Handout Man Returns

Posted July 21, 2010, at 5:33 p.m.

Kenneth Feinberg, who specializes in distributing money in hardship cases, is back on the job. This time he is parceling out BP’s $20 billion fund to victims of the gulf oil spill.

Earlier, the Washington lawyer, a Colby College graduate, apportioned nearly $7 billion in federal funds to more than 5,000 people and families hurt by the 9-11 attacks, then administered a fund for families of victims of the 2007 Virginia Tech mass slaying, and last year, as executive-pay czar, slashed the compensation of top executives of the largest bailed-out companies. He also had paid out benefits to Vietnam veterans injured by the herbicide Agent Orange and women harmed by the defective birth control device Dalkon Shield.

Mr. Feinberg has it down to a science. He tells groups of often skeptical and contentious fishermen, merchants and workers that the program is purely voluntary, but “It’s my opinion that you are crazy if you don’t participate.” If they take the payments, they must sign an agreement not to sue BP. The company and the federal government both favor acceptance so as to escape the cost and trouble and delay of lengthy court action.

His 36 claims offices have already handed out more than $200 million in emergency payments to 32,000 claimants who could prove their losses, according to a New York Times reporter who accompanied him to meetings in four southern Louisiana towns. Then he will negotiate with each claimant for a lump sum covering economic losses from the spill during the next three years.

The Times quoted him as saying, “If you think the lump payment is inadequate, don’t sign,” adding that litigation would mean years of delay, uncertainty as to the outcome, and a cut for the lawyers. “I am determined to come up with a system that will be more generous, more beneficial, than if you go and file a lawsuit.”

In estimating lost future earnings, Mr. Feinberg asks for tax returns or profit and loss statements but will settle for check stubs and other records. If a claimant has none of those, he was quoted as saying, “Well, then, tell the captain of the boat, or your priest, to vouch for you.”

Mr. Feinberg expects to encounter some anger and abuse from people who have seen their livelihoods suddenly wiped out, but he expects from past experience that most of them will accept the payments he assigns. He still faces a request from the attorneys general of the gulf states that he set aside the time limit of 90 days after the leak is plugged for filing of claims and abandon the waiver of lawsuits.

But he is tough and determined. He told The Times: “If you’re not willing to go into the lion’s den and confront the emotion and the hurt, you shouldn’t do it.”

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