01/21/2011 11:19 am ET | Updated May 25, 2011

Fishermen Dismayed Over Low Payouts in Spill Claims

This article was published in the January 17, 2011 edition of The Louisiana Weekly

For fishermen counting on checks for losses they sustained from the BP spill, the mail can bring the denial of a claim or a much slimmer payout than anticipated. Last week, Ken Feinberg, administrator of the $20 billion, Gulf Coast Claims Facility, was hammered by questions from fishermen and others during his two-day road show to discuss claims rules in Mississippi and south Louisiana.

Meanwhile, in a report released last week, President Obama's national oil spill commission said that some GCCF claimants are dissatisfied with the amounts of their payments.

Kimberly Chauvin, owner of Mariah Jade Shrimp Company, a family-run, shrimp-trawling and seafood dock business in Terrebonne Parish, said "we were told the payments would be 'from the water first and out' geographically, but the fishermen here are being overlooked."

She said her company provided the GCCF five years of tax returns and profit-and-loss statements, which were three more years than required. She joked that her forms included everything but the results of her last physical exam and blood test.

Chauvin said "we own three boats and a dock. We've received a payment on one of our boats for 11.5% of the emergency payment requested and on another for 36%. Our third vessel was denied an emergency payment." She has received nothing for her dock.

Chauvin said "it seems like anything over a certain dollar amount gets thrown into a pile by GCCF to be considered later."

Captain Gregg Arnold in New Orleans runs charter boats for fly fishermen, and said he too is discouraged. "When I first submitted a claim back in May, I gave them three years of tax and bank statements, and was told I had the most complete forms of anyone so far," he said. "I received a check in the summer and another in September. Then I submitted a claim with GCCF for a low, six-digit figure to cover business losses, and got a check for 12% to 13% of that amount, with no explanation."

Arnold said "my clients are mostly from out of state, and very few of them have booked trips since the spill. I had five charter boats when the spill started, and have sold two of them since." His boats were too small to do cleanup for BP, he added.

Chauvin said "when you submit a claim, there's no information or transparency about how it's handled." She said claims should be processed locally but are instead handled by an office in Ohio. "If I walk into the GCCF office in Houma, they can't answer any of my questions."

Amy Weiss, GCCF spokeswoman, said 35 claims offices are open across the Gulf while claims processing is done in Ohio by GCG, formerly known as Garden City Group. That company specializes in the resolution of mass claims and was hired by the GCCF last summer. Weiss added, however, that more local people from firms across the Gulf had been assigned to all offices on the coast.

Chauvin, nonetheless, has a litany of complaints, saying "Feinberg has continually lied to the people." She continued "it started with him saying that fishermen and the seafood industry would be the first to receive payments, and second it was that we would be issued emergency payments within 48 hours, and next it was that we would have transparency."

Kevin Dean, attorney in charge of BP litigation at Motley Rice LLC in Charleston, South Carolina, pointed to similar problems faced by his firm's clients, which include charter and commercial fishermen from Louisiana and other Gulf states. "Many of them with documented and legitimate claims have had their GCCF claims denied," he said. On attempts by Motley Rice, which assists clients with their clams, to contact GCCF, "there's been no one there to explain why they were rejected, so you are shooting in the dark as to how to correct or supplement the claim."

Dean said "many of the claims adjusters seem to be temporary contractors," lacking the will, experience or guidance to handle simple claims. Feinberg changes the rules almost daily, he said. "There's no consistency as to how claims are processed, and much of it depends on which adjuster your claim was assigned to."

Claims can be denied because of minor omissions, Dean said."We did find out that one of our client's claims -- which had been under review for over eight weeks -- was rejected because of a simple clerical mistake in the Social Security number. But instead of calling my office for verification or correction, they denied the claim," he said.

Dean continued "another claim was rejected after many weeks because it was missing a zip code. The adjusters won't pick up the phone and call with a simple question like a zip code."

Dean said circumstances surrounding a Nov. 23, GCCF deadline to file damages resulting from the BP rig explosion and spill were suspect, especially since many claims filed in November were denied in December. "I'm convinced that deadline was simply a sick, data-gathering mission for GCCF and BP to learn how many people overall were planning to submit claims," Dean said.

Many fishermen have turned to non-profit groups for advice on filing claims. Mark Maher, New Orleans-based managing director of non-profit Seedco Financial Service's Louisiana office, said his group is one of twelve, assistance providers selected by the state to help individuals and businesses with their GCCF claims. Among the twelve are Catholic Charities, VIET, A Shared Initiative, Inc., GNO, Inc. and Operation Hope, he said. Together the twelve groups have sponsored over 475 events since the spill to help with processing claims and other financial matters.

"Since the spill, Claims Assistance Providers have assisted over 1,500 fisheries-related business owners with lost-income claims and been able to expedite their GCCF claims," Maher said.

If you think doing your taxes is hard, try figuring out the GCCF claims maize. Maher noted that through the GCCF, claimants can apply for various types of compensation, including interim payments available quarterly until the expiration of the facility in August 2013; quick payments -- in amounts of $5,000 per individual and $25,000 for businesses for those claimants who received earlier, emergency payments; and final lump-sum payments for all past and future losses, giving up all rights to sue BP.

Maher said that, to date, Seedco has not recommended that fishermen sign on with attorneys in class action suits against BP.

Seedco's Belle Chasse office was established as a one-stop center for fishermen in May 2008. The group is funded by banks and foundations, and has participated in the Louisiana Dept. of Economic Development's business-recovery grant and loan program.

Maher defended Ken Feinberg and pointed to the size of the fund administrator's plate, saying that the GCCF has processed over 470,000 claims from five, coastal states to date, and has paid out roughly $3 billion to over 168,000 of them. Maher said Feinberg has acknowledged publicly a number of times this fall that he's trying to improve clarity and consistency in the claims process.

Meanwhile, Chauvin said her industry continues to suffer. "Our seafood sales are down, especially because tarballs continue to wash up in Alabama and Louisiana, and consumers hear about that," she said. "We haven't received orders from our out-of-state customers since the spill started last April."

She said "some of the fishermen in Southeast Louisiana are still officially employed by BP to do cleanup. BP is dragging its heels on sending out some of their termination letters, but commercial fishermen can't return to fishing until they get those letters because of language in their BP contracts."

Curtis Thomas, spokesman for BP's Gulf Coast Restoration Organization, said "98 vessels in Louisiana are still a part of the Vessels of Opportunity program, with 65 working on any given day. Each vessel has one to three people on board." Duties include cleanup, laying and collecting boom, and transporting material and personnel to work sites.

Thomas said "less than 40 vessels are currently in the queue in Louisiana to be 'deconed" -- or cleaned, decontaminated and readied to be put back in the water, without any oil or other residue from the spill. Then they can go back to fishing, or to what they were doing before we hired them to help out on the spill." Not all VOO boats are fishing boats, he noted.

Delays in boats being 'deconed' can result from weather, vessel availability and attempts to contact the boat owner or captain, Thomas said. He also said "fishermen employed by BP are free to file a GCCF claim at any time if they feel they can support it."

Meanwhile, critics of the GCCF worry that Florida has had unfair advantages in the claims process. Chauvin said "when you look at the electoral votes, Florida has more than Louisiana. More attention was given to Florida, than here, in the very beginning."

Dean said "Feinberg has dedicated a significant amount of the BP Trust Fund to a fund for economic losses of real estate agents overseen by Florida Realtors, and operated by a private contractor, NCA, to adjust claims."

In August, Florida Realtors, formerly known as the Florida Association of Realtors, contracted with Indiana-based NCA, a claims-adjustment firm, to handle claims and administer payouts. Checks are drawn against a special, $16 million fund, covering loss of income and sales, that Florida Realtors negotiated with Feinberg, according to the Florida Realtors' website. Claimants must hold a Florida real estate license.

Criticism of the GCCF made its way to Washington, DC some time ago. Last week's report from the national oil spill commission noted that after the U.S. Dept of Justice sent Feinberg a Sept. 17 letter, urging expediency, Feinberg streamlined claims-processing times and extended payment periods. The commission recommended that, after all claims are paid, the GCCF's effectiveness be evaluated for lessons in case any big spills occur again.

On the Louisiana coast, Chauvin is fed up with the GCCF's meetings with constituents. "Feinberg continues to show face for only one hour per public meeting when there are so many things going wrong with his claims process," she said. "Instead of actually listening to the people, he's rolling through and moving on."