Economic Recovery

Quote from BP CEO Tony Hayward May 31, 2010

“We're sorry for the massive disruption it's caused their lives. There's no one who wants this over more than I do. I would like my life back."

Agenda

• Tony Hayward• Kenneth Fienberg • Claims Process• People Affected

Tony Hayward Compensation

• Former CEO of BP• Stepped down as CEO on October 11, 2010• According the Telegraph, Tony Hayward got

£2m in salary and severance payments, plus a £600,000-a-year pension.

Kenneth Feinberg

• In charge of distributing the $20 billion dollars of BP, head of the Gulf Coast Claims Facility

• Administrator of the 9/11 Victim Compensation Fund

• “Neutral Player”• Paid 10 million a year for his work • BP complaining Finberg's settlements are to

generous.

The BP Game

Last Day

Recap of the BP Game • There are problems with the claims process

– There is theft and unethical people trying to make money off of other peoples misfortunes

– The wealthy are usually paid first– BP is constantly whispering in Feinberg ‘s ear

• According to the Associated Press, 490,000 claims have been filed and more than 50% have been turned down

• According to the Gulf Coast Claims Facility, “less than 20% of claimants have submitted complete 2010 supporting documentation”

• Quick payments– $5,000 per individual – $25,000 for business.

People Affected

• Fishermen - Fishing has been ban in 40% of the water in the gulf after the spill.

• People are out of a jobs– According to a fisherman in the New York times article, BP Says Spill

Settlement Terms Are Too Generous . “We need help now! We have not been paid in 8 months. I have a mortgage, car payment, utilities, and a child. I’m close to losing my home and I pray that you figure out everything before I lose everything. We are people with real lives! This has been a horror for my family.”

• Tourism Industry hit hard

Other Problems

• First permit to drill again in the gulf was approved.

• Mary Landrieu a Democratic Senator from Louisiana said “ hope that this permit is the first of many to come, and I will continue to use every lever at my disposal to ensure that it.”

Conclusion

• Money and greed drive big organizations • At the end of the day, main street is the one

who looses• The path to recovery is going to be long and

hard.

Questions

What did we learn form this

• Distributing money is hard. • There are many people that are over paid• Having access to a lawyers and other people that

advocate on your behalf helps • Showed that claims process is very convoluted• There is incentives in holding on to money.• Oil companies can persuade politicians.• Financial recovery is going to be more than 2

years.

Reference• http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8358

531/BP-directors-take-bonuses-for-year-of-Gulf-of-Mexico-oil-spill.html

• http://www.nytimes.com/2011/02/18/us/18bp.html?partner=rss&emc=rss • http://www.nola.com/news/gulf-oil-spill/index.ssf/2011/02/gulf_oil_spill_cl

aims_process.html

• http://www.wdsu.com/r/26863948/detail.html • http://www.boston.com/news/science/articles/2010/08/15/fishermen_tak

e_shots_at_bp_skimming_program/

• http://travel-industry.uptake.com/blog/2011/01/24/louisiana-bp-oilspill-tourism-losses/

• http://thinkprogress.org/2011/02/26/ken-feinberg/• http://i2.cdn.turner.com/money/2010/07/16/smallbusiness/florida_bp_clai

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