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Justice Department says BP fund should be spent faster

By Terry Frieden, CNN Justice Producer
Fireboats battle the blaze after the Deepwater Horizon rig exploded in the Gulf of Mexico on April 20.
Fireboats battle the blaze after the Deepwater Horizon rig exploded in the Gulf of Mexico on April 20.
  • Justice Department urged faster process to pay more claims from BP's $20 billion fund
  • About $3.5 billion has been paid by Kenneth Feinberg, head of Gulf Coast Claims Facility
  • Feinberg's job "is not to preserve the $20 billion fund," says State Department
  • Whatever amount is not ultimately paid out to claimants goes back to BP

Washington (CNN) -- In a bluntly worded letter to the official who handles claims stemming from last year's Gulf oil spill, the Justice Department Friday urged changes to speed up the process and to pay more claims from BP's $20 billion fund.

Associate Attorney General Thomas Perrelli told Kenneth Feinberg, who was appointed to run the Gulf Coast Claims Facility, that his job "is not to preserve the $20 Billion fund that BP has established or to return money to BP."

To date about $3.5 billion from that fund has been paid. Whatever amount is not ultimately paid out to claimants goes back to BP. Perrelli made clear in his three-page letter made available by the Justice Department that his concerns had been simmering since the fund was established nine months ago.

"Businesses in the Gulf that have suffered harm as a result of the Deepwater Horizon explosion and oil spill need to be investing in their businesses and marketing themselves now to avoid losing another year of revenue and to continue the revitalization of the Gulf that is a national priority," Perrelli said. "This is a matter of urgency."

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Perrelli, the third-ranking Justice Department official, has been the government's point man on the issue since the spill.

"The impact of the spill on the lives of the people of the Gulf cannot be overstated," Perrelli said. He said Feinberg had interpreted the rules too narrowly, and said claims should be granted not only where damages were directly caused by the spill, but from communities that demonstrate "pervasive affects of the spill on the overall economy."

Feinberg, a longtime Democrat and associate of the late Sen. Ted Kennedy, was appointed to the Gulf claims position because of his skillful handling of highly complex and controversial claims by families and survivors from the September 11, 2001, terrorist attacks.

In that case, Feinberg attempted to pay all reasonable claims while protecting taxpayer dollars, not corporate dollars.

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