ProPublica publishes report on BP oil spill 'splillionaires'

By Alejandro de los Rios | Apr 13, 2011


A report issued by the non-profit news group ProPublica outlines how industry and government insiders exploited the BP oil spill for millions of dollars during and after the cleanup.

Released April 13 on ProPublica's Web site, the report cites thousands of documents that "show that local companies with ties to insiders garnered lucrative cleanup contracts and then charged BP for every imaginable expense."

Among the incidents cited include:

-- A subcontractor billing BP more than $15,000 a month to rent a $1,500 a month generator

-- A company renting land worth $1,700 a month to BP for more than $1 million a month

-- $1 million given to St. Bernard Parish for oil-spill expenses used on "cameras, printers, a file cabinet, staplers and 712 shirts emblazoned with the parish name"

-- Parish employee David Dysart was paid $23,000 for 487 hours of overtime in less than seven weeks with BP funds

The report focuses mainly on St. Bernard Parish government and business officials who were on the front lines of the spill's cleanup efforts but it also looks at the uneven Gulf Coast Claims Facility (GCCF) process.

The reports cites that one man who earned just under $70,000 in 2009 as a crab farmer and nutria hunter was given a $120,000 in claim checks and $90,000 for cleanup work.

That payment contrasts with one man who reported $90,000 in taxable income in 2009 but has received only $22,000 from the GCCF.

On April 8, lawyers for GCCF administrator Kenneth Feinberg wrote that the GCCF was complying with all Oil Pollution Act mandates and is operating efficiently.

The memo was filed in U.S. District Court for the Eastern District of Louisiana, where the multidistrict litigation (MDL) surrounding the BP oil spill is being held.

The GCCF has come under heavy scrutiny from Gulf States attorneys general, governors and plaintiff attorneys.

In March, Alabama Attorney General Luther Strange wrote a memo that said the GCCF payments "do not amount to much" and Alabama residents have been "reduced to begging for handouts from an organization ... whose primary missions seems to be turning them down."

Feinberg's attorneys fired back against critics who say the GCCF has given out too few payments since it was established.

"To date, in just nine months of operation, the GCCF has paid almost $4 billion to over 174,000 claimants in honoring approximately 300,000 claims," it states. "In the face of such overwhelming statistics, the [Mississippi] Attorney General's naked claims of malfeasance ... must be summarily dismissed."

In February, Louisiana Attorney General Buddy Caldwell and Governor Bobby Jindal filed a memo criticizing the GCCF with U.S. District Judge Carl Barbier, who is overseeing the BP oil spill multidistrict litigation.

The memo criticized the GCCF for allegedly failing to comply with the Oil Pollution Act (OPA) and that claimants should not be required to relinquish their right to sue BP in exchange for a final payment.

The Louisiana legislature also expressed concern with the GCCF and has formed a special committee to oversee the claims process.

In Florida state court, a marine salvage company filed a lawsuit against Feinberg and the GCCF alleging that they committed negligence and fraud in the claims process.

Conversely, BP has criticized Feinberg and the GCCF for handing out payments that are too high and that there "is no credible support for adopting an artificially high future loss."

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