Feinberg meets the Mississippi press
Ken Feinberg, who will oversee the process devoted to paying oil spill-related claims, was in Jackson visiting with Gov. Haley Barbour this morning and held about a 30-minute Q&A with assembled media.
Before we get into what was said, let’s talk a little about Feinberg. He’s an interesting character. He administered the fund created by the federal government to pay victims of 9/11. He did the same with a private fund set up to reimburse victims and relatives of victims of the 2007 mass shooting at Virginia Tech.
The Wall Street Journal has dubbed him “The Special Master of America.”
The first thing I noticed about Feinberg when he took the podium today was how enthusiastic he seemed, and how his voice boomed. I kept trying to come up with a good way to describe him to somebody who had never seen him, and the best I could do was this: He’s Houston Nutt with a thick Boston accent.
Anyway, Feinberg will set up an independent claims facility he says will be independent of the White House and BP. BP is funding the cost to run the program, whose budget, Feinberg says, is virtually unlimited.
The goal is to reimburse any legitimate loss related to the spill — business interruption, wage loss, personal injury, even death claims, to name a few. BP will pay those claims, Feinberg and Barbour emphasized repeatedly.
That’s about all we’re certain of right now. What separates a legitimate claim from one that’s not is something Feinberg says he has yet to establish guidelines for.
He did say that he would rely heavily on Mississippi law for answers. For instance, if somebody files a claim whose legitimacy is less than clear, Feinberg would turn to Mississippi law to determine if the claim, if it were filed as a lawsuit, would be eligible for settlement or reward money arising from litigation.
“We’ll be looking at, if you go to court in Mississippi, where does the law cut (settlement or reward eligibility) off?,” Feinberg said.
Speaking of lawsuits, Feinberg said that if somebody files a claim, there is a strong possibility part of the terms of the claim being paid will include the claimant waiving his/her right to sue BP afterward, especially if the claimant receives a lump sum payment.
“That’s the way I see it,” Feinberg said.
BP has established an escrow fund that will, starting this year, receive annual payments of $5 billion until it reaches $20 billion, to pay spill claims.
“We’re entitled to recover all of the losses (from BP), even administrative costs,” Barbour said. Barbour had raised a few questions about the escrow earlier this week. He said he was worried pumping $20 billion into a fund immediately would rob BP of the working capital it needed to continue to make money so it could pay spill claims. He was satisfied with the annual installment plan.
Feinberg and Barbour both seemed comfortable that $20 billion would be enough to cover the damage done by the spill. Feinberg added that bankruptcy for BP “is not an option.”