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Dispute Heats Up Over BP's $20B Oil Spill Fund

Administrator of BP's oil spill fund says Mississippi Attorney General could undermine the claims process by urging a court to intervene and by making defaming allegations.

JACKSON, Miss. (AP) -- The administrator of BP's $20 billion oil spill fund says Mississippi Attorney General Jim Hood could undermine the claims process by urging a court to intervene and by making allegations that border on defamation.

Hood called those statements, made Tuesday in a court filing in Louisiana, "surreal." Hood said he just wants the fund's administrator, Washington lawyer Kenneth Feinberg, to make the process more transparent so people will know if he's looking out for best interest of oil spill victims or BP PLC.

The dispute heated up after Feinberg's lawyers filed the 12-page motion Tuesday in federal court in Louisiana. It accuses Hood of making "unsupported and damaging assertions" about the claims process. Feinberg was responding to documents has filed that ask the court to audit the claims process.

Hood told The Associated Press on Wednesday that he believes Feinberg's claims facility is intentionally delaying and denying legitimate claims to force people to take the so-called Quick Pay option.

Quick Pay gives individuals $5,000 and businesses $25,000. They are required to sign a waiver that they won't sue and won't seek more money from the claims facility. Feinberg says 110,000 people in Mississippi and other states have taken that option.

"At some point, I'm going to put his tail in a chair and make him raise his right hand in a deposition and get to the bottom of whether him and BP conspired to force people into the Quick Pay process," Hood said.

Feinberg told AP on Wednesday that Hood has no evidence to back up his allegations of wrongdoing.

"The idea that there's some sort of conspiracy to force people to take the Quick Payment is totally false," Feinberg said. "Mounting a soap box and making that argument is no substitute for taking a close look at the statistics, reviewing the claims and seeing what is going on here."

Feinberg has been criticized by others about the size and pace of payments and a perceived lack of transparency. Some lawmakers have demanded the White House step in and provide more oversight of the program. Louisiana Gov. Bobby Jindal is among others who want a federal judge to intervene in the fund.

Feinberg's court filing was in response to a motion Hood filed in a mass case that combines dozens of oil spill lawsuits. In the motion, Hood urged the U.S. District Court in the Eastern District of Louisiana to audit the claims process. He also criticized BP for raising Fienberg's pay from $850,000 a month to $1.25 million.

Hood's motion said the pay raise "speaks volumes about what services that BP requires Mr. Feinberg to perform."

That statement, Feinberg argued in court papers, "almost rises to the level of defamation."

Hood, a Democrat in his second term, has been both praised and criticized in the past for his fiery rhetoric and legal intervention related to disasters that affected Mississippi, particularly in taking on the insurance industry after Hurricane Katrina hit in 2005.

Hood said he was surprised by the nature of Feinberg's court filing.

"It just seemed kind of surreal and defensive to me. It seems like they are nervous the judge is going open the books on this process," Hood said. "Transparency is what we want."

Feinberg said the fund has paid out nearly $4 billion on about 300,000 claims. He said hundreds of claims continue to pour in and there have been about 800,000 in all. Feinberg said the fund is such a massive undertaking that there will be some mistakes, but he tries to correct them as quickly as possible.
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