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BP ‘cuts payments to 40,000′ over incomplete claims forms

By admin
Sunday, July 11, 2010 11:53 EDT
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BP plans to reduce payments to some 40,000 oil-spill claimants, potentially making life more difficult for individuals and businesses affected by the Gulf oil spill, a Louisiana official has said.

The Associated Press reports that Louisiana’s secretary for children and family services, Kristy Nichols, found “a significant cut in daily payments” during a recent review of claims against BP, which appears to be related to incomplete forms.

In a letter to Ken Feinberg, the federal administrator of the oil spill claims process, Nichols wrote that it was “rash” of BP to cut payments to 40,000 of the 99,000 claims filed so far.

Nichols wrote:

It is rash for BP to make this decision without consulting the State to determine if there are alternative methods for obtaining the documentation in State records. If not quickly rectified, the direct impact will be devastating to individuals surviving financially month-to-month. This action is irresponsible and in complete contrast to BP’s repeated promise that they will “make things right.” BP has negatively impacted these people’s livelihoods as a result of the oil spill and has not kept pace with their needs.

Nichols suggested that BP use government records, such as those held by the Louisiana Department of Wildlife and Fisheries, to fill in missing information. She argued that claimants often don’t have access to the information required on the claim forms.

Nichols went on to say that BP is differentiating between claims made as a result of the oil spill and claims made as a result of the moratorium on deepwater drilling enacted by the Obama administration, and recently overturned by federal judge.

“When the State asked BP how many claims fall into this category, representatives stated that the current design of their database does not allow them to identify that information,” Nichols wrote, adding that that amounts to “a significant flaw” in the system’s design.

“The moratorium is the direct result of the oil disaster and people affected should be adequately, accurately and promptly compensated,” she wrote.

Nichols also suggested that BP’s willingness to pay claims may be correlated to the political pressure it’s feeling to respond to the oil spill.

“Analysis has shown that BP issued the most claims checks in the middle of June, with a spike that came within a week of additional pressure placed on BP by the State. Payments to large loss claimants show the same type of spike immediately after the state pressured BP regarding those claims,” she wrote.

 
 
 
 
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