June 14, 2010 in Nation/World

Thousands await relief from spill’s economic hit

Frustrated claimants awaiting checks get few answers from BP
Kim Murphy Los Angeles Times

Emma Chighizola has filed a claim with BP for lost income at her souvenir shop in Grand Isle, La.
(Full-size photo)

GULF SHORES, Ala. – Alabama real estate agent Mike Reynolds had two desirable beachfront condos in escrow when the tide of crude from the Deepwater Horizon spill washed over his business and left it looking about as appetizing as an oiled crab.

“I lost $20,000 in commission,” Reynolds said. “The guy called and said he’d never be able to make any money off of them. He walked away from a $10,000 earnest-money check.”

Just a few miles east of Reynolds’ Gulf Shores, Ala., condos, restaurant owner Matt Shipp has seen his Orange Beach business plummet by 90 percent even before thick masses of oily seaweed painted the white sand beach Saturday. He put in a claim for $35,000 in lost business for May, and after more than 40 days of phone calls and faxes, got approved for $18,000. When will he get the money, he asked BP’s adjuster, the fourth one to whom he’d been passed.

“He said, ‘I don’t know,’” Shipp said. “I said, ‘Who will send it to me?’ He said, ‘I don’t know.’ I said, ‘Is it a check? A bank transfer?’ He said, ‘I don’t know.’ As of today, I still don’t have the funds.”

Across the Gulf of Mexico, residents already shell-shocked by the tar balls, oil soup and dead sea life washing up on their beaches are now getting hit with the sudden collapse of their livelihoods, and the intimidating challenge of getting BP to pay for it.

President Barack Obama, who today makes his fourth visit to the Gulf in six weeks, will try to compel BP to set aside a “substantial” sum in an escrow fund for economic damage claims. Senate Democrats on Sunday requested that BP set aside $20 billion that would be overseen by an independent party, a contingency that will further stress the oil giant, which has lost about half its market value since the April 20 explosion on the Deepwater Horizon drilling rig started the worst spill in U.S. history.

The 42,000 claims filed with the oil company so far go well beyond the shrimpers, oystermen and seafood processers who have been the spill’s most visible victims. Hotels, restaurants, machine shops, bars, tour companies – all became collateral damage when the Gulf of Mexico, one of the nation’s most important fisheries and tourist destinations, became an industrial cleanup site.

The people whose lives depend on those businesses complain of claims that have been ignored, phone lines that ring unanswered and lost paperwork.

“What the future will hold, I have no idea,” said Emma Chighizola, owner of Blue Water Souvenirs on Grand Isle, La., a barrier island full of colorful beach cabins at the southern tip of Louisiana that is normally flush with tourists this time of year. “We’ve never been through anything like this. We’ve been through a lot of hurricanes and we always came back. We knew what to expect. This, we don’t.”

For now, cleanup workers have booked all the rooms, but the shelves stocked tightly with paperweights, shell necklaces, crab potholders and swimsuits are just as full as they were when the season began.

Chighizola and her husband filed a claim several weeks ago for lost revenue but have received no response.

“They keep saying, ‘Not yet. It takes time for the paperwork,’” Chighizola said. “But I have to pay these bills. All this merchandise, it was all ordered back in December, and I’m having a hard time paying for it.”

BP says it has paid out $53 million in economic damage claims so far, mainly the initial checks of $2,500 or $5,000 to fishermen and others who can document immediate, direct losses. More than 20,000 of the 42,000 claims submitted have been paid, and no documented claims have been denied, said BP spokesman David Nicholas.

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