FOR IMMEDIATE RELEASE
NEWS RELEASE
March, 21, 2011
For More Information, contact:
Luther Strange
Joy Patterson (334) 242-7491
Alabama Attorney General
Suzanne Webb (334) 242-7351
Lee Ellen Fleming (334) 353-1640
Page 1 of 4
AG STRANGE, LOCAL OFFICIALS DEPLORE HUMAN, ECONOMIC
EFFECTS OF GULF COAST OIL SPILL AS WELL AS DELAY IN
PROCESSING CLAIMS
(MONTGOMERY)–Attorney General Luther Strange and local officials are expressing
serious concern for Gulf Coast residents and businesses that are struggling to survive the
aftermath of the 2010 Deepwater Horizon Gulf oil spill and the subsequent excruciating claims
process.
The disaster that began with an explosion on April 20, 2010, followed by nearly 100 days of
uncontrolled release of millions of gallons of oil caused 11 deaths, countless instances of
personal injury and property damage, and catastrophic environmental and economic
devastation expanding far beyond the Gulf Coast region.
Following the oil spill, citizens faced additional hardships from the frustrating
and inadequate processes set up for compensation through the Gulf Coast Claims Facility and
its administrator, Kenneth Feinberg. ìTo say that the processing of claims has been an
extremely inefficient and painful process to experience or watch would put it mildly,î said
Orange Beach Mayor Tony Kennon.
Attorney General Strange noted that the GCCF appeared inappropriately proud in its recent
announcement that it has managed to process 54 percent of final claims (140,338 out of
256,319). He emphasized some major concerns that he and local officials have in response to this
report:
1. The GCCF now omits from its reports and from its recent self-laudatory news release the
number of claimants denied through the Emergency Advanced Payment (ìEAPî) and
the Real Estate Funds.
2. Of the claims reportedly paid, almost alló98.9 percent (96,417 out of 97,423) are of the
express-line quick-pay option requiring no processing by the GCCF, and disturbingly,
that the claimant was required to forfeit any and all other legal recourse for
compensation.
3. Finally, although Feinberg restates a concern over fraud and lack of documentation, only
a small number (14.6 percent) of the processed claims were reported to require further
documentation.
Attorney General Strange and Gulf Coast officials also are troubled that the GCCF continues
to rearrange data in a way that hinders true transparency. One simple example is since
February 21, the EAP (emergency advanced payment) data on total claimants is no longer
available on the GCCF website. ìI canít help but think that the numbers are being manipulated
to paint the best picture for Mr. Feinberg and the GCCF,î stated Congressman Jo Bonner.
501 Washington Avenue Montgomery, AL 36104 (334) 242-7300
www.ago.state.al.us Page 2 of 4
Additionally, the GCCF touts the amount paid in claims, but refuses to release what
percentages they are paying of the amount sought by claimants. Attorney General Strange
commented that paying $3.5 billion when losses actually were many billions more is hardly a
reason to claim success. This complete information to provide a true perspective of payment is
essential for an accurate and fair evaluation of the GCCF process.
Lastly, the average final full offer that has been accepted by claimants in Alabama averages
approximately $12,000. Attorney General Strange said he finds this suspect and troublesome as
no one knows exactly how long the effects of the spill will impact our coastal community,
noting that it seems highly likely that many businesses lost much more than the $12,000 they
have been paid as a final amount.
ìIt is unacceptable for the GCCF and Mr. Feinberg to continue to operate in this manner,î
said Attorney General Strange. ìA multimillion dollar public relations campaign has been used
to distort the truth, which is that people in Alabama are hurting and struggling to survive a
situation over which they had no control and that was caused by BP and others. I stand here
today to promise that I will hold the GCCF accountable and I will do everything I can to help
our coastal victims survive this catastrophe.î He went on to demand that, ìMr. Feinberg, you
must quit dragging your feet and stalling these claims to a point that the victims are desperate
to settle for anything. Your actions are causing severe harm to businesses and are hurting the
lives of innocent people. The apparent intentional delay of processing claims, and the resulting
desperation of claimants, has added an appalling burden to those who suffered the initial
consequences of the 2010 Gulf oil spill.î
A Gulf Shores city councilman, Jason Dyken, who is also president and CEO of
Dyken Wealth Strategies, stated, ìI continue to be disgusted by the allowance
of BP/GCCF/Feinberg to operate as they have been. Why do we not have acknowledgment of
this problem from the President? Obviously the welfare of BP is more important to this country
than the thousands of individuals and business owners who were damaged by this disaster.î
According to Baldwin County Sheriff Hoss Mack, the effect of the oil spill has been all
across-the-board. ìWe had to increase patrols to assist with the initial impact; provide deputies
for off-duty security details to guard staging and cleaning sites; our narcotic and domestic
violence cases increased; we are facing budget cuts by the County Commission due to
decreased revenue; and the stress of the economy and additional work has increased stress
among personnel.î He added that ìThe impact that the BP/Deepwater Horizon incident has
had on the Baldwin County Sheriffís Office has been substantial and to a point that is not yet
totally realized. I feel there will be a continued increase on certain criminal activity as well as
demands on the Sheriffís Office. I wish I could contain this and put it in a box so we could study
it and build a comprehensive response, however I feel it is best characterized as looking
through a window. We can see what is in view, but we do not see what is not in view. Our data
indicates to us there is more on the horizon and more we donít yet have a full comprehension
of. We will be required to do more with less while maintaining a high standard of quality and
professionalism.î
Another critical concern is the extreme emotional toll on citizens affected by this disaster.
ìWhile the spirit and determination of our people cannot be broken, the reality of serious
stresses caused by the 2010 Gulf oil spill and the claims process is affecting our families and our Page 3 of 4
children. The concern over finances, stability and security is written on their faces,î said
Representative Steve McMillan, who represents Baldwin County.
Officials note the harsh reality that there was not enough money offered and it did not come
quickly enough for most people to keep their businesses afloat and their doors open to pay their
employees. They note that every dime received by victims was used to keep their heads above
water, with no recourse left for the upcoming demands of income taxes due in April. This is
among the factors recognized by the Alabama Department of Mental Health for significant
concerns about the welfare of Alabamians, including the following factors:
1. The claims process, uncertainty, and frustration that victims are experiencing;
2. an increasing demoralization is increasing, with independent people being forced to
ask for help, and essentially having to beg for relief in a manner that is humiliating for
them;
3. although it was hoped the situation would have been a little better by now, in reality,
the stress level is increasing;
4. causes of high-stress include letters of denial with no transparency or explanation, and
the degree of scrutiny that people must endure and which feels like an accusation of
fraud— instead of being treated like victims, they instead are treated in a way that feels
as though they are being persecuted; and
5. psychological stress will bring about long-term physical problems if it is not abated.
Bob Higgins, the senior vice president of the Baldwin County Economic Development
Alliance and chairman of Coastal Resiliency Coalition, stated, ìAt the end of the day as we
look around our community, we find that the level of personal stress created by this
dysfunctional claims process far exceeds the level of stress created by the oil spill itself. This
stress results in domestic violence, drug use, people losing their homes and businesses, and
watching their livelihoods being destroyed. The problem that the claimants are faced with is
that if you are already near financial ruin, the only way to receive any payment with certainty is
the quick-pay process. Even if you decide that it is not enough money to compensate you, it is
still more than your other choice, which is complete uncertainty. There is no wonder people
would give up their right to sue and accept a quick claim payment instead of continuing in this
broken process that may never lead to anything at all. ì
According to the Baldwin County Mental Health’s Project Rebound, there are now children
who are homeless or having to live with extended family, due to divorce or because one parent
has to leave the area to find work in an effort to support the family. “One of the most
heartbreaking consequences of the grossly inefficient and ineffective claims process is the
devastating damage it is doing to our children,î laments Carolyn M. Doughty, mayor pro tem
of Gulf Shores. ìOur children are coming to school unbathed, in dirty uniforms, and are not
getting adequate food outside of the two meals they may get at school during the week days.
Our teachers and our school counselors are now having to be social workers and substitute
parents in addition to their normal duties. BP’s and Mr. Feinberg’s unwillingness to understand
the situation and adequately and quickly replace our lost ‘tourist dollars’, caused by the BP oil
spill, has created monumental financial stress that has then resulted in extreme mental stress
on so many of our businesses, citizens and families that goes way beyond anyone’s
imagination.” Page 4 of 4
ìI am of the firm belief that Feinberg and the BP claims process is preying on the desperate
economic situation of these families with their backs against the wall, and is dangling grossly-
inadequate ‘final’ payments in hopes that people will give up their claims for quick cash. This is
why these releases that permanently force people to give up rights should be thrown out by the
court,î stated Attorney General Strange.
Gulf Shores Mayor Robert Craft said, ìThe people of Alabama’s Gulf Coast have
worked together, shoulder-to-shoulder, to overcome many overwhelming disasters.
From hurricanes Frederick to Gustav, dozens of natural disasters have challenged the spirit and
soul of our citizens. Each and every time, we reach out and find the strength to recover. We
have endured throughout multiple economic pressures, from recessions to high interest rates to
bank failures that pressed our family-owned businesses to the brink and curtailed the vacation
habits of our tourists. Never in the face of these many challenges did our people quit or
complain.î But Mayor Craft went on to explain that ìthis oil spill is different. It was not caused
by Mother Nature, nor was it a problem facing the entire nation. How could our people not
have felt somewhat abandoned, with the daily media barrage of ads by BP telling the world
they were ‘making it right’ while we continued to see no relief? Yet even now, the same strength
upon which we have drawn in the past, we find again, as we have fought to use every available
resource, and now stand ready to greet the upcoming tourist season.î
On behalf of all Gulf Coast communities, Mayor Craft welcomes visitors to return and enjoy
the treasures of the Gulf Coast, assuring that, ìOur beaches are safe and clean. Our seafood has
been tested more than any food group, and found to be safe. Visitors will find this season
marked by an unprecedented spirit of appreciation and optimism. The lost summer of 2010 is
over, spring is gloriously here, and we meet the future with hope and determination, as
the Gulf Coast will thrive, with or without the help we deserve from BP.î
People seeking to file a lawsuit, to join any of the current litigation as a plaintiff, or those
who do not qualify for assistance from Legal Services of Alabama, may contact either of the
following:
Mobile Bar Lawyer Referral Service, 251-433-1032, Hours of Operation: Monday
through Thursday, 9 a.m. to 4 p.m., and Friday, 9 a.m. to noon.
Alabama State Bar Lawyer Referral Service, 1-800-392-5770, Hours of Operation:
Monday through Friday, 8:30 a.m. to 4:30 p.m.
Income-eligible people seeking free legal assistance with matters unrelated to the claims
process or litigation but related to a loss of income from the spill, such as consumer debt
collection, may seek assistance from the Mobile Bar Association Volunteer Lawyers
Program at 251-438-1102 or the Alabama State Bar Volunteer Lawyers Program at 1-888-
857-8571.
–30–
S T A T E OF ALA BA M A
OFFICE OF THE ATTORNEY GENERAL
501 WASHINGTON AVENUE
LUTHER STRANGE
MONTGOMERY, AL 36130
ATTORNEY GENERAL
(334) 242-7300
WWW.AGO.STATE.AL.US
March 21, 2011
Mr. Kenneth R. Feinberg. Esq.
Feinberg Rozen, LLP
The Willard Office Building
1455 Pennsylvania Avenue, NW, Suite 390
Washington, D.C. 20004 -1008
Dear Mr. Feinberg,
Our anxiety has reached a boiling point. Nearly a year has passed since the
Deepwater Horizon spewed oil into the Gulf and onto Alabamaís beaches. In that year,
little has changed. In the summer of 2010, thousands of Alabamians desperately awaited
compensation. As the summer of 2011 approaches, most are still waiting, more desperate
than ever. And to be blunt, the Gulf Coast Claims Facility is largely óif not primarilyóto
blame.
As an initial matter, the GCCF appears inappropriately proud of its re cent
announcement that it has managed to process 54 percent of final claims (140,338 out of
256,319). Even if the processing of a claim alone was cause for celebration, more than
100,000 claimant óa hefty 46%ówould be left out. Of course, we both know tha t a large
percentage of the ìprocessedî claims were merely rejected, often without the courtesy of
being told why.
Numbers aside, here are some additional concerns and questions I have with your
report:
1. Quick-pay: Of the claims reportedly paid, almost all óa whopping 98.9 percent
(96,417 out of 97,423)óare of the express-line, quick-pay option that requires no actual
processing by the GCCF. Just as disturbing, these quick -pay recipients were required to
forfeit any and all other legal recourse for compensation. Simply put, almost no one is
being paid when their claim is actually ìprocessedî; they are just swiftly paid to go away.
Why are you working so diligently, and so swiftly, to protect BP and secure relea ses for
their liability?
2. Meager Payments: When payments are released, they do not amount to much.
The average final full offer that has been accepted by claimants in Alabama averages
approximately $12,000. I find this both suspect and troublesome, seei ng as though no one
knows exactly how long the effects of the spill will impact our coastal community. It seems
highly likely that many Alabamians óboth citizens and businesses ólost much more, and
will continue to lose much more, than the $12,000 they have been paid as a final amount.
3. Lack of Fraud: You constantly speak of your concern about fraud and lack of
documentation. But only a fraction of processed claims (14.6%) were reported to require
further documentation. In other words, an overwhelming maj ority of Alabamians are
properly documenting their claims; you are simply turning them down for other reasons.
4. EAP: Why does the GCCF now omit from its reports, and from its recent news
release, the number of claimants denied through the Emergency Advance d Payment (“EAP”) and the Real Estate Funds? If transparency is so vital to the GCCF, why isnít the GCCF
completely forthcoming?
5. Ratio of Claims to Payments: Along the lines of transparency, why doesnít the
GCCF release the data that would reflect the ratio of what is being paid versus what is
being claimed? Paying $3.5 billion when claimed losses are many billions more is hardly a
reason to claim success. Providing the complete picture of claims versus payment is
essential for an accurate and fair eval uation of the GCCF process.
These five concerns with your recent report are just the tip of the iceberg. I could
go on and on. Instead, I want to show you the effect the GCCFís failures have had on
Alabamians. The Alabama Department of Mental Health has identified significant concerns
regarding Alabamiansí mental welfare in the wake of the oil spill, which flow from the
following factors:
1. Frustration and uncertainty stemming from the claims process;
2. The demoralization, and often humiliation, of str ong-willed, independent
citizens who have been reduced to begging for handouts from an organization
(the GCCF) whose primary mission seems to be turning them down;
3. The frustration and feeling of stress and hopelessness that arises from the
repeated rejection of claims, often without any explanation as to why or how
to correct any ìproblemî;
4. The once-held feeling that a person or businessí problems would be solved by
now; only to be struck by the harsh reality that it has not óand likely will not
be in the foreseeable future.
I have been assured by the Department of Mental Health that the worst is yet to come.
Todayís stress and frustration will turn into long -term physical problems if the problems
with the GCCF are not abated.
Rest assured, I will do everything I can to help our victims survive this catastrophe,
including holding the GCCFís feet to the fire. Quit dragging your feet and stalling the
large majority of claims to a point where victims are so desperate that they settle for
anything. Remember, your job is to compensate the victims ónot magnify their problems by
playing games with BPís money (to BPís benefit).
Sincerely,
Luther Strange
Attorney General, State of Alabama
cc: Gov er n or Rob er t Ben tley
United St ates Sen ator R icha r d Shelb y
United St ates Sen ator Jeff S es s ion s
Congr es s man Rob er t Ader holt
Congr es s man Mik e Ro ger s
Congr es s woman Mar th a Rob y
Congr es s woman Ter r y Sewell
Congr es s man Mo Br ook s
Alab am a Leg is la tur e
Gregor y H. Hawley
