"I just got off the phone with Feinberg's people and I'm really

upset," says seafood merchant Michelle Chauncey from Barataria,

Louisiana.

Her business, which sells wholesale and retail crabs, has not

provided her with an income since the end of May, and her home is being

foreclosed.

Attorney Kenneth Feinberg's Washington-based firm, Feinberg Rozen,

has been paid $850,000 a month by BP to administer a $20bn compensation

fund and claims process for Gulf residents and fishermen affected by the

Deepwater Horizon explosion last April.

The Gulf Coast Claims

Facility (GCCF), which Feinberg manages, was set up after negotiations

between BP and the Obama administration, but over recent months there

has been growing concern among the Coast's residents that Feinberg is

limiting compensation funds to claimants in order to decrease BP's

liability.

Late last month, Feinberg told Bloomberg Television

that he anticipates that about half of the $20bn fund should be enough

to cover claims for economic losses.

"It remains to be seen, but I would hope that half that money would be more than enough to pay all the claims," he said.

Grade F

Chauncey is angry.

"[Kenneth] Feinberg told me personally I had a legitimate claim, and

that he was going to personally look into my claim and see why I wasn't

being paid," she explains, adding that one of Feinberg's colleagues gave

her his personal number and promised to help.

"I told Feinberg's

man that I know strippers who have gotten money. So if I took off my

clothes ... and worked in a bar, I'd have been paid, but since I have a

seafood business I haven't been paid.

"The really sad part is

that my story is not isolated," Chauncey adds. "There are loads of us,

and they are all in the same predicament as I am."

Rudy Toler from Gulfport, Mississippi is a fourth generation

fisherman. He submitted 62 pages of documentation to the GCCF, but says:

"My claim got denied on December 4, with about 100,000 other people."

The

GCCF, which also covers cleanup and remediation costs, has

received more than 468,000 claims and has paid about $2.7bn to

approximately 170,000 claimants (about one-third of those who have

submitted claims) in the last four months.

Most of the claims that have been paid are temporary emergency payments.

"You've paid 30 per cent of the claims," Gulf Shores City councilman

Jason Dyken told Feinberg at a recent meeting in Gulf Shores, Alabama.

"Seventy per cent of the claims have not been paid. Where I went to

school that's an 'F'."

The amount paid out averages nearly $16,000 per claimant. But

according to the US department of health and human services, the 2009

poverty threshold for a family of three was $18,310.

With mounting problems from an escalating health crisis and decimated

fishing and tourist industries, many consider this an inadequate amount

of compensation for their loss of livelihood.

Feinberg has recently been on a tour of the Gulf Coast, holding

public forums where he has often been faced with throngs of enraged

residents and fishermen.

While Feinberg admits that mistakes have been made in processing

claims, he has also said that many claims lack sufficient documentation

to warrant payment.

"I'm trying to do the right thing," Feinberg has said. "This is an

unprecedented job. There are thousands and thousands and thousands of

claims. But we're getting through them, and the money is going out."

During his recent visit to the Gulf, Feinberg said: "I will bend over

backwards to pay claims." But large numbers of Gulf residents and

fishermen beg to differ.

"Last week I spoke up at the Town Hall meeting in Bay St. Louis, and

Feinberg told me to give him my number and information and he would

personally take care of it," Toler says. "Here it is a week later and

I've not heard from him. You can't get answers from nobody. Nobody. Now,

I'm 15 days past due on my rent. It don't seem right to me."

Like Chauncey, Toler is angered by seeing residents who are not

directly involved in the seafood industry being awarded compensation

cheques, while those who are have their claims denied.

"It's very frustrating," he says. "They say on the news they are

going to help the fishermen and the people who deserve it while we

aren't getting the help, but the people at Burger King and other stores

are getting paid."

Circumventing US law?

Feinberg's claims operation is now offering three options to claimants:

Final settlements for all present and future damages that require

the claimant to agree not to seek future compensation or sue anyone

involved in last year's oil spill.

the claimant to agree not to seek future compensation or sue anyone involved in last year's oil spill. Smaller interim claims that do not require a lawsuit waiver.

Quick

payments of $5,000 for individuals or $25,000 for businesses that

require a lawsuit waiver but, unlike final or interim payments, do not

call for financial documentation. Only those approved last year for

emergency claims can take a quick payment.

Attorney Brian Donovan, with the Donovan Law Group in Tampa, Florida,

believes Feinberg is simply doing what he is being paid by BP to do.

"He's

doing his job," Donovan says. "Feinberg is a defence attorney

representing BP. To think otherwise is being foolish. As a defence

attorney, he's doing a great job for BP. But they are saying 'go with

us, or sue us'."

Donovan has written: "In lieu of ensuring that

BP oil spill victims are made whole, the primary goal of GCCF and

Feinberg is the limitation of BP's liability via the systematic

postponement, reduction and denial of claims against BP. Victims of the

BP oil spill must understand that 'Administrator' Feinberg is merely a

defence attorney zealously advocating on behalf of his client BP."

Contrary

to what Feinberg is telling claim applicants, according to Donovan,

under the Oil Pollution Act (OPA) of 1990, a victim of the BP oil spill

must first present a claim for damages to BP/GCCF and wait 90 days. If

he or she is not paid, or accepts a lesser amount, that does not

preclude the victim from pursuing future compensation. In addition, the

GCCF/Feinberg requirement that a claimant sign a general release of all

rights and claims is contrary to the OPA.

The OPA, signed into law in 1990, provided the statutory

authorisation and funding necessary for the Oil Spill Liability Trust

Fund (OSLTF). The National Pollution Funds Centre (NPFC), an

administrative agency of the US coast guard (USCG), manages OSLTF and

acts as the implementing agency of OPA.

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Since 2003, USCG has

operated in the department of homeland security. A primary purpose of

OSLTF is to compensate persons for removal costs and damages resulting

from an oil spill incident. In essence, OSLTF is an insurance policy, or

backstop, for victims of an oil spill incident who are not fully

compensated by the responsible party.

"If the OSLTF was used as it was intended by OPA, when BP/GCCF does

not pay a claim, the victim presents the claim to OSLTF," explains

Donavan. "At that point, OSLTF pays the victim and then the US attorney

general, at the request of the secretary of the department of homeland

security, shall commence an action on behalf of OSLTF against BP and

collect the amount from BP. That's how it is written."

Donovan believes that these laws are being ignored for political reasons.

BP created the Deepwater Horizon Oil Spill Trust (DHOST) on August 6, 2010.

"The fact that, pursuant to the DHOST agreement, future production

payments pertaining to BP's US oil and natural gas production, rather

than hard US assets, are being used as collateral by BP, guarantees BP's

continued long-term operation in the offshore Gulf of Mexico," Donovan

says. "Ironically, the federal government has acquired a vested interest

in ensuring the financial well-being of BP."

While Donovan's firm has been largely successful in assisting its

clients in obtaining their settlements, he says: "I'm sure down the road

we're going to have to file suit. I don't doubt that."

'Every trick in the book'

The criticism from angry residents, business owners and fishermen of

Feinberg's handling of the GCCF has mounted over the months, and now

seems to be at a fever pitch.

At a January 10, meeting in Grand Isle, Louisiana, resident and

seafood worker Karen Hopkins handed Feinberg a petition, which now has

nearly 800 signatures, demanding his resignation.

"We need him to pay us the money that the company he's working for

owes us," Hopkins says. "He's not working for our interests. He's

working to save as much of that fund for BP as he can. If he was here to

serve us, he'd give us a plan for long-term testing for the chemicals

they've poisoned us with."

The chemicals Hopkins referenced are the at least 1.9 million gallons

of toxic dispersants BP has used to sink the oil from sight.

At the same meeting, Feinberg said: "We've paid out $1bn in Louisiana

alone. Somebody's getting money. It might be the wrong people, but

somebody's getting money."

Hopkins, who works for a large seafood company, says every person who

complains to Feinberg about their claim is told "to leave him his claim

number and he'll look into it".

"I know loads of fishermen who

have never been paid one dime for emergency payments. Not one thin dime.

He doesn't understand our culture, or the damage this has done to our

way of life," she says.

Hopkins believes Feinberg is pressuring people to take the smaller,

immediate payments, rather than pursue litigation in order to obtain

appropriate levels of compensation.

"He's saying to opt in to the fund, you'll come out with more money

than if you litigate this," she says. "He's scaring these people. He's

not our lawyer. But he's basically saying if you try to sue us, we'll

f*** you up. He's condescending. He's completely crooked and corrupt.

He's trying to pull every trick in the book on us."

'Lives are being destroyed'

The lack of compensation payouts is afflicting people across the Gulf Coast.

"Most of the people I care about are hungry, they've lost their

house, they're losing their cars," says Cherri Foytlin, the co-founder

of Gulf Change, a community organisation in Louisiana.

"I've met

so many people over the last three days who've had red beans and rice

for Christmas while this man's firm is getting $850,000 a month for

this. I saw people on their knees in these meetings begging this man. I

don't know how he sleeps at night. He takes money from BP and claims to

represent and care about people in the Gulf."

Lorrie Williams fishes crab from Ocean Springs, Mississippi. Her

11-year-old son has been sick for months with symptoms she blames on

toxic chemicals related to the oil spill. Her son's blood tested

positive for several of the chemicals in BP's crude oil.

"My concern is not a claim, or money, but finding somebody who is

going to treat my son, and other sick people," she says. "For Feinberg

to tell me to file a claim, what am I filing for? To get $5,000 since

I'm sick? My fear is that in five years my child is going to have

cancer. Or my husband or I will pass away and not be here to care for my

child."

Kathy Birrin and her husband are financial partners in their seafood

business in Hernando Beach, Florida, each owning half of the company.

They both filed identical personal claims for their portion of the

business' lost income to the same claims officer.

"They paid my personal claim in 10 days, but my husband's was denied

six weeks later," Birrin says. "In Florida we're watching them pay

strippers and waitresses, while they are denying commercial fishermen's

claims. I'm hearing this same thing in all the meetings I'm attending in

all four states."

Birrin describes the situation in her area of Florida as a "disaster"

and adds: "Our fish are not there this year. We're way, way, way down

from what we usually have. People's lives are being destroyed."

Teresa Abraham also lives in Florida, where she has a publishing business that prints tourism related material.

"Most of my clients can't pay me because they've not been paid by

BP," she says. "I filed for loss of income, and of course my emergency

payment was denied, like everyone else I know who's filed."

Abraham explains that Feinberg promised Florida senator Bill Nelson

he would personally look at Abraham's claim, but she adds: "He didn't

look at it, and it looks like I may very well go out of business in the

next few weeks."

Abraham, who has been in business for 15 years, feels strongly about the way Feinberg is handling the GCCF.

"He's a self-appointed tsar and doesn't answer to anybody," she says.

"My

business is down 50 per cent. People are losing their businesses. This

is happening now. They are not paying claims to businesses that are

desperate. This is extremely frustrating. Nobody has any jurisdiction

over this guy, so there's nobody we can go to."