A law professor being paid $950 an hour with BP's money has declared that the czar of the $20 billion claims fund for Gulf oil spill victims is independent of the oil giant.
Fund administrator Ken Feinberg said Thursday he has agreed to pay New York University professor Stephen Gillers for his advice. Since being hired, Gillers has written a letter stating that Feinberg is neutral and not subject to BP's direction or control.
Feinberg said the Gulf Coast Claims Facility, created to administer payments from the fund to people and businesses, is billing BP for Gillers' services.
Some victims, lawyers and state officials unhappy with the claims process have questioned Feinberg's independence and suggested he is a pawn in a BP effort to limit its liability.
A statement Thursday from the Gulf Coast Claims Facility said Feinberg asked Gillers for advice about a Nov. 24 letter from Louisiana Attorney General James "Buddy" Caldwell questioning the independence of the fund and Feinberg's role as the independent administrator.
In a letter to Feinberg, Gillers wrote: "You are not in an attorney-client relationship with BP. You are an independent administrator and owe none of the attributes of the attorney-client relationship (e.g., loyalty, confidentiality) to BP. By 'independent' I mean (and I think the context is clear) that you are independent of BP. You are not subject to its direction or control."
The total amount Gillers will be paid is unclear. He told The Associated Press he is billing $950 an hour for his services and an assistant is billing $475 an hour. Gillers said he and the assistant have not calculated exactly how many hours they spent on the work, which Gillers said is now finished.
GCCF spokeswoman Debra DeShong Reed said neither Feinberg nor the fund have any past relationship with Gillers. She said he was chosen because he is a nationally recognized expert in the field of legal ethics.
Gillers said his work for Feinberg included reading the letter Caldwell sent Feinberg, reading court papers filed by lawyers suing BP, and researching rules governing lawyers in Gulf Coast states and in Washington, where Feinberg's law firm is located.
Both Gillers and Feinberg said they don't believe there is anything wrong with using BP money to pay for the advice.
"Is he being paid by BP money? Yes," Feinberg said. "Who else is going to pay for the entire cost of this program? You can't ask claimants to pay, you can't ask states and federal governments to pay. The buck stops with BP and BP has agreed to pay the entire cost of the infrastructure of this program."
But Anthony Kennon, mayor of Orange Beach, Ala., has questions about the relationship between Feinberg and BP.
"He can proclaim independence as much as he wants," said Kennon, whose community was hard hit by the oil spill. "The only thing that will show true independence is if he makes those people whole who were harmed by the oil spill. We have not been made whole by a long shot."
Lawyers who have already filed more than 300 lawsuits on behalf of Gulf residents and businesses say Feinberg should stop calling himself independent.
They asked a federal judge last week to order changes to the release form people must sign if they accept a final payment from Feinberg.
Feinberg currently requires people who accept final payments to agree not to sue BP or any other responsible party, including companies involved with the Deepwater Horizon rig that exploded April 20 off Louisiana's coast.
The blast killed 11 workers and led to 200 million gallons of oil spewing from BP's well a mile beneath the Gulf of Mexico, according to government estimates that BP disputes.
The lawyers say people should only have to give up the right to sue BP for compensatory damages, but they should still be allowed to go after BP in court for punitive damages. And, the lawyers say, people who accept final payments from the fund should be allowed to sue other responsible parties for both compensatory and punitive damages.
So far, the fund has paid out roughly $2.6 billion.
Money left over in the fund is expected to be returned to BP.
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