GULF SPILL:
DOJ-ordered audit of BP payment fund finds 'significant errors'
Greenwire:
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A Justice Department-ordered audit of the BP PLC-backed Gulf Coast Claims Facility that made payments to people and entities affected by the Deepwater Horizon disaster has found $64 million in underpayments.
In a release issued last night in advance of today's two-year anniversary of the explosion and spill at the Macondo well, DOJ said there were "significant errors" that required extra payments to be made to 7,300 individuals and businesses in the Gulf of Mexico.
BP set up the claims facility, known as GCCF, to oversee a $20 billion compensation fund. Washington, D.C., lawyer Kenneth Feinberg, known for his expertise handling similar funds in the past, was appointed to head the facility.
The GCCF's most recent report shows that it has now paid out a total of just over $6.2 billion to more than 220,000 claimants.
The independent report by BDO Consulting found that, while the facility "operated in an extremely time-sensitive, challenging and dynamic environment," mistakes were still made.
In addition to the underpayments, which are now being rectified, the audit also found that some overpayments were made and that 2,600 claims were "erroneously denied."
The auditor concluded that, due to the unprecedented nature of the spill and BP's response, "it was inevitable that some claimants and stakeholders would have concerns."
The facility "was designed to respond, and did respond, with urgency to the economic difficulties of those most likely affected by the spill," the report stated.
In a Justice Department statement, acting Associate Attorney General Tony West said while the facility "labored under extremely challenging circumstances to get a huge number of payments processed successfully," the audit did show that people were "wrongfully denied or shortchanged."
DOJ took action after Attorney General Eric Holder visited the Gulf last summer and heard complaints from residents, West added.
BP defended the GCCF in its own statement, saying it had "delivered significant achievements" in the process of handling more than 1 million claims.
"BP supported the audit throughout the process, and the GCCF played a critical role in helping us to expeditiously meet our commitments under time-sensitive and challenging circumstances," the company said.
Feinberg, who has since stepped down, faced some criticism from people in the Gulf about how he managed the facility, which led to him appearing before a House committee in October (Greenwire, Oct. 27). Via a spokesman, Feinberg declined to comment on the audit.
Since March, the facility has been headed by Patrick Juneau, a Louisiana attorney (Greenwire, March 9). As a result of a proposed settlement between BP and private plaintiffs in litigation over the spill, the facility will be reconstituted to pay those claims in addition to the claims paid out to those who did not sue BP.