Wednesday, June 30, 2010

Chaos and confusion, part deux: the $20 billion slush fund

Just yesterday, we learned about the apparent confusion over who's covered by the $20 billion BP shakedown fund when, during an interview with CNN, the fund administrator told the interviewer that he'd just learned that the moratorium claims would be covered.

But it's a different day today, so it's a different story.

Kenneth Feinberg, who is administering the new claims process for victims of the Gulf oil disaster, made crystal clear today that individuals and businesses hurt by the drilling moratorium are not eligible for a piece of the $20 billion escrow fund BP set aside to pay all eligible claims.

"If they send moratorium claims to me what am I supposed to do with them under the $20 billion?" Feinberg said during a break of a hearing of the House Small Business Committee at which he was testifying about his new job. "Those moratorium claims are only going to be paid out of the $100 million."

This is not what he said Monday:

"Yes, I now have discovered -- I didn't realize this until yesterday -- that the moratorium claims will fall under my jurisdiction," Feinberg said in an interview Monday on CNN.

"That's a huge development, and we didn't know that before?" replied the CNN reporter.

"I didn't either," Feinberg said.

There doesn't seem to be any lack of confusion or chaos on the part of the White House or BP, either.  In the second story linked above, a White House spokesman said that the $100 million fund would be administered by BP.  In the story linked yesterday, Feinberg said he believed he'd be administering the fund.  Keep in mind, sports fans, that these two slush funds were established in negotiations between the White House and BP on June 16, two freakin' weeks ago.

So why all the confusion?  Maybe it's because there is no document formalizing the agreement.  At least, there isn't one that's been made public.  As a result, Kenneth Feinberg tells the media one thing on Monday and tells Congress something completely different a few days later.

Who the hell is in charge?  $20 billion here.  $100 million there.  Pretty soon, we're talking about a lot of money, and a tremendous opportunity for waste, fraud and abuse.

Gimme some feedback in the comments.