BP Oil Spill Fund

February/16/2011 16:06PM
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I include here a blog I wrote last June.

I predicted that BP made a great deal with their $20 billion fund for victims of the oil spill. The money was not the coup, it was handing off the handling of the claims to the government. It was a given that this is an impossible job.

Whenever you are handing out money, you will find the demand to be bigger than the supply. Now, it seems no one is happy with Mr. Kenneth Feinberg and his handling of the claim process.

The Wall Street Journal had an article about Feinberg and the claims process. It read almost exactly like the June, 2010 blog I wrote.

Here is that blog.

$20 Billion Slush Fund
June 23rd, 2010 BP made a great deal with Obama. With the government handling the claims and with Obama’s name stamped on this deal, BP can sit back and watch the constant criticism.

First, the trial lawyers will feast at the trough. The people who have Obama in their pocket will take the biggest chunk of this money. No tort reform in the Health Care Bill as you will remember. There will hundreds of ambulance chasing lawyers who will be offering help to the “small people” as the Chairman of BP called them. They will only take the standard 40% to fill out the forms. They will bundle as many as possible in class action suits. Like carpetbaggers they will thrive on this windfall.

Then there will be the frauds. Like Medicare, our Federal Government can’t avoid fraud. Kenneth Feinberg will try hard to keep this out, but he won’t succeed. At some point audits will show the scammers were right behind the lawyers in looting this fund.

The paperwork will be complex and slow. The claimants will be complaining as they are now with BP, but there will be more and the cries will be louder. The criticism will be severe. The foibles of the government handling something of this magnitude will be obvious.

Keep in mind the government is the major deterrent in the clean-up in the Gulf right now. They can’t resolve how to handle the offers from foreign countries to help. The Coast Guard called 16 boats off the water to check them for fire extinguishers. They couldn’t motor out there to check while the boats cleaned up oil, they pulled them in. The President can’t get by the Jones act which favors domestic, union, ships and bans foreign ships. So, much of the help we could be getting we can’t use since Obama is loyal to the unions. No one is in charge. Most everything the government has touched they have botched. Governor Jindal has complained from day one that he can’t get anything he needs in a timely fashion from Washington. The governor is out there every day like a general getting the facts and talking to the right people. The President has played 7 rounds of golf since the disaster occurred, been to a major league baseball game, been to fund raisers, and had Paul McCartney serenade Michelle.

What looks on the surface as a big victory for Obama with the $20 billion will become his worst nightmare. BP has gotten out of the business of handling claims, a no win business, and Obama with no vision or judgment, has taken on a mess that will cost more down the road than the little victory.

Once claimants draw on this they forfeit future claims. This will really thrill the people who are damaged. They may find this after the fact. It’s part of the BP deal with Obama. A part he has neglected to mention.

Stay tuned and watch the fireworks. They should start by the 4th of July.

According to the Journal article, the fund has paid out $3.37 billion ot 168,000 claimants. The states of Florida, Mississippi, and Louisiana have blasted the slow pace and lack of transparency on payouts. Especially why claims were denied. BP is paying Feinberg and his law firm $850,000 a month to administer the fund. Florida Senator, Bill Nelson(D) asked Obama to order an administration review of the operation.

Feinberg will be fired, the government will put someone else there, they will be fired. And on it will go. BP got out of an impossible job and Obama took it. Like always, he believes the government can do it better. Let’s see how they do this.

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