BP Hard To Pin Down On Oil Spill Claims BP says it will pay all "legitimate claims" related to the Gulf of Mexico oil spill, but such promises raise a crucial question: What exactly does "legitimate claim" mean? BP has declined to define the term, and the Obama administration and Congress want answers.
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BP Hard To Pin Down On Oil Spill Claims

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BP Hard To Pin Down On Oil Spill Claims

BP Hard To Pin Down On Oil Spill Claims

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As that oil spreads along the coastline, the number of potential claims against BP is also expanding. The company has promised, time and time again, that they will pay all legitimate claims. But what is a legitimate claim and who gets to decide that?

NPR's Yuki Noguchi digs into those questions.

YUKI NOGUCHI: If there's a line that separates legitimate claims from illegitimate ones, it's not exactly clear where that lies.

BP President Lamar McKay remained steadfastly vague during a Senate hearing this month, despite prodding from Washington Democrat Maria Cantwell.

Mr. LAMAR MCKAY (President, BP America, Inc.): We're going to pay all legitimate claims.

Senator MARIA CANTWELL (Democrat, Washington): If it's an impact for business loss from tourism, you're going to pay.

Mr. MCKAY: We're going to pay all legitimate claims.

Sen. CANTWELL: Long-term damages to the Louisiana fishing industry and its brand.

Mr. MCKAY: I can't quantify or speculate on long-term. I dont know how to define it.

NOGUCHI: The Obama administration also sought more clarity. It sent a letter dated May 14th, asking BP to clarify that the company will not leave taxpayers holding the bag on any damages BP considers not legitimate. And this week, BP faces the House Judiciary Committee probing the same issue. A BP spokesman declined to speak on tape or to discuss the company's definition of legitimate.

But in an email, the spokesman said BP hired a firm called ESIS to assess all oil spill claims. As of last week, it had received nearly 16,000. The spokesman said BP has, in some cases, paid some claims within 48 hours of receiving supporting documentation. BP's assurances to do right by the oil spill's victims sounds familiar to Walter Parker.

Mr. WALTER PARKER: Exxon did. Yeah, it made very similar promises. Don't worry, we will take care of everything.

NOGUCHI: Parker chaired the Alaska oil spill commission two decades ago, following the Exxon Valdez tanker disaster there. He says things quickly went sour. Exxon disputed many claims, and the sides spent years in court. So Parker believes Gulf Coast victims will have a fight on their hands.

Mr. PARKER: When it comes to money, I don't believe anything oil companies tell me. I don't trust that they would do anything to make the Gulf whole again -anything that amounts to anything - without tremendous pressure from all states and the federal government.

NOGUCHI: Exxon officials declined to be interviewed. A spokesperson said the company voluntarily paid more than 11,000 individuals and businesses within a year of that accident.

John Velsko, a fisherman based in Homer, Alaska, was one of those who received payment. He lost an entire fishing season the year the Valdez ran aground. To receive initial compensation, Velsko says Exxon required him to produce three years of fishing records.

Mr. JOHN VELSKO (Fisherman): It'd be like someone asking you when your house is on fire to dig out your tax returns from two years ago.

NOGUCHI: Velsko considers himself relatively lucky. Exxon paid him better than other fishermen he knew, but he says no one knew how Exxon arrived at those numbers. At the time of the accident, Velsko also owned a home on a lagoon in Homer, but the city blocked the water to prevent the oil from seeping in. Velsko sold the home at a loss, but says Exxon denied his claim to cover that.

BP swiftly settled claims following its Texas City refinery explosion five years ago, which killed 15 people. BP later pleaded guilty to a related felony charge. Brent Coon says that was a relatively simple case.

Mr. BRENT COON (Attorney): Almost all those claims were extremely legitimate cases, and there wasn't much debate over that.

NOGUCHI: Coon was the lead attorney representing plaintiffs in the Texas City case. He now represents some injured workers from the BP Deepwater Horizon rig and several fishermen affected by the spill. Coon says this time BP will face many hundreds of times more claims than they did with Texas City. Waterfront homeowners, for example, are seeking to recoup for loss of property value. Coastal communities could see their long-term credit ratings hurt by the spill. All of those might seem like legitimate claims.

But, says Coon.

Mr. COON: You know, at some point, BP's going to try to turn off a spigot. Because of the nature and scope and extent and the massive amount of damage that's done, they're going to do everything they can for damage control. So, they're going to say, we're not paying here, we're not paying there. The question is where are they going to draw that line?

NOGUCHI: With oil still wending its way through the ocean currents, it's likely to be some time before that becomes clear.

Yuki Noguchi, NPR News, Washington.

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