[Harris:] OK. So here we go. Day 63 of the Gulf oil disaster. Going forward, a government- appointed commission will pay damage claims. Its chief, Ken Feinberg, says the BP-funded operation will be up and running within six weeks. Until now, BP, as you know, has handled the claims, but those who have gotten offers say BP is paying out just pennies on the dollar. CNN's Chris Lawrence reports.
[Chris Lawrence, Cnn Correspondent:] It took 40 years for Stu Scheer to build his business, running charter fishing boats for tourists in the Gulf. Now it's all falling apart between the oil spill that shut down business and haggling with BP over his claim.
[Stuart Scheer, Charter Boat Captain:] Excuse me. You wonder how a guy my age, 260 pounds, could be emotional. Sorry. But, you know, it's like I told you, salt water runs through my veins. It's all I've done. It's all I've ever wanted to do is fish.
[Lawrence:] Stu walked into the local claims office, but BP classified him "large loss" and moved his claims 90 miles away. He only speaks with his adjuster by phone.
[Scheer:] They wanted 2007, 2008, 2009 returns. They wanted my log books. They wanted my bank statements. They wanted all my licenses, P&L; statements.
[Lawrence:] So you laid out
[Scheer:] Everything.
[Lawrence:] all this paperwork?
[Scheer:] Everything.
[Lawrence:] To the number?
[Scheer:] To the penny, virtually. This is what I calculated from May 9th through the end of December that I had on the books, actual books, not projections, not people still calling me.
[Lawrence:] When you itemize these costs with BP, you even accounted for that you wouldn't be using fuel.
[Scheer:] That's right, if my boat didn't leave the dock, I wouldn't have fuel, bait, rods, reels, ice, contract, labor. My gross was $162,800, less expenses, daily boat expenses, came out to $107,982. My bookings for this year amounted to a gross net of $107,000 and they basically offered me $33,000.
[Lawrence:] He turned down that offer and is now hassling to make up the difference. [on camera]: Are you any more confident in the government running the claims process as you were with BP?
[Scheer:] Well, again, like I said, there's always an air of optimism. And the fact that the Obama administration has gotten BP to put the $20 billion in escrow and, supposedly, a new regime is going to come in and handle the claims, yes, there's optimism. I hope it works out, but I'm suspicious.
[Lawrence:] Unfortunately, the bottom line is he's probably going to have to take that initial offer and then re-file additional claims every few months while his boats are out of business. We did call BP. Now, they don't comment on individual claims, but so far they have cut more than 30,000 checks and paid out more than $100 million. Chris Lawrence, CNN, New Orleans
[Harris:] OK. We are getting more answers about the new claims process today from Kenneth Feinberg, the lawyer overseeing the $20 billion escrow fund from BP. He spoke with our John Roberts on CNN's "AMERICAN MORNING."
[Kenneth Feinberg, Administrator Of The Independent Claims Facility:] We've got to get the claims out quicker. We've got to get them out with more transparency so that claimants understand what the status is of their claim, and we've got to ease the burden on these folks in the Gulf. I was there last week. I'll be there tomorrow. We've got to accelerate the process just as the president instructed me to do.
[John Roberts, Cnn Anchor:] So, you've got to accelerate the process, but you've got thousands upon thousands of claims that you have to process. How do you make sure that you get that money out there quickly, but then, at the same time, avoid fraud? Because there are always people who try to take advantage of a situation like this.
[Feinberg:] It's a delicate balance. On the emergency payments that have been going out that you mentioned and I give BP credit. I give them credit. They've set up this program. They've already accelerated a process and paid out over $100 million in claims. But with the emergency payments, John, you've got to allow those payments to go out with less corroboration than you would if you're giving a lump sum payment that is the total compensation. For the emergency payments, we've got to air on the side of the plaintiff.
[Roberts:] All right. So, how do you quantify who gets what? For example, we talk to and Missy and Robert Bennett, who were the owners of the Edgewater Inn, in Biloxi, Mississippi last week. They say that they've got a claim, though there's been no oil on their beach. They've lost business because of the perception that the Gulf waters are fouled around where they are. And then we also talked I don't know if you heard it this morning to Stu Scheer. He's a fisherman who painstakingly went through his last three years of income tax returns, said to BP, I'm going to lose $107,000 worth of business this year because of the oil spill and they said we'll give you $33,000.
[Feinberg:] I can't speak for BP. I'm running an independent facility. But just as you point out, I'll take a look at the historical, the recent past economics of these claims and we will quantify and calculate an award or an amount and sit, if necessary, with the individual claimant, come up with an acceptable amount that will compensate fully. The president made it clear he wants full compensation. The $20 billion might not be enough. Maybe it will. Whatever it takes, these individuals and businesses must get paid.
[Roberts:] You know, in addition to the fishermen and the local businesses that have been affected because of a lack of tourism or whatever, just lack of availability of seafood, there's also the question of oil workers and the effect on them because of the moratorium. BP, in addition to the $20 billion escrow fund, is setting aside $100 million to compensate those people. Ken, do they come to you or is there a separate process for these out of work oil workers because of the moratorium?
[Feinberg:] Separate process. I've got enough challenges with this independent claims facility. That $100 million is a separate moratorium agreement between the administration and BP. It is not on my watch. And but I'm sure that $100 million will be dispensed fairly quickly.
[Roberts:] Now some people may be looking at this saying, OK, if I go to Ken Feinberg and I'm looking for a settlement, do I give up my right to sue BP because, as we know, there are probably going to be tens of thousands of lawsuits filed against this company?
[Feinberg:] As with the 911 fund, you'll recall the emergency payments that are going out under my watch do not require that any claimant give up any of his or her rights to litigate or go forward in court. You can take these emergency payments, pocket them, and if you ultimately want to litigate, go ahead. I think that is very unwise. I will urge these claimants, don't go to court11, come into this program, the emergency payments are without any condition. And then ultimately, if you receive an award and you're willing to give up your right to sue, it's purely voluntary. And I would urge claimants to do just that.
[Roberts:] All right. Now you said at the beginning of this, Ken, that you are an independent entity who is going to be looking into this. But the point has been made by some critics of the administration how can Ken Feinberg be independent because he's also on the White House payroll as the executive compensation czar. So what do you say to that?
[Feinberg:] I'm not on the payroll. I'm doing the White House pay czar role pro bono without compensation. And in terms of this facility, who else is going to pay for this program but BP? Not the federal government. You can't ask the people in the Gulf to pay for this. You can't ask the federal or state governments to pay for this. I mean, if the critics have a better idea as to how to go about doing this, I don't think anybody will ultimately question the independence of this program.
[Roberts:] Ken Feinberg, you got a lot of work to do. Thanks for taking time out of your busy day. We really appreciate it. We'll let you get back to it because we know how desperately so many folks need that money. Thanks for joining us.
[Feinberg:] Thank you.
[Harris:] OK. You can help those affected by the oil disaster, of course. CNN is gearing up for an all-star telethon to benefit the people on the Gulf. The "LARRY KING LIVE" event happens tonight. And joining me with details from New Orleans, Kyra Phillips. Kyra, good do see you. Maybe we could start with, who is going to be hi.
[Kyra Phillips, Cnn Correspondent:] And you don't know the details already, Tony?
[Harris:] Well, yes, but I don't want to tip your hand. How are you, lady?
[Phillips:] You know, I was just sitting here going over the list, right, of all the people participating in this telethon. And you've probably seen the page. By the way, every time I come up live, I cue the train just to add a little flavor to the New Orleans lifestyle. That's just for you.
[Harris:] Love it. Love it.
[Phillips:] Deepak Chopra, Cameron Diaz, Philippe Cousteau, Ted Danson, Faith Hill, Tim McGraw, Kerry Kennedy, Alyssa Milano, Robert Redford, Edward James Olmos, Lenny Kravitz. Musical performances by Sting and Herbie Hancock. I mean, the list goes on and on, Tony, and these folks are going to be participating at the phone bank, at this telethon that Larry King and hi crew have put together for tonight from 8:00 to 10:00 p.m. Eastern Time. I'm actually going to head over to Grand Isle, where I will be with some families, some fishermen families, talking about the devastation there and why this money is so essential to their livelihoods. You know, we're going to raise money for three various charities United Way, National Wildlife Federation and Nature Conservancy. And United Way has talked specifically about these fishermen. They've been calling for money to pay rent, to pay utilities, to buy food. And, you know, so many times, Tony and I mentioned this earlier in the morning when a natural disaster hits, we always respond. Right?
[Harris:] Yes.
[Phillips:] We respond to Haiti, we respond to Katrina, we respond to the earthquakes in California. But when it's a manmade disaster like this oil disaster, we think, oh, OK, whoever is responsible for that problem, they'll pay up, they'll take care of it, they'll solve the problem. Well, as you can see, things just aren't moving fast enough, and people are losing their livelihoods. I mean, even mentally, Tony, we're seeing a tremendous spike in mental health care in this region. I mean, they're just coming back off of Katrina, and now they've got this second disaster. So, we're wanting to do something more to contribute and to help. And that is why we're doing the telethon tonight.
[Harris:] Hey, Kyra, can I ask you a question? Do you think we're going to host this telethon tonight, and we know it's going to raise a boatload of money, just a lot of money for folks. Do we believe that getting it to these organizations, the NGOs that have an infrastructure in place, will mean that the money will get to individuals affected maybe even more quickly than the structure that's being set up by Ken Feinberg?
[Phillips:] Absolutely.
[Harris:] Yes. Yes.
[Phillips:] That is why we're working with these three charities specifically, because this money isn't going to go into some general fund and it's going to sit there, and we're going to sort of wait to see it distributed. This money's going directly to these organizations, which in turn will go directly to wildlife efforts, to environmental efforts, and to the people right now that are losing their livelihoods here in the Gulf because of this oil disaster.
[Harris:] This is terrific. Can't wait to see you tonight. And you're playing a major role in it as well, Kyra. Great to see you. Talk to you next hour.
[Phillips:] Thanks, Tony.
[Harris:] Thanks, Kyra. Ten days of bloodletting. Kyrgyzstan's government tries to reel in murderous mobs. We're back in a moment.