NEW ORLEANS (CN) – An independent audit found the Gulf Coast Claims Facility shortchanged 7,300 people and businesses hurt by the BP oil spill by $64 million, according to the Department of Justice.
The April 20, 2010 explosion of the Deepwater Horizon oil rig killed 11 and set off the worst oil spill in U.S. history. Hundreds of thousands of people and businesses suffered physical and economic damages.
In August 2010, at the suggestion of the Obama administration, BP set aside $20 billion to pay economic claims arising from the spill. The Gulf Coast Claims Facility was set up to process and pay claims.
After criticism from public officials and Gulf Coast residents that the GCCF was not processing claims in a fair and timely manner, the attorney general ordered a third party to audit the claims process.
Tony West, acting associate attorney general for the Department of Justice, said the audit found thousands of unpaid claims.
“Approximately 7,300 individuals and businesses throughout the Gulf region will now see the benefits of that action, to the tune of over $64 million in additional payments,” West said in the report.
He added: “While there’s no question that the independent GCCF labored under extremely challenging circumstances to get a huge number of payments processed successfully, the fact that this audit has resulted in tens of millions of dollars being made available to claimants who were wrongfully denied or shortchanged underscores the importance of the audit.”
West said checks worth $64 million are now being sent to roughly 7,300 claimants who received less than they were entitled to from the GCCF.
The report identified more than 2,600 claimants whose claims were erroneously denied or to whom payments or offers were not issued because their claims files did not contain information needed to determine whether the claimant sustained a financial loss.
The auditor’s report also found claimants who were overpaid. Attempts to identify all the claimants who were overpaid or to quantify those overpayments have not been made, and the GCCF is not making any effort to recover those overpayments.
The report noted the unprecedented nature of the spill and the context under which the GCCF operated: with intense pressure to pay claims quickly, a claimant community that was suffering significant economic pressures after a very difficult post-spill tourist season, and more than 1 million claims, including many with complex economic losses.
During the year and a half it operated, the GCCF paid $6.2 billion to more than 220,000 claimants. Its doors were closed in March as a result of the settlement between BP and the private plaintiffs. Payments to claimants are continuing through a court-appointed third party.
The evaluation was conducted by BDO Consulting, which evaluated tens of thousands of claims files and searched the GCCF’s database of more than 1 million claims.
According to BDO’s findings, the GCCF paid more than $6.2 billion to more than 220,000 individual and business claimants.