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S. HRG. 112–433 

A YEAR AFTER THE DEEPWATER HORIZON OIL 

SPILL: THE STATUS OF RECOVERY EFFORTS 

IN FLORIDA 

FIELD 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS AND 

ENTREPRENEURSHIP 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

JULY 11, 2011 

Printed for the Committee on Small Business and Entrepreneurship 

( 

Available via the World Wide Web: http://www.fdsys.gov 
(II) 

COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP 

ONE HUNDRED TWELFTH CONGRESS 

MARY L. LANDRIEU, Louisiana, Chair 

OLYMPIA J. SNOWE, Maine, Ranking Member 

CARL LEVIN, Michigan 

TOM HARKIN, Iowa 

JOHN F. KERRY, Massachusetts 

JOSEPH I. LIEBERMAN, Connecticut 

MARIA CANTWELL, Washington 

MARK L. PRYOR, Arkansas 

BENJAMIN L. CARDIN, Maryland 

JEANNE SHAHEEN, New Hampshire 

KAY R. HAGAN, North Carolina 

DAVID VITTER, Louisiana 

JAMES E. RISCH, Idaho 

MARCO RUBIO, Florida 

RAND PAUL, Kentucky 

KELLY AYOTTE, New Hampshire 

MICHAEL B. ENZI, Wyoming 

SCOTT P. BROWN, Massachusetts 

JERRY MORAN, Kansas 

DONALD R. CRAVINS, JR., Democratic Staff Director and Chief Counsel 

WALLACE K. HSUEH, Republican Staff Director 
(III) 

C O N T E N T S 

OPENING STATEMENTS

Page 

Rubio, Hon. Marco, a U.S. Senator from Florida .................................................. 1 

Broxson, Hon. Douglas V., a Representative in the Florida House of Representatives ........................................................................................................... 39 

Ingram, Hon. Clay, a Representative in the Florida House of Representatives 39 

WITNESSES

Putnam, Adam H., Commissioner, Florida Department of Agriculture and 

Consumer Services ............................................................................................... 4 

Zales II, Robert F., President, National Association of Charterboat Operators . 16 

Gilchrist, Joe, Owner, Flora-Bama Lounge, Package, and Oyster Bar ............... 29 

Merrill, Collier, Chairman, Pensacola Chamber of Commerce ............................ 33 

ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Brigman, Bobbie 

Letter ................................................................................................................. 62 

Broxson, Hon. Douglas V. 

Testimony .......................................................................................................... 39 

Gilchrist, Joe 

Testimony .......................................................................................................... 29 

Prepared statement .......................................................................................... 31 

Ingram, Hon. Clay 

Testimony .......................................................................................................... 39 

Merrill, Collier 

Testimony .......................................................................................................... 33 

Prepared statement .......................................................................................... 36 

Nelson, Hon. Bill 

Prepared statement .......................................................................................... 3 

Putnam, Adam H. 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 7 

Rubio, Hon. Marco 

Testimony .......................................................................................................... 1 

Zales II, Robert F. 

Testimony .......................................................................................................... 16 

Prepared statement .......................................................................................... 19 

(1) 

A YEAR AFTER THE DEEPWATER HORIZON 

OIL SPILL: THE STATUS OF RECOVERY EFFORTS IN FLORIDA 

MONDAY, JULY 11, 2011 

UNITED STATES SENATE, 

COMMITTEE ON SMALL BUSINESS

AND ENTREPRENEURSHIP, 

Pensacola, FL. 

The Committee met, pursuant to notice, at 9:34 a.m., in the 

Amos Performance Studio, Pensacola State College, 1000 College 

Boulevard, Pensacola, Florida, Hon. Marco Rubio, presiding. 

Present: Senator Rubio. 

OPENING STATEMENT OF HON. MARCO RUBIO, A U.S. 

SENATOR FROM FLORIDA 

Senator RUBIO. Good morning. First of all, thank you all for welcoming me here to Pensacola. It is a pleasure to be here, despite 

the serious discussion before us. I would particularly like to thank 

the Pensacola State College for allowing us to use this beautiful 

studio. The air conditioning works well—thank you very much— 

and the staff here has been immensely helpful in helping us prepare for this event. 

And I do want to thank some of the people who were not able 

to attend today’s field hearing but who made this possible, Senator 

Landrieu of Louisiana, who was instrumental in making this possible, as well as Senator Snowe, and their hard-working staffs who 

are here with us today, for allowing me the honor to conduct this 

field hearing before the Committee on Small Business and Entrepreneurship. 

I particularly want to single out Senator Landrieu for the hard 

work she has done in keeping folks up in Washington engaged on 

this much-needed long-term recovery in the Gulf. I was recently 

asked about—just a few seconds ago asked about, well, has the 

world not moved on? Have people not forgotten about this? And the 

answer is, for most of America, this is something that happened a 

year ago. But for folks, particularly in the Gulf region and here in 

northwest Florida, this is something that is still happening, and 

that is why this is so important that this hearing take place and 

that we continue to talk about this. 

A little over a year ago, on April 20, approximately 4.1 to 4.9 million barrels of oil began spilling into the Gulf of Mexico. As a result, the Federal Government closed approximately 88,500 square 
2 

miles of Gulf fishing. That negatively impacted 131,000 jobs supported by a $12.8 billion year industry. 

Subsequently, the tourism industry in Florida, the state’s largest 

industry, significantly declined as people canceled their summer 

vacations in fear of oil-slicked beaches. There is one study that 

says that 45,000 jobs linked to tourism in Florida’s counties along 

the Gulf of Mexico were impacted. Summer home rentals were 

down by 80 percent between April 20 and the end of May of 2010. 

And while the oil-slicked beaches were never realized, I am certain 

those of us in this room did not need statistics to prove the impacts 

both on the state and on everyday lives, including the everyday 

lives of people who find themselves here with us today. 

In some way, each of you have lived daily with the impacts from 

this spill. As of July 7, the Gulf Coast Claims Facility received 

184,591 claims and paid over a total of $1.8 billion. In total, BP has 

paid $2.133 billion to the State of Florida. But I think what we are 

going to hear today is that that is not enough. While tourism has 

increased over the past year, there is still more to be done, and the 

long-term effects on our fisheries, an industry vital to both our 

economy and our tourism industry, may not be known for decades. 

I am here today for one reason and one reason only, and that is 

I want to hear from those worst impacted by the spill on how I can 

best assist them in my role as the junior Senator from Florida, and 

I am here to listen. 

I understand that there are still significant frustrations regarding the claims process, and I would like to understand specifically 

what those frustrations are at this point and how you feel they can 

be best addressed. I would also like to understand what impacts 

continue to be felt throughout the tourism industry, the seafood industry, and the fishery community so that I can help guide the 

Federal discussion on how best to assist these industries so vital 

to our state’s economy. 

Specifically, I have been working with all of my Gulf state colleagues on legislation spearheaded by Senators Landrieu and Shelby that would redirect to the Gulf states the Clean Water Act funds 

that BP will likely pay as a result of the oil spill. And in that, I 

also want to recognize my senior Senator from Florida, Senator 

Nelson, who has been intricately involved in this conversation, as 

well. He could not be here today. He had a prior commitment, but 

he expresses his desire to have been with us here today, and I assure you we are working together on these issues that impact our 

state. 

[The prepared statement of Senator Bill Nelson follows:] 
3 
4 

There is no doubt in my mind and in his mind, and I think I can 

speak for him when I say this, that all this money should be sent 

to the Gulf states. There is no doubt that Florida deserves and 

must receive their fair share of this recovery money. 

So today, I would like to hear from each of our witnesses how 

this money can be best directed to the recovery efforts that should 

have started yesterday so that these efforts can start tomorrow. I 

am here to listen. 

I want to quickly recognize two members of State government 

that are with us here today, elected to represent this region, State 

Representatives Clay Ingram, who is here—thank you, Representative Ingram–and Doug Broxson, who is here. Doug, thank you for 

being a part of this, as well. I appreciate both of you being here 

today, and we are going to open it up after the second panel of witnesses. I would love to hear your perspective on this, as well. I 

think it is important that we have a strong partnership with our 

State government officials. 

And with that, I segue to someone we are very proud is with us 

here today, who is on the leading edges of many of these issues 

that we are dealing with, and this is Commissioner Putnam who 

joins us here today. Commissioner Putnam has both more Washington experience and now more Tallahassee experience than me 

and he is younger than I am, which is a small group of people in 

politics. But he is someone that is uniquely qualified to speak on 

these issues. He is doing a phenomenal job on behalf of the entire 

State of Florida, but particularly on behalf of aquaculture, which 

is a critical part of our economy. 

Commissioner, thank you for being a part of this and for sharing 

your input and insight and for being an excellent partner on these 

issues with us. Thank you. 

STATEMENT OF ADAM H. PUTNAM, COMMISSIONER, FLORIDA 

DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES 

Mr. PUTNAM. Thank you very much, Senator Rubio, and most importantly, thank you for being here and physically bringing the attention of the United States Senate to northwest Florida. 

As you know, Congress has the attention span of a 20-minute sitcom. A year out, it is critically important to continue to remind our 

Federal policymakers of the damage that continues to reverberate 

throughout these Gulf Coast communities. And you have got a 

great panel of witnesses here and a great legislative delegation 

that is going to share some thoughts on how Tallahassee has positioned itself and what the continued harm is to our charter boats, 

to our hotel and restaurant industries and tourism in general. 

I wanted to focus my remarks on the seafood side. As Commissioner of Agriculture and leader of the Department of Agriculture 

and Consumer Services, we are the lead agency in the State for 

food safety. We are also the lead agency for promoting what we 

grow and what we raise in the State of Florida through our ‘‘Fresh 

From Florida’’ campaign. So if I could, I will just take a few minutes and go over what our role in that is. 

I would like to begin by just thanking the legislative delegation 

and Senator Gates, who is also in that northwest Florida delegation, for passing the Deepwater Horizon Oil Spill Economic Recov-
5 

ery Act that, in essence, says whatever fines and settlements do 

come forward as a result of this horrible tragedy, 75 percent of that 

will stay in the most impacted communities here in northwest Florida. I mean, it is a no-brainer, but I am glad they codified it in the 

law, because the last thing we want is for those fines and settlements and recovery restoration monies to turn into a slush fund for 

other communities that did not have the harm, the real harm, that 

these eight counties in northwest Florida had. The seafood industry for the State of Florida is $600 million of economic impact. Fishing, in general, is $8 billion—$8 billion. And 

so this is an enormous industry for our state and it is one of these 

great examples of where the health of our environment directly impacts the health of our economy. 

In the aftermath of the spill, seafood sales declined between 35 

and 40 percent, and over 60 percent of all seafood buyers polled in 

the immediate aftermath of the spill said that they had lost confidence in the safety of Gulf seafood. A year later, we really have 

not seen that public confidence number move. 

Our responsibility in the Department, and we have negotiated a settlement with BP for $10 million for additional food safety testing, and when it is fully ramped up, we will be testing 200 samples 

a week—excuse me, 200 samples a month. We have now run a year 

out, using existing capacity, we have run several hundred samples 

and there has been no indication whatsoever of any level of oil residue or dispersant residue, the two things that people are most concerned about, in Florida seafood. So it is a perception problem, not 

a substantive problem. But the brand that our charter boat captains and our commercial fishermen and our oystermen in 

Appalachicola and throughout the State of Florida had built over 

decades and generations was destroyed overnight by the spill. And 

so our efforts are focused on aggressively ramping up that testing 

capacity. 

We have a world class laboratory in the State of Florida. It is one 

of the few in the nation that is a state lab also recognized by the 

U.S. Food and Drug Administration (FDA) and National Oceanic 

and Atmospheric Administration (NOAA) for seafood safety. We are 

making investments in that equipment and ramping up the pace 

of testing, but we have not found any evidence whatsoever that 

there is a problem with the quality of Florida seafood. But that 

perception, that brand damage, lingers. 

We negotiated a second component to a settlement with BP that 

involves $10 million in promoting and marketing to undo that 

harm, and as you know, having run an expensive statewide campaign, that is a—to rebuild a national brand, it is a drop in the 

bucket. But that $10 million is targeted toward the seafood buyers 

around the country—Philadelphia, New York, Chicago, the big brokers—and the people who go into restaurants and the people who 

travel to the State of Florida in those key markets. 

Many of you have a copy of the latest edition of the Guy Harvey 

Magazine. We have partnered with Guy Harvey, who is a world renown artist, but also a researcher and conservationist, to highlight 

the safety of seafood. You will see in regional publications—Coastal 

Living, Southern Living, those types of regional markets—a 

ramped-up presence of Fresh From Florida seafood. You are going 
6 

to hear later from Collier Merrill, who took a road tour of chefs up 

to New York to highlight for them, and I do not want to steal their 

thunder, but the idea here is that we work in concert with all the 

different entities so that it is not the Department of Agriculture 

doing one thing and Visit Florida doing another and the northwest 

Chamber is doing another, to bring harmony to that on the marketing piece. 

It is our goal to begin to bring those confidence numbers back up, 

and part of the challenge and part of the market in bringing those 

numbers back up is right here in Florida, because half of Florida 

seafood is consumed in Florida. And so a lot of the story that we 

have to tell is with our own Floridians, and the studies have shown 

that the closer people are to the water, the higher their confidence 

in Florida seafood. 

If you look at the polling, the market research, it is communities 

like Gainesville, Orlando, places interior, that have a lower confidence in Florida seafood than coastal communities like Tampa or 

Jacksonville, Pensacola, Panama City, Miami. Those all have higher numbers. 

Restoring that confidence is a key part of our effort, but also having the world class testing facilities so that we can say with confidence that there is no residue, that it is safe. 

It is important, I think, and this is something that Doug Darling 

is here from the Governor’s Office as his Deputy Chief of Staff, and 

I know he has worked real hard on the Natural Resource Development Assessment (NRDA) process. It is important that at the end 

of this saga, at the end of this tragedy, that whatever has been 

done, we can look back ten years from now, 15 years from now, and 

say, this is a permanent benefit to these communities in northwest 

Florida. I do not think any of us want to see a situation where we 

look back and say, well, we spent a lot of money on billboards and 

magazine ads and we do not really have anything to show for it. 

There are conversations out there about real infrastructure investments that will improve the quality of the fishery, improve our 

ability to continue to bring in charter business, commercial business, continue to do good things with our tourism business and our 

seafood business. That more permanent view of how we use those 

dollars most wisely is critically important to protect that $8 billion 

industry and expand it even more. 

And so with that, Senator, thanks for letting a House guy come 

to a Senate hearing, and thank you for your commitment to restoring these communities to their pre-spill levels and, frankly, even 

using this as an opportunity to make some improvements. But from 

our standpoint, we have a great story to tell. The science is with 

us. The harm is not there from a scientific basis. The harm continues to be there, though, from an economic basis, and that is 

what these communities and small businesses have to live with 

every day, one year out. 

[The prepared statement of Mr. Putnam follows:] 
7 
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13 

Senator RUBIO. Well, thank you, Commissioner. 

First of all, the Commissioner has a big state to serve and so he 

does a lot of driving these days. He drove all the way to Tallahassee last night and drove all the way over here this morning. I know 

he has to drive back and continue the hard work, but I do have 

a few questions, Commissioner, that I hope you can help us with. 

One is one you understand very well, and that is that as Congress begins to consider what to do with the money that comes 

from these fines—this is a big pot of money, and as you can imagine and I know you know well, once there is a big pot of money 

available in Washington, people get all kinds of ideas. So that is 

the first thing we are going to have to confront. Obviously, I think 

there will be consensus in this room that that money from those 

fines should be specifically targeted to those states and those regions that were most directly impacted by this bill because that is 

why the fines happened. 

The question I have is, and you have already kind of alluded to 

it a little bit, the second part of our conversation is that once we 

decide, yes, this money should be designed specifically for those regions that were impacted by the oil spill, what kind of projects 

should we be prioritizing? What kind of expenditures should we be 

funding? I think what you are going to hear is all kinds of arguments, and not necessarily from our delegation, or from anyone, for 

that matter, elected, but extended to its most absurd conclusion, 

you could argue anything is economic development if you really 

wanted to. 

So, in essence, where do you think we can get the most bang for 

our buck? I read this morning an editorial here locally that talked 

about how we should focus on environmental clean-up issues, that, 

in fact, the environment is directly linked to the economy. I think 

that is a valid point. Others, I think, will tell us today that there 

are some economic incentives and economic development projects 

that could potentially help to offset or diversify or balance out some 

of the losses. I think you have talked about some of the things that 

maybe not enough attention is being paid to, and it is just maybe 

public perception, public awareness-type campaigns, where, in fact, 

where there is not a problem but people think there is a problem, 

that one of the things we should be doing is educating people to 

the fact that there is nothing wrong with our seafood, that there 

is no reason why you should not be coming to our beaches. 

What is your thought process in terms of what I should be saying 

on where we should be prioritizing the type of projects—the types 

of projects that we should be prioritizing? 

Mr. PUTNAM. Well, I think that is the key question, and as you 

alluded, it is important that the non-affected states, the non-Gulf 

states, not have their finger in the cookie jar. We do not want to 

see research and development opportunities diverted to other universities because there is an oceanography department in Indiana. 

I mean, that is the classic Congressional ploy that we have all seen 

before, where a well-placed person will use it as their earmark 

fund, and that cannot be allowed to happen. Those funds need to 

come to the impacted states and the impacted communities within 

those states. 
14 

I think continued research is critical. Even before the spill—and 

I suspect that Captain Zales is going to touch on this—even before 

the spill, a lot of our fishermen were under assault by Federal regulations based on flawed models that had dramatically curtailed 

their ability to harvest. And so I think that there is, frankly, an 

opportunity and a nexus between the resource and the harm, the 

tragedy done by the spill, that funds go into stock enhancement 

and development activities, such as continued reef development. 

There have been some ideas floated about locating buoys and 

markers a certain number of miles offshore to build the bottom 

fishing, to create the artificial reefs, to guarantee that it takes 

pressure off some of the more near-shore areas and gives charter 

boat captains a place to go. Reef restoration for your shellfish, for 

scallops and oysters. A lot of those reef development opportunities 

are out there. 

Other stock enhancement things include hatcheries, which other 

states have been doing for a long time and Florida has been doing 

successfully on the fresh water side, but I think a hatchery-type 

situation is a permanent gift that keeps on giving. It continues to 

build that ecosystem and build that fishery that draws people here 

for world class fishing, world class beaches, world class seafood, 

and you have all of those things interconnected and there is a 

nexus between that gain and the harm that was done by the spill. 

So those types of permanent things, I think, are important. It is 

critical for the local communities, the local lawmakers and commissioners to have some say in that. I think that this is not a situation 

where Washington should dictate what all of these projects are. I 

think Florida has done a good job developing a consortium of all 

of our state universities to avoid them fighting with one another 

over research dollars. I think that that consortium concept has 

worked fairly well in terms of channeling the research and development dollars that have already come and creating a model for future dollars. 

So those are some of my thoughts on how we proceed. But I do 

think it is important that workforce development and retraining efforts, the research and development pieces, and the restoration and 

stock enhancement pieces of that puzzle be a part of that final use 

of those dollars. 

Senator RUBIO. I think the only issue that I think is—that, 

again, has a political dynamic to it, as well—is once the money, 

God willing, reaches the State of Florida and that money begins to 

be spent through state entities and counties, et cetera, are some of 

the regional conflicts that begin to emerge with regards to how that 

money should be spent and who was impacted more and so forth 

and so on. Kind of the direction I have been headed in my thought 

process, and I would be interested to see your input on it because 

I am open-minded on all these things, is that what we need to decide is on the type of projects you have just outlined, a bunch of 

them, and let the money chase the projects as opposed to the 

money simply chasing the geography, and I think what you will 

find if you do that, if the money goes after the projects rather than 

just the geography, you will find that the geographical areas that 

were more impacted are going to see themselves being treated fairly. 
15 

But that is an issue that has become recurrent and I would not 

put the horse too far ahead of the cart here, because I can assure 

you that this issue of how the money is going to be spent is going 

to be—it has some ways to go in Washington, and the direction it 

is headed in some regards has been interesting, to say the least. 

It is a crash course for me in the politics of how money is spent 

up there. 

But just any thoughts about how we manage that once the 

money gets here, between regions? When I mean regions, I think 

there is general consensus, by the way, in the state, from everyone 

I have talked to, that we are talking about the Gulf region. We are 

talking about regions within the Gulf region. We are not talking 

about people down in Key West thinking they should be at the 

table the same way that people in the Gulf region are with regards 

to oil spill impact. I am talking about different counties and different potential projects that may be competing with each other 

here in this region for the same availability of funds. 

Mr. PUTNAM. Well, you know, I think, clearly, this tragedy did 

impact the entire state. There were lost bookings throughout the 

state and a perception problem throughout the state. But the bulk 

of the actual harm is in these eight counties, and because of the 

leadership of the legislative delegation, there is now some certainty 

that the bulk of the funds from fines and settlements will come to 

northwest Florida and to these eight counties. 

The eight counties, and I think your point is well taken, they 

need to be wise enough to understand that this is one of those moments for regionalism. This is not the time for the Panama City 

versus Destin versus Pensacola fight. I mean, this is what do we 

do to market our region? What do we do to repair our region? What 

do we do to build our resources that are the reason why people 

come to our region? And I know that that is easier said than done 

with a lot of impacted parties and a lot of sub-units of government. 

But this is one of those times when all of us need to step up as 

a region and say, this is what we need to do for northwest Florida 

and all of us will benefit if we have something that channels our 

energy in the same direction instead of splintering off, because if 

we splintered off, in five or ten years from now, we are going to 

look back and say the State of Florida got over $100 million and 

what do we have to show for it? Do we have new pilings at the marina? Do we have waitresses and waiters who were given $8,000 to 

$15,000 that was a shot in the arm in the economy for a short period of time, but we have not done anything to fundamentally 

strengthen our economy and build on the pillars that we have with 

seafood and tourism and the military to really build that 

generational difference, and that is why we have got to think regionally on this one. 

Senator RUBIO. Commissioner, I appreciate your time. I know 

how busy you are. As we told you at the outset, you are welcome 

to stay the whole hearing. I know you have other commitments and 

places you need to go, so we are just grateful you made the drive 

to be a part of this day and we look forward to continue to work 

with your office on these issues. 

Mr. PUTNAM. Thank you for the great work you are doing for the 

State of Florida in Washington, and more power to you. 
16 

[Laughter.] 

Senator RUBIO. Better me than you, right? 

[Laughter.] 

Thank you. 

Mr. PUTNAM. I appreciate it. 

[Applause.] 

Senator RUBIO. We are going to call our second panel now and 

I will introduce them. 

First is Mr. Collier Merrill. All of you know him well. He is the 

Chairman of the Pensacola Chamber of Commerce. We have Mr. 

Joe Gilchrist, who is the owner of the Flora-Bama Lounge, Package, and Oyster Bar, and Captain Robert Zales is the President of 

the National Association of Charterboat Operators. They are going 

to take their seats up here and—— 

[Pause.] 

Captain, why do we not start with you. Are you ready? 

STATEMENT OF ROBERT F. ZALES II, PRESIDENT, NATIONAL 

ASSOCIATION OF CHARTERBOAT OPERATORS AND PANAMA 

CITY BOATMEN ASSOCIATION 

Mr. ZALES. That is all right with me. I am ready. Thank you very 

much. 

Senator RUBIO. All right. Thank you for being a part of this. 

Mr. ZALES. Thank you. Senator Rubio, my name is Robert F. 

Zales II. I am appearing today on behalf of the National Association of Charterboat Operators and the Panama City Boatmen Association. NACO and PCBA thank you and the committee for your 

kind invitation to present testimony on the critical issue of the impact of the Deepwater Horizon oil spill and status recovery efforts 

in Florida. 

NACO is a nonprofit 501(c)(6) association representing 

charterboat owners and operators across the United States, with a 

substantial number in Florida. PCBA is a local association representing the local charterboat fleet in Panama City. I also wish to 

point out that I am a simple charterboat operator and not accustomed to providing formal testimony such as this, so please pardon 

my rambles in what I provide. 

Charter, commercial, and saltwater recreational fishing is extremely important to Florida and the Gulf of Mexico, both economically and socially. In 2008, there were 90,000 Floridians directly 

employed in recreational fishing-related businesses. Florida alone 

accounts for 40 percent of all marine recreational fishing nationally, with $9.7 billion in total sales from recreational fishing in 

2008. 

As a result of the blowout, charter fishing customers began canceling their trips and family vacations. This began the end of the 

fishing season, which had begun as a promising season after the 

last two years of overly restrictive Federal regulations and sour 

economies. The Gulf Coast Claims Facility (GCCF) was established 

to provide those affected by the impacts of the spill with their economic losses. To many of us, the GCCF has been a massive failure, 

as our claims are either still in review or ridiculous offers have 

been made. We see recent reports from commercial and recreational fishermen of harvested fish being seen with several 
17 

health issues, and according to the National Marine Fisheries Service (NMFS), possibly infected with Vibrio vulnificus, very harmful 

to humans. More important, more studies are now underway to determine the extent of this issue and to attempt to discover the 

cause. This year, Mother Nature has provided great weather. Our 

waters appear to be clean and free from oil in areas we can see. 

Our fishing, with the exception of the sick fish, has been as good 

as ever and business has been good for most. Still, we live in fear 

of the future. 

Millions of gallons are still unaccounted for and located somewhere. The fish we see harvested are from year classes prior to the 

blowout. The 2010 year class for many of the prime species is highly questionable. Contrary to a report produced by Mr. Kenneth 

Feinberg released on January 31, 2011, stating harvest levels will 

return to normal by the end of 2012, several renown fishery biologists say it will be a minimum of three and could be five years or 

longer before we have any real knowledge of the impact of these 

species. 

Our future needs: It is imperative that the fines that will be assessed as per the Clean Water Act (CWA) for this disaster in the 

Gulf are dedicated to the Gulf. You will hear from many organizations, communities, states, and others, all with their respective 

hands out for funding. Charterboat owners do not have organizations with the infrastructure to seek this funding, so we ask for 

your assistance to help us. We do not seek individual economic help 

from the CWA fines, although we should—should we find in three 

to five years that the fish species we seek are in dire straits, we 

will certainly need financial assistance to survive. 

Our needs are resource oriented. We must have an ecosystem 

that is capable of sustaining our fishery resources. We must expand funding for cooperative independent research of our fish 

which will utilize vessels from the charter fishing fleet. This data 

is recommended by the NMFS and can be done through grants to 

nonprofits in conjunction with universities and state wildlife agencies. 

Funding for improved and yearly stock assessments should be 

provided. In the Gulf, most fish stock assessments are conducted 

only every five to seven years. We need adequate funding to ensure 

our natural and artificial reefs are clean and intact. Enhancing our 

artificial reef system is a priority. 

Research funding to further study fish health must also be a priority. Our prime interest is to ensure that the fish we harvest are 

safe to handle and consume. We must know with reasonable certainty that any fish that appears to be unhealthy is properly handled and tested so that consumers can have confidence that are 

catching and eating quality Gulf seafood. Many of the fish health 

issues have never been observed before the blowout, so it is a must 

that the cause of any health issues be known as soon as possible. 

Funding from the CWA should also be used to advertise that the 

charter fishing fleet is alive, well, and ready to serve the public. I 

suggest that a panel of a variety of stakeholders be created who 

will be responsible to distribute CWA funds for the various needs 

of the gulf. Politics and the buddy system should be removed from 

the process. Once the funds are received and proposals for the var-
18 

ious research and renewal projects are provided, the panel should 

be charged to make recommendations that will ensure the most important and effective projects are funded and activated. There must 

be stipulations that the charter fleet will be actively involved in 

fishery independent research. 

In closing, I wish to state that the Gulf Charter Fleet was once 

a viable, productive, and sustainable group of small business owners. We provide a necessary service to individuals who want to fish 

and enjoy our natural resources. Over the last six years, the fleet 

has struggled and yet continues to survive. The impact from the 

Deepwater Horizon oil spill was almost the last nail in the coffin. 

It is imperative that the CWA fines be dedicated to the Gulf, that 

they be properly utilized to ensure the health and safety of our 

Gulf, and ensure the sustainability of the charterboat fleet. 

The charterboat fleet owners, operators, and crews are the first 

responders to any issue on the water. We care for our Gulf and all 

things within and around. 

Senator, this concludes my testimony. Again, I appreciate the invitation and opportunity to provide you and the committee with 

this information and I will be pleased to answer any questions. 

[The prepared statement of Mr. Zales follows:] 
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Senator RUBIO. Thank you, Captain. 

We will move next to Mr. Gilchrist. Thank you for being here 

today and being a part of this field hearing. 

STATEMENT OF JOE GILCHRIST, OWNER, FLORA–BAMA 

LOUNGE, PACKAGE, AND OYSTER BAR 

Mr. GILCHRIST. Thank you, Senator Rubio. I wanted to make a 

couple of remarks before I got into my prepared statement. 

One was I agree with Mr. Putnam that long-term investment in 

our communities is critical. At the same time, we have short-term 

needs and promotion for the communities to rebuild the economic 

and tourism structure and others. Obviously, what we need longterm is a balance between environmental investments, including 

artificial reefs, and shorter-term promotions of the area. 

And I will also say that I went snapper fishing last week and 

caught an excellent red snapper to eat. Obviously, I am not starving. 

One of the concerns of our coastal communities—and these are 

as relayed to me by my employees and customers and people that 

I meet from all over the world—relating to the disastrous oil spill 

was, frankly, that poor stewardship by the United States Government got us here. With all the money that has been cycled through 

Federal, State, and local agencies, to have no one be prepared for 

something to go wrong is not logical. In fact, the planning and protection of our society has been a disappointment to a lot of Americans. 

Sadly, also, news media in America. I saw the same picture on 

TV of a pelican in Louisiana for 90 straight days. That pelican survived, but it did not seem to be proper stewardship of the nation’s 

best interests. I have no problem with accuracy in news reporting, 

but it seemed like the only goal of many people in the news media 

was to get more people to watch. 

BP and the other companies have all created a resolution process 

that has been very favorable to some people, and they are happy. 

Some people have abused it. But, unfortunately, there is a residual 

number of people and businesses that have not had resolution to 

this and I do not think that is successful for our society. I would 

like to encourage some outside-the-box thinking to help get some 

resolution, perhaps some ombudsman intermediary between Mr. 

Feinberg’s team and the people that are not able to reach resolution, because it seems an awful lot of arbitrary decisions are being 

made by people that nobody can find, nobody can document, and 

nobody can hold accountable. 

My business is fairly representative of the coastal communities, 

I believe, along the coast from Louisiana through Florida. We deal 

with tourists from all over the world and in our regions, and I 

think we were looking at a 10- to 15-percent gross increase in each 

of 2010 and 2011. We went from being about 15 percent ahead of 

prior year’s business in April to where we were 15 percent below 

in 2010. The net result is that at this point in time, our businesses 

and the ones that I oversee, look at, are only up six to eight percent 

over 2009, and since most net income comes from the last 20 or 30 

percent of your gross income, it severely impacted our ability to 
30 

grow, pay for ourselves, and, of course, pay for the 50 percent of 

our gross that goes to Federal, State, and local governments. 

And our real estate, construction, and recreational communities 

were and are still struggling with after-effects of this. I think some 

more longer-term, medium-range investments in the coastal communities will probably be helpful. Of course, this is all in the middle of our current economic challenges that everyone has across the 

country. 

Finally, we should not forget that BP promised to make our communities whole, and I think this is a difficult project to do, but I 

believe that it requires more time to do so and so I would encourage us to look at two- to five-year time frames of periodic investments in the communities. 

Finally, I just end up with some questions. As a new storm season approaches, nobody can predict what will happen and what the 

consequences will be of what is in the Gulf. I personally think it 

was a mistake not to allow oil to rise to the top, be skimmed by 

skimmers that are part of the international oil community. We did 

not avail ourselves very effectively of that. So the longer-term effects of correcting it and trying to keep oil from rising to the top 

may be, as many people discern, a longer—a bigger problem. The 

fact that there is no solution that would allow a wellhead to be covered and oil to be recovered at the top to me makes no sense. 

As clear as it is that BP and its partners did not act responsibility, the Government of the United States has also failed in some 

of its responsibilities. So I guess the final question is, at what point 

in this process should the average citizen or business feel like we 

are moving toward a just conclusion? 

Thank you for your time. 

[The prepared statement of Mr. Gilchrist follows:] 
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Senator RUBIO. Thank you. 

Mr. Merrill. 

STATEMENT OF COLLIER MERRILL, CHAIRMAN, PENSACOLA 

CHAMBER OF COMMERCE 

Mr. MERRILL. Thank you, Senator Rubio, and I, too, want to echo 

I appreciate you being here. I know it is unusual to have a Senate 

hearing outside of Washington, but we appreciate you coming down 

and doing that and we certainly appreciate Commissioner Putnam 

being here. 

I am going to jump right in with what Mr. Gilchrist ended with, 

on the efforts that happened after the spill. A year ago today, we 

were still having two million gallons of oil pump into our gulf every 

day and it was disheartening not to know where that end was. 

Every day, two million gallons was going into there, and you 

touched on it, Senator, at the beginning, of how many barrels were 

going, total barrels, five million barrels. But it came down to two 

million gallons every day, and it went on for 85 days. 

And there has got to be a way to stop that, whether we have a— 

put a billion or two billion into some kind of recovery vessel that 

is parked somewhere and takes even a week to get there. It is better than sitting every day, day after day, and you see those—when 

BP finally released the videos a month into it of the oil spewing 

out of the bottom of the gulf. And that was such a damper to people, as I had workers quit and leave, not knowing when it is going 

to end, and we have to go home at night and just watch it continue 

to spew, and with no recovery planned. They are going to drill this 

well down and release pressure or do whatever. 

So I want to echo what Mr. Gilchrist said. If nothing else comes 

out of this going into the record of trying to enforce, there is a lot 

of oil wells out there across the world and nation, to put some kind 

of fund, that they have some kind of recovery vessel. I have paid 

a lot of money over the years, taxes, for fire trucks. I have never 

used one. Thank God, I have not. But they are out there and they 

are ready to go should something happen, and we need to have 

some kind of recovery vessel, I would believe, for offshore, as Mr. 

Gilchrist talked about, that can come out there, and I do not know 

what they do—I am certainly not a scientist—that can do something. For that kind of money, somebody could build a ship that 

could go down and cover that until the oil was—relief oil well was 

drilled and release the pressure or whatever, but somehow to funnel that oil back to the surface and be able to pick it up, build the 

ship, whatever is out there. 

Like I said, I am not a scientist and we will leave that to people 

that are, but hopefully, so that the next time something like this 

happens, and I think it is just going to have to happen—at some 

point, it will—there is something there besides we are trying a test 

well that hopefully will relieve the pressure, as we just sat over 

here in the Panhandle and day by day watched two million gallons 

a day, every day, spill into there. 

Second, and everybody has touched upon it on this panel and the 

earlier panel, on the fine money, and I, too, want to thank Senator 

Gates and our delegation for leading the effort, getting this Oil Recovery Act passed. We are in a tough time here in the State of Flor-
34 

ida, and to get $10 million a year was no small feat and I appreciate it, and it is $10 million a year this year, next year, and the 

year after. So we have got $30 million that we are going to help 

diversify our economy with. 

Then I heard you, Senator Rubio, ask Commissioner Putnam 

about, what are we going to do with this money? Where is it going 

to go? You know, we have already got a plan in place that was 

passed with this bill, as you said, on the 75 percent of the fine 

money will also go to the eight counties affected by oil. And we ask 

you, Senator, to try to make that happen at the Fed level, as well, 

as money comes in. That is where it needs to go. 

The plan as it stands now, and it is still in the works, of exactly what this $10 million will go to, and hopefully the fine money will 

follow suit, is kind of what was said earlier, you know, the project. 

The money will follow the projects. And the money right now is 

going to be administered through the Governor’s office, come to the 

University of West Florida through the Haas Center, and Dr. Rick 

Harper and his staff there will be in charge of vetting these 

projects out as the Governor and his department—Grace Wupu is 

running that, will be here in a couple weeks and continue to work 

on how exactly that system will work. 

But there will be procedures in place, and as Senator Gates very 

eloquently said, if there is a lot of infighting here in these eight 

counties, he will march down to the Senate floor and take the 

money back, and he will. So hopefully that process will be in place. 

It will knock out any infighting, and it will be what is best for the 

eight counties and not individual counties or cities or anything 

else. And we are excited about that. 

Senator, in the previous Administration, some of the money that 

came in early, last year, was sent to other parts of the state. Some 

marketing money came in. There was an ad that came out somewhere in South Florida, it had somebody covered in lotion and it 

said, ‘‘The only oil on our beach is suntan oil,’’ and it was just a 

direct market against Pensacola, and that happens. Cities market 

against each other, but there is a good chance that that ad was 

paid for by BP money, because that money that was supposed to 

come up to us was sent to other parts of the state and it is just 

wrong. It was wrong. Twenty-five million came in early and it was 

not handled correctly up to the eight counties that actually were 

affected by oil. And I heard you say loud and clear, I heard Commissioner Putnam, and I appreciate your efforts on that, that the 

money that comes in is spent to the places that need that. 

And the last thing I want to touch on briefly is what has also 

been said here is the accountability of BP needs some teeth behind 

it somewhere, because we continue to hear, and I am not speaking 

on behalf of the Chamber or anybody else, but just from what I 

hear out there is that they continue to tell the same story, well, 

you are going to hear something in 60 days. You are going to hear 

something in 90 days. And those things come and go and, well, we 

did not hear anything. Maybe later. 

The last time—I speak from personal experience—that we were 

going to hear something in February, and then in February, they 

said, okay, you need to redo all your claims, and we had several 

different organizations that had claims in. Redo your claims and 
35 

then in 90 days, this new system we have now—90 days from now. 

I know you are not happy because you waited since last September, 

but now redo them all and in 90 days, we are going to have the 

fix. That is 140 days ago, and nothing. 

If you could at least have somebody to talk to and say, well, this 

is where you are and we need these questions answered, but it is 

under review, it is under review. Can you give me somebody to talk 

to? There is nobody ever to talk to. 

And I heard Mr. Feinberg say, ‘‘Well, we were just overwhelmed 

by so many claims,’’ and we started hearing that a year ago, how 

many claims they are overwhelmed by. Well, hire more people. You 

know, we told him that last year. We told him that in December. 

We told him at the February meeting when he said he is still overwhelmed by the number of claims that have come in. 

After Katrina, 1,600,000 people filed claims with their insurance 

companies. They hired 15,000 adjustors and they came out and 

knocked out 98 percent of those claims in a year. You know, that 

is what you have got to do, and they come in and they—nobody 

wants a hurricane, and everybody is not exactly happy with the insurance companies, but they come up with a settlement, they do it, 

and they get on with their lives. As Mr. Gilchrist said, this just 

continues to linger and linger and linger. 

I want to end with, once again, we appreciate you being here and 

I am here for questions. Thank you. 

[The prepared statement of Mr. Merrill follows:] 
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Senator RUBIO. Thank you. 

I think before we have further questions, and it is kind of not 

in the script, but I would like the two members that are here from 

the legislative delegation to provide their brief input. I do not know 

how we can do that. We have a microphone here if you guys want 

to share it, and maybe get an extra chair because we talked so 

much about the Oil Spill Recovery Act a little bit here early on, so 

I am interested in how that played out in terms of the view on the 

$10 million the state is putting forward. 

One of the things, A, I think if there are some projects that are already in mind and the $10 million acts as seed money to that, 

that we can make sure that there are not redundancies. On the 

other hand—I guess what I am trying to say is I want to make 

sure that whatever we do at the Federal level complements the intent of the state legislation, not contradicts it or in some ways duplicates it in an unnecessary way. So thank you for being a part 

of this, both of you. You both entered the same year, did you not, 

so I do not even know who is senior. Who wants to go first? 

Mr. INGRAM. He is better looking. I will let him go first. 

[Laughter.] 

STATEMENT OF HON. DOUGLAS V. BROXSON, A REPRESENTATIVE IN THE FLORIDA HOUSE OF REPRESENTATIVES 

Mr. BROXSON. Senator, thank you very much for being here. Our 

delegation has taken a fairly active position in dealing with the 

Gulf Coast Claims Facility, and first of all, I want to applaud BP 

for stepping up and offering the gulf coast $20 billion. I think they 

were on a guidepath to pay families and businesses for their loss. 

However, it is our strong opinion when they retained Mr. Ken 

Feinberg to administer the Gulf Coast Claims Facility, he created 

a network of rules and regulations that virtually shut down the 

process. To date, BP has paid about $4 billion of the $16 billion. Last year, they wrote off $38 billion in losses, considering the anticipated payout they have not made. And what we would like to see 

is that the remaining $16 billion go to a new claims network of the 

states and counties represented by the oil spill to filter this money 

back to the citizens and businesses of the area. And I would pray 

that you do not allow this money to go back into the coffers of BP, 

that this money that they promised us, that should have been paid 

out, was not paid out, and we expect them to fulfill their obligation 

to the gulf coast. 

STATEMENT OF HON. CLAY INGRAM, A REPRESENTATIVE IN 

THE FLORIDA HOUSE OF REPRESENTATIVES 

Mr. INGRAM. Thank you, Representative. 

And then, Senator, thank you so much for coming here and 

bringing the spotlight of Washington here on this problem. It 

means a whole lot to me and I know the rest of the delegation. 

There is not a whole lot more I can add than what you have 

heard directly from the folks that were affected the most, but a few 

things I would like to echo. 

First of all, from the delegation’s standpoint and State government’s standpoint, we did, I think, what we could do with the Oil 
40 

Spill Recovery Act. I think it was a step in the right direction and 

the right thing to do. It had support from home, and then the Governor’s office helped. Senator Gates spearheaded the effort, and I 

think it was great that we could do that from the standpoint of 

State government. 

The other two things I would like to echo, and this piggybacks 

on what Joe Gilchrist said, is I hope that as you take this back to 

Washington, the Federal Government looks at the nuts and bolts 

of what happened and can be prepared from the emergency standpoint. I know Collier alluded to that, too, comparing this to lessons 

we learned from other disasters, hurricanes and things like that. 

After some of the hurricanes, President Bush, I know, waived the 

Davis-Bacon requirements to allow things to be rebuilt faster. 

Maybe at the Federal level the next time—knock on wood, we hope 

this never happens again—but being able to waive portions of the 

Jones Act to allow foreign vessels to come and aid in cleanup and 

making things go faster. If we can look at those nuts and bolts 

things we can do to make cleanup happen a lot faster and prevent 

oil from getting to the shores, I think that would be tremendous. 

And the other aspect, and Representative Broxson alluded to 

this, is that the folks who were affected the most, you know, the 

fishing boat owners, business owners like these guys sitting here 

at the table, if they are not paid by the Federal Administrator, for 

some of these folks, it is too late if they do not have the money in 

their hand. They have already been foreclosed on. They cannot eat. 

Their kids are going without. So from the standpoint of being a 

United States Senator and being able to maybe put pressure on the 

Administrator to make those payouts now, because I think there 

becomes a point where it is just too late. If you have been foreclosed on or you cannot feed your family, the promise of getting a 

payout down the road does not matter. So for some of these folks, 

it is too late, but whatever we can do from this point forward to 

put that pressure on the Federal Administrator, I think is very important. 

So thank you. 

Senator RUBIO. Well, let us—here are some questions that I 

have, and I want to break it up into two parts. I mean, let us close 

the loop on the claims process because it is still a very sore subject 

for obvious reasons. 

My perception, based on what I have heard in the past before 

coming here today, is that the problem is the process itself. It takes 

too long and no one is given a reason—there is no clear understanding as to why it is taking long. Collier, you talked about recently where people had submitted claims, had filled out the paperwork, and then were told, we have created a new form and a new 

process. Fill out this form and that will be done. It will be faster 

and move quicker than the other one did. They have done that. 

They are still waiting. 

Is it—and I do not know. In your mind, what is the biggest problem? Is it just a time frame, the length of time that it is taking 

to pay the claims? Is it a combination of that and some of the people that have been denied, some of the rationales behind the denials do not make sense? What would you identify as the two or 

three real sore points with regard to the existing claims process? 
41 

Mr. INGRAM. The thing we hear a lot is that there is fraud in the 

system, and I am sure there is, that people try to make—— 

Senator RUBIO. I am sorry, that you hear a lot—— 

Mr. INGRAM. From BP. 

Senator RUBIO. Oh, from BP. I beg your pardon. 

Mr. INGRAM. Collier may be better able to answer that, or—— 

Unidentified Speaker. About the fraud allegations, you mean? 

Unidentified Speaker. Payouts from [indiscernible], I guess. I 

mean, I guess what they are on the lookout for are the fraudulent 

claims, and that is a legitimate concern—— 

Senator RUBIO. Right. 

Unidentified speaker [continuing]. No doubt about it, but to allow 

that to hold up all payouts, or most legitimate payouts, I think is 

probably something that ought to be looked at. 

Mr. BROXSON. I think Collier mentioned that we are equipped to 

handle major storms and companies bring in a massive amount of 

adjustors. The thing that you have there is you have a contract. 

They know what they are supposed to do. The reality is, the problem with the Gulf Coast Claims Facility is that there is no contract. One person goes in with one set of circumstances and gets 

paid. Another person goes in with the same circumstances and does 

not get paid. 

If there was a ground of understanding of what their expectations were, this would help. I have spoken to Mr. Feinberg two or 

three times and encouraged him to do that, also to have someone 

from the Department of Insurance here in Florida to shadow his 

procedure to see that people are being paid properly and fairly. In 

some cases, they were paid unfairly. The concept of paying out 

$25,000 to a business, if that business received $10 in compensation that they justified, they are entitled to $25,000. But a business 

that has a $1 million loss of income is still entitled to $25,000. That 

makes absolutely no sense. 

But, frankly, I do not think there is any salvation for Mr. 

Feinberg and the GCCF. I believe we have to create a new entity, 

and the $14 billion that is left should be reinvested back into the 

five States that were impacted. And Florida, which we are not an 

oil producing State, we need our proportionate share that 19 million people bring to the table. 

Senator RUBIO. In terms of the—one of the things I am interested in about the claims payments, those are not tax-exempt, correct? If a claimant receives payment, they pay taxes on that money, 

is that correct? 

Mr. BROXSON. That is correct, both those individuals and businesses. 

Senator RUBIO. Right. So I would imagine I know the answer to 

this. This is what they call a leading question. Would it be helpful 

if those claimants were tax exempt? 

Mr. ZALES. If I could, and in the last Congress, we tried to get 

a bill through Congress to make the payments from not only that, 

but the emergency payments that started right after the spill 

through the claims and final payments, to have them tax exempt, 

and we were unsuccessful in doing that because of all the issues 

that you are well aware of. 

Senator RUBIO. The revenue adjusted—— 
42 

Mr. ZALES. Right, and—but it would be a tremendous help if 

something like that could come across and then, you know, you can 

make it retroactive to last year and the payments that people have 

made on their taxes, which in many cases the money that they received which got them through the year, they had to pay back to 

the Federal Government, and so they are right back at square one. 

So that would be a tremendous help, if something like that could 

happen. 

Senator RUBIO. I think that—let us move beyond that. It is pretty clear, and I think your statement, you all—there are some people that have been helped by the claims process. They have gotten 

their money, obviously not in a tax-exempt way, and they have 

moved on. There are many others that have had denials. They have 

gone in and basically there are two claims that are virtually identical or very similar. One gets paid. One does not. There is no rational explanation for it. Some people are waiting forever with no 

clear explanation as to why it has taken so long to pay them. It 

sounds like it is a combination of no clear, at least in the minds 

of those here, from the testimony here today, no clear parameters 

as to how they are making these decisions. It also sounds like potentially it is a manpower issue. Have they hired enough processors on the claims? 

Mr. MERRILL. I do not know how many they have hired. Representative Broxson might know. He tried to pay a visit at their office one time and did not find a lot of people working, and I will 

defer to him on how many people they have hired. But what we 

hear is, ‘‘We are overwhelmed by the number of claims,’’ and I get 

that. So hire more people. You know, we heard that back in August 

a year ago, back in July a year ago, and then in August, September, and we just continue on. Then hire more people. 

And then, as Representative Broxson and Representative Ingram 

said, they would come up with these different formulas. All right. 

We are going to start over. We are going to start over. So we 

bought into that a couple of times. Now, here we are. We were 

going to start over in February and we are going to have 90 days. 

‘‘We hate telling you that again because we know you have been 

waiting,’’ is what their response was. Maybe 60, but by 90, you are 

good. Well, that was, for me personally, it was 142 days ago that 

they received my claim, verified they received my claim, on several 

different businesses, and we just cannot tell you what is going on. 

We do not know. 

So I will defer to Representative Broxson on the number of employees they have. 

Mr. BROXSON. Well, originally, they had 3,500, and they had— 

they went—and I do not want to be a complainer, because it is 

really over, but they promised those jobs would be on the Gulf 

coast. They were in Ohio, Virginia, and Washington, the State of 

Washington. 

Senator Rubio, I do want to tell you this. I admire you for being 

here. I think it is a great step. However, no matter what you do 

or what any other Senator or Governor or Representative has done, 

the process and Mr. Feinberg have total immunity from our criticism. He will tell you, and he probably has told you, that his boss 

is the President of the United States and that when he complains, 
43 

he will listen. That is a pretty high hurdle to get over when you 

are trying to deal with someone to get them to adjust to a procedure. That is why I believe that we have to move on beyond that 

process and establish a new one to administer the balance of that 

money. 

One of the Justice Department attorneys of the Southeast did 

say that he did not think it was fair for that money to go back into 

the coffers of BP, and I would strongly pray that you do not allow 

that to happen. I mean, they, in fact, have taken the tax advantage 

for spending that money that they did not spend. So whatever influence you can levy from the Congress would be a great help to 

us to—— 

Senator RUBIO. Just to be clear, your concern is that BP after a 

while will say, ‘‘We reviewed all the claims that are worthy and we 

still have money. It did not add up to the total amount of money 

we had set aside, and so we are going to reclaim this money back 

into our coffers.’’ 

Mr. BROXSON. Exactly. 

Senator RUBIO. Okay. Well, we are going to—all of this testimony 

here is on the record and we will, as we move forward, we are 

going to talk to some of the other Senators involved on these issues 

and figure out how we can try to influence Mr. Feinberg’s boss, and 

we have some ideas and we will—yes, I am sorry, Captain. 

Mr. ZALES. If I could add, because I am one of the people, I have 

had a final claim in since February, and as far as I can see on the 

Internet, it is still under review. But there are a lot of people in 

this same situation, and I was a member of Governor Crist’s Economic Recovery Task Force and Mr. Feinberg came to us several 

times. I am glad to hear finally he has a boss, because he told us 

at every meeting he did not have one. He was completely independent, like he was king, which is essentially how he plays. 

So, clearly, some kind of oversight needs to be put there because 

there is absolutely no transparency in the process at all. You cannot find anything out about your claim from anybody. It is—I do 

not—it is worse than pulling hen’s teeth. So that is the process 

that everybody is in, and there is no rhyme or reason to it. It is 

like somebody else said here. One person can go in—you can have 

two identical sets of records. One person can go in, they come out 

and they are taken care of. The other person will go in and they 

do not get anything at all. There is no standard to the process. 

Senator RUBIO. Well, again, and I do not want to put something—I am not committing to something, because I have not 

thought about it, we have not thought about all the implications, 

I have not talked to anybody about this yet, but one of the things 

we can consider is whether, if a bill moves forward, as I anticipate 

it will, with regards to the fines under the Clean Water Act, whether this claims process will be pulled into that legislation and somehow some mechanism be made a part of that legislation that helps 

close out the rest of these cases that are out there and prevents 

exactly what it is you are concerned about, which is the money 

being reabsorbed by the company. 

And again, that is not something I have talked to anybody about. 

It is just a spur of the moment thought based on the testimony I 

have heard here today and how perhaps this bill could act as a ve-
44 

hicle to try to address these things and define, moving forward, 

how we are going to close out this process a year and whatever 

after it has already happened. 

So let us move on to the Clean Water Act, and I will explain to 

you, frankly, what some of my concerns are. There are a couple of 

hurdles to be overcome in a bill in Washington to take this fine 

money and assign it to the States. 

The first is kind of a philosophical/ideological argument by some 

that this money should not be assigned but rather should be absorbed into the General Treasury of the United States. I am not 

sure that is a majority position, but I think there are some that 

will have that position and there will be a debate about that. In 

what form and in what set-up, I am not sure, but there will be a 

debate among some that will argue that it is not right for this 

money to be assigned to a special fund, but rather that the money 

should go the way the money would normally go, and that is the 

General Treasury of the United States. 

So I think it is critically important that the Gulf states are 

united in presenting a united front on why it is important this 

money be assigned, and the argument is this is not general revenue. This is not the money that is normally collected. This is 

money that is being collected because of a specific incident. It is a 

fine related to a specific incident that occurred, and, therefore, the 

funds from that specific incident should go toward the damage 

caused by that specific incident and to prevent such incidents from 

happening in the future. That would be our argument. Others will 

argue differently. So we need to be careful about that. 

The second danger is that this huge pot of money is going to be 

sitting out there, and I assure you that there are those who already 

have designs on it, including those who are far removed from the 

spill. There are Senators and Congressmen from all over the country that see this as an opportunity to fund something they have 

had their eye on for a very long time, a condition of their vote, unfortunately—and I say this—let me rephrase that. And a condition 

of their vote may be that somehow this money, that a portion of 

that money be made available to them, to their state, to their 

project, even though it is far from home. 

And the reason why I put that at the table is because looking 

three steps ahead, you can very quickly find yourself in a situation 

where our choice may be a bill that has most of its money to the 

Gulf region but has other areas of the country picking at it, getting 

their piece of the money, because otherwise they are not going to 

let the bill move forward, or no bill at all. And I lay that on the 

table because there is no way we are going to avoid that debate. 

There is just too much money sitting out there for it not to be attractive, like a shiny object. 

So I want to lay that out there because that conversation, at 

some point, could happen, where we are going to have—we may 

have to make a decision about whether we do not vote for this 

thing at all because we think it is wrong that money that comes 

from a BP oil spill in the Gulf is going to fund some project on a 

lake, you know, 1,500 miles away that had nothing to do with the 

oil spill, or worse, going to fund some new airport somewhere else 

in the country. 
45 

I know this may sound nonsensical to you. I have been in Washington six months. I am learning. These things happen, unfortunately. So I want to lay that on the table because I do think that 

you may hear about that, that it may happen. And I am not committing one way or the other, other than to tell you that it is disturbing to think that we may have to vote for a bill that would 

have that kind of stuff in it when it goes against all of our principles and where we think that 100 percent of this money is the 

result of the BP oil spill, 100 percent of the money should go toward that. 

Now, that being said, I want to explore a little bit more how— 

what kind of projects we should be funding, because I think that 

is going to be an important part of how this bill gets put together, 

and what I heard today, moving forward, are three different directions for the money to be spent. And I think I heard arguments 

from most of the testimony here today, and we are going to open 

it up to the public, but in favor of a combination of all three. 

The first is ecological concerns. There is a bunch of oil that is 

still missing. Where is it? What does it mean moving forward? How 

can we restore some of these reefs, particularly the artificial reefs, 

so that they are productive and attract people here? So I think that 

is the first part of it. 

I think there is a consensus that there be some ecological spending. Again, there was an editorial this morning, I believe, in the 

Pensacola News Journal that said most, if not all, of the money 

should be spent on ecological programs, that enough has been 

spent on the economics. I think that is a debate that will be had, 

and depending on where you fall on these environmental issues, 

there are some that are going to argue for more money for preservation-type and conservation-type projects. But I think there is a 

consensus that at least some significant portion should be on ecological concerns and things of that nature. 

The other is research, research about things like how to be prepared and prevent future spills, but also research on things like 

fisheries. One of the things we kept hearing about from the fishermen is how poor the data is, and yet some devastating decisions 

on catch limits are made based on this poor data. And I know Senator Nelson, for example, has worked very hard on securing funding as part of this for better data, so that if someone is going to 

come in and say, you cannot catch any more after X-date, it is not 

just because some guy decides some computer model told him this, 

but, in fact, it is based on some real research that is based on some 

real facts and that you are not destroying people’s livelihoods based 

on an educated guess, but rather on data that actually has some 

substance. 

And then the last part that we have heard is some economic investments, obviously things like promotion, promotional-type 

things, because so much of the problem that we are facing in the 

region is directly related to perception, whether it is perception 

about the safety of the seafood or maybe ongoing perception about 

the quality of the beach and the water. There is a perception issue 

out there that needs to be overcome. 

The sad truth is that last year, a lot of people canceled their vacations, a fishing trip or a stay on the beach, and went somewhere 
46 

else, and maybe they really liked it and they went back again this 

year. In essence, they have started establishing a new tradition. If 

I am wrong, you are going to correct me, but just knowing human 

behavior, you go to the same—you make a family tradition of going 

to northwest Florida year after year for the summer, but one year, 

you cannot go. You have to go somewhere else and you end up liking it and all of a sudden you have got a new family tradition 

going, and so we have got to reverse that. And one of the ways you 

reverse that is through promotion of the region. 

And then, obviously, the possibility of some diversification. 

Maybe this is an opportunity to provide some stability moving forward by finding some new economic activities and from this bad 

thing something good can come, in essence, the birth of a new industry. 

That is my sense of kind of the testimony I have gotten today. 

I am not sure I touched all the bases or got them all right, but it 

sounds to me like the two things that we are focused on are, one, 

the BP claims process that is ongoing and how we can get that 

closed out, which is basically what everybody wants. Let us get this 

closed out. And number two is moving forward, what to do with 

this money if and when it comes, gearing it toward these kinds of 

projects, ecological restoration, research on prevention, and other 

things like the fish catch limits, et cetera, and, of course, investments in our future. 

Is there anything the panel would like to add to that in terms 

of how I have summarized it? I may have missed something or 

maybe misstated it. 

Mr. ZALES. You are very perceptive. I think you hit the nail on 

the head with all of it. In the fishery research part of it, I would 

encourage a substantial amount to go toward fish research for the 

Gulf. Dr. Steve Murawski used to be with the National Marine 

Fisheries Service. In a meeting with him about two months ago 

about some research they were doing, he made the statement that 

if red snapper was in the Bearing Sea, we would not have a problem with red snapper because of all the money prior to the time 

you got to the Senate that used to come to the State of Alaska and 

the northwest Pacific. They do yearly stock assessments on their 

fish. They have an abundance of data that is there. And so their 

fish are—the data on them is relatively good and they do not have 

the problems that we have here. 

And so it is like I said in my statement. Generally, stock assessments here happen every five to seven years in the Gulf. Forty percent of the recreational fishery in the United States is in the State 

of Florida. That is substantial. And so we do not get near the funding out of Washington for that type of activity that we deserve because of the effort that is put here. And so anything that can be 

done along that line would be very well liked. 

Mr. GILCHRIST. Senator, the only thing I would say is that it appears clear to me that there have been plenty of tools available to 

government entities to work with and solve these problems and 

plan ahead. The ineptitude of governmental entities cannot be understated, in my opinion. 

[Laughter.] 

Senator RUBIO. You will find no disagreement. 
47 

Do you want to add something, Collier? 

Mr. MERRILL. Only, Senator, on the first two, ecological and research, that is certainly a component. You did mention research on 

how to prevent that. Hopefully, we will not use our fine money 

doing that. I mean, the people that are drilling should be working 

on that themselves, and they should—— 

Senator RUBIO. I apologize. What I meant by prevention is preventing the bad response that existed. I heard—I think you commented on, and I thought it was a good analogy, you have been 

paying for fire trucks all these years, but what I meant to state 

was if we never want to see this kind of late response again, in essence, if this were to ever happen, God forbid, in the future, we 

want to make sure that we have in place the technologies and the 

mechanisms to prevent the spill from getting out of control the way 

this one did, some way to address it. 

Mr. MERRILL. Yes, sir, and I think the oil companies need to 

pitch in to some fund. As I was referring to, I pay taxes to buy fire 

trucks, and they are ready there if we need them. The oil companies need to pitch in, I do not know how, whatever, to come up 

with some kind of emergency vessel, whatever it is. A couple billion 

dollars, you can come up with something to surround this oil spill 

until they—then they can spend 82 days drilling a well like they 

did this last time, but at least two million gallons are not coming 

up on our beaches at that point. So I appreciate that clarification. 

And ecological, I will not touch on, but the economic investments, 

yes, we do need to diversify and that is what we are talking about, 

what we are going to do with the $10 million a year for three 

years, and as the fine money comes up here, as well, we can put 

it through that same pattern of qualifications and preventing and 

fighting and trust you to get as much of it down here as you can. 

Mr. BROXSON. Senator, I think your big battle is time. The longer 

it goes before you have a resolution in Washington, your battle is 

going to be dealing with the memory of the oil spill. If something 

does not happen this year, your battle will be greater next year because this money will filter away. BP spent over $200 million telling the nation that we had recovered and we were back to normal, 

and this would be the battle you will have with your colleagues, to 

convince them that we deserve to have money come back here 

when the economy has completely, in the minds of the public, been 

put back the way it was prior to the oil spill. 

Senator RUBIO. Well, just as an update on that, let me state that 

I am pleased by the unity and progress that has been made by numerous members that have been working on this. Senator Landrieu 

has taken the lead, along with Senator Vitter, Senator Shelby, Senator Nelson, myself. All the gulf State Senators, for the most part, 

have been working well together. Now it becomes the bigger battle, 

and that is going to the rest of our colleagues and encouraging 

them to be a part of this process. In an ideal world, this bill would 

be written the way the Gulf state Senators want it and spent that 

way. My sense is that it will probably develop differently. Nothing 

in Washington moves very quickly, certainly not in the Senate, 

which takes great pride in taking a long time to do everything. But 

I am just learning it as I go. 
48 

I think there is real unity behind the Senators in the region. I 

think outside of it, it has yet to be seen how it all plays out, including the positions I have outlined. There are some who are going to 

argue that this money should go to the General Treasury of the 

United States, that it should not be assigned and directed in this 

way, and others that argue differently, and then yet others that see 

this as a big pot of money that maybe they can dip their beak a 

little bit in and get some for themselves and their States. So we 

will figure out how this all plays out. It should be interesting. 

I wanted to—unless there were any other comments from the 

panel, I wanted to—I know we have a—what are we going to do 

with the roving microphone? So we have about 40 minutes, and 

what I would like to do is take any public input that may be out 

there. I know we have a lot of folks that are attending and have 

some thoughts. I would encourage you, if you have a question, 

there is a question. If you have a statement, make your statement. 

If you have both, that is fine, as well. Be considerate of the other 

folks who are waiting who may have something that they want to 

add, as well, in the next 40 minutes. And, obviously, thank you for 

being a part of this. 

Who wants to go first? 

Mr. DIXON. My name is John Dixon [phonetic], Port St. Joe, Florida. I would like to thank Senator Rubio and everyone for organizing this. It does seem like this bill has sort of fallen out of the 

national limelight and I appreciate your helping to bring the light 

back on it. 

The way I read this and the way I see it, Thursday, last week, 

July 7, BP basically declared war, in a sense, on Florida tourism. 

The comments that they provided to the Gulf Coast Claims Facility 

(GCCF) attempts to use the Oil Pollution Act (OPA) ’90 as that geography and causation is reason not to pay those claims. The original saying BP had was ‘‘BP will pay all legitimate claims.’’ They 

have now changed that as of last Thursday and it says, ‘‘BP remains committed to paying all legitimate claims under OPA.’’ 

So we have a corporation—the Alaska pipeline, the Texas City oil 

refinery explosions, the Gulf of Mexico—had a corporate culture 

that seemed to put profits above human life, safety, and the environment, and we thought maybe what happened in the Gulf was 

a moment for them to turn their corporate culture around. They 

met with the President and put money into the fund and it seemed 

like, okay, they understand now. They get it. People, safety, and 

environment should be before profits. 

Last Thursday, it looks like that progress was lost and they are 

now back to profits before people, safety, and the environment. 

OPA ’90 is Federal legislation that in no way should be used to not 

allow Florida tourist business to recover from the claims. So I 

would hope, I guess—my prayer is that, Senator Rubio, you could 

go back and perhaps whatever loophole BP is trying to use in OPA 

’90 to not pay Florida tourists is closed, very clearly. 

Senator RUBIO. We talked about that briefly yesterday, and that 

is a new development as of last Thursday, I believe, right? So we 

are going to—that is now part of the committee’s record and we 

will delve into that issue as soon as we return to Washington tonight. 
49 

Male speaker. Thank you for coming to our great town of Pensacola. I was up and visited your office last week and got to meet 

with Miss Sarah and we had some issues about what we are still 

uncovering in the Gulf of Mexico, and this is one of my largest concerns. 

As of today, as a commercial fisherman—I have been a lifelong 

commercial fisherman, ever since I was 16 years old—they have 

not cut our quotas and we are catching fish. But it is like coming 

into your home and somebody has been there. Things are out of 

place. Things are not normal. We are seeing some disturbing things 

that we see as a lifelong commercial fisherman. 

I was brought up on the beach. I played in these waters as a sixyear-old kid. My mom used to light the lighthouse at Pensacola 

Beach before the Navy Yard told them they had to leave and move 

to another place. 

So my biggest concern is BP packing up and leaving before we 

can prove our losses. As Mr. Zales asked for stock assessments and 

money, what if our fishery collapse in two years, as it did in Alaska? Where am I left then if BP goes, ‘‘Okay, I am going to pay everybody off what you have lost today,’’ and I am not saying BP 

owes me a bunch of money or anything at this time. Dr. James 

Cowan just last week did a study saying he found lots and lots of 

dead natural breeds, and these things are emerging daily. 

It is just hard for me to watch BP get on the horse and take off 

before we realize the consequences of the spill in the long term. 

Yes, my catch register does not ring every day like some people it 

does on the beach, and thank you for coming to our great home 

town. 

Senator RUBIO. Just to restate here, because I think it is actually 

a very valid point and I think we heard it earlier in the testimony—I think Mr. Gilchrist talked about this, as well—is we do 

not yet—I think the argument is, while we are glad the oil is not 

spewing and we are glad that you do not see it on the surface and 

we are glad that people are coming back and fishing is going on 

and this, that, and the other, we are concerned that there is a 

bunch of oil that is still unaccounted for, and more importantly, we 

are concerned that the impacts of the spill is not something that 

may be fully felt for years to come. 

And what you are saying is, what happens if two or three years 

down the road, all of a sudden, we wake up and realize, my goodness, we are dealing with this new permeation of something that 

happened two or three years ago. There are plenty of precedents, 

by the way, out there for this happening. There are plenty of precedents for delayed impacts after a catastrophe or a cataclysmic 

event. 

What happens if this impact is felt two or three years from now, 

but to everyone’s mind, it is ancient history and there is no money 

on the table to pay for it, and I think that is an issue that is going 

to have to be discussed within the context of the fine bill, because 

I think you have made a very valid point, and that is the full impact of the spill, particularly on those that depend on these waters, 

may not be known or felt for years to come. That is a very valid 

point. 
50 

Ms. ESSER. My name is Ruth Dupont Esser [phonetic]. I want to 

thank you, first of all, for being here today. 

Senator RUBIO. Thank you for coming. 

Ms. ESSER. This is clearly an environmental issue. I would like 

to ask if you would pay attention to EPA and its role in its contract 

with UNEP, United Nations Environmental Program, and please 

assure us that you will be watchful that the funds from BP do not 

go to EPA in order to commit to an agenda by UNEP, which is 

communistic in structure, so it is as anti-American as it gets. We 

need these funds to come to our free-market system, to the people 

that suffered from the consequences of this event, and we really 

need to be protected so that they do not go to an entity that does 

not intend to assist the American way of life. 

I believe that we do need environmental clean-up. I do not by 

any means think that we do not. We clearly do. But we need to 

have the funds in the hands of the free-market system and in the 

hands of environmentalists who are not working in conjunction 

with the United Nations. Thank you. 

Senator RUBIO. Thank you. And I have gotten several e-mails 

about this topic, and let me just say that I think the intention of 

everyone, I hope—there might be a debate about this in Washington, too, but the purpose of the fine bill is not to advance any 

ideological view, but rather to deal with the fact that a bunch of 

people have been hurt really bad by the negligence of an individual 

company. And the law says that when you do something like this, 

you pay a fine for it, and the argument now is how should that 

money be spent, and the money should not be spent, in my opinion, 

to do anything. I am not even talking specifically about what you 

outlined, but in general, should not be used to make a point behind 

any ideological philosophy. The point of this money, my hope is, 

will be to address the damage that was caused by the specific incident, and that is the direction I hope we will head. 

Mr. VILLMER. My name is Matthew Villmer. I am an attorney 

over at Emmanuel Sheppard and Condon out of Pensacola. We represent about 60 different individuals and businesses in their claims 

with the Gulf Coast Claims Facility. 

I just want to echo what the panel said today, that the biggest 

problem with the Gulf Coast Claims Facility is disparate treatment. So that would mean that different claimants with the exact 

same claims are treated differently. And I just wanted to figure out 

if your office can provide any assistance with shaping Feinberg’s 

opinion or helping with individual claims that are treated differently underneath the Gulf Coast Claims Facility’s rubric for 

compensation. 

And as a perfect example, our firm represents five individuals 

who all worked for the exact same business and have the exact 

same position. Last year, we filed a claim on behalf of all five that 

were identical, from top to bottom, 200-page claim packets that 

were identical. Two were paid, three were not paid. We then turned 

around and filed this year interim and final claims that were, 

again, identical from top to bottom. Two were paid, three were not 

paid and finally denied. The GCCF’s position is that the two that 

were paid were properly paid and the three that were not paid 

were properly denied, which makes absolutely no sense. 
51 

So if there is anything that your office can do to assist with individual claims in the GCCF claims process, I would like to know 

that. 

Senator RUBIO. And other than what we do already, which is try 

to assist claimants who call us, but I think the process that you 

are outlining is—I think what we are learning, and increasingly 

being confirmed to us, is that the problem here is we have a flawed 

process, a process that has no uniformity. So two different people 

are viewing, for example, five claimants, as you have outlined—this 

is my guess, but it sounds like I am going to be right—five different people work in the same place and the exact same thing 

happened to them. But these five claims are reviewed by two separate people. Two claims are reviewed by one guy or gal and three 

claims are reviewed by somebody else, and the three get denied because that person has got a certain mindset and the other two get 

approved because the other person has a certain mindset, and that 

is the problem. It is a procedural problem that I think lingers. 

So I think part of—one of the things that has come from this 

hearing is, whether it is the Clean Water Act fine bill or some 

other mechanism, I think we are going to have to figure out a way 

to close this process out. It cannot continue in this process where 

you have a bunch of people out there who feel like their claims 

have been denied and would like to appeal that decision. You have 

others that are waiting in a backlog. I think the process of closing 

out the claims is going to have to be a part of any discussion moving forward, and what I can commit to doing is making sure that 

that happens. 

Yes, Collier, I am sorry. 

Mr. MERRILL. I know there are—I see that I recognize, representatives in the audience from BP, so maybe they are taking the right 

notes and will do something, but do not hold your breath. 

And I say that—you know, in February, the procedure, you 

know, we were complaining. There was a group there meeting with 

Mr. Feinberg and complaining and he said, ‘‘Well, I am hiring a 

group of law firms and each State is going to have some people representing that you can talk to,’’ because I said, we cannot talk to 

anybody. You do not know where your claims are. And I was trying 

to help some people. Fortunately, we are able to survive, but I have 

got employees and other small groups that were having trouble getting anywhere, and they said, well, these people, you can talk to. 

And that is when they told us, well, refile. It is going to be 90 days. 

And so that came and went. I actually talked to this group here 

that is representing Florida on Thursday and I said, it has been 

142 days. You said 90. What can you tell me? And they said, ‘‘Well, 

all I can tell you is your claim is under review.’’ So, I mean, it is 

the same thing that I would get from anybody else. I guess they 

do not have any authority, either. I do not know where we go from 

there, but it is—this frustration is what I hear every day when I 

walk around, just that you do not have any response. I was hoping 

that this latest development in February was going to work that, 

but it just has not. So I just wanted to echo that, as well. 

Senator RUBIO. Janice. 
52 

Ms. GILLEY. Yes, Janice Gilley, University of West Florida. I 

think everybody else has said we are so glad that you came to Pensacola and would have this official hearing here. 

I wanted to speak a little bit more about the way the funds 

might come back to the states. I definitely agree with the environmental research and continuing to monitor the impact. Obviously, 

economic diversification for the region. But I would hope that we 

would also consider endowing some of those funds, because once 

they are spent, they are gone forever. Obviously, as everyone else 

has said, God forbid we ever have this type of situation ever happen again. But I think that we do need to be good stewards of those 

funds if—if—and when they are made available to our region and 

they are endowed so that we can continue for the decades, monitor 

these situations and have resources or have an opportunity for resources to continue the research and the diversification. 

Because my fear is that the funds may come, and, like you said, 

from a policy perspective, they are divided up nationally. If they 

are maybe somehow endowed, then you could only qualify for those 

funds if you are in the region, and it could potentially be in perpetuity. So that would be one of my concerns about the funds and 

maybe how they could be managed. I know that is a pipe dream, 

maybe, from D.C., but—— 

Senator RUBIO. No, no, it is not. It is a good suggestion. Have 

you worked in government before, Janice, or—— 

[Laughter.] 

Mr. DIEP. Good morning, Senator. 

Senator RUBIO. Good morning. 

Mr. DIEP. My name is Lan Diep. I am an Equal Justice Works 

AmeriCorps Legal Fellow working at the Mississippi Center for 

Justice. We are part of a five-state consortium from Texas to Florida that provides free legal assistance for folks who want legal advice dealing with the oil spill and dealing with the GCCF. 

In following the panel’s discussion this morning about the GCCF, 

many of the issues raised, I feel, are important, but really have 

only scratched the surface. Our consortium has handled or in the 

process of handling about 3,000 or so claims. I, myself, have handled about 50 or so claims. 

And I think in terms of small businesses—the list goes on and 

on, but in terms of small businesses, specific points of contention 

with the Claims Facility right now are their loss of income calculations. Small business claims get discounted by what Feinberg calls 

a loss of income percentage, and what that percentage says is basically because you are not selling as much, you do not have to buy 

as much inventory, so you are actually saving money. So your 

claim is discounted. And that percentage, as far as I can tell, is 

somewhat arbitrary. 

People can provide specific numbers on their taxes, but then industry numbers are used. Very broad strokes are used. People are 

not really getting the full amount—— 

Senator RUBIO. I am sorry to interrupt. I want to clarify that in 

my mind. So the way it reads is, so I own a store that sells whatever and since I do not have as many customers, I do not have to 

have as much inventory. Therefore, I do not need as much money. 

That is the—— 
53 

Mr. DIEP. Right. So that is kind of their thinking. So they discount all your claims by—it is an arbitrary number, and the number is hard to calculate. That is one thing. 

Two, the GCCF distinguishes you as a business or a small business from an individual claim by looking at your taxes and seeing 

whether you have a Schedule C. But recently, what we have encountered is that if on the Schedule C, which qualifies you as a 

business and guarantees you a $25,000 minimum payout—— 

Senator RUBIO. Right. 

Mr. DIEP [continuing]. They are going back and they are looking. 

If you did not file individualized expenses, itemized expenses, they 

are going back and they are moving a lot of these folks back into 

individual as claimants. So if you did not file—if you just filed a 

Schedule C Easy, they might put you back as an individual claim. 

And so there are these sole proprietors and individuals, or deckhands, fishermen, who are getting put back in the wrong bucket. 

Senator RUBIO. But are not—they are in, like, contract labor type 

situations, folks are—is that what you are—or is it—— 

Mr. DIEP. Right, like small business owners, cleaners—— 

Senator RUBIO. Right. 

Mr. DIEP [continuing] Or sole proprietorships. They have a 

Schedule C which qualifies them as a business—— 

Senator RUBIO. Right. 

Mr. DIEP [continuing] But because they did not file under taxes 

itemized expenses, the GCCF is right now going back and considering—— 

Senator RUBIO. Reclassifying them as individuals? 

Mr. DIEP. Reclassifying them—— 

Senator RUBIO. Right. 

Mr. DIEP [continuing]. And kind of denying them their $25,000 

minimum. 

Senator RUBIO. Even though they are not anyone’s employee, per 

se, they are basically—— 

Mr. DIEP. Right. Right. Yes. There are problems with start-up 

businesses, businesses that started right before the oil spill, January 2010, that do not have the 2008, 2009 documents to fit in their 

formula are having trouble navigating the process. So there is no 

real system to deal with those individuals. 

One problem that is of particular concern to me that might the 

cause of a lot of the delays that people are facing is that Feinberg, 

because he is overly cautious of fraud, is using some of the money, 

or I am not sure which of the $20 billion, but he is hiring private 

investigators to investigate claims of fraud, and I am not entirely 

sure that that is his place. He might refer those that they are suspicious about to the FBI or whoever. But I am not sure it is the 

GCCF’s place to be investigating claims of fraud. Furthermore, he 

is not providing notice to the individuals being investigated, which 

might have some, you know, Fourth Amendment type concerns. 

Senator RUBIO. Right. 

Mr. DIEP. Finally—or not finally—the 90 days everyone keeps 

talking about, the 90 days comes from OPA. You have 90 days to 

review. But from Feinberg’s perspective, it is 90 days from when 

the claim is substantiated, which means you can turn in all your 

documents, but the 90 days does not start counting until they feel 
54 

that they have everything that they need to sit down and review 

your claim. So you do not know when to start counting the 90 days. 

The standard review that they are using is a lot higher than you 

might even find in a court of law. 

And finally, just as to the point in your opening comments, you 

said that the GCCF has about 190,000-something unique claims. 

The number is, as of July 8, 520,386 unique claims, but only 

196,644 have been paid. But what is of concern is that of that 

amount that has been paid, 118,314 are quick pays, which means 

they are the kind that just say, ‘‘Fine, I give up. I want to take the 

money and just move on with my life.’’ So I feel that because of the 

time delay, a lot of individuals are waiving their rights against BP 

and the other defendants—— 

Senator RUBIO. Because they need the money. 

Mr. DIEP [continuing]. Because they need the money. So, thank 

you. 

Senator RUBIO. The gentlemen standing next to you there is Captain Tande, who runs our office here. It sounds like you—I do not 

know if you wrote all that down during the hearing or if you 

have—but I would love to get something like that, not just for the 

record of the committee, but for our office if, indeed, we get involved in—as I expect we will—in some sort of reforms to the 

claims process, be they wholesale or partial. I would like to be able 

to point to some of the real world—I mean, it sounds like you have 

a wealth of knowledge, so if you could somehow communicate with 

us to get us a memo or something that outlines these points, that 

would be very helpful. 

Mr. TANDE. He has my card. 

Senator RUBIO. Oh, he does. Okay. Good. 

Mr. KUGELMANN. Good morning, Senator. My name is Robert 

Kugelmann [phonetic]. I was an oil spill volunteer for Escambia 

County and also for the National Park Service. 

I wanted to encourage you in Washington to take what steps you 

can to review through oversight the effectiveness of our natural energy regulatory mechanisms. I think that public citizens have not 

been able to maintain confidence, not only based on the Gulf Coast 

oil spill, but also what has happened in West Virginia in the coal 

mining industry and the fact that it turned out here in the Gulf 

Coast that many of the plans that were submitted as part of the 

permitting process, many of the emergency plans were really not 

serious efforts. They talked about wildlife that was common in 

Alaska, but nonexistent in the Gulf. 

So we do want to encourage you and your colleagues up there to 

take a strong look to enforce accountability, and not only among 

public corporations that seem to need a heavy hand to comply with 

the spirit and letter of the law, but also with the Federal career 

service that is paid to review and to exercise oversight in these 

critical areas. 

So thank you all for being here today. 

Senator RUBIO. Thank you. 

Ms. DUBIS. Hello and thank you again for coming to Pensacola 

to see firsthand how we feel about what is going on. We appreciate 

it, Senator. 

Senator RUBIO. Thank you. 
55 

Ms. DUKES. My name is Dottie Dubis [phonetic]. I am a local 

resident and I do not own a small business, but since that is the 

focus for which this hearing was called, I want to call to your attention that there are a lot of small businesses that do not really 

fit into the tourism, fishery categories that you have spoken of but 

who were gravely impacted, and, in fact, many of whom have 

closed their doors and moved out. 

In the particular building with which I am associated, we had a 

manufacturing organization that manufactured windows and doors 

and aluminum items which survived between hurricane seasons by 

doing refurbishing for beach houses. Unfortunately, with the impact of the Horizon, no one wanted to redo their beach house because they could not even conceive that they might be renting them 

out for several months. And so this business has folded. The five 

positions that were there are gone. And if you look at the population base of Pensacola, it has depreciated since the Horizon impact. 

I was wondering if you might be able to somehow capture the 

funds that you do eventually end up with and assign them in a sort 

of a HUBZone, if you will, but maybe a Horizon Zone for the eight 

areas of Florida that were directly impacted, that that would be 

where a business would have to come and bring itself in order to 

benefit from it, rather than saying, we will spread it out and let 

it go elsewhere. If there is a company that is successful in Arkansas or Missouri or whatever that sees that they have an opportunity to do something that would impact positively, come and do 

it here. If you could somehow create an incentive program similar 

to the HUB and Empowerment Zones, but have it be a Horizon 

Zone, it might help. 

Senator RUBIO. And it is a concept that we had discussed during 

the campaign. It was part of one of my ideas that we outlined. You 

have touched on one of the difficulties of this issue, and that is that 

you are absolutely right. There are the—and we are not discounting, because that is where the first wave of pain was inflicted, 

the hotels, the tourism industry, the fisheries, and all those sorts 

of things. But then from that, there is a spin-off effect. I mean, the 

bottom line is if one of your fishermen is making half as much 

money as they made a year ago, they have a lot less money to 

spend in the local economy, which ultimately impacts everybody. 

The trickle effect of it is very real. 

The challenges politically, as you can imagine, in creating that 

chain and justifying it become harder, but I think what you have 

touched upon is some sort of a regional incentive program that will 

hopefully attract, the way that the oil spill may have detracted people from coming here, maybe reverse course on that. I do not—I 

think that that is something worth having a conversation, maybe 

outside the framework of the fine bill, but one that should be discussed. 

Ms. KRAFT. Good morning. My name is Bethany Kraft [phonetic]. 

I am the Director of the Alabama Coastal Foundation and I am 

here today on behalf of our Florida members. We share an incredible resource in the Perdido area and I thank you all for taking the 

time today to solicit input from your citizens. 
56 

Just a couple of really quick comments specifically related to the 

Clean Water Act fine money. First, regarding your anticipation, 

Senator, of other members of Congress seeing the bright shiny object of fine money and trying to get a piece of that for their own 

constituents, I would really like to encourage you and your fellow 

Senators as you work on legislation and a bill reaching out on a 

regular basis to the nonprofit community who have extensive networks across the country and help us help you encourage citizens 

across the United States to continue to understand how important 

the gulf is to their life and how important it is for that money to 

come here for restoration. 

In the wake of the oil spill, just my organization and two others 

in Alabama alone received over 10,000 calls from citizens across 

the country looking to make a connection to the Gulf of Mexico. We 

still communicate on a weekly basis with those 10,000 citizens, letting them know what is happening here and why their input is still 

so important. So I encourage you to keep us involved in the process 

and let us help put pressure on those elected officials who might 

see dollar signs in their eyes. Their citizens know how important 

the Gulf of Mexico is to their own livelihoods and are committed 

to restoration money coming here to the Gulf of Mexico. 

Senator RUBIO. Well, again, your statement actually is a great 

example of why these hearings are so important. That is actually 

a great strategy. The truth is that my sense is that many of my 

colleagues who are committed to conservation and the environment 

probably have conservation and environmental projects in their 

home state and they see this as an opportunity to take some money 

for that. And it would be great—I am not sure if I am being naive, 

but it would be great if the conservation and environmental community outside of government would tell them, thank you, we appreciate you doing that, but if this ever happens to us, we would 

like all that money to come to us, and since this is happening to 

them, we as a community have taken the position that this money 

should go to the Gulf region. 

I do not know if that is unrealistic. I do not know how hard it 

is for people to walk away from that. But that would be great, if 

that is the kind of national message that we could get out to our 

friends in the Senate and in the House. 

Ms. KRAFT. Well, we are absolutely ready and willing to help you 

with that. 

Secondly, just really quickly, I was happy to hear the idea of the 

Clean Water Act fine money, the projects driving the money and 

not looking at it from a specific geographical boundary perspective. 

I think that the Gulf ecosystem as a whole deserves better and we 

have a responsibility to take advantage of what could amount to a 

huge opportunity for us to bring the Gulf of Mexico back to a place 

that will sustain not only us, but our children and our grandchildren. 

Toward that end, I would love to see the final Clean Water Act 

bill contain some basic guidelines that will help ensure that the 

projects are, first and foremost, in the minds of our politicians and 

our citizens and all of our community leaders, guidelines that look 

at the root causes of what has caused the Gulf of Mexico problems 

in the past five or six decades. 
57 

When you are talking about habitat loss, when you are talking 

about why your fisheries have declined, which lead to restrictive 

regulations which make it more difficult to increase your catch limits, these are the things that we need to be looking at and putting 

that into the legislation, saying we want to address the root causes 

of degradation in the Gulf of Mexico. We do not just want to put 

band-aids. We want to see projects that build on each other. We do 

not want to see discrete little things that end up amounting to a 

non-scalable change. 

We have guidelines that we are putting forth in the environmental community, and I think that you could easily make the argument to do that on the economic side, as well. But coming up 

with some broad priorities at the Federal level within the bill will 

help ensure that that money does not just disappear into small 

projects that do not bring us forward as a community. Thank you. 

Senator RUBIO. Thank you. 

We are getting close to wrapping up. We have probably time for 

one or two more statements or questions, if there is anyone left. 

These lights make it hard to see out into the audience. 

Mr. ATARDO. Good morning, Senator. 

Senator RUBIO. Good morning. 

Mr. ATTARDO. I am Lew Attardo and I was formerly the Director 

of the Office of Small Business Advocate in the Florida Small Business Regulatory Advisory Council during the time of the oil spill. 

As some of you know, we worked with our local legislative delegation from northwest Florida on a strategy for trying to revitalize 

the regional economy as a result of this spill, particularly on what 

we could do for small and medium-size enterprises that would be 

adversely affected. 

One of the things that we did was immediately after the spill is 

we went on-site to locations along the beaches within two weeks 

after the Deepwater Horizon disaster occurred and we listened to 

businesses. And as you have heard today, it was not just fishermen 

and the bait shops and the property owners that had rentals, but 

also everything from janitorial companies that had contracts for 

cleaning condos between residents to manufacturing companies 

who saw a dip in their business and in some cases actually folded 

up because of the loss of business. 

What is most important, I think, is the fact that as an organization, through the Office of Small Business Advocate, we submitted 

a report to the legislature in Florida and to both Governor Crist at 

the time and then Governor Scott when he came into office on a 

strategy that we presented to the EDA team that was here with 

the International Economic Development Council that did the surveys post-disaster about what needed to be done to transform and 

recover. 

One of the things that we recommended was there needed to be 

a long-term strategy, a five-year and a ten-year plan, on how to diversify the region’s economy, how to support small and mediumsize enterprise development, and what would be necessary for that 

recovery to take place. Those plans included several strategies for 

business retention and expansion, including some innovative ideas 

on things like subsidizing the fishing industry to purchase fish as 

we do with other food supplies to put into the public school system, 
58 

to introduce in the public schools fish, as an example, as being 

properly prepared and properly handled, and that would, first, support the local businesses immediately, is by putting fish in schools, 

and secondly, help to provide a new generation of potential seafood 

and fish eaters that might not get it in their homes otherwise. 

But beyond that, bigger programs like small business loans that 

would be necessary to help with recovery, because we knew a year 

ago that the BP funding was not going to be immediate. It would 

take time. There is a report on that, and I will be glad to leave a 

copy with your staff, on what was recommended at the time on various strategies for economic recovery and diversification, what 

would be necessary to boost and revitalize the area’s economy, and 

as I think others have voiced today, is to make sure that those 

funds that were committed to supporting this region along the Gulf 

Coast, Florida and the other affected states, stays in this region 

through some kind of a program that would endow the funds 

through foundation or some kind of a regional Gulf Coast Economic 

Development Program that would help support the region’s needs 

over the next five to ten years while we try to figure out how we 

recover and how we rebuild the economy after that disaster. 

So thank you very much for coming today. 

Senator RUBIO. Thank you. 

We have time for one more. 

Mr. ELLINGTON. Thank you, Senator and distinguished guests. 

My name is Ron Ellington. I am with Innisfree Hotels. We have six 

hotels, three on Pensacola Beach, three on Orange Beach, Alabama. We have just filed our final claim with the GCCF for those 

six hotels. 

One of the things that we addressed in there that everybody, I 

am sure, has already spoken to, and I apologize, I was a little late, 

so if I am asking a question you have already addressed, but it is 

the volume of oil that is still in the gulf that we are still fearful 

that we will see again with any kind of storm that brings it back 

up on our beaches. And one of the things we are having to address 

in this claim, obviously, is how do we deal with that potential liability and the fear of that reoccurrence and the cost that that 

brings again. 

In your bill, or in the bills pending, is there anything in there 

that would address finding that oil and remediating it? 

Senator RUBIO. First of all, the bill has not been fully vetted yet. 

It has not even been introduced publicly yet, so we will know more 

about that in the next few days. 

In the conversations that I have had—and that does not mean 

it is not in there, I could be wrong—but in the conversations that 

I have had, I have not heard discussion about that issue. I think 

it is an issue that I have heard here today, I will not say for the 

first time, but certainly in the most persuasive way possible has 

been this persistent concern that the full impacts of the oil spill 

may not be known until sometime in the future when either some 

other event or by natural process we begin to see some secondary 

effects that are dramatic and have real repercussions, and the fear 

is at that point—let us say it happens four years from now where 

we—let us say two or three years from now, your fishermen are 

coming back and reporting some really bizarre things, or worse, we 
59 

have a storm and all this oil reemerges and washes up on the 

beaches and have these massive kills. What process will be in place 

to address it three or four years down the road—two or three years 

down the road? 

I think the very persuasive argument has been made with regards to that. How we address it is something we are going to continue to look for your input. I have not heard it discussed to the 

level that it has been discussed here today. That does not mean it 

is not being discussed at that level. That does not mean that some 

other Senators do not have it on their mind. But that is why we 

do these things, because in the midst of all these issues that are 

flying around, to really identify some of these things that would not 

otherwise emerge, maybe even in a hearing in Washington, is so 

critical. It is certainly something I am going back with as part of 

our message. 

Well, I want to thank all of you for joining me here today. A couple of things I want to tell you is that if you were unable to—let 

us say you have something you wish was on the record for the committee and it occurred to you afterwards or just did not have the 

time today, or we did not have the time to get to you, you can submit that in writing to be part of the record of this hearing. That 

record is going to remain open for the next two weeks. So for the 

next two weeks, if you have something that you want to see made 

part of the record here today, you can submit that either through 

my office or through the Committee on Small Business and Entrepreneurship. 

I want to thank all the members of the panel. We took a lot of 

your time and I am grateful to you for being a part of this and for 

your input. Hopefully, we will be able to come back to you in a few 

weeks or months with an update on the status of the fine bill and 

hopefully some progress on the claims process. 

With that, the hearing is adjourned. 

[Whereupon, at 11:23 a.m., the committee was adjourned.] 

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