Obama should step in over Gulf spill fund-Alabama gov.

* Alabama governor condemns oil spill fund “extortion”

* Says spill victims being forced to give up claim rights

* Some claimants received no payments since June-Riley

ATLANTA, Dec 6 (BestGrowthStock) – President Barack Obama should
intervene to stop the $20 billion BP oil spill compensation
fund from depriving claimants of their rights, Alabama Governor
Bob Riley said on Monday, calling the way the fund was
operating “extortion.”

The fund, set up by BP Plc (BP.L: ) for victims of the worst-
ever U.S. offshore oil spill that hit the Gulf Coast region
earlier this year, encourages claimants to file early for final
settlements to get the most generous terms, according to its
administrator, Kenneth Feinberg.

But Riley said that in practice, claimants are being asked
to sign away their rights to sue BP for damages.

“We’ve gotten to the point today where someone said, ‘Well,
this is not extortion.’ Of course it is!” Riley said in
comments to MSNBC-TV. “Now they’re not paying any of these
claims unless you sign the final release.”

The Alabama governor said some small business people who
are owed tens of thousands of dollars have received no payments
since June and have gone out of business as a result.

The April 20 blowout of BP’s Macondo well while it was
being drilled in the Gulf of Mexico off Louisiana, killed 11
rig workers and spewed more than 4 million barrels of oil,
closing fisheries and stunting tourism from Louisiana to
Florida.

BP set up the fund in June in response to public outcry and
political pressure from the White House, but there has been a
slew of complaints by affected states and individuals about the
way it is being administered.

Feinberg last month warned that Gulf Coast inhabitants and
businesses who decline to settle and refuse to give BP and its
contractors a release from future risk of lawsuits might end up
getting less money.

“There is no guarantee that, in the future, a lump sum
final payment will be as generous as it will be currently,”
Feinberg said last month.

Riley argued that one reason economic victims of the spill
felt under pressure to sign a final settlement was because they
did not know what the future held.

“It is insane. And it’s time for the president or the VP
(vice president) or someone to step in and say ‘Enough!’

“The biggest thing that they need to do right now is walk
in and reassess the process,” he said.

After the emergency claims filing period ended last month,
Feinberg outlined a final settlement process that gives
claimants two options.

They can accept a lump sum final payment in exchange for
releasing BP and its contractors from future liability. Or they
can continue to receive interim payments in hopes of a bigger
final payment in the future.
(Reporting by David Morgan, writing by Matthew Bigg, Editing
by Pascal Fletcher and Maureen Bavdek)

Obama should step in over Gulf spill fund-Alabama gov.