BP Cuts Payments to 40,000, La. Official Says

BP has decided to reduce payments to tens of thousands of people whose claim files are incomplete, the secretary of Louisiana's Department of Children and Family Services said.

Special Section: Disaster in the Gulf

"This action is irresponsible and in complete contrast to BP's repeated promise that they will 'make things right,'" the secretary, Kristy Nichols, wrote in a letter sent Friday to federal oil spill claims administrator Kenneth Feinberg.

It was not immediately clear how severe the payment cuts would be. BP did not immediately respond to a request for comment.

Nichols said her department discovered the change after reviewing BP's Thursday claims summary, which showed a significant cut in daily payments.

She said a BP representative estimated more than 40,000 of the 99,508 people who have filed claims may get lower checks. That "will be devastating to individuals surviving financially month-to-month," she wrote.

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"It is rash for BP to make this decision" without checking to see whether the state might be able to provide needed information, she wrote.

Nichols said many people don't have records that BP finds acceptable. "It is crucial that BP not continue to penalize these individuals and instead accept alternative forms of documentation, such as records held by the Louisiana Department of Wildlife and Fisheries," she wrote.

Nichols says BP should have asked states if there are other ways to get the needed information from state records.

BP also told the state "it will begin adjusting claim payments based on the seasonal nature of fishing activities, which will also result in a decrease in payments," Nichols wrote.

Nichols also took issue with what she said is BP's policy against considering business expenses, including loan payments on fishing boats, when paying captains of shrimp, fish and oyster boats.

"This is especially significant because many captains were forced to buy new vessels after they were damaged or destroyed by hurricanes Katrina and Gustav. Monthly payments of $5,000 are simply not sufficient to maintain timely payments on boats and continue to pay for living expenses incurred by small business owners," Nichols wrote.

BP also cannot tell the state how many people haven't gotten any money because the company classified their claims as related to the moratorium on deepwater drilling, Nichols wrote.

"This is a significant flaw in the design of the system and one that must be corrected," she wrote. "The moratorium is the direct result of the oil disaster and people affected should be adequately, accurately and promptly compensated.

The BP-leased rig Deepwater Horizon exploded April 20, killing 11 workers. It sank two days later. Oil spewing from the well a mile under the surface of the Gulf of Mexico began arriving in mainland Louisiana on April 29.

On the Web

Louisiana's Letter to Kenneth Feinberg

[sciline]

I cannot fathom on what basis the decision was made to inject dispersants of known toxicity into the escaping oil at the wellhead.
This had to be BP?s idea to cover up the extent of the catastrophic environmental destruction they have wrought.
This unwise move has turned a temporary, relatively easy task of skimming off defined areas of oil at the surface into billions of oil particles into an enduring and impossible to handle, colloidal suspension, throughout the entire water column.
A colloidal suspension that will contribute to the eventual demise of all marine life in the former Gulf of Mexico!
Since the first day of this catastrophic event when BP?s estimate of their oil flow was initially given as 1,000 barrels a day, BP management had to be recognized as inveterate liars! All of their statements that followed over the ensuing months, proved this!
Anyone who would continue to believe anything that the despicable BP had to say after that would have to be judged a sycophantic idiot.
Tom Nass
5th Marine Division - WWII

[sciline]

When applied to BP, the word "despicable" would be a compliment to these ethical degenerates!

[captdave666]

As for the documents, I talked with a BP adjuster and he told me he withheld a payment because a photo ID was not sent in. So, to throw away or deny a claim for a minor document is not the way to handle claims. He also said that there electric would be turned off the next day but without the document there is nothing he could do.

[credibility_problem]

If there's insufficient documentation up front, then the claimant should be given the basic bottom-line payment, and informed that any fraudulent claims (say, a Maine fishing boat trying to claim benefits) will be prosecuted.

What's disgusting is BP's insinuation that the claims are fraudulent - they should have zero say in overseeing this, but as usual, the "government oversight panel" is just rubber-stamping BP's corporate decisions.

What do you expect - Sarah Palin's husband is a long-time BP employee, and Obama's top political advisor, David Axelrod, runs consultant companies whose top employees also work for the American Petroleum Institute. The politicians aren't setting the energy policy - the corporations are setting the policy, and the politicians are selling the policy to the public - and that policy is more offshore oil, more tar sand imports, more foreign quests for oil in Africa, the Arctic, etc., and more dirty coal-to-gasoline plants - and yes, more shale gas extraction, too. This is the corporate energy policy that both Republicans and many Democrats adhere to - particularly coal-state Democrats like Obama, who listen to what corporate consultants like David Axelrod tell them.

[Cowcharge]

And what does Todd Palin have to do with any of this? The Palins certainly have no influence in this administration, lol (loonie).

[stn_sage]

Is THIS supposed to surprise us or something?? IT DOESN'T!!

[pragmatist1]

Seems to me if the claimants don't have sufficient paperwork to support their claims that BP has every right to deny the claim. Sounds to me like a lot of folks trying to scam the system and using the BP disaster to justify their fraud. No reputable business or individual should ever be able to claim a loss of anything without proper documentation.

[pragmatist1]

Feinberg, who was appointed to oversee the BP claims will also require specific documentation in support of purported claims...Feinberg, like BP, will not tolerate fraudulent claims...

[Martha812]

BP and the government agency administrating this program have every right to see bookkeeping records and tax returns of every person asking for relief funds. Remember what happened after Katrina? Our government issued $2,000.00 debit cards to whoever was in line with their hand out? I'd like to know how much money taxpayers were scammed for that fiasco. Right now there are people headed for the coast of Louisiana wanting to scam the system. I live in Houston and heard that there are hundreds of legitimate fishermen who did business "cash only" and never filed any tax returns or only filed and payed taxes on a small portion of what they actually made and they expect BP to pay based on their word? They're the ones who are complaining. If you can't PROVE you've made money or your living on fishing in the past through your tax records, your claim should not be approved.

[larrydbaxter]

You know this is terrible, but if I was BP I would not pay a claim unless you had the last 5 years of your tax return, when something like this happens, you have everybody from everywhere wanting to get something for nothing.

[KyTrish56]

This is such a underhanded thing to do. I understand there is a process but to pull the rug from under these hard working people is just a travesty. BP should be ashamed of themselves, what is our government doing about it, they ordered BP to set up this fund and what does BP do. They spit in the faces of the people in that region. BP can spend a crap load on advertising and how they are for the little people but in the end they are just wanting to save a buck. These people need help, they have to put food on their table and pay their mortgages. I guess they aren't going to count these numbers in the unemployment stats because you watch and see these folks will have no work because these companies are going to pull out of the gulf and drill elsewhere. The exodus has already started. How can these people look themselves in the mirror every day.

[endurorob_5]

Pay attention. This is due to people not providing sufficient or appropriate documentation. There are likely many scammers out there that would try to get money from BP that they did not deserve.

[antoniof123]

And so it begins, really did anyone think they would pay.

Like Exon they will run to the courts and then the courts will say yes you are guilty.

BUT YOU DON'T HAVE TO PAY.

Another day.

[endurorob_5]

They are paying but they are not paying to anyone that comes and holds there hand out. They expect those who deserve to be payed to show they lost money due to the oil spill.