Administrator of $20 Billion Compensation Fund for Gulf Oil Spill Will Not Make Payments to Illegal Aliens

By Penny Starr | June 30, 2010 | 3:27 PM EDT

Before his job as administrator of the BP compensation fund, Kenneth Feinberg is the man President Barack Obama picked to set salary caps for executives of U.S. companies that were given money from the Troubled Asset Relief Program, or TARP. ( Starr)

( – The man who will administer the claims process for individuals and businesses seeking compensation from the $20 billion fund established by BP in the wake of its oil rig explosion and ongoing spillage said he will follow federal immigration and tax laws when deciding the eligibility of claimants, meaning he will not make payments to people who are not legally authorized to work in the United States.
When asked if the claims process would include requiring proof of U.S. citizenship, Kenneth Feinberg said it would.
“Of course,” Feinberg said. “Required by law. I can’t violate federal law."
“Federal law says I’ve got to follow the law governing immigration,” Feinberg said. “I’ve got to follow the law governing the Internal Revenue Service – people who get a check for wage loss – 1099."
“That’s the law of the land,” Feinberg said.
Feinberg made his first appearance before Congress on Wednesday at a House Committee on Small Business hearing. Members of the committee questioned Feinberg about how the claims process would work, but Feinberg said he was still in the process of designing the program that he will oversee for distributing BP’s $20 billion compensation fund.

Kenneth Feinberg greets Rep. Nydia Valezquez (D-N.Y.) at a hearing Wednesday of the House Committee on Small Business about the $20 billion BP compensation fund Feinberg will administer. ( Starr)

Feinberg said in his opening remarks that BP had successfully laid the groundwork for processing claims that could eventually involve thousands of people and businesses in five states.
“I am now in the process of establishing the Claims Facility (sic) and hope to complete this initial phase of my work within the next 30 days,” said Feinberg, who was appointed in June 2009 by President Barack Obama as Special Master for Compensation charged with the task of deciding salary caps for the executives of companies that received federal TARP funds.
“In the meantime, credit is due BP for its initial efforts in establishing an emergency claims process that has already paid over $130 million in emergency payments to the victims in Alabama, Florida, Louisiana, Mississippi and Texas,” Feinberg said. “My job will be made much easier because of these preliminary efforts by BP.”
Rep. Nydia Velazquez (D-N.Y.), chairwoman of the committee, said that she hoped the compensation process would not be like what took place following the 1989 Exxon Valdez spill off the Alaskan coast.
“That catastrophe took decades of litigation to assess damages,” Velazquez said. “The roughly 32,000 claimants, primarily fisherman, received only about a quarter of the losses filed by each claimant after the Exxon Valdez spill.

Rep. Nydia Velazquez, chairman of the committee, and other members questioned Feinberg about the claims process, but Feinberg said he is still in the process of designing the plan for distributing the money to thousands of individuals and businesses that have been affected by the explosion of a BP deepwater oil well and the ongoing leakage of oil into the Gulf of Mexico. ( Starr)

“The hope is that this time, small businesses will be more fairly compensated for their losses,” Velazquez said.
Feinberg’s career as an attorney and mediator has included deciding federal compensation for victims of the 9/11 terrorist attack on the World Trade Center and the Pentagon and for survivors of the mass killing on the Virginia Tech campus in 2007.
In the late 1970s, he was chief of staff for the late Sen. Ted Kennedy (D-Mass.).
Feinberg said at the hearing he was not certain if he or someone else would administer a separate $100 million dollar fund the Obama administration announced earlier this month that would compensate individuals and businesses for losses suffered as the result of moratoriums on oil drilling in the Gulf Region.
Feinberg also announced that BP has agreed to replenish its $20 billion compensation fund if necessary.