Who gets paid by victims fund?

June 24, 2010 at 12:00a.m.

Associated Press

NEW ORLEANS

Is a strip club that caters to oil-rig workers entitled to a piece of the $20 billion fund for victims of the Gulf of Mexico disaster? How about a souvenir stand on a nearly empty beach? Or a far-off restaurant that normally serves Gulf seafood?

The farther the massive spill’s effects spread, the harder it will get for President Barack Obama’s new compensation czar to decide who deserves to be paid.

Fishermen, rig workers and others left jobless by the oil spill seem certain to get their slices of the pie, sooner or later. It’s the people and businesses a few degrees — and perhaps hundreds of miles — removed from the Gulf but still dependent on its bounty who will have a tougher time getting their claims past Kenneth Feinberg, the lawyer who handled payouts for families of Sept. 11 victims.

“How can there not be a trickle-down effect?” said Jeffrey Berniard, a New Orleans lawyer who represents about 100 people and firms filing claims against BP PLC. “How can the businesses that serve all the people who work in the industry not be affected if all the people in these industries are out of work?”

The question of who gets paid also gets trickier with time. As the spill enters its third month, Berniard and other attorneys say they’re hearing more from people who might not have been affected right away.

Charles Lavis Jr., another New Orleans lawyer, said he’s fielded several inquiries from people worried the value of their recreational boats could drop if they are driven through an oil slick or if fewer people are interested in buying them because they don’t want to cruise along an oil-spattered coast.

There has been so much confusion over who is eligible that Feinberg has had to respond to rumors about a New Orleans strip club putting in for a payout.

“I’m dubious about that claim. I’m very dubious about that claim,” Feinberg told ABC’s George Stephanopoulos. “But I don’t want to prejudge any individual claim.”

The business, called Mimosa Dancing Club, turns out to be a modest bar with a small dance floor in a Vietnamese enclave on the east side of the city, at least an hour from any oiled waters.

Under pressure from the White House, BP will pay $20 billion into a compensation fund that will be administered by Feinberg. Curry said the company has not rejected any of the more than 67,000 claims it has received, although it has asked thousands of people for more documentation before cutting a check.

That could be a problem for many of those who need money most urgently, said Tuan Nguyen, deputy director of the Mary Queen of Vietnam Community Development Corp. in eastern New Orleans, where many immigrants and their families work in the seafood business.

“It’s a very cash-involved industry. Some of the boat captains or boat owners, they sell fish on the side of the road or directly to families. They don’t have records of that,” Nguyen said.

Feinberg said that when drawing the line, he probably will try to determine if the law in the state where the claim is filed would recognize it if it were filed in court, a process he used in determining who had a legitimate claim to the 9/11 victims fund.