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Tallahassee, FL – Florida officials are pressuring authorities to cut the red tape and speed up payments to businesses from the $20 billion Gulf oil spill fund. James Call reports business leaders warn frustration with the claims process could lead to thousands of lawsuits.
Attorney General Bill McCollum emerged from a meeting with claims administrator Kenneth Feinberg, cautiously optimistic that claims by Florida hotels, restaurants and seafood workers not directly affected by the oil spill will be paid.
"Everything today from his end was couched in terms I'm inclined to or I'm leaning towards, so you are not getting commitment but at least we're getting dialogue."
Feinberg declined to talk to reporters after a statehouse meeting with the Attorney General and representatives from the Governor, Chief Financial officer and Agricultural Commissioner. Florida officials are critical about how the Gulf Coast Claims Facility, which Feinberg heads, is handling damage claims. Businesses and workers complain about red tape and low payments. At a cabinet meeting CFO Alex Sink read portions of a letter written by the president of the Pensacola Beach Chamber of Commerce.
"As of this day, I know of no Pensacola beach business who has received payment. Most of the small business has run out of cash reserve Most of the small businesses have run out of cash reserves, and are desperately in need of the prompt relief promised by Mr. Feinberg. If it is going to take an additional month to review and process the claims many of these businesses will not be able to keep their doors open."
Feinberg has been on the job since late August. He has paid out $175 million since he took over the claims process. About 1,000 payments are approved each day. But about a third of the claims lack what Feinberg considers adequate documentation. And he has expressed skepticism about claims from Florida hotels and restaurants far from the spill. His remarks frustrate officials like Sink who argued on behalf of a St. Peterburgh resort.
"I don't know of any clearer case for them to make. That, one day things are booming along and the next day they have cancellations they can prove it. They file claims I mean this is a big business they aren't out there trying to cheat somebody."
The Deepwater Horizon exploded south of Lousiana April 20th. 4.9 million barrels of oil flowed into the Gulf before the well was plugged in July. The physical impact on Florida has been more than 19,000 pounds of tar balls coming ashore. About 800 workers are still on the job picking up Florida beaches. The indirect impact is more difficult to measure. Officials say coverage of the massive oil discharged into the Gulf harmed the Florida brand. It scared consumers away from Florida as a destination for a vacation or as a source for fresh seafood. Agriculture Commissioner Charles Bronson says Florida's Gulf seafood industry lost more than a quarter of its business.
"People aren't sure it is safe even though we have been testing it we know what is being sold is perfectly safe trying to convince the public of that is tough and uh we've lost about 25 28 percent of our sales because people still aren't sure or they weren't sure watching all that national TV coverage about the oil spill."
Florida officials and representatives from the tourism and seafood industries agree that the perception the entire Gulf of Mexico was affected by the oil discharge was bad for business. And now they warn if Feinberg does not satisfy their claims they will go to court. Attorney General McCollum is trying to head off that kind of confrontation. He said he thinks it is unnecessary because the 20 billion dollar compensation fund is large enough to satisfy legitimate claims.
"The people who have been injured by this whether they be fishermen, or hotel owners or restaurant owners or whoever, those are the claims we are talking about and the objective here is for us to help negotiate and help these people help our constituents avoid litigation directly with BP and get and get their claims resolved."
By mid-September, about 26 percent of the nearly 63,000 claims from Gulf Coast states had been paid. Many claims had been sent back because of a lack of documentation. Crist, a candidate for the U.S. Senate and CFO Sink, running for governor, have invited Feinberg to appear before the Florida Cabinet and explain the claims process. The next cabinet meeting is September 28th.