Two years after Deepwater Horizon disaster, Justice Department audit nets extra $64 million in payments for oil blast victimsThursday, April 19th, 2012 by Dara Kam
An independent audit of the Gulf Coast Claims Facility resulted in an extra $64 million for more than 7,400 victims whose claims had originally been denied by former administrator Ken Feinberg.
More than half of the money will be going to Floridians whose claims were erroneously rejected, according to Florida Attorney General Pam Bondi. As a result of the audit, the Justice Department approved $37.7 million for 4,450 Florida individuals and businesses whom Feinberg turned down.
The U.S. Justice Department released the preliminary audit findings Thursday, one day before the second anniversary of the massive explosion that killed 11 oil rig workers and spewed an estimated 206 million gallons of crude oil into the Gulf of Mexico. It took more than 85 days for engineers to finally stanch the oil flow from BP’s Macondo well that devastated coastal wetlands, stained Florida Panhandle beaches, killed wildlife and shut down commercial fishing in the Gulf for extended periods of time.
The initial findings of the audit were released The audit, released by the U.S. Justice Department today, found that overall Feinberg did a fine job distributing more than $6.2 billion – less than half of the $20 billion BP set aside to pay for damages caused by the spill – to more than 220,000 claimants over 18 months.
“While our independent evaluation did uncover instances in which errors were made in the claims evaluation process, in general, the GCCF appeared to have consistently applied its protocols and methodologies in processing claims,” BDO Consulting auditors wrote.
The audit found that Feinberg’s GCCF denied about 60 percent of the claims. Initially, claims were denied because the types of businesses trying to get paid were not eligible for payment or because claimants failed to provide required financial documents. During the second part of the claims process, the majority of claims turned down were rejected because they could not document that their financial losses were caused by the massive Deepwater Horizon oil blast.
Feinberg made changes to the claims process in response to problems identified by his workers, likely adding to some of the inconsistencies in payments, the auditors found.
But they praised him, given the “complexity and unprecedented nature” of Feinberg’s task.
“The GCCF was designed to respond, and did respond, with urgency to the economic difficulties of those most likely affected by the Spill. However, because of the complexity and unprecedented nature of the task undertaken by the GCCF, it was inevitable that some claimants and stakeholders would have concerns about its operations. While hundreds of thousands of individual and business claimants received payment without litigation over the two years immediately following the Spill, many others have sought an alternative to the GCCF. We hope
that all those who have been genuinely affected by the Spill, ultimately receive an appropriate resolution to their claims,” the auditors wrote.
Claimants encountered a variety of problems, including being denied even though the companies they worked for had been approved. Others complained that about inconsistency. In some instance, employees who worked the same shift at the same restaurant received different treatment.
Bondi, one of the Gulf Coast state attorneys general who pushed for the audit last year, specifically wanted the audit to include an investigation into the discrepancies.
“I had always wanted an audit in order to bring transparency to the claims process, and thankfully Floridians will now receive the millions in relief that they deserve,” Bondi said in a statement.