An Open Letter To Kenneth Feinberg

Online, April 22, 2011 (Newswire.com) - An Open Letter To Kenneth Feinberg

Dear. Mr. Feinberg,

On this the first anniversary of the sinking of the Deepwater Horizon oil platform and subsequent destruction of the Macondo Prospect oil well, I am writing to, first and foremost, call you a liar. Secondary to this, but only slightly so, I also call you to task for running a completely inept and incompetent operation, Gulf Coast Claims Facility. I shall enumerate the reasons for my opinions in a moment.

But first, I am writing this letter with three specific goals in mind. One, as indicated in my opening paragraph, I wish to express my thoughts and opinions on the performance of your organization, and you as its head, with regard to its stated goal of distributing recovery and relief funds to victims of the Macondo Prospect blowout and subsequent oil spill. Two, I am disseminating this letter openly with the idea of intensifying the harsh glare of public scrutiny that is currently slow-roasting both yourself and GCCF. Finally, it is my hope that this letter motivates legislators and Attorneys General to investigate GCCF's operation in minute detail, and to either expose you and GCCF to civil action for gross negligence, or prosecute you and GCCF for fraud, or both. With any luck, even President Obama will read this and rethink his decision to appoint you for a task for which both you and your organization have demonstrated such wonderful examples of textbook incompetence.

I shall preface my challenge to your person with my back story, greatly abbreviated for the sake of brevity. I had a business in a town whose entire financial basis was built around tourism and fishing. When the oil spill happened, the crowds stayed away and the town's revenue generation fell off a cliff. So, I submitted a claim for my projected losses, and followed up with submissions of every single scrap of documentation GCCF requested. My claim was ignored, and once GCCF began purging unprocessed claims in November to make room for final claims, my claim was dismissed out-of-hand with a form letter that stated that "the GCCF has determined that you did not demonstrate that you lost profits or income as a direct result of the Spill." Not only is this absurd, as my documentation demonstrated a painfully obvious and direct causal relationship between my business' revenue generation and the spill, but it is insulting to know that my claim was dismissed without ever having been looked at - I'll cover how I know that in a moment.

At any rate, the end result was that because GCCF was more concerned about clearing its hideous backlog of unprocessed claims by flushing them unreviewed instead of processing them (more than 150,000 denials in November alone, more than twenty times the denials of the six preceding months combined), my business was left to twist in the proverbial wind. So, a few weeks before Christmas 2010, I shuttered my operation, putting several people out of work and bringing an end to a decade of hard work. Five months later I'm still out of work and facing an increasingly uncertain future. Would we have survived had GCCF helped with a timely emergency payment for which I had more than ample documentation? We'll never know now, will we?

That having been said, I have impugned your person, and the oft-unwritten rules of adult civility indicate that I should explain myself. So, I shall.

I hereby repeat publicly my assertion that you are a liar and base this on multiple reasons, which are as follows.

My first reason is that you have sold yourself to the United States Government as the "go-to guy" for fair and impartial disbursement of funds for victim relief, but you have crafted an organization that is as far from "fair" in its real-world performance as is possible. Although I have nothing to offer but praise on behalf of the GCCF field agents for actually caring and genuinely trying to get people the help they need, GCCF's core operation demonstrates no consistency whatsoever in what its procedures are and how those procedures are implemented. Payouts are apparently more a function of random chance than a result of documented losses, and I personally know hundreds of people that were either overpaid on skimpy documentation, or not paid at all despite having submitted astonishing amounts of it. I've talked to quite a few attorneys who all note that they have to deal with a policy-du-jour mindset that can and often does change completely from one day to the next.

My second reason relates specifically to the documentation. You have stated recently that only about 20% of the final claim requests GCCF has received have adequate documentation. I assert that, in reality, the documentation is basically irrelevant, and it's far more a function of the mood of the adjuster that determines whether and how much is paid and not nearly as much of a function of the volume and quality of documentation in support of a claim. I back this assertion with the following: I know of entire companies that have provided their employees the exact same documentation in terms of content quality for assessing losses and have had some of those employees overpaid, some underpaid, and some not paid at all. From the same employer. With the same documentation. I know of people that worked the same hours per day at the same shifts at the same job and have had completely different responses to their claims despite having a nearly-to-the-dollar duplication of losses. For my own company, I know that I provided all of my employees the same pay breakouts for their claims, and some were paid while others were not. If you insist on being so adamant that documentation has to be there, such disparities should never be permitted, but they have, and they continue, because they're institutionalized.

My third reason stems from your claim of impartiality, which was recently slapped down by a U.S. District Judge. He was correct to opine that you cannot reasonably be expected to be impartial given the absurd amount of money your law firm receives to administer the oil spill fund (which I see was recently raised from $800,000 per month to $1,250,000 per month), who is bankrolling the operation, and the lengths you go to in order to keep the details of every aspect of GCCF's operation under wraps. It stands to reason that your claim of impartiality is at best dubious, and at worst fraudulent, and I hope every affected Gulf Coast States' Attorney General places you and GCCF in a very small and very brightly lit fishbowl to see who is making what money on the backs of the victims of the oil spill. The only metric that matters in a situation like this is what kind of results you post, and you have utterly failed to "deliver the goods" needed by the residents of the Gulf Coast and I hope that you're eventually forced to surrender the money BP paid you and your organization, for if you didn't do the job you claimed you were there to do you certainly shouldn't be getting paid (and paid obscenely well) to not do it.

My fourth reason stems from a recent interview, in which you stated, "Overall, I think the program has worked well... I think the program has been fairly transparent." Nothing about GCCF's claims process is transparent. NOTHING. In fact, the polar opposite is true: GCCF's operational policies are engineered to make it maximally, prohibitively difficult to obtain any useful information about the status of a claim. Claimants are only told what documents they need to send in, and are then given no information aside from "claim under review" until a claim is either paid our or kicked back. No indication is given as to whether a claim was even looked at, let alone by whom and for how long. Not even field agents working for GCCF can obtain any useful information, and if there's a problem they must wait to meet with a higher-ranking adjuster when they decide to swing by that particular field office. Denials are given the boilerplate response of "the GCCF has determined that you did not demonstrate that you lost profits or income as a direct result of the Spill" even in cases where the documentation was significant and compelling. I find this to be in stark contrast to standard operating procedure for every other claims process I've ever dealt with, where genuinely useful information is often just a phone call or email away.

My fifth reason for calling you a liar stems from your oft-repeated assertion that, thanks to GCCF and its claims process, there should be no need for anyone to have to resort to legal action to recover their losses and that getting a claim pushed through won't require a licensed professional signing off on the claim. In the real world, practically everyone I know that has had a business claim paid had their CPA and/or attorney submit the claim, where practically everyone I know whose business claim was denied submitted the claim themselves. I've seen the documentation for both paid and denied claims, and while I could work out with a calculator what their losses were (in about five minutes, I might add - I realize you're an attorney and not an accountant, but this is basic High School level math here) based solely on their documentation, the sharp difference in payout probability for claims submitted by attorney and CPAs versus self-submission shows me that it matters a great deal whether you submit a claim or have your attorney do so in your behalf. This also cuts at the heart of your claim of impartiality, as small mom-and-pop type businesses are probably not going to have the money to hire someone to represent their interests. My company's emergency claim was self-submitted and went nowhere, so this time around I'm sending two entire law firms after GCCF; I WILL recover my losses, even if I have to sue every last involved party, yourself included, on a person-by-person basis, to do it.

My sixth reason for calling you a liar stems from the insult added to injury that is the first paid final payment. You have asserted that all claims must be inspected individually and paid or denied on their own merits - I've already covered how utterly GCCF has failed in this regard - and yet a company goes directly to BP and forces GCCF to pay out on a claim it hasn't reviewed. This tells everyone how fair the claims process through GCCF really is, and also tells all of us that if we want to have any hope of getting compensated for our losses we have to take on BP and the other companies involved in the Deepwater Horizon/Macondo Prospect fiasco directly, sidestepping GCCF entirely. If that is what it takes, why do WE need YOU?

I had mentioned earlier that I knew for a fact that my company's claim was never touched by human hands before being dismissed. The reason for this is another demonstration of negligence and incompetence: I was told by a few field agents (who will likely be fired for leaking this information, if they haven't been already) that a glitch was discovered in the computer system set up by GCCF to automate its claims handling. This glitch caused many claims submitted during the first week of GCCF's operation to become "lost in the system" - they were marked as being in-process but were evidently never handed off to an adjuster for processing, and thus were never touched. A good few-dozen-thousand such claims were thus flushed out of the system in the first week or so of November, and not one of them was ever looked at by a human. So much for the importance of documentation if your own systems lose it for you and you can't be bothered to reevaluate the affected claims. Of course, since GCCF hides its activities so completely from claimants I'm sure the response to this assertion will be denial on the outside, and a flurry of activity to determine who to fire for leaking word about the glitch on the inside.

GCCF has succeeded in paying out about 4 billion dollars to about 200,000 claimants, out of just shy of half a million total claims. I find it both amusing and noteworthy that GCCF is no longer providing denial statistics, but before that stopped the last figure I'd seen was about 180,000, the overwhelming majority of those having happened between November 1 and the start of final claims submission, December 15, 2010. How many of those denials actually had documentation but were never looked at? How many were given a cursory glance and denied simply because the adjuster in question was in a bad mood? How many of the paid claims were overpaid compared to their documentation? How many people have lost their livelihoods because of incompetent claims handling? These are questions I for which hope State and Federal Governments find answers, forcefully if need be.

Why is GCCF still managing the relief fund, given how badly it has failed to do so for so many people? Why are you still in charge given how badly you have failed to live up to your job description regarding the oil spill? On what plane of reality do you justify being paid one and one-quarter million dollars per month given how pitiful your results have been?

History is a harsh judge, and I for one feel perfectly justified in my opinion of you and GCCF. I challenge you to prove me wrong by fixing the mess you created under the guise of helping the oil spill victims, and I further challenge you to live up to your billing by getting the money people need to the people that need it and doing so in a reasonable timeframe. If you cannot or will not do so, let's hope you and your inept organization are replaced with someone that can and will.

Sincerely, a disgruntled and disillusioned Gulf Coast ex-business-owner who's basically lost everything.

P.S. Identity withheld due to pending litigation.

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