Those attending the 13th annual Environmental Summit at Florida Coastal School of Law on Thursday were told to not expect to see the public policy developed to assist those affected by the BP oil spill too often.
The statement was made by keynote speaker Ken Feinberg, administrator of the Gulf Coast Claims Facility that processes claims for the $20 billion fund established by BP to address damages that resulted from the Deepwater Horizon oil spill in 2010.
As one of the worst environmental disasters in U.S. history, Feinberg’s knowledge of the recovery efforts fit with the summit’s theme of “Economics, Ethics and the Environment.”
“What lessons do we draw from these programs?” asked Feinberg. “First, these programs are exceedingly rare. Do not think for a minute that this is the wave of the future. That there are going to be more and more of these special programs running parallel to our conventional state and federal litigation systems.
“I believe that these programs are a precedent for nothing. They are one-off responses to unique, American tragedies,” he continued. “If you look at the number of times programs like these have been established, they are very rare. They should be rare.”
In 2010, Feinberg was appointed by the Obama administration to serve as administrator of the Gulf Coast Claims Facility.
In 2009, he was assigned by the Secretary of the Treasury to serve as the Special Master for TARP (Troubled Asset Relief Program) executive compensation.
He was charged with developing the compensation rate for executives of companies that requested government assistance to avoid bankruptcy.
The U.S. Attorney General appointed Feinberg to serve as Special Master for the September 11th Victim Compensation Fund of 2001.
He described the BP program as an “unprecedented program” in public policy.
“After the oil rig exploded the Obama administration shook hands, not Congress, they shook hands with BP and BP said we will put up $20 billion to pay for all the victims who were impacted by the oil spill and we will pay those claims for anybody deemed eligible,” said Feinberg.
The availability of that type of money provided a good learning experience for Feinberg and his staff.
“When you announce $20 billion ... build it and they will come. I have received, over the last 14 months, over one million claims from 50 states and 38 foreign countries all claiming damage due to the spill. I have received claims from Alaska, Canada, Sweden, and Norway. I have received claims from dentists, chiropractors, veterinarians and restaurants in Boston and Las Vegas, all claiming injury due to the spill,” said Feinberg. “We have received a volume of claims that are contrary to my experience.”
While the BP and 9/11 funds are both similar in that Feinberg describes them as “unique,” they also differ in scale.
“In the entire 33-month life of the 9/11 fund I received 7,300 claims. I get 7,300 claims in a week with the BP oil spill. We have paid over the last year about $6 billion. We have honored about 475,000 claims,” said Feinberg.
The Gulf Coast Claims Facility will remain open until August 2013.
Feinberg explained how he is often asked if the programs, BP and September 11, are good public policy.
“I do indeed. Both are examples of creative, sound, effective public policy,” said Feinberg. “Just don’t do it again and make sure they are the exception and not the rule.”
He supported the special programs, but warned that the creativity with public policy should be sparingly used.
“Be careful in America about setting up a special program for just a few people who are the victims of life’s misfortune. Bad things happen to good people every day in this country and you don’t have a BP fund or a 9/11 fund. You go to court, they have their lawyer, you have your lawyer, judge and jury. The court system works pretty well in our country,” said Feinberg. “Even if you think the rule of law and court system in this country doesn’t work well, that the adversary system ought to be changed, you are tilting at wind- mills. The American system, the adversary system, is so ingrained in the fabric and the history of the country, it’s here to stay.”
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