Louisiana officials urge BP to speed claims payments

BP, the government and an army of volunteers are fighting to contain and clean the millions of gallons of oil spewing from the site of the Deepwater Horizon explosion in the Gulf of Mexico.
By Ylan Q. Mui
Washington Post Staff Writer
Tuesday, July 6, 2010

CHAUVIN, LA. -- The BP claims center here is housed in a former bar and dance hall complete with parquet wood floors, but there is little to celebrate.

Maps tracking the spread of the oil gushing into the Gulf of Mexico since the explosion on BP's Deepwater Horizon drilling rig more than two months ago hang on the walls. Other maps show projected paths of Tropical Storm Alex, which soaked the Gulf Coast last week and pushed the oil into the bayous near this town of fishing camps and houseboats. Three rows of chairs are set up in the front room to accommodate the dozens of out-of-work boat captains, shrimpers and deckhands who come here each day to file their claims against BP -- and, they hope, leave with a check.

Stephanie Thomas of nearby Bayou Blue said she received about $1,000 from BP for the first month that she could not work as a deckhand on a shrimp boat, but she has not received anything for the second month. After a visit to the claims office on a recent afternoon, she learned that she needed additional documentation of employment and income to qualify for the payment.

Thomas said she is paid in cash, like many workers here, which makes income more difficult to prove.

"That's what we're tripping on," Thomas said. "All of a sudden we need all kind of proof."

Kenneth R. Feinberg, who was appointed last month by the White House to oversee a claims fund, has said that the biggest challenge to distributing the money -- and avoiding future lawsuits -- is earning the trust of workers in a fiercely independent industry, whose livelihoods have been devastated by the spill. He said on "Fox News Sunday" that BP had paid out about $130 million so far.

But according to state officials and interviews with residents at the claims center, the most pressing concern was speeding payments to those most affected.

BP community relations coordinator Bob Warren, who works at the office in Chauvin, said the company tried to push through checks quickly during the early days of the spill, resulting in more cursory scrutiny of claims. Now adjusters are evaluating requests more thoroughly, he said.

An analysis released last week by Cannon Cochran Management Services, which Louisiana had hired to review claims payments, showed the number of claims more than doubling in June from 30,000 to more than 85,000 in all affected states. The number of new claims has outpaced the rate of checks sent, and the cost of each claim increased from an average of $1,200 to the range of $1,500 to $1,600. [BP said Monday that it has spent $147 million to settle 47,000 claims, about half of the claims submitted so far, the Associated Press reported.]

"The state continues to be concerned about the growing need in the communities impacted by the oil spill and BP's slow response in the claims process," said Kristy Nichols, secretary of the Louisiana Department of Children and Family Services, who is overseeing claims in the state. "For many individuals and families, claims checks may be the only income they receive during this disaster, and prompt payments are vital."

After taking charge of BP's gulf cleanup efforts last month, BP senior executive Robert Dudley said the company would start paying small and medium-size businesses a month ahead for money lost as a result of the spill. Dudley said he realized that many companies needed a steady cash flow to pay bills and employees.

The state has criticized BP for not hiring more claims adjusters -- the report said there are about 1,000. In Chauvin, four adjusters staff the center every day from 7 a.m. to 7 p.m. In the first month after it opened in mid-May, between 60 and 100 people showed up each day to file claims. Many families brought along small children, so workers set up a play area with toy trucks and a TV showing cartoons.

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