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Overseer of BP fund gets his hands dirty

By Kimberly Kindy
Washington Post Staff Write
Wednesday, October 20, 2010; 6:36 PM

In June, President Obama tapped lawyer Kenneth R. Feinberg, 64, to oversee the $20 billion account funded by BP to compensate victims of the Gulf Coast oil spill, making him the nation's most famous mediator.

Every week, Feinberg leaves his Pennsylvania Avenue office, where the walls are adorned with dozens of pictures and news articles chronicling his work, to spend time with fishermen and others who make their living off the coastal waters.

In a recent interview with The Washington Post, the Brockton, Mass., native, who also oversaw the government's Sept. 11 Victim Compensation Fund, talked about the task ahead as he wraps up emergency claim payments and moves on to making final payments to victims. Excerpts follow:

Have you met one-on-one with people who were affected by the spill?

I've sat down personally with hundreds of people. I've had town hall meetings throughout the gulf with thousands of people. You can't do this from Washington. You have to go down there, and that's what I've been doing.

Why have the claims skyrocketed in the past two weeks?

People are getting paid. The payments are generous. People are saying, "Let's file a claim; we might get paid too." We don't know yet how many of them are legitimate.

What problems are you experiencing with processing emergency claims?

There are 25,000 claims with absolutely no documentation. Thousands of them say things like, "My neighbor got paid; pay me too." Or they say, "I fish off the gulf to eat. Send me grocery money." There are 50,000 of them with woefully inadequate documentation.

What was wrong with the BP claim centers? Why did they need to be replaced by your operation?

The BP claim centers served their purpose. It was an emergency bandage approach. Sometimes it went to the right people; sometime it went to the wrong people. I know of situations where they paid people who were in desperate straits. I've seen in many cases BP paid claimants and the payments appear to be fraudulent.

When it comes to final payments, you are counseling people to take the money. Some are suspicious of whether you are looking out for their best interests, since BP is paying your firm [Feinberg Rozen LLP] $850,000 a month to run the program. What do you say?

I get paid the same no matter what people do. I will counsel people to take the check, however, because this program is very generous. I am getting independent information about the long-term impacts of the spill from experts. I will not simply be throwing out a number without verification. But take the money. Move on as best you can. Finality is a good thing.

What have you learned about human nature, best and worst, from the mediation claims programs you've managed?

I've learned that human nature is as diverse as people can be. . . . I've learned . . . one, do not underestimate human emotion; it trumps reason every time. Two, human reaction to tragedy is as diverse as human emotion - anger, frustration, skepticism, gratitude. It runs the gamut.

What is required in your line of work?

You have to have a stiff backbone. You have to be a good listener. You have to be empathetic. But there are hundreds, thousands, maybe millions of Americans who could do what I'm doing. It's not rocket science.

How is this tragedy different from others you've encountered as a mediator?

It's largely financial uncertainty that distinguishes the BP disaster from others. What you are hearing mostly in the gulf is the concern about their financial future, their way of life.

When you talk to people in the gulf, what are their greatest concerns?

We don't know yet, and we may never know, about the long-term impact of the spill on the gulf. It's a murky crystal ball, I must say. We can only gather the evidence together as best we can.

Do you ever hear from people in 9/11 who didn't take the settlement?

I never hear from the people who did take the settlement or didn't take the settlement offer. People move on. They close that chapter as best they can. I think that is appropriate. I don't think it's a good idea that people stay in touch with me or they have a reunion.

You don't have a lot of peers with the work you do. Who do you look to? Who are your mentors?

Senator [Edward M.] Kennedy taught me: Do what's right. Don't worry about the criticism. [Federal District] Judge [Jack B.] Weinstein taught me how to be a creative lawyer, to come up with substantive solutions. And [Supreme Court Justice] Stephen Breyer taught me the wisdom of compromise. Breyer's favorite quote: "The perfect is the enemy of the good."

You are being criticized for the length of time it's taking to process the emergency claims. Is any of it legitimate?

Yes. I thought we could do it much quicker. It takes time for the accountants to look at the documentation and compare it to the claim form. I underestimated that.

Tell me about the claims you are paying out now.

They are emergency payments until Nov. 23. There is absolutely no obligation [to not sue BP]. This is found money. . . . If they want, they could turn around and pay their lawyer with it to sue BP. Then there is the Final Payment Program. Anyone who takes that money gives up their right to sue BP.

Three years from now, when the program has run its course, what do you think people will say about whether it worked or not?

At the end of the day, this program will be a success. You go through these valley and hills. We started off, and now we are being criticized, while we pour the money out. The test, the real test, of whether the program is a success: Have you been able to corral the claims? Instead of litigating for years, did they come into the fund?

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