BP's Victims Fund: Kenneth Feinberg's Tough Task
If you know this man, you know he is the go-to guy for thankless jobs - America's arbiter of human suffering. Kenneth Feinberg is his name.
"60 Minutes" first met him when he was asked by the government to adjudicate the 9/11 victims fund, to place a monetary value on each of the almost 3,000 lives that were lost. And there were the Agent Orange victims and the Virginia Tech massacre victims and now, in sheer numbers, the biggest headache of all, compensating the thousands and thousands of angry people affected by the BP oil spill.
Feinberg has been holding town meetings for weeks now in the Gulf States, where, armed with only his reputation and a $20 billion pot of money, he calls for patience and accepts all blame.
Extra: Feinberg and BP
Extra: Uncertainties
Feinberg may be perceived by most Americans as the fairest in the land, if not for looks then surely for his judgment. But to the shrimpers, oystermen, boat captains, restaurant and hotel owners and their employees, all of whose lives and livelihoods have been completely upended, he is seen as a penny-pinching scrooge, when they wanted a beneficent Santa Claus.
"We had Katrina. We had a down economy. Now, we got the spill. You can't tell me one person that has not suffered. Why don't you open up the purse strings?" an audience member asked Feinberg at one hearing.
"Here's my answer: don't trust my words. My words, you've heard a lotta talk. Let's just see over the next few weeks and months, 'Have I delivered on my promise to help people in Mississippi?'" he replied.
Ever since the Deepwater Horizon blew last April, it was clear that this was a disaster in the making. The fishing industry came to a stop, tourism was wrecked, and the livelihoods of hundreds of thousands - anyone who was dependent on these waters - were in deep jeopardy.
Under pressure from the federal government, BP agreed to create a victim's compensation fund; both BP and the White House wanted one man, Ken Feinberg, to administer it.
"I felt that if asked, I should step up and try and help as best I can," Feinberg told correspondent Morley Safer.
"What is it about Ken Feinberg that makes him the nation's arbiter of impossible decisions?" Safer asked.
"I think there's something that experience brings to the table, in terms of getting these problems solved," he replied.
This 64-year-old lawyer's experience in mediation and placing monetary value on human suffering is unmatched.
President Obama made him his "pay czar," where he cut the salaries of executives of companies that received government bailouts. But it was his role as special master of the 9/11 victim's compensation fund that was his greatest challenge, and likely his lasting legacy.
He told Safer, "9/11 was a horrific experience because you were dealing with traumatic death where people said goodbye to loved ones that morning and never saw them again. Incinerated, no body to bury. This is different but it's very, very emotional, BP. Very emotional. It's not death. It's more, 'What does the future hold in terms of my ability to earn a living?'"
He has $20 billion of BP's money to dole out as he sees fit.
The idea behind the fund is similar to 9/11: persuade people to accept payment for their losses upfront instead of engaging in long and costly and uncertain lawsuits against BP.
"It's a free country. If you wanna come into the fund, with all the benefits of the fund, come on in. You're welcome. We'll give you a fair shake. We'll process your claim. We'll pay what you're due. If you don't like what we're paying you, if you think we're nickel and diming you, if you think we're not being fair, opt out and go the other route. Now, in 9/11, 97 percent of all eligible claimants entered the fund. Only 94 people out of 3,000 decided to litigate," Feinberg explained.
But in the Gulf he must evaluate not human life, but something much more vague: economic loss - everything from the price of shrimp that won't be caught to hotel rooms that won't be occupied.
Even though most fishing grounds have reopened, the market remains wary of Gulf seafood and its beaches. Feinberg looks and listens.
An endlessly moving target, he takes hits at meeting after meeting, makes his pitch and moves on.
"60 Minutes" joined him at the crack of dawn, where he was calmly preparing for another day of personal abuse.
"With all due respect 5,000 people have got checks. That's not enough," he told one group.
"Five-thousand out of 20,000 claims sucks. That's not very good," a man replied.
"It's been ten days now. Can we take whoever programmed this, take him down in the swamp drop him off for ten days and let them wait on us to go pick them up to see how it feels to keep waiting?" one applicant asked Feinberg.
"I don't think you should keep waiting. I told you you wouldn't have to keep waiting. I can't speak…," Feinberg replied.
"It's a contradiction of your words, sir," the man interrupted.
"I know. There may be. It won't be the first time. I'm trying," Feinberg replied.
He acknowledges he is dealing with a weary and frustrated population who may distrust a hotshot lawyer with a Boston accent. "What these fishermen and others want to see are checks and compensation. Not promises from somebody from Boston. And that is an obstacle that I try to overcome in part by coming down here and meeting with these people," he told Safer.
When Safer interviewed Feinberg, he said he had already taken over a dozen trips to the affected regions.
"Do you feel that the tide is somehow turning in your favor, that people say, 'Okay, let's give him a chance'?" Safer asked.
"Not yet," Feinberg replied.
"The average for each of the claim that you paid out is $5,000. And that's for six months. And that sir is nothing to be brag about. Thank you," one audience member told Feinberg.
"They really go after you," Safer remarked.
"They do. They do, but it goes with the territory," Feinberg agreed. "I mean, you go in there expecting that you're gonna receive that criticism. And woe be unto you if you hide. That is a mistake. You cannot hide. "
Feinberg admits the program had a rocky start, which only added to the mistrust.
A group of fishermen Safer talked to agreed. Asked what they made of the meeting, one of them said, "Well, I think he sounds sincere. But there's a lot of niches in the system that he needs to get right and he was supposed to be so generous with the payments."
"Do you believe what he's telling you?" Safer asked.
"Absolutely not," a man replied.
"I think he's just another attorney talking his talk," another fisherman said.
"But you don't think his record in dealing with 9/11 was an honest job?" Safer asked.
"To be honest with you, I could care less about 9/11. I care about this oil spill. And I could care less about anybody else's claims. I care about my claim. That's it," one of the fishermen replied.
"But see, it's our responsibility to do what we did here today, okay. Put him up against a wall, make him do what's right," another added.
Feinberg runs the fund from his office where, for a moment, he soothes his savage schedule by listening to opera, exchanging one real grand disaster with a more melodious fictional one.
His private life is private, but in the role of arbiter he is remarkably accessible. He has an army of about 1,500 people and 35 centers in the Gulf to sort through and process what could amount to over 100,000 claims.
He devised a two-step claims process: first, a six-month emergency payment with no strings attached,
"These emergency payments are designed to help claimants meet their immediate financial needs. No release required. No obligation," he explained.
"And then, after that comes the so-called final payments?" Safer asked.
"That's right. That's more controversial because with the final payment will come the requirement that the claimant release BP from any suit, any lawsuit," Feinberg replied.
And that is a tough call. Though scientific studies are underway, no one can predict the full effects of the Deepwater Horizon spill.
How do the fishermen calculate what future losses they may suffer?
"We won't know what to file for until we find out what the scientists say really happened out there," one fisherman pointed out.
"What I'll try and do is work with you to make sure that the payment I'm giving you will minimize the risk that you're worried about," Feinberg said.
Further complicating matters is a local business culture that's not renowned for keeping records. It's mainly cash on the line.
"We still do business as we did 40 years ago. Do a job, maybe a $20,000 or $30,000 job with just a handshake, not even a piece of paper. But, in this town, handshake still mean anything. Am I right?" a man explained at a meeting.
"Right. Yes," many agreed.
"A handshake is still important. And we don't want to be deprived of that. And I don't know how you're gonna work with us on that but a lot of it was cash money. A lot of it was handshakes," the man added.
"I can't pay money on a handshake. It can't be done. I don't, now, I don't care about documentation. Do you have somebody who will come in and say, 'Here's a letter. I will vouch for this man. I know him. And we had a handshake deal for X. Signed, friend.' Something like that, other than, 'You see this? Pay me,'" Feinberg replied.
With $20 billion available, it's not surprising that there may be a certain degree of "hanky panky" going on.
"Do you think there is much fraud out there?" Safer asked a group of fishermen.
"Let me put it to this way: after all the oil spill, I ain't never seen so many commercial fishermen in my life. They had so many people in line at them meetings. I've never seen these people, and I'm behind 'em in line. And I ask some of the other fishermen, 'Have you seen that guy before?' 'No, I ain't seen that guy before.' No, it was comical," one of them replied.
So far, Feinberg has paid out almost a billion dollars in emergency claims.
"I don't want to get tied up in litigation for five years, ten years, 15 years down the line. Who knows how long it'll take," one man told Safer.
"The thing is, Mr. Safer, none of us are trying to get rich off of this deal. We just want to get back to normal. Get our lives back. Pay us what damage you did, let us go on with our lives," another added.
Feinberg's life, for a good part of the last decade, has been steeped in other people's misfortune. His reputation remains unsullied. But this tragedy, so large, so complicated, could be a man's undoing.
"Oh, I don't worry about that. Ted Williams never batted a thousand. I mean, my credibility is only as good as the latest program that I'm administering. And you can't do these projects worried about what people are gonna think," Feinberg said.
"But is your most powerful weapon your reputation?" Safer asked.
"No. Definitely not. My most powerful weapon are the checks going out. That's all that matters here," he replied.
"Show me the money?" Safer asked.
"Show me the money. Show me the money," Feinberg agreed.
And he will: under increased pressure from both victims and the administration, Ken Feinberg announced this past week that he would make the program more efficient, more accessible, and more generous.
Produced by Deirdre Naphin Curran