to wear everybody down, they'll take such a small amount and just give up," she says. "And they'll sign that dotted line that they're not going to sue. I think that's his goal."

For most spill victims, Feinberg is offering final settlements of twice 2010 losses, based on assumptions that the Gulf would fully recover by the end of next year.

Newman says she's not signing anything until business is back to where it was before the April 2010 oil spill. The wedding planners are opting instead to file interim claims every three months, but they are frustrated that they haven't received any money since September. They are not the only ones.

"The people of the Gulf Coast are sick and tired of being lied to, time after time, after time," says Rep. Jo Bonner (R-AL).

The congressman is part of a growing chorus of lawmakers pressuring Feinberg to get more money flowing. Bonner says when President Obama announced that Feinberg would take over last summer, everyone thought he would be an advocate for people on the Gulf.

"Yet what we've seen it looks like is a miser hoarding the money to protect BP's interest while these innocent victims continue to struggle and hope," Bonner says. "It's almost as if they want us to say thank you when they give us a crumb off the king's table."

A New Orleans federal judge ordered Feinberg to quit saying he's independent from BP, given that the company pays his law firm $850,000 a month to administer the compensation fund. State attorneys general want the judge to assert more control over the process.

Even the U.S. Justice Department wants to see payments stepped up. In a letter, Associate Attorney General Thomas Perrelli said Feinberg's job is not to return money to BP, but to help people struggling after the oil disaster.

But in court filings and at Gulf Coast meetings, Feinberg defends his program as "nothing short of extraordinary."

"We are doing something right," he told members of the Florida legislature last week, pointing to the $3.5 billion he has paid to 168,000 claimants. But more than 490,000 people have filed claims. Feinberg says 80 percent of them don't have proper documentation.

Skeptical lawmakers suggest Feinberg is stalling.

"You have created the perfect system to frustrate our constituents and not pay," says Florida state Rep. Doug Broxson (R-Gulf Breeze).

Feinberg says he is getting complaints from both sides. BP says he's being too generous, while local officials say he's being tight-fisted. He says the idea that the Gulf Coast Claims Facility is not serving oil spill victims is untrue.

"I agree that there's a great deal of frustration, and I come back down here and listen to these concerns," Feinberg says. But he adds the program is working as intended.

"It's already too late for many businesses," Allison Davenport, a real estate broker who is vice chair of the Chamber of Commerce in Perdido Key, Fla.

Davenport, who is spearheading an effort to get the White House's attention, says she thinks it's time for Obama to step in.

"If somebody taps you for the job," she says, "they could un-tap you." Copyright 2011 National Public Radio. To see more, visit

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