In La., anger mounts over BP claims process

Business owners cite long delays, small payments

By Brian Skoloff and Ray Henry
Associated Press / June 10, 2010

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GRAND ISLE, La. — Gulf Coast fishermen, businesses, and property owners who have filed damage claims with BP over the oil spill are angrily complaining of delays, excessive paperwork, and skimpy payments that have put them on the verge of going under as the financial and environmental toll of the disaster grows by the day.

Out in the Gulf of Mexico, meanwhile, the oil company yesterday captured an ever-larger share of the crude gushing from the bottom of the sea and began bringing in more heavy equipment to handle it.

The containment effort played out as BP stock plunged to its lowest level in 14 years amid fears that the company might be forced to suspend dividends and find itself overwhelmed by the cleanup costs, penalties, damage claims, and lawsuits generated by the biggest oil spill in US history.

Shrimpers, oystermen, seafood businesses, out-of-work drilling crews, and the tourism industry all are lining up to get paid back the billions of dollars washed away by the disaster, and tempers have flared as locals direct outrage at BP over what they see as a tangle of red tape.

“Every day we call the adjuster eight or 10 times,’’ said Regina Shipp, who has filed $33,000 in claims for lost business at her restaurant in Alabama. “There’s no answer, no answering machine. If BP doesn’t pay us within two months, we’ll be out of business. We’ve got two kids.’’

An Alabama property owner who has lost vast sums of rental income angrily confronted a BP executive at a town meeting. The owner of a Mississippi seafood restaurant said she is desperately waiting for a check to come through because fewer customers come by for shrimp po-boys and oyster sandwiches.

Some locals see dark parallels to what happened after Hurricane Katrina, when they had to wait years to get reimbursed for losses.

“It really feels like we are getting a double whammy here,’’ said Mark Glago, a New Orleans lawyer who is representing a fishing boat captain in a claim against BP. “When does it end?’’

BP spokesman Mark Proegler disputed any notion that the claims process is slow or that the company is dragging its feet.

Proegler said BP has cut the time to process claims and issue a check from 45 days to as little as 48 hours, provided the necessary documentation is supplied. BP officials acknowledged that while no claims have been denied, thousands of claims had not been paid by late last week because the company required more documentation.

Meanwhile, at the bottom of the sea, the containment cap on the ruptured well is capturing 630,000 gallons a day and pumping it to a ship at the surface. That amount could nearly double by next week to roughly 1.17 million gallons, said Coast Guard Admiral Thad Allen, who is overseeing the crisis for the government.

A second vessel that will arrive within days is expected to greatly boost capacity. BP also plans to bring in a tanker from the North Sea to help transport oil and an incinerator to burn off some of the crude.

The government has estimated 600,000 to 1.2 million gallons are leaking per day, but a scientist on a task force studying the flow said the actual rate may be between 798,000 and 1.8 million gallons.

Crews working at the site toiled under oppressive conditions as the heat index soared to 110 degrees and toxic vapors emanated from the depths. Fireboats were on hand to pour water on the surface to ease the fumes.

Allen also confronted BP over the complaints about the claims process, warning the company in a letter: “We need complete, ongoing transparency into BP’s claims process, including detailed information on how claims are being evaluated, how payment amounts are being calculated, and how quickly claims are being processed.’’

The admiral this week created a team that includes officials from the Federal Emergency Management Agency to help with the damage claims. It will send workers into Gulf communities to provide information about the process. Allen also planned to discuss the complaints with BP officials yesterday.

Under federal law, BP is required to pay for a range of damage, including property losses and lost earnings.

Residents and businesses can call a telephone line to report losses, file a claim online, and seek help at one of 25 claims offices around the Gulf. Deckhands and other fishermen generally need to show a photo ID and documentation such as a pay stub showing how much money they typically earn.

To jump-start the process, BP was initially offering an immediate $2,500 to deckhands and $5,000 to fishing boat owners. Workers can receive additional compensation once their paperwork and larger claims are approved. BP said it has paid 18,000 claims so far and has hired 600 adjusters and operators to handle the cases.

The oil giant said it expects to spend $84 million through June alone to compensate people for lost wages and profits. That number could grow as new claims are received. When it is all over, BP could be looking at total liabilities in the billions, perhaps tens of billions, analysts say.

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