Year Old Gulf Oil Spill Claims Fund Has Paid $5 Billion

August 23, 2011

The Gulf Coast Claims Facility set up to handle claims from the BP oil disaster has paid out $5 billion after one year of operation.

It has paid 204,434 individual and business with a total of 359,441 claims.

Established by the Obama Administration and oil giant BP four months after the explosion of the Deepwater Horizon Oil Rig in the Gulf of Mexico, the GCCF has spent the last year distributing monies from a $20 billion fund set up by oil giant BP.

The explosion on the Deepwater Horizon drilling rig on April 20, 2010, killed 11 workers and spilled nearly 5 million barrels of oil into the Gulf. Among Gulf states, Louisiana suffered the most damage as 650 miles of its coastline were spoiled. The GCCF monies have gone to claimants primarily in Alabama, Florida, Louisiana, Mississippi and Texas.

Kenneth Feinberg, who ran the compensation fund for Sept. 11 victims, has run the oil spill claims facility. By agreement between the Administration and BP, the claims process will remain in place until August 2013.

In its one-year report, the GCCF said it has been able to process 97 percent of the 947,892 claims it has received from 528,994 claimants from all 50 states and from residents of 36 countries.

Not all claims that have been processed have been paid. Of the 947,892 submitted, more than 300,000 have been denied, while others have offers pending or need further documentation.

The GCCF says that, with few exceptions, the GCCF claims process is current and generally the only claims remaining to be processed are ones submitted in past 60 to 90 days, ones that have been filed with little or no documentation, and ones that require further investigation.

Just in the past three months, the GCCF said it has received 61,558 new claims from new and returning claimants submitted at the average rate of 4,397 claims per week.

“The GCCF has largely succeeded in its primary objective — to compensate those individuals and businesses who can demonstrate financial harm due to the Oil Spill,” the GCCF said in its report.

However, it acknowledges there have been some problems along the way.

“The compensation program has not been perfect; but several midcourse corrections have been made in an effort to deal with the constructive criticism offered by victims of the spill, public officials, and others,” the report says.

As recently as last month, Attorney General Eric Holder said the fund was moving too slowly to settle claims, echoing complaints heard for months from Mississippi Attorney General Jim Hood, other state officials and plaintiff lawyers. Holder also announced that an independent audit would be done of the GCCF.

In February, a federal judge ordered BP to stop referring to Feinberg as a “neutral” participant in the claims process that is being funded by BP.

The $5 billion which has been paid to date by the GCCF can further be broken down by state as follows:

  • Alabama: 53,681 claimants paid totaling: $862,643,555.02
  • Florida: 150,920 claimants paid totaling: $2,017,086,318.87
  • Louisiana: 115,702 claimants paid totaling: $1,518,921,642.54
  • Mississippi: 30,193 claimants paid totaling: $387,278,996.73
  • Texas: 3,493 claimants paid totaling: $122,991,401.78
  • Other: 5,452 claimants paid totaling: $139,803,394.42

While the GCCF has processed virtually all of the current inventory of claims, not all of these claims have been paid. According to GCCF, the breakout as of Aug. 19, 2011 is as follows:

A. 947,892 claims received by the GCCF (from 528,994 claimants)

B. 359,441 claims paid (to 204,434 claimants) as follows:

  • Emergency Payments: $2,583,413,488.07
  • Quick Payments: $1,212,705,000.00
  • Final Payments: $901,301,057.23
  • Interim Payments: $296,871,189.31
  • Final Payment Offers Outstanding: $558,203,349.32

C. A total of 305,000 claims denied seeking Emergency Payments (from 278,359 claimants);

  • 125,000 claims denied seeking Interim/Final Payments (from 98,794 claimants);
  • 14,000 claims denied (from 11,137 claimants) because submitted documentation confirmed that no losses were sustained.

D. 25,000 Interim and/or Final claims (from 18,160 claimants) deemed by the GCCF to be deficient; i.e., lacking sufficient proof in order for the claim to be processed.

E. 23,559 Final Offers to claimants are currently pending (90 days for claimants to respond from the time the offers are made).

The United States Coast Guard has acted as an independent reviewer of 1,126 claims
submitted from claimants dissatisfied with their GCCF determinations, According to GCCF, the Coast Guard has ultimately affirmed all individual GCCF determinations.

Topics Claims Louisiana Energy Oil Gas Mississippi

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