President Obama scored a major PR victory by claiming (rightly or wrongly) credit for the $20 billion fund that BP has set aside to handle damage claims from the oil spill. But there is a distinct possibility that this PR stunt will backfire. Here’s how.
Yesterday on MSNBC, Ed Schultz asked Jeffrey Breit, a lawyer for 500 fisherman who are not receiving the checks that BP promised them, a question about BP’s sluggish and bureaucratic restitution process:
“I think there’s some fear of the court system. And I think that they can stand with their $20 billion and try to do a PR campaign. In the meantime, we’ve got all these families waiting for checks and waiting for money and they say we’re just not not going to do it. Hopefully in August, when we have a trial judge, we’ll be able to put some pressure on them to make sure they take care of these people.”
This is known as “legal saber-rattling.” Although Breit refrained from criticizing the administration or soon-to-be claims administrator Kenneth Feinberg, his language hints that things had better improve under Feinberg’s watch–or else.
Meanwhile, Feinberg, who will take over administration of the $20 billion fund in a month or so, made three appearances in Louisiana. Here is a sample of his message:
As Feinberg explained, the compensation plan includes two components: a no-obligation six month payment and a terminal payment with acceptance of release for BP. All victims can apply for the six month payment, up until three months after BP manages to contain the leak (which may end up being from the day of his town hall gatherings). However, if claimants choose to accept the second and final GCCF offer, they wave any right to bring further court proceedings against BP.
If victims do not consider the offer sufficient, they may turn it down and pursue higher payments through the courts. However, Feinberg views the lack of court proceedings associated with his facility as a win-win for both sides. “Everyone should come in,” and the matter will be over with, in a matter of weeks or months, rather than years. To drive home his point, he mentioned other oil spills that still have ongoing litigation regarding compensation, decades after the event.
The $20 billion fund is BP’s main tool for avoiding a flurry of lawsuits, and President Obama — because he insisted on inserting himself into this process — is complicit in the company’s efforts to keep as many plaintiffs out of court as possible.
And that’s fine, as long as claimants think that the payments are fair, and as long as BP keeps shoveling in more cash when Feinberg announces (inevitably) that $20 billion won’t be enough. But within the next nine months, you may well start hearing stories about dissatisfied claimants who feel that they are getting a raw deal or a raw offer from the fund.
At that point, the president will be running for re-election.