Nightly News   |  September 23, 2010

BP claims czar : 'We oversold this program'

After hailing him as a hero when he first took over BP's claims processing one month ago, many Gulf Coast residents say they're being stalled and low-balled by independent claims czar Kenneth Feinberg. NBC's Lisa Myers reports.

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This content comes from a Full-Text Transcript of the program.

BRIAN WILLIAMS, anchor: gulf oil spill. Let's not forget 87 days worth of oil in that water, and about that $20 billion compensation fund. It's been a month since Ken Feinberg took over the claims process from BP . He's a lawyer with a track record of handling other difficult situations, like the fund for the 9/11 victims families. Gulf residents welcomed him as a plain spoken New Englander and a hero when he went back to Orange Beach , Alabama , to see how he's doing. Our report from our senior investigative correspondent Lisa Myers .

LISA MYERS reporting: Since the spill, BP has pounded home this message.

Unidentified Man #1: BP has got to make things right.

Mayor TONY KENNON: And they're spending $100 million on a PR blitz to tell the rest of the country they're making us whole. Guys, it's not true. It's not true.

MYERS: And Mayor Tony Kennon of Orange Beach , Alabama , devastated when tourists stayed away, says the new independent claims administrator Ken Feinberg has not made things better.

Mayor KENNON: So we're very upset with the overall performance of Ken Feinberg .

MYERS: In an interview, Feinberg acknowledges problems.

Mr. KEN FEINBERG: We haven't processed all of the claims as quickly as we should have. I oversold this program at the beginning and I'm paying the price for it. I do not work for BP .

MYERS: He's been the target of anger and frustration at recent town hall meetings.

Ms. RHONDA DRUMMOND (Small Business Owner): You've killed my working class business.

MYERS: We went back to two businesses we've kept up with. Jeff Hardy owns a shoe and apparel business and says his losses are now more than a million dollars. He's received one check for $5,000. These twin sisters who plan weddings on the beach have received $29,000 on a claim of $240,000.

Ms. SHEILA NEWMAN (Orange Beach Weddings): We feel like we deserve what we lost, and that's all we're asking for is give us what we lost.

MYERS: Do you understand how angry and desperate some of these people are when you send them these tiny checks?

Mr. FEINBERG: I understand the frustration. I understand the concern. Remember, though, that there are thousands of citizens in the gulf who received very, very generous checks.

MYERS: Feinberg 's office has paid out almost $350 million for 26,000 claims in only a month. He showed us several e-mails from grateful claimants. And overall gives himself a pretty good grade. Feinberg says most still waiting for money simply haven't provided enough documentation.

Mr. FEINBERG: They just don't have the backup to justify it.

MYERS: But Hardy says he's provided 1700 pages to back up his claim.

Mr. JEFF HARDY: Now I'm being told, since I've got so much information on the table, then it cannot be processed.

Unidentified Man #2: No, that's ridiculous.

MYERS: Feinberg says he's sticking to his promise. Anyone who can prove lost income will be fully compensated.

Mr. FEINBERG: If I don't do that, I've failed. I've failed.

MYERS: Lisa Myers , NBC News, Washington.