18 Oct 2010

Vigilance against fraud pledged by Gulf claims boss

12:33 pm on 18 October 2010

The administrator of a $US20 billion compensation fund arising from the BP oil disaster in the Gulf of Mexico, says there's no doubt that fraudulent claims are an issue.

Kenneth Feinberg, who oversaw compensation for victims of the September 11 attacks, is pledging to be vigilant over who receives payments, to protect the integrity of the fund.

About $US1.3 billion has already been disbursed in emergency payments.

Mr Feinberg told the BBC there have been about 160,000 applications for compensation - about half were filed in the last two weeks.

"That's some indication that citizens think that the programme is available to generously pay them," Mr Feinberg said.

"There's no doubt that fraud is hovering all the time over a programme like this."

But he pledged each application would be carefully examined, saying, "nothing would undercut the credibility of this fund more than fraud and the payment of ineligible claims."

The fund is to reimburse Gulf of Mexico residents and businesses for lost wages and profits and for personal injuries and clean-up, among other claims.

Those seeking compensation in return must give up their right to sue BP.

Leak duration

The oil leak began on 20 April after an explosion and fire on the Deepwater Horizon drilling rig.

An estimated 206 million gallons of oil flowed into the Gulf before BP capped the well on 15 August.

The Gulf Coast Claims Facility, as the claims programme is known, was set up in June.

Claimants are required to document their losses in their applications for compensation.

But Mr Feinberg said that about 5000 claims had been made with no documentation at all.