U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

78–127 2013

THE BP OIL SPILL AND GULF COAST TOURISM: 

ASSESSING THE IMPACT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMERCE, TRADE, 

AND CONSUMER PROTECTION 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

JULY 27, 2010 

Serial No. 111–150 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 


jbell on DSK7SPTVN1PROD with HEARING
(II) 

COMMITTEE ON ENERGY AND COMMERCE 

HENRY A. WAXMAN, California, Chairman 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

CHRISTOPHER S. MURPHY, Connecticut 

ZACHARY T. SPACE, Ohio 

JERRY MCNERNEY, California 

BETTY SUTTON, Ohio 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 


jbell on DSK7SPTVN1PROD with HEARING
(III) 

SUBCOMMITTEE ON COMMERCE, TRADE, AND CONSUMER PROTECTION

BOBBY L. RUSH, Illinois 

Chairman 

JANICE D. SCHAKOWSKY, Illinois 

Vice Chair 

JOHN SARBANES, Maryland 

BETTY SUTTON, Ohio 

FRANK PALLONE, JR., NEW JERSEY

BART GORDON, Tennessee 

BART STUPAK, Michigan 

GENE GREEN, Texas 

CHARLES A. GONZALEZ, Texas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

ZACHARY T. SPACE, Ohio 

BRUCE L. BRALEY, Iowa 

DIANA DEGETTE, Colorado 

JOHN D. DINGELL, Michigan (ex officio) 

CLIFF STEARNS, Florida 

Ranking Member 

RALPH M. HALL, Texas 

ED WHITFIELD, Kentucky 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

MICHAEL C. BURGESS, Texas 


jbell on DSK7SPTVN1PROD with HEARING

jbell on DSK7SPTVN1PROD with HEARING
(V) 

C O N T E N T S 

Page 

Hon. Bobby L. Rush, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 1 

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

Hon. Ed Whitfield, a Representative in Congress from the Commonwealth 

of Kentucky, opening statement ......................................................................... 7 

Prepared statement .......................................................................................... 8 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 11 

Prepared statement .......................................................................................... 12 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 15 

Prepared statement .......................................................................................... 17 

Hon. Kathy Castor, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 21 

Hon. Cliff Stearns, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 21 

Hon. Gene Green, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 22 

Hon. Robert E. Latta, a Representative in Congress from the State of Ohio, 

opening statement ................................................................................................ 23 

Hon. Betty Sutton, a Representative in Congress from the State of Ohio, 

opening statement ................................................................................................ 23 

Hon. Phil Gingrey, a Representative in Congress from the State of Georgia, 

opening statement ................................................................................................ 24 

Hon. Steve Scalise, a Representative in Congress from the State of Louisiana, 

opening statement ................................................................................................ 24 

Hon. Charlie Melancon, a Representative in Congress from the State of Louisiana, prepared statement .................................................................................. 99 

WITNESSES

Kenneth Feinberg, Administrator, Gulf Coast Claims Facility ........................... 26 

Prepared statement .......................................................................................... 28 

Answers to submitted questions ...................................................................... 102 

Roger Dow, President and CEO, U.S. Travel Association .................................... 30 

Prepared statement .......................................................................................... 32 

Answers to submitted questions ...................................................................... 107 

Rip Daniels, CEO/Manager, WJZD-FM, Vice President, Mississippi Gulf Coast 

Tourism Commission ........................................................................................... 39 

Prepared statement .......................................................................................... 41 

Herb Malone, President and CEO, Alabama Gulf Coast Convention and Visitors Bureau ........................................................................................................... 47 

Prepared statement .......................................................................................... 49 

Answers to submitted questions ...................................................................... 114 

Keith Overton, Senior Vice President and Chief Operating Officer, 

Tradewinds Resort, and Chairman, Florida Restaurant and Lodging Association .................................................................................................................... 54 

Prepared statement .......................................................................................... 57 

Ralph O. Brennan, President, Ralph Brennan Restaurant Group, LLC ............ 67 

Prepared statement .......................................................................................... 70 

Answers to submitted questions ...................................................................... 118 

SUBMITTED MATERIAL

Statement of the Northwest Florida Tourist Development Council Coalition .... 100 


jbell on DSK7SPTVN1PROD with HEARING

jbell on DSK7SPTVN1PROD with HEARING
(1) 

THE BP OIL SPILL AND GULF COAST 

TOURISM: ASSESSING THE IMPACT 

TUESDAY, JULY 27, 2010 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMERCE, TRADE, AND CONSUMER PROTECTION, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The Subcommittee met, pursuant to call, at 10:03 a.m., in Room 

2322 of the Rayburn House Office Building, Hon. Bobby L. Rush 

[Chairman of the Subcommittee] presiding. 

Members present: Representatives Rush, Schakowsky, Sarbanes, 

Sutton, Green, Gonzalez, Butterfield, Barrow, Castor, DeGette, 

Waxman (ex officio), Melancon, Whitfield, Stearns, Terry, Gingrey, 

Scalise, Latta, Barton (ex officio), and Burgess. 

Staff present: Michelle Ash, Chief Counsel; Tim Robinson, Counsel; Angelle Kwemo, Counsel; Anna Laitin, Counsel; Will Wallace, 

Special Assistant; Elizabeth Letter, Press Assistant; Jeremy 

Feigenbaum, Intern; Billie McGrane, Intern; David Cavicke, Chief 

of Staff; Amanda Mertens Campbell, General Counsel; Katie 

Wheelbarger, Deputy Chief of Staff; Brian McCullough, Senior Professional Staff; Kevin Kohl, Professional Staff; Aaron Cutler, Counsel; and Sam Costello, Legislative Analyst. 

OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. RUSH. The Subcommittee on Commerce, Trade, and Consumer Protection will come to order. I thank those who have gathered here for this hearing, and the Chair recognizes himself for 2 

minutes for an opening statement. 

The Chair wanted to remind the members that anyone other 

than the Full Committee Chair or the Full Committee Ranking 

Member or the Chairman Emeritus will be encouraged to limit 

their opening remarks to 2 minutes because of the time consideration for some of our witnesses. 

April 20 was a tragic day for the people of the Gulf Coast region 

of the United States. Eleven workers died following an explosion on 

the Deep Water Horizon oil drilling rig located 40 miles offshore in 

the Gulf of Mexico. Since that tragic day an estimated 50 to 150 

million gallons of oil have leaked into the Gulf, severely damaging 

our environment, destroying people’s way of life, and severely damaging the entire region’s economy. 

Tourism is the Gulf Region’s second largest industry. It generates more than $39 billion in state revenue. Tourism represents 


jbell on DSK7SPTVN1PROD with HEARING
2 

46 percent of the region’s economy. Tourism employs over one million people. Various setting indicate that this oil spill has put 

300,000 jobs at risk, representing 15 percent of the total job base 

in the region. 

The saddest part of this story is that some of the businesses that 

are impacted today were still recovering from the aftermath of 

Hurricane Katrina, which occurred over 5 years ago. Now then BP 

has created a $20 billion claim pool to compensate victims who 

have been impacted by the oil spill. 

The purpose of this hearing is to make sure that the travel and 

tourism industry will not be left behind, that they will be included. 

One might ask why. Well, I am glad you asked. 

Because of the intricacy of that particular industry, the complexity of the methodology that needs to be employed to determine 

the level of damages and grant compensation and because of the 

tourisms vast economic impact on the entire Gulf Coast Region. 

Furthermore, we have learned from the massive media coverage 

of the oil spill and by various studies by the tourism industry itself 

that it is losing business not only because of the beaches may not 

be safe but also because travelers perceive that it is not safe to 

travel to the Gulf Coast Region of the U.S. 

You have also heard the concerns of the industry about the 

claims process, its timeframe for compensation and eligibility. 

Finally, we have to consider what needs to be done to bring back 

the industry to the stature it had before the oil spill. These are difficult issues we have to examine here today. The complexity of the 

matter may require more than one hearing. 

I want to thank all the witnesses for appearing before this subcommittee. We have concerns about the tourism industry and how 

it will be compensated and how it will be revitalized, and I hope 

our discussion today be a very fruitful and productive one. 

[The prepared statement of Mr. Rush follows:] 


jbell on DSK7SPTVN1PROD with HEARING
3 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 7 78127A.001
4 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 8 78127A.002
5 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 9 78127A.003
6 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 10 78127A.004
7 

Mr. RUSH. With that I yield back the balance of my time. Now 

I recognize the Ranking Member for 2 minutes. 

OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF KENTUCKY 

Mr. WHITFIELD. Mr. Chairman, thank you and I want to welcome 

all the witnesses today. We appreciate Mr. Feinberg being with us, 

as well as representatives of the tourism industry. 

We know that since the explosion of the Deepwater Horizon oil 

rig on April 20 the Gulf Coast economy has faced many difficult 

challenges. We also know that this is the summer peak months for 

tourism and that many people have been adversely impacted by 

this incident. 

It is my understanding that BP prior to the Gulf Coast claims 

funding set-up gave Florida $25 million to promote tourism, Mississippi, Louisiana, and Alabama, $15 million each to counter the 

publicity and the impact, the perception that it would not be open 

for tourism. 

BP has been paying claims to businesses affected by the spill. 

They had paid out, it is my understanding over $200 million thus 

far in claims. It is not surprising that some businesses are having 

difficulty at getting their claims processed quickly because really 

BP is not an insurance company. 

The administration of the claims process is being handled by Mr. 

Feinberg. He certainly has experience in this arena, having disbursed funds as a result of the 9/11 incident. It is my understanding that he is going to be taking control of 36 BP offices and 

1,500 employees established to pay claims to qualified businesses. 

Mr. Feinberg is charged with administering the entire $20 billion 

Gulf Coast claims account and paying legitimate claims to affected 

parties. It is an admirable and certainly a difficult position because 

we know that paying claims in this kind of a situation is certainly 

an inexact science. Will it be restricted to the beach resorts only, 

or will downstream suppliers to the tourism industry qualify for 

compensation? There are a lot of unanswered questions. We do 

want to see that people are reimbursed who have legitimate claims. 

We know that there will be some people filing claims that are not 

legitimate, but that is one of the challenges that Mr. Feinberg 

faces. 

And then one other question that I think is going to have to be 

answered as we go along is the drilling moratorium imposed by the 

Administration is certainly going to have an impact on the economy 

up and above the impact on the tourism as a result of the spill. 

And there is going to have to be some questions asked about who 

should pay for the cost of those—of that moratorium. Should it be 

the government, should it be BP? So there are a lot of unanswered 

questions, and I know that this committee is totally committed to 

making sure that everyone receives compensation that deserves it. 

We look forward to your expertise, your thoughts on this important 

subject and certainly look forward to all of your testimony. 

Thank you. 

[The prepared statement of Mr. Whitfield follows:] 


jbell on DSK7SPTVN1PROD with HEARING
8 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 13 78127A.005
9 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 14 78127A.006
10 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 15 78127A.007
11 

Mr. RUSH. The Chair recognizes the Chairman of the Full Committee, Mr. Waxman, for 5 minutes. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you very much, Mr. Chairman. 

The BP spill on the Gulf of Mexico is the worst environmental 

disaster this country has ever seen, and while we have every hope 

that the cap will hold and the flow of oil into the Gulf has truly 

stopped, we know that the devastation is enormous, and its affects 

will continue for years. 

In the 3 months since the Deepwater Horizon explosion and 

blowout, the Committee on Energy and Commerce has held eight 

hearings examining the causes of the explosion, efforts to mitigate 

the damage, and the impacts on the environment and the local 

community. 

I would like to thank Chairman Rush for holding our ninth hearing which will focus on the impacts of the spill on tourism and the 

tourism economy in the Gulf area. The economies of Louisiana, 

Mississippi, Alabama, and Florida are heavily dependent on the 

travelers who come to the Gulf Coast beaches each summer for 

swimming, fishing, and other activities across each of these four 

States. Some beaches are closed, and significant fishing grounds 

are still off limits. Hotels, restaurants, charter boats, and resorts 

are facing cancellations. Tourists are shying away from the areas 

of the Gulf even where no oil has come ashore. Diners and grocery 

shoppers across America are asking about whether the seafood is 

from the Gulf and whether it is safe to eat. 

Today we will hear from tourism officials and businesses from 

each of the four States dealing with this catastrophe. We will also 

hear from Kenneth Feinberg, the independent administrator in 

charge of handling all claims for damage and loss of the oil spill. 

He is responsible for determining the proper level of compensation 

for each business, worker, and family impacted by the spill. 

This hearing will give the committee a better understanding of 

the impacts of the spill on an essential part of the Gulf Coast economy and help us understand what we can do further to help the 

region recover. I thank all the witnesses for being here today, and 

I look forward to their testimony. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Waxman follows:] 


jbell on DSK7SPTVN1PROD with HEARING
12 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 18 78127A.008
13 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 19 78127A.009
14 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 20 78127A.010
15 

Mr. RUSH. The Chair now recognizes the gentleman from Florida, 

Mr. Stearns, for 2 minutes. For 1 minute. I am sorry. 

Oh, I am sorry. I didn’t see the Ranking Member down there. 

Mr. BARTON. I am willing to let Mr. Stearns go. 

Mr. RUSH. He is to my left. You are not normally on my left. 

The Chair now recognizes the Ranking Member of the Full Committee, Mr. Barton, my friend from Texas, for 5 minutes. 

OPENING STATEMENT OF HON. JOE BARTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BARTON. I thank the distinguished gentleman from the 

windy city of Chicago, home of the Cubs and the White Sox. I appreciate that. 

I want to thank Chairman Rush and Chairman Waxman for convening this hearing today, and appreciate Ranking Member Whitfield, whose leadership on this issue. I want to thank each of you 

witnesses for appearing before us today. I know it is a busy time 

for all of you. 

Since the Deepwater Horizon exploded and sank 3 months ago, 

this committee in my opinion has conducted a fair and rigorous investigation of the accident and developed what I consider to be a 

measured Congressional response. Our Oversight and Investigations Subcommittee, Energy and Environment Subcommittee, 

Health Subcommittee, and now the Commerce, Trade, and Consumer Protection Subcommittee are each doing their best to review 

and discuss all of the issues surrounding the oil spill. 

As a result of these investigations and the bipartisan engendered 

by them, the Full Committee recently voted 48 to zero to report out 

a Blowout Prevention Bill that, again, in my opinion is a balanced 

response to the tragedy. 

I want to welcome all of you witnesses today to consider our investigation, continue the investigation. I especially want to welcome Mr. Ken Feinberg. Mr. Feinberg has competently administered the 9/11 Victims Compensation Fund. That was a very tough 

job, and I expect him to competently and transparently administer 

the current BP Spill Escrow Account. 

The people of the Gulf Coast who have lost their jobs or had their 

livelihoods diminished by the oil spill should be compensated, 

should be compensated fairly, and should be compensated quickly. 

We are going to hear from some of the people who have been affected when we get to the other witnesses on this panel today. 

Tourism, fishing, and energy development are vital to the Gulf 

Coast where they employ hundreds of thousands of people. The 

tourism industry, which is the focus of today’s hearing, by itself 

generates over $30 billion a year. 

The oil spill reveals much about the Gulf Coast community. 

Many of us on this committee have come to know the strength of 

that community following the vast swath of destruction that was 

left by Hurricane Katrina nearly 5 years ago. Gulf Coast people are 

nothing if not resilient, but with this latest manmade disaster 

some of those folks must be wondering what on earth is going to 

hit them next. 

The Gulf Coast economy is tied to earth and ocean resources. The 

industries along the Gulf are so intertwined that the losses in one 


jbell on DSK7SPTVN1PROD with HEARING
16 

sector ripple throughout the entire regional economy. That is why 

if you are going to understand the magnitude of the tragedy, we 

must listen closely to those who are being directly affected by the 

Administration’s decisions, especially the one currently to ban energy exploration. 

I have said this before, but the Administration should reconsider 

its second moratorium decision. I think that is the wrong decision 

that they made. Enforcing a blanket policy in exploration is not unlike sending a new oil spill or a big storm to further threaten the 

jobs of the Gulf Coast. The Administration has shown some tendency towards panic in this regards lately. This should not be a time 

for panic but instead a moment, a time for careful, thoughtful consideration. 

I hope the Administration will choose not to forget about the 

fishermen, shrimpers, rig workers who share the same uncertainty 

as those who work on the beaches and the hotels and along the retail establishments of the main streets of the Gulf Coast. 

This is an important hearing. Again, I want to thank the witnesses. I look forward to your testimony, and again, Mr. Chairman, 

and Chairman and Ranking Member Whitfield, thank you for arranging this hearing. 

With that I yield back, Mr. Chairman. 

[The prepared statement of Mr. Barton follows:] 


jbell on DSK7SPTVN1PROD with HEARING
17 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 23 78127A.011
18 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 24 78127A.012
19 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 25 78127A.013
20 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 26 78127A.014
21 

Mr. RUSH. The Chair recognizes the gentlelady from Florida, Ms. 

Castor, for 1 minute. 

OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

Ms. CASTOR. Thank you, Chairman Rush and Chairman Waxman 

and Mr. Whitfield, for organizing this important hearing. 

You know, since April and the BP Deepwater Horizon blowout 

Floridians have been living their worst nightmare. The environmental damage, the economic damage is taking a terrible toll on 

our small business owners, our hotels, our fishermen. You know, 

we were just coming out of the recession, so BP’s disaster is wreaking havoc again on our hard-working folks in Florida. 

And what is particularly frustrating in the Tampa Bay area 

where I represent, we have got the most beautiful beaches in the 

world, from Pinellas County, Manatee, Sarasota, all the way down 

to Sanibel Island. There is no oil there. The oil is hundreds and 

hundreds of miles away, and yet the word has gone out all across 

the globe, especially to Europe and South America, where we rely 

on all those tourists, that the Florida beaches are damaged, that 

the Gulf Coast is toxic. 

We have got to turn that perception around. The efforts of BP 

to date have been inadequate to say the least. What is particularly 

maddening is we watch these incessant ads, full-page ads by BP, 

that are polishing their corporate image at a time where they 

should be devoting a good portion of those monies to helping small 

business owners, our hotels get back on their feet and explain to 

folks around the globe that our beaches are pristine, and we want 

you to come to Florida rather than how many millions and millions 

and millions of dollars have they spent on polishing their own corporate image. 

So that is the frustration I wanted to share today. So I am really 

looking forward to hearing from our expert witnesses. A special 

thank you to Keith Overton from the Tradewinds from St. Pete 

Beach who is the head of Florida’s Restaurant and Lodging Association. We have a lot to learn from all of you, and I am glad you 

are here. 

Thank you. 

Mr. RUSH. The Chair now recognizes the gentleman from Florida, 

Mr. Stearns for 1 minute. 

OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

Mr. STEARNS. Thank you, Mr. Chairman, and let me also compliment you and Mr. Whitfield for your leadership on this hearing 

and welcome Kenneth Feinberg, the Gulf Coast Claims Administrator here. He is going to have a tough job. 

I saw in the paper recently he said, ‘‘I have a concern that BP 

is stalling claims. Yes, BP is stalling. I doubt they are stalling for 

money. It is not that. I just don’t think they know the answer to 

the questions by the claimants.’’ That is going to be true whether 

you decide a claim because of geographic distance or whether you 

decide a claim because of ownership. Are you going to ask for tax 

returns? I mean, how are you possibly going to figure out what parVerDate Mar 15 2010 04:20 Mar 28, 2013 Jkt 078127 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 E:\HR\OC\A127.XXX A127

jbell on DSK7SPTVN1PROD with HEARING
22 

ticular claim is valid or not. So we all pray and hope that he will 

have the wisdom of Solomon to do this. 

I noticed in a report as of July 24 in Florida 41,818 claims were made, and money that was handed out was $45,320,000. So obviously some claims have been paid, and a lot of people across many, 

many counties and including counties that are not even affected by 

the Gulf Coast, have been paid. Florida has the most densely-populated coastline of the United States, and so this spill threatens our 

beaches, and as a former restaurant, hotel owner I deeply sympathize and empathize with these businesses and hope obviously 

that they are not hurt badly and that we can come back. 

But in the end I think the hard questions for the Administrator, 

Mr. Feinberg, is how to solve the questions of who gets the money 

and gets served with the extra support. 

So, Mr. Chairman, I think this is a very important hearing to 

hear from Mr. Feinberg and as well as the members of the tourist 

industry, what they think should be done. So thank you. 

Mr. RUSH. Mr. Green from Texas. 

OPENING STATEMENT OF HON. GENE GREEN, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. GREEN. Thank you, Mr. Chairman, and like my colleagues I 

want to welcome our panel, particularly Mr. Feinberg, but on a 

personal note I would like to welcome Mr. Brennan here. You have 

reopened the Houston Restaurant after a terrible fire, and we appreciate it in Houston. And, Mr. Chairman, I want to thank you 

for raising the issues of the effects of the oil spill on tourism in the 

Gulf of Mexico. 

Having watched Jimmy Buffett’s concert a few weeks ago from 

Gulf Shores, it is almost like we need that every week to get the 

word out along a number of different places on the Gulf Coast because that was a good turnout, people saw the clean beaches, and 

were enjoying the music. So we need to do more of that. 

Along the Alabama to Texas Gulf Coast oil and gas exploration, 

fishing, and tourism are the largest industries for employment in 

an economic progress. The oil spill is a profound impact on all 

three and during one of our worst economic times in the last 70 

years. 

I represent a district in Houston where thousands has lost or furloughed their jobs as a result of the drilling moratorium. Other 

areas have been hit even harder, and some Gulf Coast towns oil 

and gas, fishing and tourism are all they have, and now they don’t 

have any of those three. I am afraid this spill is going to have a 

lasting negative impact on communities beyond the environmental 

implications for years to come with so much money being removed 

from the system. The economy is already hard hit. We will struggle 

to bounce back. 

It will be important for us to help those communities. One way 

this can be accomplished is by fixing misconceptions that lead the 

potential tourists to believe that the entire Gulf Coast has been 

marred and cannot be visited again. I see it all the time on the 

news. There are white beaches, and the water is clean, so hopefully 

people who are watching this will know they can spend their vacation along the Gulf Coast. 


jbell on DSK7SPTVN1PROD with HEARING
23 

I am pleased that our expert panel has given time today to be 

here, and I look forward to the hearing. Again, Mr. Chairman, 

thank you for calling this hearing. 

I yield back my time. 

Mr. RUSH. Mr. Latta is recognized for 1 minute. 

OPENING STATEMENT OF HON. ROBERT E. LATTA, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO 

Mr. LATTA. Well, thank you, Mr. Chairman, Ranking Member 

Whitfield. I believe this is a very important hearing today as we 

examine the devastating impacts that the Deepwater Horizon oil 

disaster has had on the Gulf Coast tourism. 

I recently toured the area around Grand Isle, Louisiana, and saw 

firsthand the devastation of the region and its economic impact on 

the people who work and live there. This area of the country is one 

that relies heavily on its fishing and tourism industries, and I am 

looking forward to hearing from today’s witnesses and their perspective on the disaster. 

I especially look forward to Mr. Feinberg’s testimony and questions he may answer as to the Administration’s platform for the 

handling and distribution of the $20 billion escrow account to compensate victims of the oil spill. 

As disaster cleanup continues, we need to make sure funds are 

handled properly and in a timely manner, and it gets to the appropriate individuals that need that assistance. 

And with that, Mr. Chairman, I yield back. 

Mr. RUSH. Ms. Sutton is recognized for 1 minute. 

OPENING STATEMENT OF HON. BETTY SUTTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO 

Ms. SUTTON. I thank the distinguished Chairman for holding this 

hearing. 

Over the last few months we have heard from BP and other companies involved in the Deepwater Horizon disaster and Administration officials about how this tragedy occurred and how we can prevent it from happening again, and at one of those early hearings 

I asked Lamar McKay, the President and Chairman of BP America, if BP would consider the loss of profits for fishing and tourism 

as a legitimate claim, and Mr. McKay replied, yes, and that was 

a good development after BP’s reckless actions. Their culture of 

carelessness caused the devastation of our waters and coasts and 

wildlife and injured countless businessmen and the tourism industry. 

And the losses to these businesses, of course, have had ripple affects throughout our economy, and we have heard some of that detailed here today where people from places beyond the Coast are 

feeling the effects of loss of tourism. I am interested in hearing the 

testimony today from the witnesses about how the Gulf Coast 

Claims Facility has been processing the claims coming in and if 

this process can be improved. 

Thank you, and I yield back. 

Mr. RUSH. Dr. Gingrey is recognized for 1 minute. 


jbell on DSK7SPTVN1PROD with HEARING
24 

OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA 

Mr. GINGREY. Chairman Rush, thank you for calling today’s 

hearing on the impact that the Deepwater Horizon explosion has 

had on tourism in the Gulf Region. As a member of the Subcommittee on Oversight and Investigation, I have had the opportunity to hear testimony on a range of matters relating to Deepwater Horizon. I look forward to hearing from today’s panel of witnesses. 

Due to the importance that tourism has for the economy in the 

Gulf, it is critically important that we use today’s hearing to assess 

the devastating impact that the oil spill will have on approximately 

46 percent of the region’s economy at a time when unemployment 

across the country is 9.5 percent, further impact the tourism industry in the region, will only exacerbate those economic woes. 

Mr. Chairman, this downturn will not only affect the areas directly hit by the oil spill, but it will also affect areas where the 

coastline and water are still pristine. Therefore, we must strike a 

balance within the funds being handled by the Gulf Coast Claims 

Facility under Mr. Feinberg’s administration. 

In particular, based on his earlier testimony at the Small Business Committee, I look forward to hearing from Mr. Feinberg in 

particular on the challenges facing the Gulf Coast tourism in the 

aftermath of Deepwater Horizon, and I thank all of you gentlemen 

who are actively involved in tourism industry. You know of what 

you speak. We look forward to hearing from you today. 

And, Mr. Chairman, I yield back. Thank you. 

Mr. RUSH. Mr. Barrow of Georgia is recognized for 1 minute. 

Mr. BARROW. I waive opening. 

Mr. RUSH. Thank you. The Chair now recognizes Mr. Scalise of 

Louisiana for 1 minute. 

OPENING STATEMENT OF HON. STEVE SCALISE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF LOUISIANA 

Mr. SCALISE. Thank you, Mr. Chairman and Ranking Member 

Whitfield, for having this important hearing on the oil spill’s affect 

on tourism in the Gulf Coast. I want to start by welcoming a dear 

friend and a respected business leader from New Orleans, Ralph 

Brennan. Not only respected in Louisiana but as former head of the 

National Restaurant Association, an authority on restaurants, tourism, and business, and I appreciate him coming and look forward 

to hearing his comments. 

And as my colleagues have pointed out, the tourism industry, including restaurants like Mr. Brennan’s, is suffering from the effects 

of the oil spill. An industry that employs over one million people 

along the Gulf Coast and brings in approximately $39 billion in annual tax receipts is now facing double-digit declines due to this disaster. A national survey done in May by the Louisiana Office of 

Tourism found that 26 percent of those who had plans to visit Louisiana had postponed or canceled their trip, while a June survey focused on nearby visitors along the Gulf Coast States found similar 

results. 


jbell on DSK7SPTVN1PROD with HEARING
25 

That is why it is so critical that the recovery fund being run by 

Mr. Feinberg is administered in a way that helps all of those that 

are being affected and will be affected by this disaster. 

And finally, Mr. Chairman, it is critical that the Federal Government does not add to the problems that we are facing along the 

Gulf Coast, and it is critical that the President end this irresponsible moratorium on offshore drilling. As people in Louisiana continue to fight the oil each day, President Obama and his Administration are taking what is already a human and environmental 

tragedy and turning it into an economic tragedy by continuing to 

pursue this reckless moratorium. 

Mr. Chairman, the economy in my State and others along the 

Gulf Coast are already suffering. The Federal Government’s role is 

to help and not hurt our recovery. I look forward to hearing from 

our panelists. 

Thank you, and I yield back. 

Mr. RUSH. Mr. Gonzalez from Texas is recognized for 1 minute. 

Mr. GONZALEZ. Waive opening. 

Mr. RUSH. The Chair thanks the gentleman. Is there any other 

member? The Chair don’t see any—does not see any other members 

seeking recognition. 

Now, the Chair has a unanimous consent request before the committee. Mr. Melancon and Mr. Burgess can sit on the panel and 

ask questions. I don’t see either of them here. If, in fact, they do 

appear, then hearing no objection if and when they do appear, they 

will be allowed to sit on the panel and ask questions of the witnesses. 

The Chair also asks for unanimous consent to insert into the 

record a statement from the Northwest Florida Tourist Development Council. Hearing no objections, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. RUSH. Now it is my pleasure and my privilege to recognize 

and introduce the witnesses that will appear before us today, and 

beginning on my left, a name that is not unfamiliar with those who 

are here in this Congress, Mr. Ken Feinberg. He is the Administrator for the Gulf Coast Claims Facility. He is on my far left. 

Seated next to him is Mr. Roger Dow, who is the President and 

CEO of the U.S. Travel Association. Seated next to Mr. Dow is Mr. 

Rip Daniels. He is the CEO and Manager of WJZD–FM. He is also 

the Vice-President of the Mississippi Gulf Coast Tourism Commission. 

Next to Mr. Daniels is Mr. Herb Malone. He is the President and 

CEO of the Alabama Gulf Coast Convention and Business Bureau. 

Seated next to Mr. Malone is Mr. Keith Overton, and Mr. Overton 

is the Senior Vice-President and Chief Operating Officer of 

Tradewinds—of the Tradewinds Resort. He is also the Chairman of 

the Florida Restaurant and Lodging Association. And then we have 

Mr. Brennan, Mr. Ralph O. Brennan, who is the President of the 

Ralph Brennan Restaurant Group, LLC. 

Again, I want to thank the witnesses for appearing in response 

to our request and our invitation. It is the practice of this subcommittee to swear in witnesses, so I will ask if you will stand and 

raise your right hand. 

[Witnesses sworn.] 


jbell on DSK7SPTVN1PROD with HEARING
26 

Mr. RUSH. Please let the record reflect that the witnesses have 

all in their entirety answered in the affirmative. And now we will 

recognize Mr. Feinberg for 5 minutes for opening statement. 

TESTIMONY OF KENNETH FEINBERG, ADMINISTRATOR, GULF 

COAST CLAIMS FACILITY; ROGER DOW, PRESIDENT AND 

CEO, U.S. TRAVEL ASSOCIATION; RIP DANIELS, CEO/MANAGER, WJZD–FM, VICE PRESIDENT, MISSISSIPPI GULF 

COAST TOURISM COMMISSION; HERB MALONE, PRESIDENT 

AND CEO, ALABAMA GULF COAST CONVENTION AND VISITORS BUREAU; KEITH OVERTON, SENIOR VICE PRESIDENT 

AND CHIEF OPERATING OFFICER, TRADEWINDS RESORT, 

AND CHAIRMAN, FLORIDA RESTAURANT AND LODGING ASSOCIATION; AND RALPH O. BRENNAN, PRESIDENT, RALPH 

BRENNAN RESTAURANT GROUP, LLC 

TESTIMONY OF KENNETH FEINBERG 

Mr. FEINBERG. Thank you, Mr. Chairman. I thank the subcommittee for the opportunity to testify. It is the fourth time I have 

testified in the last 2 weeks in the Congress, three times on the 

House side and once on the Senate side, and I am here again to 

answer any questions that the members may have. 

I am the independent administrator of this new Gulf Coast 

Claims Facility set up by agreement between the Administration 

and BP. I do not work for the Administration. I do not work for 

BP. I have been delegated the authority to design, implement, and 

administer this purely private facility funded by BP in a $20 billion 

escrow account. 

I have been assured by both the Administration and BP that this 

facility that I am administering will, in fact, be totally independent. I answer to the people in the Gulf, not to the Administration nor to BP. BP has—is setting aside $20 billion in an escrow 

fund to pay all eligible claims that are submitted to the facility. 

Hopefully the $20 billion will be enough. If not, BP has agreed that 

it will honor any additional financial obligations that it may have 

over and above the $20 billion. 

I am now in the process, as you know, of establishing this facility. It is not yet up and running. It will be up and running next 

month, in a few weeks, and we will assume all responsibility from 

BP for processing private claims of individuals and businesses. I do 

not have any jurisdiction over government claims, state, local, or 

federal. None. I also have no jurisdiction over the moratorium 

claims for the rig workers, the $100 million set aside by BP for 

moratorium rig workers that is not part of the $20 billion and is 

being administered, as I understand it, separately. 

I want to give BP some credit. It has already paid over $230 million worth of claims, not out of the $20 billion but as part of its 

petty cash. It has paid out $230 billion in individual and some 

business claims. When I said—somebody—Congressman Stearns, I 

think, reminded me about stalling. BP has not been paying certain 

problematic claims for the reasons really expressed by Congressman Stearns. 

I mean, what constitutes an eligible claim is a major question 

here, and it is going to be a major question today when it comes 


jbell on DSK7SPTVN1PROD with HEARING
27 

to tourism. It is easy to compensate a motel or a restaurant on the 

beach where there is oil. You don’t need the wisdom of Solomon for 

that claim. You really don’t. You don’t need the wisdom of Solomon 

for a claim involving a motel on the beach where the beach is pristine but you can’t fish. That is an easy claim. 

Proximity is going to be the problem here. Proximity. How far 

from the beach does a steakhouse that has lost 30 percent of its 

business because of a downswing in tourism is precisely the question posed by Congressman Stearns. What constitutes and eligible 

tourist claim? 

Now, I have got some great help on that from Mr. Malone from 

Alabama, who I have met with on a couple of occasions, who is 

thinking this problem through from the perspective of tourism in 

Alabama. Governor Crist in Florida has reminded me about the 

Pan Handle and the influence of this disaster on a—on the Florida 

coast, but what I am going to have to decide, you see, as part of 

this Gulf Coast Claims Facility is what constitutes a direct claim, 

a direct claim, that is immediately payable, and how far attenuated 

may a claim be from the spill. The overall impact of the spill undoubtedly impacts tourism throughout a particular state. I am sure 

of that. 

The question is what constitutes an eligible claim, and what is 

required to be proven in advancing that calculation in order to get 

money from this facility. I am as interested as the members are in 

hearing from the—my fellow witnesses today. Maybe I will come up 

with some additional ideas that Mr. Malone has already advanced 

for my consideration in terms of trying to come up with a fair, equitable, just way to determine eligibility and to determine what the 

appropriate compensation should be. 

I look forward to the testimony of my other fellow witnesses. I 

look forward to working with this committee. There are some members here who I have already been working with over the past few 

weeks, and I look forward to continuing to work with Congresswoman Castor and others, Congressman from Louisiana also. I 

have been meeting with them. I return to Florida tomorrow. I will 

be in Mississippi and Alabama on Friday and will be returning to 

Florida again—and Louisiana in the next 2 weeks. 

So you can’t do this from Washington. You have to spend a lot 

of time down there, hearing what people have to say, the uncertainty, the concern, and I really look forward to working with this 

committee in the months and weeks ahead. 

Thank you. 

[The prepared statement of Mr. Feinberg follows:] 


jbell on DSK7SPTVN1PROD with HEARING
28 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 34 78127A.015
29 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 35 78127A.016
30 

Mr. RUSH. Mr. Dow, you are recognized for 5 minutes. 

TESTIMONY OF ROGER DOW 

Mr. DOW. Thank you, Mr. Chairman, and thank you, Ranking 

Member Whitfield, and the members of the committee that are 

present. It is an honor to be here today, and I have already submitted and will submit my testimony for the record, but I would 

like to be brief. 

To give you an idea, the U.S. Travel Association I represent is 

basically—represents the whole $704 billion travel industry or one 

of nine Americans employed. Our 2,000 members represent all the 

airlines, hotels, lodging companies, attractions, et cetera, and our 

mission is real simple, and that is to promote travel and increase 

travel to and within the United States that creates American jobs. 

During the current environmental crisis that mission couldn’t be 

more important. In my testimony I am going to highlight several 

things. One, the significance of the impact of travel and tourism 

which you have already heard from distinguished members of the 

panel, and you will hear from the panel and also from the committee state but also the potential long term of the oil spill, the 

damages and what BP and the Federal Government can do. 

It is mentioned that four States are impacted to the tune of $94 

billion of their travel economy and a million employees in their 

travel economy, but you also have Texas, which perception has not 

been hit as hard but perception can cause people not to go to parts 

of Texas, and that is even a bigger place. 

When you look at tourism, it has a much larger portion in the 

Gulf Region than many—any other region in the country. Fifteen 

percent of private employees are in this industry in the Gulf Region versus other areas. When you really look at how many people, 

the question is who is harmed, as Mr. Feinberg said well, and how 

long I think are very important questions. 

We commissioned Oxford Economics, one of the most respected 

economics firms in the globe, to take a look because we have got 

to deal with facts as Mr. Feinberg so rightly says, not hearsay, and 

we commissioned them to look at 25 national disasters around the 

world; hurricanes, tsunamis, earthquakes, oil spills, pandemics, 

and take a look at what would happen and the facts of data of how 

long it took them to recover. 

Well, as you have already heard stated, Katrina 5 years later, 

New Orleans hadn’t recovered from pre-Katrina numbers. Oxford 

Economics estimates that the damage is going to be probably $22.7 

billion. That is just to the travel and tourism industry, over 3 

years. 

What I want to talk about today is that cost can be reduced significantly by up to a third or $7.6 billion. We have submitted the 

Oxford Economic study, and we have also submitted a roadmap to 

recovery with concrete ideas how to mitigate the damages so we 

can lessen them for the taxpayers and lessen them for BP. Using 

travel to stimulate the economy and speed the recovery. 

And it is three parts. One is to inform the perception, and we all 

know how important perception is. Second, create an incentive for 

people to travel back to this area. Third, to make businesses and 


jbell on DSK7SPTVN1PROD with HEARING
31 

people whole, and this must be funded by BP to help reduce the 

long-term implications. 

A key lever that is available to BP and the Federal Government 

is the opportunity to create marketing to bring people back. We are 

asking that it be considered a $500 million fund, which would be 

a 15 to one return or $7.5 billion to bring people back. Mr. 

Feinberg has the challenge of assessing real damages, but the challenge is, if left untouched these damages will mount and will grow. 

We have an opportunity to shrink them, and we need to address 

that. And so with no guidance for recovery, we don’t know how to 

submit the claim. So that is going to be important. 

We believe that the Gulf Coast Claims Facility is the right and only area to take $500 million and properly allocate it to the people 

that can make a difference. There have been many requests by 

states, and they have received as you have already said $70 million. The unfortunate problem is of that $70 million very little actually got to marketing. 

We would like to remove the politics. We would like to remove 

special interests. We would like to get a transparent process where 

we can mitigate and pull this down. The damage has already occurred. Everyone is talking about capping the damages and capping the well. Well, we also need to cap the damages long term, 

and we can do that. 

The 400,000 people that work in this industry know how to do 

things in this industry. They probably don’t know how to file a 

claim. So we need to get them back more quickly. A $500 million 

marketing effort will do that. We have seen that over and over. We 

saw that with SARS in Canada. We have watched for 98 days on 

television the problems. We can turn this around, we can mitigate 

it. Nothing is more important than getting a fund to do this, put 

it in place, and I believe that will help the communities, the families, and the taxpayers, and in the long term reduce the liability 

for BP. 

Thank you very much. 

[The prepared statement of Mr. Dow follows:] 


jbell on DSK7SPTVN1PROD with HEARING
32 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 39 78127A.017
33 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 40 78127A.018
34 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 41 78127A.019
35 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 42 78127A.020
36 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 43 78127A.021
37 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 44 78127A.022
38 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 45 78127A.023
39 

Mr. RUSH. The Chair recognizes now Mr. Daniels for 5 minutes. 

TESTIMONY OF RIP DANIELS 

Mr. DANIELS. Thank you, Chairman Rush, Ranking Member 

Whitfield, and other subcommittee members. I am representing 

myself today. 

Mr. RUSH. Would you turn the mike on and pull it closer to you? 

Thank you. 

Mr. DANIELS. I apologize for that. I am representing myself as 

a private citizen and not the Harrison County Tourism Commission 

primarily because I wanted to represent small business as well as 

it applies to tourism. 

I have been in tourism since 1978, starting as a tavern owner, 

radio broadcaster, real estate broker, tourism commissioner, and 

the primary investor in the Coast’s newest African-American hotel, 

the Almanett. I have seen firsthand the adverse effects of a range 

of disasters from Hurricane Camille’s destruction on the seafood industry’s processing in 1969, to the economic recession of the ’80s 

which resulted in the closing of the Hilton and Sheraton hotels, the 

complete destruction of the Coast tourism destination by Hurricane 

Katrina. 

However, I have also been a part of the recovery and renewal of 

the Coast after each calamity, and the resilience of the Gulf 

Coastians in the face of insurmountable destruction is a testament 

to their faith in God and in each other. 

On the eve of the 5-year anniversary of Hurricane Katrina, the 

Coast was poised to have a banner year for tourism. On April 20, 

the Deepwater Horizon sunk and so did our hopes to finally reestablish the Mississippi Gulf Coast as a tourist destination as opposed to a hurricane-ravished resort. 

The impact of the BP oil disaster on tourism has been and will 

be a disaster. The devastation is difficult to measure because both 

the actual damage and the perception of the damage cannot be 

readily measured. Was the Gulf Coast spared because there was a 

limited amount of oil to reach the shoreline, or was the shoreline 

spared because most of the oil is still at the bottom of the Gulf or 

dispersed in plumes? Is the perception of clean beaches better than 

the perception of clean seafood? And in the words of my grandson, 

‘‘Is it safe to go in the water? And if not, is it safe to eat the fish?’’ 

One can glean that the Mississippi Gulf Coast billion dollar tourism industry is undoubtedly tied to seafood. According to recent 

Harrison County surveys the number one reason for visiting the 

Mississippi Gulf Coast was the food, the seafood. Ladies and Gentleman, the Coastal view is still gorgeous. The beaches are clean, 

the sound and the bayous are open for fishing, but the seafood; is 

it safe? How does the Coast remove the perception that it is not? 

Surprisingly, according to the hotel/motel association and the casino association, hotel stays over the last 90 days have been up, 

and casino revenues have been up, but of course, that is compared 

to last year when the tourism economy was at an all-time low. Yet, 

maybe the fact that the Harrison County Tourism Commission 

under my guidance investing $650 billion in advertising did help 

at least with drive-in markets. 


jbell on DSK7SPTVN1PROD with HEARING
40 

Hotel/motel association stats have shown that many of the room 

nights are as a result of extended stay, BP employees, government 

agencies, media, petroleum-clean-up-related businesses, and the 

like. Although there is a perception at times that the Gulf Coast 

revenue is up, is it the result of tourism, or is it a result of oil recovery? And if so, does that not suggest that the recovery is not 

over until tourism is back to the ratio that existed prior to the explosion? 

The most serious adverse effect over the last—over the lack of 

tourism, not recovery workers, is that many of the Mom and Pop 

shops, the restaurants, off boats, seafood merchants, water sports 

vendors, and golf courses and the like have suffered. They are not 

getting tourist dollars which were far greater. 

And then even more importantly, we have notice that inquiries 

about future visits to the Coast as it applies to tourism is off 40 

to 50 percent. What happens when all the recovery money is gone, 

and all the workers have gone? 

Ironically, just as the Deepwater Horizon was an exploratory 

mission, Mississippi Gulf Coast now finds itself challenged with the 

exploration of what to do in the coming years to fight the perception. There are too many unknowns right now. Considering the fact 

that we just had Bonnie, one has to wonder just what will happen 

when there is another Katrina or another hurricane and just how 

many tar balls will be washed up. 

Ladies and gentlemen, on the Mississippi Gulf Coast as it applies to tourism, we are not enthusiastic about trading a $1 billion seafood industry for a $1 million well. So we would hope and in my 

testimony you will see some recommendations and hopefully some 

cures for this ill. 

Thank you. 

[The prepared statement of Mr. Daniels follows:] 


jbell on DSK7SPTVN1PROD with HEARING
41 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 48 78127A.024
42 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 49 78127A.025
43 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 50 78127A.026
44 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 51 78127A.027
45 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 52 78127A.028
46 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 53 78127A.029
47 

Mr. RUSH. The Chair recognizes Mr. Malone for 5 minutes. 

TESTIMONY OF HERB MALONE 

Mr. MALONE. Good morning, Mr. Chairman, and thank you and 

thank the members of the subcommittee for inviting us here today. 

It is a tremendous honor to represent our area. It is an honor to 

represent the some 2,000—— 

Mr. RUSH. Move the mic to you. Thank you. 

Mr. MALONE. OK. It is an honor to represent some 2,000 business owners and some 40,000 employees that they employ whose 

livelihoods all are at risk as we sit here today. 

Our area began receiving oil on our beach in mid May. We have 

continued to receive it, have some sheen offshore, coming ashore 

today as we speak. This is our high season. With the oil impacts 

we have had it is—I cannot describe it verbally as well it should 

be. Many of us have had problems with the media and the way 

that the media has overstated things, which sometimes they tend 

to do, but I will tell you honestly when the media in the second 

week of June reported that the beaches of Alabama were slathered 

with oil, we were slathered with oil, and it was not a false report. 

They failed to report how much is being cleaned up. Our beaches 

do look good today, and there is a clean-up process. It took awhile 

to get it working, but it is working. 

What has this done to our tourism economy is destroyed it. We 

are devastated. We should be at 90, 85 to 90 percent occupancy 

today in mid-July and late July. We are running less than 30 percent, and when occupancy goes down, the rates go down even 

greater. So our revenue to our lodging, to our restaurants, to everyone in town, I don’t know of a single business, and I conveyed this 

to Mr. Feinberg in a recent meeting, I don’t know of a single business in our town that has not been directly affected by this oil. It 

has created a sense of despair that I have never seen. 

Like Mr. Daniels, I have grown up on the Gulf Coast. I have 

been through hurricanes. We have been through hurricanes. I have 

been in this position for 22 years. I look at the eyes of my friends 

and colleagues around the community, and I see despair I have 

never seen before. 

We mentioned and remembered 11 victims of the explosion of the 

rig. We have got a 12th victim. We have got a charter boat captain, 

Captain Alan Cruise, who in the sense of despair, beyond hope, 

took his own life. We hope that is the last one. We have measures 

in place to try to prevent that from happening again. We hope we 

are successful with those. 

We are the smallest beach, laterally we are the smallest beach 

on the Gulf Coast. We have the least amount of coastline of any 

of the five States, but we generate $2.3 billion annually from our 

tourism product. We the decline that we see in this high season, 

we fully expect our loss to be at or near $1 billion just this year, 

not counting what happens in the summer, I mean, in the future 

years. And that is the direct spending by the consumer, not counting the ripple affect as it would ripple through our economy. 

So it is devastating to us. It is about survival. The BP claims 

process has been mentioned in the numbers that they seem to tout 

quite often of what they have paid. The bigger number is what they 


jbell on DSK7SPTVN1PROD with HEARING
48 

have not paid. Last night I received an e-mail from one of our local 

CPA firms that I know has been very actively engaged in the 

claims process. They have filed over—gave me a detailed list of 

over 70 claims they have filed on behalf of businesses. These 70 

claims total over $27 million. This is just for May and June. July 

claims are just now starting to be filed. Of that $27 million less 

than $5 million has been paid yet to owners. Of that $5 million, 

$3.5 million went to two claims. 

So as you see there is a tremendous void in what has been filed 

and what has been requested and what has been documented, and 

this CPA firm is highly reputable. They have been actively engaged 

from the very beginning, and they like the rest of us, are being 

frustrated why money is not coming into the hands of our business 

community. Without that they can’t support the jobs, they can’t 

make payroll next week, they can’t pay the notes that are due. 

Our industry is much like farmers. We prepare in the spring, we 

market, we spruce up the place, we paint the boat, we remodel during the winter, we are ready for the coming season. Just like the 

farmer who has lost his crop, we have lost our yield. So is it—not 

only is it a terrible time in regards to the recession and the previous hurricanes, it is a terrible time of year for us. 

So our request to you today is this committee, subcommittee and 

members of Congress is to do, please, whatever you can to get 

money in the hands of Mr. Feinberg and his program and get it up 

and going as fast as possible. We have had two meetings with Mr. 

Feinberg. We have found him to be very fair and open-minded. Our 

first meeting he scared us with his eligibility requirements, but in 

our second meeting he listened to our side of the case, and he said 

we closed the gap tremendously with him. We still have some work 

to do, Mr. Feinberg, but we are feeling better about it, and we look 

forward to working with him. 

But our problem is I have businesses who have bank notes due 

last week. Every day that goes by is critical. Every week that goes 

by there will be another foreclosure. So when Mr. Feinberg says he 

is taking over mid next month, I wish for us he would take over 

tomorrow, and if there is any way that members of this committee 

or any other members of Congress can help facilitate getting this 

into the control of Mr. Feinberg and out of the control of BP, it 

would be a tremendous benefit to us. 

With that I would like to close over than to say, again, thank you 

for your interest in this issue. Thank you to the gentleman who 

recognized our Jimmy Buffett concert. Thank you to the lady from 

Florida who discussed the beautiful beaches. We share the same 

beautiful beaches with Florida. At least we did before the oil. We 

look forward to the day those beaches are beautiful once again. 

[The prepared statement of Mr. Malone follows:] 


jbell on DSK7SPTVN1PROD with HEARING
49 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 56 78127A.030
50 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 57 78127A.031
51 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 58 78127A.032
52 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 59 78127A.033
53 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 60 78127A.034
54 

Mr. RUSH. Thank you. Mr. Overton, you are recognized for 5 

minutes. 

TESTIMONY OF KEITH OVERTON 

Mr. OVERTON. Thank you, Mr. Chairman, and distinguished subcommittee members. For the record we, too, are a little frightened 

of Mr. Feinberg so far, but I think we are going to get through it 

OK as we have more discussion. 

Florida is the vacation capital of the country, and it has been for 

generations. When visitors think of Florida, they envision warm 

sunshine, blue waters, sugary white sand beaches, fresh seafood, 

and the natural environment like no other. All of these wonderful 

characteristics have been damaged as a result of the perceptions 

that Florida’s beaches are covered in oil. 

Tourism is big business. It is our number one industry. We 

hosted over 80 million visitors in 2009. We captured nearly 17 vacations from Floridians—17 million vacations from Floridians. Collectively our visitors spent over $60 billion on travel last year, generating nearly $4 billion in sales tax collections. 

What that means is more than one-fifth of Florida’s sales tax dollars are paid by visitors, and it also means jobs. Nearly 1 million 

Floridians are directly employed in travel and tourism. 

To give you an example of the economic impact the BP oil spill 

is having on hotels, let me give you some statistics from my hotel, 

the Tradewinds. For purposes of geographic reference, we are the 

largest resort on the West Coast of Florida, just west of Tampa 

Bay, located in Pinellas County. Call volume is down by as much 

as 25 percent. We have 800 of the county’s approximate 35,000 

hotel rooms. So when you take an average of the last 3 years, 

which is what BP is asking us for, of our revenues shortfalls and 

you compare that to the revenue that we have achieved since the 

oil spill, we are down approximately $1.7 million. 

Now, if you extrapolate that out and you assume the balance of 

Pinellas County’s 35,000 rooms have had a similar impact, that is 

a $70 million economic loss just in hotel room revenue, and that 

doesn’t include restaurants or secondary businesses related to tourism. 

And then if you think about the Pan Handle, which has 76,000 

hotel rooms in its entirety and the effects clearly have been more 

devastating to them than they have in Pinellas County, it is easy 

to see that the losses to Florida’s tourism are in the billions. It is 

a substantial number, and it is something that we want to make 

on the record today that we need help with that. 

What is most concerning to me is that all of these losses have 

occurred to our resorts without a drop of oil being on any beach in 

Pinellas County. It is amazing to me how the perceptions of the 

media have gotten us to this point. Nonetheless, we are there. 

I also want to share with you that the Y–Partnership conducted 

a survey on June 18, and it was asked at the time of the participants which States do you believe will most directly be impacted 

by oil. Ninety-five percent of them put Florida at the top of the list. 

Florida is clearly the least affected State, at least physically, from 

the oil that is impacted the shorelines. 


jbell on DSK7SPTVN1PROD with HEARING
55 

So clearly, again, I want to restate this is a perception problem, 

and I certainly think we can all agree that perceptions have worsened since June 18. 

Prior to appearing on Neil Cavuto show a couple of weeks ago, 

I was viewing a monitor, and it had the President who was appearing at Pensacola Beach, and at the time there were a few tar balls 

there, but it hadn’t been materially affected. And the tickertape 

along the bottom, I couldn’t hear what was being said, but it read, 

‘‘Oil finally reaches Florida’s beaches.’’ Plural. And when they 

transitioned to the next shot, the television station, and I can’t recall which one it was, superimposed the oil running down the 

screen behind the President over the beautiful Gulf waters that 

were behind him. And I said to myself, you know, $25 million, $50 

million, $100 million, there is no amount of money that is going to 

combat that kind of imagery, and it is a challenge that we are 

faced with, and it is going to be there for many, many years to 

come I believe. Much like what happened in the hurricanes of 2004. 

We are still suffering from that and cannot gain occupancies in August and September that we used to achieve. 

I have five requests of the committee in closing if you would acknowledge them, and I would ask you to at least address them in 

your comments and your questions. One is the media must be held 

accountable to accurate and fair reporting of the facts regarding 

this oil spill. They have a legal and an ethical responsibility to do 

so, yet many of them continue to put ratings ahead of accuracy. 

I urge you to charge some agency, maybe it is this governing 

body, I am not sure, within the Federal Government to review 

news reports weekly and hold them accountable for the sensationalism and the accuracies that are there. We need somebody to 

support us in that regard, or it will just continue on even with the 

next crisis beyond this one. 

Number two. We are optimistic that the oil leak has been capped, 

however, there is still going to be years of cleanup and recovery efforts remaining. We all fear that the claims are going to cease 

being paid prior to the end of the actual losses. I think that is an 

accepted concept today. 

Additionally, Mr. Feinberg’s recent comments with regards to 

what is a compensable or legitimate claim based on whether or not 

oil is on its beaches and the proximity to that oil is also very concerning to all of our members and all of the tourist-based businesses within Florida, and we implore Mr. Feinberg and any 

branch of the government that can influence the claim process to 

look very carefully at this and not allow it to be a black and white 

issue. We want to make sure each business owner has an opportunity to be heard for their legitimacy of their claims and not just 

ruled out because of geographics. 

Third, I would like to make you aware that the CVBs in all of 

the Gulf Coast counties rely on bed tax dollars, and those bed tax 

dollars are related to hotel room revenues. When they fall, revenues fall, then the bed tax dollars fall. We need that marketing 

money. We need to be made whole. I know that is not Mr. 

Feinberg’s responsibility, but those CVBs need to made whole on 

the dollars that have been lost for their marketing purposes. 


jbell on DSK7SPTVN1PROD with HEARING
56 

The fishing and seafood industry and our wildlife are critical to 

tourism and Florida’s economy. I am not going to go into the details, but I have included in your packet some recommendations 

from very legitimate ocean conservancy, other agencies that will 

help you in some of your studies as it relates to our wildlife. 

And lastly, we have to continue to spend money on marketing efforts both domestically and internationally. We have not yet gotten 

more money past the $25 million originally that BP has given to 

us. Fifty million dollars was requested by our governor, and it has 

been turned down. We really need that money. It is very important. 

This is going to go on for a long period of time as I said earlier, 

and those dollars are vital to our recovery. 

I thank you very much for allowing me to speak today and giving 

you our testimony. 

[The prepared statement of Mr. Overton follows:] 


jbell on DSK7SPTVN1PROD with HEARING
57 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 64 78127A.035
58 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 65 78127A.036
59 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 66 78127A.037
60 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 67 78127A.038
61 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 68 78127A.039
62 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 69 78127A.040
63 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 70 78127A.041
64 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 71 78127A.042
65 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 72 78127A.043
66 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 73 78127A.044
67 

Mr. RUSH. Mr. Brennan, you are recognized for 5 minutes. 

TESTIMONY OF RALPH O. BRENNAN 

Mr. BRENNAN. Thank you very much, Mr. Chairman, and thank 

you for this opportunity to testify on behalf of the National Restaurant Association and the restaurant industry. As you said in my 

introduction, I am from the Ralph Brennan Restaurant Group, and 

I have been involved in the restaurant industry in New Orleans for 

almost 30 years, and my family has been in the restaurant business for more than 60 years, and as a group we operate 12 restaurants, nine of those in New Orleans. And Gulf seafood is an important ingredient in all of our menus. 

I want to thank you for holding this hearing and for your continuous focus on the oil spill’s impact on the economy of the Gulf Region and the Nation, and I appreciate the opportunity to tell the 

restaurant industry’s part of the story. 

Ours is an industry that employs an estimated 2.3 million employees in the Gulf Coast Region. Restaurants in the Gulf Coast 

area generate about $77 billion in annual sales. 

Since April 20 when oil began flowing into the Gulf of Mexico, 

our coastline, our sea life, our culture and our tourism economy are 

again in great jeopardy. After Hurricane Katrina roared ashore on 

August the 29th, 2005, Gulf Coast residents and businesses essentially knew what to do to return to normal or as we call it today 

the new normal. The water came into New Orleans, the water went 

out, and we began to rebuild and move on. But this is not the case 

today. 

The key message that I want to share with you is one of longterm uncertainty impacting both the ecosystem of the Gulf and the 

economy of the Gulf Coast area and potentially devastating tourism 

in the Gulf States. 

Across the affected areas restaurants report a range of experiences. Those located in seaside or in beach communities are decimated as tourism shrivels. Tourists are not coming because there 

is either oil on the beach or in the water, or people have the perception that there is oil there, and visitor perception is key to decisions about where to vacation. The overall numbers of tourists are 

down, restaurant guests and sales are decreasing, product costs are 

increasing, and jobs are in jeopardy as already thin margins precariously slip away. 

In New Orleans one of the driving forces of our economy is culinary tourism and Gulf seafood is at the heart of our culinary tourism. Like we saw after Hurricane Katrina, convention groups and 

leisure travelers are now calling to express concern about upcoming 

business and whether to book future business. Many are asking if 

oil is on the doorsteps in New Orleans, and New Orleans is miles 

inland. Today almost 5 years after Hurricane Katrina convention 

bookings have not returned to pre-Katrina levels because of the 

damage to the New Orleans brand, and the oil spill risks surrendering the ground that we have gained over the last few years 

along with future increases. 

While the focus of my testimony is not primarily on the BP 

claims process, I have heard from some of our restaurant association executives along the Gulf that there is a willingness to set up 


jbell on DSK7SPTVN1PROD with HEARING
68 

a claims center and that would be solely focused on the restaurant 

and hotel industries, and I want to voice my strong support for that 

idea. 

Regarding my three New Orleans restaurants specifically, sales 

are down, counts are down, costs are up, and margins are down, 

and this is not a sustainable business model and as the oil looms 

offshore with an impact that could last for many years to come. 

With regard to perceptions and misconceptions, I would like to 

begin applauding our state and federal officials for the stringent 

safety testing of Gulf seafood that has allowed truthful reporting 

around the potential toxicity of the seafood. We are fortunate that 

100 percent of the reports to date have shown that Gulf seafood is 

to be safe to consume from areas that are approved. Ongoing testing is crucial for a safe and informed public. 

Despite the testing concerns about safety and supply, one of the 

recent national polls indicated that 54 percent of the respondents 

said they would only eat seafood that they know does not come 

from the Gulf. Our staff has received many calls and comments, all 

centered around safety and supply. And to combat concerns we 

have aggressively trained our staff to knowledgeably share precise 

locations of where our seafood comes from. 

To demonstrate support for the fishermen and the safety of the 

product, my restaurants have added seafood offerings. As I told the 

‘‘New York Times,’’ the way to help is to eat Gulf seafood. If highprofile individuals, including celebrities, celebrity chefs, and even 

members of Congress could be seen eating a Gulf shrimp po boy it 

would go a long way to alleviating consumer fear. The Obama family’s visit to Florida beaches next month is a welcome opportunity, 

again, for positive reinforcement, and I know the National Restaurant Association is looking to plan some of its meetings in the 

Gulf Coast Region, and I would hope that trade associations and 

even government agencies would do the same. 

Despite a curb in the demand for Gulf seafood, prices across the 

board have increased. On average in my restaurants we are paying 

18 to 30 percent more for the seafood that we serve. 

Finally, I would like to comment on the long-term impact of a 

misinformed public. In the years after Hurricane Katrina potential 

visitors from around the country thought that the city of New Orleans was still under water, that the drinking water was unsafe, and 

there were no hospitals or other city services. These misperceptions 

were largely created and reinforced by the media because of the 

regular replaying of images from days after the storm. 

Many in New Orleans feel it was only after the New Orleans 

Saints and the city of New Orleans hosted two playoff games back 

in January, and the Saints went on to win the Super Bowl that 

those misperceptions were finally ceased. 

Misperceptions are happening again now. Just about every day 

a story is reported live from New Orleans on the spill. The perception shaped by the media, even if unintentional, is that oil is on 

the doorsteps of New Orleans. That is sensationalistic and untrue, 

yet if reporting from these locales continues, the public will continue to draw its own conclusions and perceive New Orleans and 

many of the cities and resorts across the Gulf as damaged destinations. 


jbell on DSK7SPTVN1PROD with HEARING
69 

Marketing dollars will be needed to counter these 

misperceptions. The long-term consequences and impact on tourism 

of the damaged brand are severe. 

Thank you, Mr. Chairman and member of the subcommittee, for 

this opportunity to be here today. 

[The prepared statement of Mr. Brennan follows:] 


jbell on DSK7SPTVN1PROD with HEARING
70 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 77 78127A.045
71 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 78 78127A.046
72 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 79 78127A.047
73 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 80 78127A.048
74 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 81 78127A.049
75 

Mr. RUSH. The Chair thanks all the witnesses for their testimony, and the Chair recognizes himself now for 5 minutes of—for 

the purposes of questioning the witnesses. 

Mr. Feinberg, I am going to begin with you. At this moment BP 

is still processing claims I understand filed by businesses and 

workers in the Gulf Coast Region. According to your testimony BP 

has already paid $200 million in emergency payments. Despite 

these numbers we have been told that there are many complaints 

about the claim spots that BP is utilizing. 

Mr. Malone describes the process as erratic, somewhat convoluted, and at times dysfunctional. And also in your testimony you 

stated how complicated it is to determine whether the oil spill is 

true or the approximate cause for the damages that businesses are 

suffering, even when there is no evidence of oil in sight. Many of 

these businesses are on life support, and they wait on a determination of their eligibility to submit a claim against the $20 billion escrow, a fund that BP has established. 

Mr. Feinberg, I just have to ask you because I am drawn to the 

infamous and traditional Gulf Coast fisherman, Forest Gump, saying life is a box of chocolates. You don’t know what you are going 

to get. 

Now, my question to you is when will the people of the Gulf 

Coast, the business people, the workers, when will they get definite 

answers? Mr. Dow talked about a roadmap to recovery. When will 

they get such a specific from you or someone else about who is eligible, why they are eligible, when they are going to get paid, how 

much they are going to get paid? These are just some basic questions. The guesswork needs to be in—it needs to come to us, the 

guesswork. 

And so your process that you are going through I understand you 

got to go through this process in terms of getting to a point of answering some of these very, very valid and important questions, 

but when is the process going to be over? When are you going to 

be able to give some clarity and eliminate the guesswork? 

Mr. FEINBERG. I will answer that very obviously critically important question with three answers. 

First, I believe that the blueprint that I have established for 

emergency payments to be paid as quickly as possible should be 

finished and available this week. That is first. That is my goal. Secondly, I have no authority to fund the $20 billion escrow account. That is an agreement between the Administration and BP. 

My understanding is that they are working overtime to try and finalize the terms and conditions of that escrow account which will 

make the $20 billion available. I can’t give you a time except to say 

I think it is probably within a matter of weeks, but I don’t know. 

I am not privy to that escrow negotiation. 

Third, I suspect that I will be able to accept transition from BP, 

BP will get out of the claims business completely, the private 

claims business, and I should be up and running with the Gulf 

Coast Claims Facility the middle of next month. The middle of next 

month. A couple of weeks. And then I will assume all authority to 

process emergency claims. Emergency claims. In which the fishermen, the small business, the restaurant will not waive any rights 

they may have. They will simply decide if they are eligible, they 


jbell on DSK7SPTVN1PROD with HEARING
76 

will decide whether they want to participate in the program, and 

we will receive, if eligible and if they document their loss, up to 6 

months of emergency payments to help get them over this immediate emergency. 

Now, that—Mr. Chairman, if I may just add, I understand from 

all of these witnesses and from the members of this committee time 

is of the essence. This is a huge undertaking, and I am working 

as fast as I can, as diligently as I can, full time to get the Gulf 

Coast Claims Facility up and running, to get it funded so that 

these emergency claims can be made as soon as possible. 

Mr. RUSH. Are you considering the workers also in terms of—will 

they—the same guidelines apply to them also? 

Mr. FEINBERG. The same. I think BP frankly has done a much 

better job of this $230 million they have paid out, I think they have 

done a much better job of paying out worker claims, shrimpmen, 

fishermen, oyster harvesters than they have paying out small business and large business claims. I think that is clear from the testimony I have heard today and from the CPA in Alabama, and I 

think that is absolutely true. That is one reason why I have got to 

get up and running with this facility as soon as I can. 

Mr. RUSH. The Chair now recognizes the Ranking Member, Mr. 

Whitfield, for 5 minutes. 

Mr. WHITFIELD. Well, thank you again for your testimony, and 

Mr. Feinberg, I think all of us are delighted that you will truly be 

independent, you are not reporting to anyone. I think that is probably good for all of us to get a fair and equitable help on this problem. 

I notice that Mr. Daniels, Mr. Overton, and Mr. Brennan in their 

testimony placed a great deal of emphasis on damages caused by 

perception as opposed to damages caused by actual damage, and I 

have heard many people also blame the media for assisting in this 

misperception of the American public. And I don’t think any of us 

are surprised by that because the media is focused on being sensational and obtaining more viewers and more readers and frequently 

without any regard to the real impact it has on people. 

But my question to you would be since you are going to be up 

and running within a month hopefully, when you start processing 

claims from your perspective it won’t make any difference if the 

damage is caused by perception or by actual damage. Is that correct? 

Mr. FEINBERG. That is correct. Under the law of the Federal Pollution Control Act, which is a very important aspect of this whole 

process, actual physical damage to property is not required. So the 

issue for me—you are absolutely right on, Congressman. The issue 

for me is not whether perception that has an impact on tourism is 

compensable. The question really is going to be how far removed 

is a claim to be eligible. It is one thing if the perception harms a 

motel on the beach, even if there is no damage. It is another thing 

if the perception harms a motel 70 miles inland. 

Mr. WHITFIELD. Right. 

Mr. FEINBERG. And I am going to decide, I take no advanced position on this, but that is where—I think that is what Congressman 

Stearns was getting at a little bit. 

Mr. WHITFIELD. Uh-huh. 


jbell on DSK7SPTVN1PROD with HEARING
77 

Mr. FEINBERG. Where you draw that line on eligibility. 

Mr. WHITFIELD. And that is going to be one of the obviously key 

points that you are going to have to decide on. It kind of reminds 

you of the old Pause Graff case in law school. 

Mr. FEINBERG. You remember. That is right. 

Mr. WHITFIELD. But on the—Mr. Dow, you talked about a $500 

million fund to assist. Now, would this money—is it your idea that 

this money for emergency marketing would also come from BP? 

Mr. DOW. Yes, I definitely believe it should come from BP, and 

the question whether it can come from this fund or additional 

amount but as I stated, my hope clearly is that this can mitigate 

the damages phenomenally to the tune of 7 to $8 billion. Just as 

all the money was spent to cap that well, we ought to cap the damages now. No one would say let the oil run forever and let us just 

pay the people afterwards for their damages. They said, stop it, 

and we have to do the same thing. 

So I believe it should come from BP. Mr. Feinberg is—may be between a rock and a hard place, can that money come from the fund. 

I don’t know. 

Mr. WHITFIELD. Do you have authority to pay out money for marketing? 

Mr. FEINBERG. I don’t think. Again, I am not privy to that negotiation involving the escrow account, but I don’t think under the 

terms of that escrow account $500 million for marketing could 

come out of that $20 billion. Now, that doesn’t mean there aren’t 

other sources for it, but I don’t think, I am not an expert on this, 

but I don’t think it could come out of it. 

Mr. WHITFIELD. If I come in for emergency payment from you 

and you give me emergency funds, will I be required to sign a release for legal liability issues? 

Mr. FEINBERG. No. 

Mr. WHITFIELD. Will I ever be required to sign a legal release? 

Mr. FEINBERG. You will be required to sign a release down the 

road only if you come back to the Facility and seek a final payment 

for all of your then damage and projected future damage. Only 

then would you have to sign a release. Not as part of these emergency funds. 

Mr. WHITFIELD. Thank you. 

Mr. RUSH. Ms. Castor is recognized. 

Ms. CASTOR. Thank you, Mr. Chairman. 

Mr. Dow, since the April BP blowout in the Gulf, have you seen 

these TV ads that BP has been running, polishing their corporate 

image? 

Mr. DOW. If you own a television set, you cannot not see them. 

I have seen them, and I have seen them, and it just points out to 

me the very clarity that BP truly understands that changing perception and getting the word out is critical. I think the same thing 

has to be done for the citizens, for the businesses of the Gulf Coast. 

It is critical, and it can stem the damages phenomenally. 

Ms. CASTOR. I think you said it well. If you own a TV, you have 

seen these incessant ads by BP. Oftentimes not very informative, 

just—they remind me of political campaign ads, frankly, and you 

can’t pick up a newspaper. 


jbell on DSK7SPTVN1PROD with HEARING
78 

Mr. Malone, I am sure you seeing in Alabama what we see in 

Florida. Is there a day you pick up the newspaper you don’t see 

these full-page ads? 

Mr. MALONE. That is true, and I can tell you that we have met 

with some of the BP officials that you see in those ads, particularly 

the gentleman that represents he is in charge of claims for BP. We 

met as early as May the 11th in my office with our mayors and 

other leading people, some of our CPAs, in a proactive approach to 

try to establish an expedited claims process. Lots of promises were 

made that day on May the 11th, and I don’t mean to be flippant, 

but in our community BP has come to stand for broken promise. 

Ms. CASTOR. Uh-huh. 

Mr. MALONE. And that is what we have seen one after another 

after another. In fact, they issued a press release around the middle of June where they said they had adopted an expedited claims 

process for business claims. I read you the figures awhile ago. It 

has not come true. 

Now, Mr. Feinberg is right. The individual employee can walk in 

a claims office and walk out with a check for 2,500 or $5,000 if he 

has got his W–9s from last year or whatever—minimum documentation. But when you ask a business to submit 2,200 pages of 

documentation before your claim would even be considered, that is 

onerous. And that same business submitted their claim in May, 

mid-May, they have yet to receive less—more than 10 percent—— 

Ms. CASTOR. Uh-huh. 

Mr. MALONE [continuing]. Of the claims they have presented 

since May to this date. These claims, they are referred to as large 

claims. They differ on whether that is over 20,000, over 50,000, depending on who you talk to. They are sent to a forensic account for 

examination before they ever get in consideration. That takes 

weeks and weeks to do. And as I said in my recent comments, to 

me is the analogy of everyone submitting their income tax returns, 

and if you do a refund, you can’t get your refund until a full audit 

is completed. They are doing a full audit before they are writing 

a single check to our businesses, and I am not always talking about 

the million dollars businesses. They guy who rents beach umbrellas 

on the beach. 

Ms. CASTOR. Uh-huh. 

Mr. MALONE. Submits $60,000 claims. That is his whole year, 

that is—— 

Ms. CASTOR. Don’t you think it is making folks mad because they 

understand how much this media campaign is costing BP? I mean, 

do you see the same thing in Mississippi, Mr. Daniels? Do you see 

all these ads on the TVs and TV commercials? 

Mr. DANIELS. Yes, without a doubt we do, and actually as a 

broadcaster we sell advertisement to BP. That is the paradox here. 

Ms. CASTOR. Uh-huh. 

Mr. DANIELS. From a broadcasting standpoint it is not necessarily the ads. It is the reassurance. 

Ms. CASTOR. Uh-huh. 

Mr. DANIELS. And if the Federal Government would do one thing 

that is reassure by way of Mr. Feinberg’s claims but especially 

when it comes down to saying that the seafood is safe. What the 

rest of the world needs to hear and especially the Nation needs to 


jbell on DSK7SPTVN1PROD with HEARING
79 

hear is that it is oK to go in the water and that it is safe and that 

it is being monitored. 

Ms. CASTOR. Right. 

Mr. DANIELS. I—— 

Ms. CASTOR. The—we—I know someone had made an inquiry of 

BP about how much money they have spent on these ads, and they 

refused to provide that information, so, Mr. Chairman, I would like 

to ask unanimous consent that this committee seek from BP the 

amount of money that they have spent on their corporate imagepolishing campaign since the BP blowout. 

Mr. RUSH. The Chairman will consent to the gentlelady’s request 

to direct staff to address a letter to BP specifically with that question in mind. 

Ms. CASTOR. Thank you, Mr. Chairman, very much, and quickly 

in my remaining time, Mr. Feinberg, this—we have got to be able 

to bring our local government and CVB industry state claims as 

part of your $20 billion escrow. How do we do this? Do we need 

to lobby the Administration and BP to have that included in this 

escrow agreement that is going to be coming out in the next week 

or two? 

Mr. FEINBERG. First of all, the government claims are included in the $20 billion escrow. They are just not part of my watch. 

Ms. CASTOR. Uh-huh. 

Mr. FEINBERG. Out of that 20 billion will come not only the 

claims that I pay but all government claims will come out of that 

$20 billion, but the way the understanding is reached between the 

Administration and BP government claims are the direct responsibility of BP, even though they are coming out of the $20 billion. 

Ms. CASTOR. So what is your opinion? Don’t you agree that you 

and your experts will—are competent, in fact, expert enough to sort 

through those very difficult and detailed claims? 

Mr. FEINBERG. If it is the will of the parties to the agreement, 

the Administration and BP, I am glad to take—— 

Ms. CASTOR. So it is up to them? 

Mr. FEINBERG [continuing]. On that—as if I don’t have enough 

problems, but I would be glad to take on that assignment, but, 

again, not only watch at the current time. Nor the moratorium 

claims either. 

Ms. CASTOR. Thank you. 

Mr. RUSH. The Chair recognizes Mr. Barton for 5 minutes. 

Mr. BARTON. Thank you, Mr. Chairman. Most of my questions 

are going to be towards Mr. Feinberg simply because he has got a 

huge undertaking, and we don’t get him before our committee too 

often, but I want to tell you other gentlemen, I listened to your testimony in my office. I clearly understand the issues that you are 

dealing with and clearly support that you should be compensated, 

and I am especially pleased to know that there is still a Brennan 

involved with Brennan’s. That is comforting to know since I am a 

frequent visitor to your restaurants when I am in New Orleans. 

My first question to you, Mr. Feinberg, oh, and let me say, I do 

support that there be a compensation fund. I do support that BP 

pays most, if not all, of the money that goes into that fund, and 

I do support that it be, as I said, fairly, quickly, and transparently 

paid out to the people that have the claims. 


jbell on DSK7SPTVN1PROD with HEARING
80 

My first question to you, Mr. Feinberg, is who do you report to? 

Do you report to the President, do you report to the Secretary of 

the Treasury, the Chairman of the Federal Reserve? Who exactly 

is your boss? 

Mr. FEINBERG. I don’t have a boss on this assignment. I think 

the fair answer, Congressman, would be that I report to the people 

in the Gulf. Both the Administration and BP frankly don’t want to 

get near me once this program is up and running, and they want 

to—they are going to reinforce—I am totally independent. 

Mr. BARTON. You did an excellent job in the other fund that you 

administered, but that was different. That fund was approved by 

the Congress, there were clear reporting standards. This is in a 

unique fund. 

Mr. FEINBERG. It really is. 

Mr. BARTON. There apparently is no precedent for it. Doesn’t 

mean, again, that we don’t need it, but if my understanding is correct, now that you have been either asked to serve or appointed by 

the President, he does not have the power to remove you. Is that 

correct? 

Mr. FEINBERG. I think that clearly is correct. Clearly he doesn’t 

have the power. 

Mr. BARTON. All right. Do you have to personally approve each 

claim to be paid? 

Mr. FEINBERG. As a theoretical matter, the answer is yes. Now, 

of course, there is going to thousands of claims, and I am going to 

have a process in place, an infrastructure where problematic claims 

will come to me. Hopefully we will consistently apply the formulas 

and there won’t be a necessity for me to look at each and every 

claim. 

Mr. BARTON. When a claim is paid, will your signature be on the 

check? 

Mr. FEINBERG. You know, I don’t know the answer to that question. 

Mr. BARTON. All right. 

Mr. FEINBERG. That is a good question. 

Mr. BARTON. Where will the funds be deposited that you allocate? Will they deposit in the U.S. Treasury in Washington, in a 

branch office of the Federal Reserve, in a private financial institution or institutions? 

Mr. FEINBERG. One, I don’t know the answer to that question because I am not privy to the escrow negotiations between the Administration and BP. Two, I have urged both of the escrow negotiators to deposit at least some of the money in local, regional institutions in the Gulf that have expressed a real desire to benefit financially from this. 

Mr. BARTON. Who makes the decision where—what depository 

institution is to be used? 

Mr. FEINBERG. Again, that would be between the Administration 

and the fellow—and the Administration that I have been consulting 

with is Tom Perrelli, the Associate Attorney General, and at 

BP—— 

Mr. BARTON. But you have no definitive role in making that decision? 

Mr. FEINBERG. None. 


jbell on DSK7SPTVN1PROD with HEARING
81 

Mr. BARTON. You are purely—make the decision what the protocol is for claims, the claims process, and the decision making protocol for making decisions on the claims and then being sure that 

there is adequate follow up and documentation. Is that a fair statement? 

Mr. FEINBERG. That is correct, and I want to make sure the 

checks don’t bounce, but that is absolutely accurate. 

Mr. BARTON. OK. What reporting requirement, if any, does the 

fund that you are going to oversee have to report to the Congress 

on dispersion and operation of the fund? 

Mr. FEINBERG. It will be expressed reporting requirements that 

all interested parties, starting with the Congress, will have information, whether it is monthly or biannually, frequent reporting as 

to how the claims are being processed, what the statistics show, 

our claim rate, et cetera. 

Mr. BARTON. What transparency will there be for the public, i.e., 

will there be a public Web site that shows claims paid and who received the money and perhaps even pending claims and the decision process by which a decision is made on a claim? 

Mr. FEINBERG. Yes. Now, we have got to be careful as we were 

with the 9/11 fund that we don’t disclose under the umbrella of 

transparency individual names or private information, proprietary 

business information, but I am completely in agreement with you, 

Congressman, in your question that we have got to have a transparent database from which people can review how we are doing 

and what our strengths and weaknesses have been. 

Mr. BARTON. I have one more, Chairman, one more question, Mr. 

Chairman. I know that my time has expired. 

You in answer to the gentlelady from Florida’s question, you indicated that other decision makers will have decision making authority over this $20 billion fund and that your authority is going 

to be restricted to certain dispersements. Do you make decisions on 

compensation for oil and gas workers who have lost their jobs? 

Mr. FEINBERG. Yes. Not the moratorium rig workers, though. 

Mr. BARTON. I understand that. For fishermen—— 

Mr. FEINBERG. Yes. 

Mr. BARTON [continuing]. And, you know, seafood—— 

Mr. FEINBERG. All individuals, all private businesses, no government claims. 

Mr. BARTON. OK. So you are—the government claims the decision maker is—— 

Mr. FEINBERG. BP. 

Mr. BARTON. Well, they would—I wouldn’t think we would allocate to them—what government official would oversee their decision? 

Mr. FEINBERG. No. I mean I think the government official will 

send a claim for reimbursement, for cleanup, or for lost tax revenue 

or whatever to BP for processing. That is currently the plan. 

Mr. BARTON. Mr. Chairman, do we—will we have the ability to 

ask written questions for responses from the panel? 

Mr. RUSH. The Chair will address that issue once—— 

Mr. BARTON. I know my time is expired, and I appreciate the 

Chair, and I thank you for your answers, Mr. Feinberg. 


jbell on DSK7SPTVN1PROD with HEARING
82 

Mr. RUSH. The Chair now recognizes Ms. Schakowsky for 5 minutes. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman, and I want to 

thank all the witnesses. 

You know, I was listening to and looking through all the testimony here, and I think that it would be good, for example, for Mr. 

Daniels’ questions, he asked a number of questions, to be included 

among those that we present as our own questions. I think they 

are very important and that he deserves those answers, and so that 

we should include that in the questions. 

Mr. RUSH. They will be included in the written questions that we 

would submit to the witnesses. 

Ms. SCHAKOWSKY. Thank you. I also wanted to ask about the 

suggestion, I think it was Mr. Dow’s suggestion, that the government incentize a—do an incentive for people to do tourism in the 

region. Was that you or Mr. Malone? 

Mr. DOW. It was me. 

Ms. SCHAKOWSKY. OK. 

Mr. DOW. It was part of three points of $500 million to get the 

perception, get the right information out, and incentize travel. 

Ms. SCHAKOWSKY. What—exactly what does that mean? What is 

incentize? 

Mr. DOW. There are several things that could be done. They have 

been done in the past. Commerce Department runs trade missions. 

There could be incentives where they don’t charge for those missions to get more people here. There is opportunities to give meal 

tax deductions or some tax—things done. There are many things 

that have been done in the past throughout areas that will give 

people an advantage by going to an area and an incentive to do so, 

and we have got a list of them in that roadmap for recovery, 

ma’am. 

Ms. SCHAKOWSKY. Thank you. I think, Mr. Feinberg, you may 

have answered this, but Mr. Malone said that he has personally 

spoken with a large number of business owners who have yet to 

see a single payment, particularly the larger ones. Are you suggesting that they re-file when you are up and running or no? 

Mr. FEINBERG. They won’t have to re-file at all. We will assume 

responsibility for those claims and accelerate them as quickly as 

possible. As Mr. Malone has pointed out to me and Governor Riley 

in Alabama has pointed out, we don’t want to reinvent the wheel 

by requiring people to re-file. 

Ms. SCHAKOWSKY. OK, and Mr. Feinberg, Mr. Overton was talking about the damage that has been done even though there is no 

oil at all. Is that still true? At his resort. This is clearly on the 

water, and so is his business eligible then for compensation from 

the fund? 

Mr. FEINBERG. His business is eligible insofar as he has a claim 

where there has been no visible damage to the beach. He would 

have—that is not the issue in that case. What I don’t know from 

that statement is how close is his business to the beach, how dependent is it on the beach or fishing or sightseeing or charter boats 

or what have you. So it is the facts surrounding the overall claim 

that are going to be critical in deciding eligibility in something like 

that. 


jbell on DSK7SPTVN1PROD with HEARING
83 

Ms. SCHAKOWSKY. Yes. This perception question is really hard to 

get your arms around, but maybe the biggest source of damage 

long term, am I right, Mr. Brennan? Did you want to comment on 

that? 

Mr. BRENNAN. Well, no. I think the best example is to look at 

Hurricane Katrina and the impact on New Orleans, the perception 

of the city as a damaged brand, and I think you as a member of 

Congress understand perception. We have to overcome that. It is 

just like BP is running these ads trying to change the perception 

of their company. We need to do a similar thing to change the perception of the hospitality and tourism industries along the Gulf 

Coast. 

Ms. SCHAKOWSKY. Whose responsibility do you think, Mr. 

Feinberg, or is it everybody’s to proactively address this issue? 

Mr. FEINBERG. Well, I think it is BP’s responsibility. I think BP 

has done some things, nothing to do with me. They clearly haven’t 

done enough. They have spent some money, I believe. From what 

I have read in the newspapers they have spent some money promoting tourism in the Gulf but others know better than I about 

that. 

Mr. DOW. I will address that. BP initially spent $70 million, $25 million for the State of Florida, $15 million for the three other 

States. Requests have been denied by the Governor of Florida and 

by about ten Gulf Coast communities—not denied. They have not 

received any other information. The Governor of Florida was denied, the other communities have not heard anything back, and the 

challenge is it is $70 million, and as I stated earlier, very little of 

that has actually got to marketing. I think one of the most important things this committee—that BP could do is isolate the funds 

and say, let us get experts working on this, and let us be sure they 

do that job, and I believe the gentleman to my right could do a terrific job overseeing that because he has proven himself. Thank you. 

Ms. SCHAKOWSKY. Yes. I thank all of you for your efforts. Mr. 

Feinberg, you—and good luck on all your work. 

If I could, Mr. Chairman, just a point of personal privilege, I 

have spent vacations many summers on the Pan Handle of Florida, 

and these sugar white sand beaches were just, of course, the lure. 

And the notion that the beaches would be spoiled but also that the 

reputation of this area would be hurt is just so painful. I can only 

imagine how it is to all of you. 

So I thank you for being here. 

Mr. RUSH. Mr. Stearns is recognized for 5 minutes. 

Mr. STEARNS. Thank you, Mr. Chairman. Mr. Feinberg, the question would be who is going to pay the salaries of the employees 

that you hire to implement this program and disbursement the of 

$20 billion? 

Mr. FEINBERG. BP. 

Mr. STEARNS. BP. And how many employees do you think that 

you will expect? Can you extrapolate from your 9/11 experience? 

Mr. FEINBERG. Well, with 9/11, which was a relatively, thank 

goodness, a relatively modest, clean cohort—— 

Mr. STEARNS. Right. 

Mr. FEINBERG [continuing]. We had 475 employees. BP in paying 

out $230 million so far has hired about 1,500 at 35 claims offices 


jbell on DSK7SPTVN1PROD with HEARING
84 

throughout the Gulf Region, and I think seven in Florida. I am now 

putting together a budget for the Gulf Coast Claims Facility. I 

think we probably wouldn’t need that many people, but I will know 

more about that in the next week or two. 

Mr. STEARNS. I understand. So it is roughly going to be 1,500 or 

less, and—— 

Mr. FEINBERG. Correct. 

Mr. STEARNS [continuing]. These employees will be paid by BP. 

Mr. FEINBERG. Right. 

Mr. STEARNS. I mean, by the BP funds. 

Mr. FEINBERG. That is correct. 

Mr. STEARNS. And the salary structure, is this going to be something like the private sector or the government—the private sector 

or the government sector? 

Mr. FEINBERG. Again, the Deputy Administrator of the fund, 

Camille Biros, who is putting—setting up the budget, she would 

have a better handle on that, but I can certainly get you that information. 

Mr. STEARNS. In 9/11 did you use—what standard did you use for 

salaries? 

Mr. FEINBERG. In salaries we used—Price Waterhouse had a contract with the Department of Justice—— 

Mr. STEARNS. OK. 

Mr. FEINBERG [continuing]. That used largely private salaries. 

Mr. STEARNS. OK. I have here I think it is a four-page claim 

form that BP used for commercial fishermen. I notice on their form 

it does not have a notary public on it, and it just—the people can 

fill it out. Do you intend to use the same form, or are you going 

to come up with your new form? 

Mr. FEINBERG. New form. 

Mr. STEARNS. New form. OK, and I notice that with BP that 43 

percent of the claims are still waiting payment. So that means are 

you going to take over and inherit all those 43 percent, and does 

that mean that these people who supposedly haven’t got claims, 

lack of information, are you going to follow up on that? 

Mr. FEINBERG. Yes. We will not require people to re-file. Now, 

that 43 percent figure, I am not sure that figure is accurate. 

Mr. STEARNS. OK. 

Mr. FEINBERG. Because BP apparently has counted as a claim 

somebody who makes an inquiry and gets a claim number and 

never fills out the form. So I am not sure. I got to get my hand 

on—I got to get a handle on that data. 

Mr. STEARNS. OK. Let me just give you a statement and ask if 

you agree with this. Do you think everybody should get reimbursed 

no matter where they are located if they can prove loss of income 

because of this spill? 

Mr. FEINBERG. No. No. 

Mr. STEARNS. Because, you know, a family could say I am in 

Tennessee, they are going to go to Pensacola, they say, we are not 

going to go to Pensacola, we are going to go to Tampa, and then 

the gas station on the interstate could say, well, golly, I just didn’t 

get that family to Tennessee and make that claim. So, I mean, how 

are you going to work this so that it is a fair thing? 


jbell on DSK7SPTVN1PROD with HEARING
85 

Mr. FEINBERG. I have to listen to these experts that are at this 

table like Mr. Malone, and Mr. Malone in a very careful presentation laid out for me sort of the proximity, the zone where there 

is the greatest direct impact and said, Mr. Feinberg, in that zone 

in Alabama that is the zone that is the most directly impacted. 

Tourism. These are the restaurants, the motels, the other sites, 

and with input from experts I will try and answer that very question as to what is the proximity where it is most likely that a claim 

should be deemed eligible. 

Mr. STEARNS. Mr. Feinberg, under 9/11 did you have anybody, 

accounting firm come in and look at what you did? Was there anybody not necessarily that you reported to but somebody sort of like 

we have here, Inspector General, GAO, can go into a government 

agency and sort of tell members of Congress what is happening. 

Did you have that on the 9/11 commission? 

Mr. FEINBERG. Constantly. The Office of Management and Budget. 

Mr. STEARNS. OK. Now, you are not going to have that here. 

Don’t you think you should—you would even want to have an Inspector General or a claims—or somebody that could oversee this 

and report back to Congress on what you are doing instead of you 

reporting back on what you are doing yourself? Don’t you think, I 

mean, I would think I would like to have somebody checking up on 

me just to make sure that I get the cross the dots—— 

Mr. FEINBERG. I love that idea. I think we are going to do that. 

Now, we will have a separate question related. What about—I have 

heard this from various Congressional committees. What about 

fraud? Right. What about the problem of fraud? Not so much auditing. It is just fraudulent claims. 

Mr. STEARNS. Right. 

Mr. FEINBERG. The Department of Justice, Criminal Fraud Division, is working with us directly. 

Mr. STEARNS. You will refer them to the Department—— 

Mr. FEINBERG. Absolutely will have an internal retained antifraud expert working within the facility to audit and check for 

fraud, but I absolutely have no problem with transparency in the 

form of Congressional oversight or some sort of regular reporting 

by an independent person checking on what we are doing. 

Mr. STEARNS. Mr. Chairman, I think what Mr. Feinberg is mentioning is something that this committee or some committee in 

Congress should help him with this legislation that allows him to 

report to or they provide sort of an Inspector General type of accounting here. This is a huge amount of money, $20 billion, and I 

think the American taxpayers obviously would like some kind of report, and obviously we have great confidence in Mr. Feinberg, but 

I think at the same time he wouldn’t mind having somebody to 

counterbalance and show that everything is going—because this is 

going to be 1,500 employees that are working in a way that is— 

he can’t control completely. So it is just a thought. 

Thank you, Mr. Feinberg. 

Mr. RUSH. Mr. Stearns, your point is well taken, and it will be 

taken under consideration by this committee. 

Now, we recognize Mr. Green of Texas, recognized for 5 minutes. 


jbell on DSK7SPTVN1PROD with HEARING
86 

Mr. GREEN. Thank you, Mr. Chairman. I know you read a statement earlier, and I would like to ask this question of Mr. Feinberg. 

We know BP has paid about over $200 million in emergency payments, and the committee has heard complaints about BP’s claims 

process, and Mr. Malone describes the process as erratic, somewhat 

convoluted, and at times dysfunctional. I think that could probably 

apply to Congress in some cases. 

But, Mr. Feinberg, I was hoping if you could comment on how 

BP’s processed these claims so far, specifically what problems have 

you identified. 

Mr. FEINBERG. I think BP deserves some credit here. Most of 

these mass disasters that I have been involved in over the years, 

when I get involved, I start sort of from scratch. There is nothing 

in place, and we have to build from the beginning. While I am 

rushing to set up this facility in just a few weeks, in August, BP 

continues to pay claims. 

Now, the problem is that as my fellow witnesses have pointed 

out accurately, BP is quick to pay the individual wage loss claims. 

They are quick to pay claims where there is physical destruction; 

oil on the beach or flowing somewhere injuring property, destroying 

property. Where they are reluctant or where they have less assuredness is business interruption claims, lost profits, lost business, calculating lost business, corroborating lost business, and 

that is why I think the gentlemen that are here today testifying 

are frustrated by BP, yes, they paid $230 million, but shouldn’t 

they be doing more on the business side? 

And I appreciate that, and when I set up this facility ASAP we 

will focus on those business claims. 

Mr. GREEN. OK, and so your testimony earlier that the claims 

will be actually—what BP is doing—you are monitoring those, and 

they are coming to you now instead of BP directly. 

Mr. FEINBERG. They will be in a matter of weeks, and I will accelerate the payment of those claims. 

Mr. GREEN. OK, and how do you plan to staff a Gulf Coast 

Claims Facility? 

Mr. FEINBERG. We will keep the people that are there now. We 

will train them in the new facility. We will keep those that we like. 

We will hire additional local, local vendors and local people in the 

four-state, five-state area, as needed, and we will set up this new 

infrastructure in a matter of weeks. 

We are doing it now actually. 

Mr. GREEN. Mr. Malone, do you have any response to that? I 

know compared to Louisiana and Mississippi and Alabama and obviously the upper, the Gulf Coast of Florida, upper coast, have you 

seen the payments getting better and more response? 

Mr. MALONE. As Mr. Feinberg said, the small payments to the 

individuals have been fairly routine matters. The payments to businesses that are in excess of $50,000, $100,000, and up, excess of 

$1 million have been extremely difficult to obtain. 

Mr. GREEN. Has it been because of documentation? 

Mr. MALONE. It is very sporadic. There have been some spells 

where they have written some companies some large checks rather 

quickly. Other companies have been waiting nearly 3 months for 

their first check. 


jbell on DSK7SPTVN1PROD with HEARING
87 

Mr. GREEN. OK. Well, coming from where I am and obviously we 

were concerned about Galveston a couple of weeks ago, but not that 

we don’t have tar balls on a regular basis but that wasn’t the issue 

and I know in southeast Texas but my concern, too, is if each of 

you could comment not only on the BP’s response but also the impact of the moratorium, the hard 6-month moratorium we are seeing on whether it be Alabama, Mississippi, or Louisiana. 

And what are you seeing on that, and those folks except for the 

workers, they probably are allowed compensation. If you are laid 

off of a rig, could you comment on that? 

Mr. MALONE. Are you talking to me or Mr. Feinberg? 

Mr. GREEN. Yes. 

Mr. MALONE. I am in tourism, sir. I am not familiar with what 

is going on in the oil and gas industry. I know that our workers 

who are laid off get compensated. They go to the State Unemployment Office, and what that doesn’t pay, then they get money from 

BP. I am just not familiar with the oil and gas industry and what 

is going on with their workers. 

Mr. FEINBERG. If a rig worker was laid off as a direct result of 

the moratorium, BP agreed to set aside $100 million, not part of 

the $20 billion, a separate fund of $100 million just for moratorium 

rig worker claims. 

Mr. GREEN. Has that been pretty widely advertised, particularly 

in Louisiana? My colleague, Mr. Melancon, you know, that we are 

doing it, because I have folks in my own district who work offshore. 

I have not heard, but the fear is that they are not going to be able 

to continue to work. 

Mr. FEINBERG. I think it has been fairly well publicized, and BP is now deciding where to deposit that $100 million, which will be 

earmarked only for unemployed moratorium rig workers. 

Mr. GREEN. I know I am out of time. Do you know how much of that $100 million has been expended? 

Mr. FEINBERG. I don’t think any of it yet. I don’t think it has 

been deposited yet to pay out those claims. 

Mr. GREEN. OK. Thank you, Mr. Chairman, for your patience. 

Mr. RUSH. Dr. Gingrey is recognized for 5 minutes. 

Mr. GINGREY. Mr. Chairman, thank you very much. We have 

spent most of the morning listening to our witnesses and asking 

questions and of course, most of the questions and the testimony 

is around the issue of how we are going to get paid. And, of course, 

everybody looks at Mr. Feinberg, of course. He has got a tremendous job and responsibility in seeing that that is done in a fair and 

equitable way. And it is important, and you brought out the fact 

that time is of the essence. I think Mr. Feinberg may have said 

that. 

The others of you have said, well, gosh, you know, I think Mr. 

Overton talked about Florida and even though there are no tar 

balls washing up on the beaches, the effect on the economy because 

of perception. And we talk about individuals, rig workers, and fishermen, and people that, you know, have these direct claims that 

are going to get processed real quickly, but the small business men 

and women across the country, the husband and wife that own the 

Motel 6, you know, maybe 100 miles, 70 miles I think was mentioned, from the coast that are suffering because they depend on 


jbell on DSK7SPTVN1PROD with HEARING
88 

when all those motels along the coast are full in peak seasons, 

thank goodness they call up their friends 70 miles away and say, 

hey, have you got a vacancy. 

I mean, how many of us know when we traveled to Florida years 

ago with our parents that you would just drive miles and miles and 

miles trying to find—or you saw these blinking neon signs that 

said, ‘‘no vacancy,’’ and you would have to go 70 miles inland. 

So, you know, there is a huge problem, and Mr. Feinberg, it probably extends a lot further than we realize today as far as economic 

losses. I want to real quickly, you know, Rahm Emanuel, the Chief 

of Staff of the President, was credited with making a statement, 

‘‘Well, let no crisis go to waste.’’ 

Now, from the political perspective on our side of the aisle we 

would say that was—that is deplorable, but from a policy statement, if that is what he was talking about, then, in fact, I would 

agree that we should not let a crisis go to waste, and we should 

make an attempt to make lemonade out of these lemons, this huge 

lemon of the oil spill in the Gulf of Mexico. 

And, you know what I think should be done, and I would love 

your opinion on it, the President’s state of the union address said, 

you know, we are going to take $30 billion of the TARP money, the 

unspent TARP money. We gave—forced, in fact, the nine or ten 

largest financial institutions in the country to take that money 

even against their will, but it has been paid back, not completely, 

but to a large extent, and the President said, let us take $30 billion 

of that money and let us give it to—let us recapitalize the small 

banks and help them make loans because small businessmen and 

women can’t borrow the money that they need to stay afloat. 

Wouldn’t this be a great opportunity for the Federal Government 

to listen to the President and to actually follow through on this and 

get money available to small community banks, not just in Florida, 

all along the Gulf Coast, indeed, Georgia has 120 miles of coastline, 

and Florida and Georgia are two of the States that are seeing 

banks close every week on Friday, you know, or Saturday morning. 

You look to see, you know, which community bank is going under, 

and all these jobs are lost as a result of it. All these small Mom 

and Pops that invested 5, 10, 15, $25,000 to start that bank would 

be part of the start up, raise $15 million or whatever. 

That money is totally wiped out. This would be a great opportunity to turn lemons into lemonade and to get that money in the 

hands of these small banks so that these businesses that are waiting on Mr. Feinberg to adjudicate their claims would have money 

to stay in business. 

I would like—Mr. Feinberg, we will start with you, but I know 

this is not you all’s area of expertise, but you all are bright men, 

and you know what I am talking about, and we need to get this 

conversation going. 

Mr. FEINBERG. Am I safe if I say worthy of consideration? 

Mr. GINGREY. How about damn worthy of consideration? 

Mr. Dow. 

Mr. DOW. Yes. Mr. Gingrey, I think it is an admirable thought. 

When you talk about small businesses, you look at the Gulf Coast, 

it is probably almost all small businesses. New Orleans has big hotels and big—but if you look at this Gulf Coast, this is made up 


jbell on DSK7SPTVN1PROD with HEARING
89 

of people who have relationships with these small banks. People 

know they have got their records and all that versus the larger 

banks, and I think it is all small business. 

And the other thing, I also think this is a phenomenal opportunity. There will be another hurricane, there will be another tsunami, there will be another earthquake, and this is an opportunity 

for us to set in place how we deal with these disasters so we don’t 

have to reinvent the wheel, and that is why I think this marketing 

fund we talked about is so critical and that we can use this over 

and over again. 

But this is a great opportunity for the government to learn and 

to really set a process for the future. 

Mr. GINGREY. Well, and I see my time is running out, Mr. Chairman. I don’t want to extend too long here, but clearly, the President called for this to be done, it hasn’t been done. This Financial 

Regulatory Reform Bill, the reason so many of us were opposed to 

it, it did nothing for Fannie and Freddie, but as far as this provision for some of that TARP money to the smaller community 

banks, it never happened. 

But it is not too late, and we need to really look into this closer, 

Mr. Chairman. I hope we have an opportunity to discuss it further. 

Mr. Chairman, I know some of the witnesses want to respond to 

this. It is up to you whether or not—I will shut up, and you can 

let them talk if they—you give them time. 

Mr. RUSH. Witnesses have a response? Yes. 

Mr. DANIELS. I must say I think it is a great idea, but I would 

be remiss if I did not impress upon you that this is still a liquid 

situation. Every day there are those of us on the Mississippi Gulf 

Coast who are praying that the cap stays. There is still oil in the 

water, and granted, the discussion of payment is excellent. Your 

idea is excellent, but BP doesn’t have enough money when we talk 

about perception over the years if the oil continues to come. 

So I think the idea of utilizing the community banks is great, but 

what the people on the Gulf Coast needs is reassurance. What they 

need, and only the Federal Government can give this, by the way, 

is the reassurance that it is safe. The reason—no matter how much 

advertisement BP does or we do in the tourism industry, if you 

don’t think it is safe to go to the beach, then you are not going to 

take your kids. 

So you esteemed gentlemen are the ones who are in charge of the 

DMR, OSHA, the DEQ. You guys need to have at BP’s expense an 

army of scientists, biologists, and marine biologists there assuring 

the rest of the world that it is oK, and first, assure them that there 

is no more oil in the water. 

So I think you have two components. I think Mr. Feinberg and 

BP with $20 billion will not be enough if we are still discussing 

this very fluid situation next year. 

Mr. RUSH. Mr. Daniels, we are going to move on because we have 

other members who want to question the witnesses. 

Mr. Gonzalez is recognized for 5 minutes. 

Mr. GONZALEZ. Thank you very much, Mr. Chairman. My question will go to Mr. Feinberg, and I have had the benefit of hearing 

your testimony in the Judiciary Committee, but I wasn’t able to 

ask a question. I want to ask it at this time. 


jbell on DSK7SPTVN1PROD with HEARING
90 

At the time of your testimony last week before Judiciary, that 

same morning Joe Scarborough, who is from Pensacola, was broadcasting his show from Pensacola and the beach, and he had a State 

Senator, and the State Senator made a couple of comments, and so 

I will build my questions on the comments. 

The first one was, look at our beaches. They are beautiful, pristine, everything is fine. We are not getting people here. So it is the 

perception, and you have referred to this in the past, and I apologize. I wasn’t here for all the testimony, and that is Charlie Gonzalez is thinking of going to Pensacola, but I am afraid there is oil, 

so I don’t go, no one is at the hotel, the motels. That hotel, motel 

owner is a victim of some perception. It may be false. How are you 

going to handle that claim? 

What was disturbing to me was that the State Senator’s comment was, right now we have been dealing with BP on claims. Can 

you imagine now we are going to have to deal with the Federal 

Government? And you have already made it very clear that you 

don’t—that is not your boss, neither is BP. 

But would you say to that State Senator? Why is it that this Gulf 

Coast Claims Facility is superior to what was in place prior to the 

agreement? 

And the second question is the one that I would like for you to 

answer if you don’t mind and then go to the perception of the 

beaches being spoiled and such. 

Mr. FEINBERG. I would like to think that with the experience 

that I would bring and the confidence that the President and BP 

had in selecting me to do this based on my prior work in processing 

mass disaster claims, BP is an oil company, not a claims facility, 

I would like to think that we will be able much more efficiently, 

much more effectively to process claims in a way that will engender 

the support of the people that I am trying to help. 

All the talk in the world won’t replace payments, and a sense 

that people have and businesses have that there are actually 

checks being paid to eligible Claimants. So the proof will be in the 

result in the next month, and I am hoping with my fingers crossed 

that the President’s confidence in me and the Administration’s confidence in me and BP’s confidence in me will result in the people 

in the Gulf having confidence in me so that the program is working 

and that it is credible. 

Mr. GONZALEZ. And to the second question, and I don’t know— 

not to pre-judge any claims, but what do you do if the perception 

was that there was oil on the beach when there wasn’t, but the 

business has suffered? 

Mr. FEINBERG. You cannot need oil on the beach to have a compensable claim. I want to emphasize this. Florida law may require, 

I don’t know. Attorney General McCollum has a different view and 

probably the correct view, but you don’t need oil on the beach, you 

don’t have to be unable to fish. Perception is compensable. 

Now, the problem that Congressman Stearns and others pose, 

well, what is the proximity requirement? What is the dependence 

on that beach or on fishing or on shodder boats or sightseeing? I 

will have to draw some lines on eligibility. The lines will be based 

on proximity to the beach or to that natural resources, fishing or 

what have you, the industry, fishing, crabbing, oyster harvesting is 


jbell on DSK7SPTVN1PROD with HEARING
91 

easy. Motels, restaurants depending on the motel and type of restaurant, legitimate, eligible, and how dependent is that claimant on 

natural resources. And I will have to in the next, actually in the 

next few weeks I am going to have to develop eligibility criteria 

that will answer that question. 

Now, the Claimant still has to prove the claim. Eligibility is one 

issue. Corroborating the claim by showing that the spill caused my 

loss, that is another issue, but that is what I will have to deal with. 

Mr. GONZALEZ. Thank you very much, and I want to thank the 

other witnesses, though I may not have a particular question. 

Thank you for your testimony, and I yield back, Mr. Chairman. 

Mr. RUSH. The Chair recognizes Mr. Scalise of Louisiana. 

Mr. SCALISE. Thank you, Mr. Chairman. 

It has been talked about by a number of you about the problems 

of perception, both with tourism, with food, the fact that even 

where some areas have absolutely no oil, you still got a double 

digit, if not over 50 percent drops in people that are coming, and 

I want to start with you, Mr. Brennan. 

When we talk about how to combat that, especially once the oil, 

you know, and we are all praying that this well is capped real soon, 

but there is still going to be oil that has got to be cleaned up, and 

there is still going to be perception problems. I know our State has 

worked on some different types of certification proposals to encourage FDA to set up a formal process so that people can go out there 

and actually have, all across the country have a clear confidence 

level that if they are buying seafood, we know if you can buy it, 

it is safe because our vendors aren’t selling seafood that is unsafe, 

but there is a perception and a concern out there, and so a certification process would give a higher level of confidence. 

First, can you talk about both that combined with marketing? 

What is it going to take in your opinion to get people to feel comfortable walking into a seafood restaurant, not just in New Orleans 

but anywhere in the country, to know if it is from the Gulf that 

it is safe? 

Mr. BRENNAN. Congressman, clearly there are two issues here. 

You know, one is the damaged brand of the entire Gulf Coast as 

a tourist destination, and the other which you just mentioned is 

the food safety concern, and there are a number of regulatory agencies at the state and federal level that are now evaluating the safety of the seafood on a daily basis. 

And we need one consistent program that can become sort of the 

goal standard that—so that people will feel comfortable. I had an 

opportunity to have dinner with a lady the other night from Santa 

Monica, California. She said she would never eat Gulf seafood because despite what they are saying about it, she still believes that 

it is tainted in some way. And there are probably many people 

around the country that feel that way, and there are restaurants 

around the country that are posting signs saying, we don’t serve 

Gulf seafood. 

So we have a serious issue here, and we need one standard so 

that the country will feel confident that the seafood that comes out 

of the Gulf is of—— 

Mr. SCALISE. Mr. Overton, we will just go down the line. 


jbell on DSK7SPTVN1PROD with HEARING
92 

Mr. OVERTON. The seafood industry in general, particularly when 

you talk about the fisheries of the Gulf of Mexico, have been underfunded for a long time, the research associated with it, and so, you 

know, back to the earlier comments of how do we bring something 

good out of this crisis, I think it is an opportunity for us to take 

some funds and do some measurable data on the water columns, 

the baselines, and know how many fish we have, how many have 

been—what, you know, this class of fish, is it totally destroyed, or 

is it partially destroyed? It will give us an opportunity to really 

look at what our data should tell us today. 

We don’t have the funding currently to do that, and if I may, just 

one other point. When it comes to the perceptions, and Mr. 

Feinberg may have a comment on this, the complexity that we are 

faced with now is that we actually lose money in September and 

in August. We don’t make a profit. We make our money in the 

other parts of the year, so what are we going to do if we don’t have 

a claim paid by then, and by the way, for the record, I am not 

aware of any business owner in Florida that has been paid a large 

claim as of yet. 

So what are we going to do? Are we going to become servants to 

the bank and our debt service covenant ratios, which are very important. Those covenants just can’t be broken, or do we go lay employees off because we need to make that number? And that is 

what we are faced with. 

Mr. SCALISE. Thank you, and I apologize, I have only got a 

minute and a half left, and I have got a number of other questions. 

Mr. Malone, if you can get me a copy of the presentation that you 

made to Mr. Feinberg, it sounds like you all really put some things 

together that made an impression on him. If you would be willing 

to share that—— 

Mr. MALONE. Yes, sir. 

Mr. SCALISE [continuing]. With us as well, I would love to see 

that, too. 

Mr. MALONE. Be happy to. Can I speak briefly to another question about perception? 

Mr. SCALISE. Real quick. 

Mr. MALONE. Real quick. 

Mr. SCALISE. I have got some questions for Mr. Feinberg, and I 

have only got a minute now. 

Mr. MALONE. OK. The science community is doing our region a 

terrible injustice. We tend to believe the EPA, the regulatory bodies, but every week somebody, some scientist from some university, 

it varies, is continually questioning the quality of the water, quality of the air. As long as those questions are out there, these 

misperceptions are going to be—— 

Mr. SCALISE. All right, and I have got to get to my questions for 

Mr. Feinberg. As you have heard some of these comments from the 

panelists today, other conversations you had, can you help give 

them some confidence that when we talk about some geographical 

limitations, if you got a restaurant in New Orleans, and it is 60 

miles away from the point of impact, how are you going to factor 

that in? 

Mr. FEINBERG. I am going to factor that in. Proximity makes it 

sort of a per se case. If you are right on the beach or you are right 


jbell on DSK7SPTVN1PROD with HEARING
93 

by the Gulf, by the waters, it sort of—that is what I mean when 

I say proximity. It is sort of easy. 

That doesn’t mean if somebody has another facility farther away 

they are automatically ineligible. We will take a look at the facts. 

Mr. SCALISE. OK. Real quick, too. On the escrow negotiations, 

are you kind of held back on what you can do to start setting up 

your operation and cutting checks for that to be completed, or can 

you start before they complete these escrow negotiations? 

Mr. FEINBERG. No. I am not held up. We are on parallel tracks. 

The sooner the escrow is set up the better, but meanwhile I am 

going forward setting up the infrastructure. 

Mr. SCALISE. Can you cut any checks before the escrow negotiations occur? 

Mr. FEINBERG. No, but I am confident that by the second week 

of August, which is, you know, already too late, I am hoping that 

the escrow should be up and running so that there will be no inability to cut checks. 

Mr. SCALISE. OK, and then you said with the $100 million, that 

is the only place to go for people who work on rigs. There is really 

no place to go that I have heard of for people that service rigs. Can 

they go to your fund? Would you pay them out of your fund? And 

if not, is just unemployment their only option at this point? 

Mr. FEINBERG. I don’t know about unemployment. I can tell you 

that unemployed rig workers who are unemployed because of the 

government’s moratorium don’t have a claim against the—— 

Mr. SCALISE. Once that—that $100 million is going to run out 

within 2 months if they start paying on it by any estimate that we 

have been given, and so once that is extinguished, do they have 

any recourse other than just going on unemployment? They are 

still unemployed, and there is still a moratorium after 2 months. 

Mr. FEINBERG. I am just suggesting I doubt very much that they 

would have a claim within this fund. 

Mr. SCALISE. OK, and then if you could give me offline here the 

protocols for review board. As you are setting up the process if 

somebody—— 

Mr. RUSH. Mr. Scalise. 

Mr. SCALISE [continuing]. Disagrees with your ruling and they 

want to go to some kind of additional process—— 

Mr. RUSH. Mr. Scalise, this is your last question. 

Mr. SCALISE. Thanks, and I yield back. Thank you, Mr. Chairman. 

Mr. RUSH. All right. The Chair now recognizes Mr. Sarbanes of 

Maryland. 

Mr. SARBANES. Thank you, Mr. Chairman. Thanks to the panel. 

Mr. Feinberg, I was going to ask you some questions. You say 

that you are not privy to the negotiations that are going on with 

respect to the escrow fund. Are you OK with that? Does that—do 

you think that is better from your standpoint? Worse? Or what is 

your perspective? 

Mr. FEINBERG. I am neutral. As long as the money is available 

when the Gulf Coast Claims Facility starts processing claims and 

cutting checks, that is fine with me. 

Mr. SARBANES. Do your decisions, are they immune from challenge under whatever understandings have been—— 


jbell on DSK7SPTVN1PROD with HEARING
94 

Mr. FEINBERG. No. 

Mr. SARBANES. No. 

Mr. FEINBERG. No. 

Mr. SARBANES. So if you and Mr. Malone are talking about the 

appropriate zone, and the government things you have drawn the 

zone too small, and BP thinks you have drawn the zone too big, 

or someone who is on the outside of the zone doesn’t agree with 

your judgment call, are you anticipating that there is going to be 

some challenge presented to that? Or are you—or under the structure of this arrangement is that not challengeable? 

Mr. FEINBERG. Neither the government nor BP can challenge my 

independence, but if an individual claimant, business or an individual, doesn’t like my eligibility determination or doesn’t like the 

amount of money that I have awarded, that individual has two 

choices. The individual can either, not either, both. First, the individual can seek an appeal to three ex-Judges or an Appellant body 

that will review my decision, and only then can the Claimant, who 

if he or she is still dissatisfied, Congressman, can opt out of this 

system altogether and go file a lawsuit. 

Mr. SARBANES. Got you. Was it a condition of your accepting this 

assignment that BP and the government agree that your judgment 

calls would not be challenged by them? 

Mr. FEINBERG. Yes. 

Mr. SARBANES. OK. Mr. Malone talked about how there are people who—let us assume there is a good claim coming down the 

pipeline, and when it eventually gets to you, you are going to do 

the right thing, but it is not there yet, and the business that is 

seeking those—that compensation is in a position as Mr. Malone 

described where they may not be able to hang on as against the 

obligations they face from others, from third parties. 

Is there anything that can be done in your mind? Is there—could 

you even though you are not set up and ready to go, is there some 

kind of comfort letter or something that you can provide to that 

business that says, you know, by all indications you will be in a 

position to submit your claim to us once we are up and running, 

and you can use this letter and present it to third parties who may 

be liening on you so they understand that, you know, there is some 

recourse available to them? Is that something that is possible? 

Mr. FEINBERG. Yes. First, I am going to be up and running in 

a matter of weeks. Now, that is too many weeks, but I understand 

that. That is small solace to somebody who is on—about to close 

their business. I will be up in a matter of weeks. 

Secondly, if I know of that claim, I mean, BP is paying claims. 

If there is a claim like that that I can’t wait 2 weeks or 3 weeks, 

be it a letter or your promise or your willingness to deal with me, 

if I know that claim, I will go to BP for that claimant. I have done 

this already—— 

Mr. SARBANES. OK. 

Mr. FEINBERG [continuing]. To try and ease that transition. 

Mr. SARBANES. So there is some recourse. I mean, if businesses 

can be identified that are kind of caught in the switches here, there 

is a way you can get that in front of BP—— 

Mr. FEINBERG. Yes. 


jbell on DSK7SPTVN1PROD with HEARING
95 

Mr. SARBANES [continuing]. And say before it is too late, do 

something here while we are in this transition period. 

OK. All right. Thank you. I yield back my time. 

Mr. RUSH. The Chair recognizes Dr. Burgess for 5 minutes. 

Dr. BURGESS. I thank the Chairman for the consideration. I am 

not part of this subcommittee, but I am part of the full committee. 

Mr. Feinberg, if I understood correctly in your answer to a question Mr. Barton asked that the framework that is being set up surrounding your administering this fund is actually being done in the 

White House by an Assistant Attorney General, is that correct? 

Mr. FEINBERG. The framework setting up my Claims Facility is being done by me. The framework for setting up the $20 billion escrow fund, my understanding is, because I am not privy to those 

negotiations, is between the Associate Attorney General’s Office 

and people at BP in Houston. 

Dr. BURGESS. Now, at some point, though, those two universes 

have to merge. Is that correct? Otherwise you have a structure 

with no fund—— 

Mr. FEINBERG. You have got it. 

Dr. BURGESS [continuing]. And they have got a fund with no 

structure. 

Mr. FEINBERG. That is right. 

Dr. BURGESS. When that merging occurs, will we on the Energy 

and Commerce Committee be made aware of what that structure 

looks like and how the fund then subsequently is to be administered? 

Mr. FEINBERG. I would think so. You will certainly be entirely up 

to date on what I am doing with the Claims Facility and how that 

is working, what the protocol is, how we are drawing on the money. 

You will have—there will be full transparency as to what I am 

doing. 

Dr. BURGESS. Well, let me just ask you this. When you worked 

9/11, it was before my time, but when you worked administering 

that fund, who—for whom were you working? 

Mr. FEINBERG. I was working for the Department of Justice and 

Attorney General John Ashcroft. 

Dr. BURGESS. So you received a paycheck from the Department 

of Justice? 

Mr. FEINBERG. I did—I worked on that assignment entirely pro 

bono. 

Dr. BURGESS. OK. Had you been paid, though, likely would have 

come from the Department of Justice? 

Mr. FEINBERG. Department of Justice. 

Dr. BURGESS. On this—are you working pro bono on this account? 

Mr. FEINBERG. No, I am not. The entire cost of this fund, the Facility, Gulf Coast Claims Facility, must, of course, be paid by BP. 

You can’t ask the claimants to fund any part of it. You can’t ask 

the government to fund any part of it. 

Dr. BURGESS. Well, then that begs the question who is signing 

our paycheck? 

Mr. FEINBERG. I am sure that BP is signing not only my paycheck but is signing the paycheck of everybody working in this 

independent Gulf Coast Claims Facility. 


jbell on DSK7SPTVN1PROD with HEARING
96 

Dr. BURGESS. Do you see any difficulty in maintaining the independence with them holding the title of paymaster? 

Mr. FEINBERG. I don’t see any difficulty in maintaining my independence. I certainly do see the implication of your question, which 

is there could be a perception that since BP is paying, shouldn’t we 

have more transparency or full disclosure, and I agree with that. 

Dr. BURGESS. And I think that is where we would like to be of 

service to you and provide some help to you. When the 9/11 compensation fund was set up, my understanding, and, again, I was 

not here, but that was set up under a Congressional authorization 

or Congressional charter. Is that correct? 

Mr. FEINBERG. It was a federal statute. 

Dr. BURGESS. Right, but it was as a direct result of action taken 

in the United States Congress. 

Mr. FEINBERG. That is right. 

Dr. BURGESS. But this is a little different. 

Mr. FEINBERG. Very different. 

Dr. BURGESS. There has been no action taken in the United 

States Congress, so if we invite you, for example, to our Committee 

on Oversight and Investigations, if Chairman Rush invites you 

back to this committee, may we expect your attendance? 

Mr. FEINBERG. You certainly may with honor. 

Dr. BURGESS. Well, I want to say as the Ranking Member on 

Oversight and Investigations and who knows what will happen to 

the world after November but as the current Ranking Member, we 

will welcome you back or welcome you to that committee some time 

this fall when you actually get funded to have a visit about how 

those funds are actually being dispersed, and of course, we also will 

be terribly interested in how the merging of the structure that you 

are producing and the funding that is yet to happen. 

You know, we had a field hearing the 1st of June down at 

Chalmette, Louisiana, Chalmette virtually destroyed in Katrina, 

built back, and now they are being destroyed by the oil spill and 

then subsequently the moratorium. There was a hotel operator 

there who talked about how he was keeping his cash flow going by 

borrowing, and having run a business before I know it is hard to 

keep your cash flow going if you are borrowing. And I asked him 

who was co-signing his loans with him, and he said his wife. I said, 

well, that is not exactly what I had in mind. I was kind of hoping 

BP was co-signing those notes with you, and he said, no such luck. 

Are we going to get to a point where that individual or an individual in similar circumstance can continue to maintain their business without facing future financial ruin? 

Mr. FEINBERG. That will be my goal. 

Dr. BURGESS. Thank you, Mr. Chairman, for your courtesy. I will 

yield back. 

Mr. RUSH. The Chair recognizes Mr. Melancon for 5 minutes. 

Mr. MELANCON. Thank you, Mr. Chairman. I appreciate you allowing me to waive on. If I would, I would like to submit a statement for the record since I am not a member of the subcommittee. 

Mr. RUSH. OK. 

Mr. MELANCON. Thank you, sir. I would like to welcome my 

friend, Ralph Brennan with the Restaurant Association. We worked 

many years ago on a promotion for Louisiana not only out of LouVerDate Mar 15 2010 04:20 Mar 28, 2013 Jkt 078127 PO 00000 Frm 00102 Fmt 6633 Sfmt 6633 E:\HR\OC\A127.XXX A127

jbell on DSK7SPTVN1PROD with HEARING
97 

isiana but also internationally, and I guess my question to you is 

do you remember how many years it took us to build that reputation once we got that fund up and running? 

Mr. BRENNAN. Congressman, I don’t remember the number of 

years, but it is a long time. 

Mr. MELANCON. And so we are right now kind of reverting back 

to where we were, and we are going to have to have some ability 

as well as Alabama, Mississippi, Florida, and Texas to get that 

message back out once this Gulf has been cleaned up. So it is a 

long time coming. 

Mr. BRENNAN. Yes, sir. 

Mr. MELANCON. I guess, Mr. Feinberg, is there any indication 

from BP of how long they are going to be in this thing, or are they 

thinking that this $20 billion is the all to end all, and is it going 

to done then? 

Mr. FEINBERG. BP has made it very clear publicly and privately 

that if the $20 billion isn’t enough, and I certainly hope it is, but 

if it isn’t enough, they have promised to honor any additional financial obligations that might be their—its responsibility. 

Mr. MELANCON. Mr. Feinberg, if I could, can you tell me what 

the hell this Alabama lawsuit is about? 

Mr. FEINBERG. I am sorry? 

Mr. MELANCON. This Alabama lawsuit. What is that about? I 

mean, BP is the responsible party. They are obligated not only for 

the money but paying for the administration of it, so somebody is 

filing—Alabama I think is filing suit. 

Mr. FEINBERG. I am not—— 

Mr. MELANCON. That was something I had heard on the news 

the other day. I was wondering what that was all about. Maybe I 

didn’t get my full information. 

Ralph, let me ask you as a person from Louisiana and for the 

Mississippi folks, I spent quite a number of days along the coast 

including the Mississippi Gulf Coast after Katrina. We are all in 

this thing together. I fully support every state that has been affected, whether it is from the storms or whether it is from BP. 

I wasn’t here for the opening statement, and I apologize to all of 

you that—for that, but Ralph, is there anything since the discussions have started that has come to your mind that you wish you 

may has said or you might want to still say while I still have 2 

minutes and 30 seconds? 

Mr. BRENNAN. Congressman, all I would say is—and I said this 

in my opening remarks, this is a long-term problem. Unlike 

Katrina it was a fixed event, it was over, we knew what we had 

to do. We don’t know the long-term effects of this on especially Louisiana, the tourism industry and the seafood industry. 

And so we have to take an approach today, and we have to start 

today knowing it is going to be a long-term battle. I think you mentioned that earlier. We can’t just end this at any date certain. It 

may go on for many, many years, and we have had conversations 

with the tourism industry officials and the seafood officials from 

Alaska, and after the Valdez incident they told us it has taken 5 

to 10 years for them to overcome the effects of just that spill. 

Mr. MELANCON. As I mentioned to my colleagues and others that 

will listen and the media, what our problem is, I guess, Mr. 


jbell on DSK7SPTVN1PROD with HEARING
98 

Feinberg, is what we don’t see out there in the marshes in the Gulf 

that are the concerns for us for the future, and that is why, you 

know, knowing that you fully well see the long term, it is not like 

a 9/11, we are settled, and we are done, and we walk away. That 

is where I may not be around either because the Lord doesn’t wish 

it for me or whatever, but I just hope that maybe that the people 

will be made whole in some way, shape, or form. 

I want to thank the Chairman for having this hearing as we continue to move forward to understand the problems that are faced 

by the people of the Gulf Coast of this country and hope that whatever we do the resolve will be such that it will be a model for the 

future. 

So, Mr. Feinberg, I pledge you and your folks full cooperation of 

my office as long as I am in office to help you with this problem, 

and again, Mr. Chairman and Ranking Member, thank you all for 

allowing me to waive onto the committee. 

Yield back the balance of my time. 

Mr. RUSH. That said, the Chair wants to inform all the members, 

all the witnesses that you have been very patient, you have participated and informed the subcommittee far beyond our expectations, 

but we—and we certainly are appreciative of your sacrifice and 

your time that you submitted to this process. Mr. Dow, you 

had—— 

Mr. DOW. Mr. Chairman, may I make one statement? One of the 

more moving and impressive things that I have seen is in September of 2008, you returned to the House on the floor to personally support the Travel Promotion Act which is now law. I do appreciate you understand what promotion can do. 

Mr. RUSH. Yes. 

Mr. DOW. Your heroism being there but most important I am 

going to ask this committee and Congress if we can move forward 

and push for a $500 million fund. It is not in Mr. Feinberg’s purview, but if we do this, we can limit significantly what is going to 

be spent in damages and recovery, and you understand as well as 

anyone. Thank you, sir. 

Mr. RUSH. The Chair does understand and however, the committee will take that under consideration and give its intense insight or intense interest in that, and we will use it in the process 

to determine what our next step should be. 

But I want you to know that I do understand how important it 

is. 

And the Chair as was indicated earlier, really appreciates all the 

witnesses for their time. I know that Mr. Feinberg does have a 

12:30 deadline that he has to meet. So with that in mind the committee now stands adjourned. 

[Whereupon, at 12:30 p.m., the Subcommittee was adjourned.] 


jbell on DSK7SPTVN1PROD with HEARING
99 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 107 here 78127A.050
100 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 108 here 78127A.051
101 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 109 here 78127A.052
102 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 110 here 78127A.053
103 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 111 here 78127A.054
104 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 112 here 78127A.055
105 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 113 here 78127A.056
106 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 114 here 78127A.057
107 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 115 here 78127A.058
108 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 116 here 78127A.059
109 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 117 here 78127A.060
110 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 118 here 78127A.061
111 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 119 here 78127A.062
112 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 120 here 78127A.063
113 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 121 here 78127A.064
114 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 122 here 78127A.065
115 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 123 here 78127A.066
116 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 124 here 78127A.067
117 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 125 here 78127A.068
118 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 126 here 78127A.069
119 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 127 here 78127A.070