BP to cut payments on 40,000 claims of individuals affected by oil spill, cites paperwork problems
BY Meena Hartenstein
DAILY NEWS STAFF WRITER

Sunday, July 11th 2010, 1:30 PM


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As oil continues to spew into the Gulf, BP has said it will significantly cut payments on claims to those impacted by the disaster because of problems with their paperwork, the Associated Press reported.

Kristy Nichols, the secretary of Louisiana's Department of Children and Family Services, sent an open letter to federal BP claims administrator Kenneth Feinberg on Friday, saying the company had confirmed to her that they would decrease payments "to individuals whose claims files were incomplete."

Nichols cites a BP representative who told her that more than 40,000 of the 99,508 people who have filed claims may get lower checks.

That "will be devastating to individuals surviving financially month-to-month," she said. "This action is irresponsible and in complete contrast to BP's repeated promise that they will 'make things right.'"

Nichols said that many people who have filed claims don't have records that BP finds acceptable. "It is crucial that BP not continue to penalize these individuals and instead accept alternative forms of documentation, such as records held by the Louisiana Department of Wildlife and Fisheries," she wrote.

She also suggested that the company look to the state to fill in any holes before punishing distressed individuals.

"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," she wrote.

In the letter, Nichols calls BP's handling of the claims process "disturbing" and demands greater transparency.

"This request is urgent," she wrote. "Louisiana has already suffered from the oil spill disaster more than any other Gulf Coast state. Our analysis continues to show the inefficacy of BP's claims process to ease the suffering of Louisiana's residents."

Meanwhile, BP has removed the containment cap that was said to be capturing up to 25,000 barrels of oil per day, as the company works to install a new oil containment system. But before the new cap is installed, hundreds of thousands of gallons of oil are once again flowing freely into the gulf.

The White House remained optimistic Sunday, even though oil containment is well behind schedule.

"We're in a very critical point in the containment efforts," Press Secretary Robert Gibbs said on Meet the Press. "The new containment procedure will more than triple our containment capacity when it's all said and done."