This is a rush transcript from "Your World With Neil Cavuto," June 21, 2010. This copy may not be in its final form and may be updated.
NEIL CAVUTO, ANCHOR: You know, perhaps any of the characters in this BP mess, he’s the least messy. He’s clearly the most trusted, the most respected, and, truth be told, the most liked by both sides.
So, when Gulf fund administrator and so-called BP pay czar Ken Feinberg told me he was getting to work right away today and getting to cutting checks right now, he clearly wasn’t cutting anyone any slack. He has got $20 billion to oversee. And this former 9/11 victims fund administer says the pace of these payouts will be bigger and faster, much bigger and much faster.
CAVUTO: Talk about baptism by fire — you’ve hit the ground running.
What do you think the pace of these payouts, however you ultimately decide to administer them, will be?
KENNETH FEINBERG, ADMINISTRATOR, GULF SPILL CLAIMS FUND: Well, they’ve got to be accelerated. I would hope that once a claim is filed, if it’s an emergency claim, I’d like to see those claims paid within a few days. The long-term claims, I would think, in the next 30 to 45 days, we’ll have a protocol in place to handle those long-term, final claims.
CAVUTO: The longer-term claims, what do you mean by those?
The ones that are more substantial or — or what?
FEINBERG: Yes, the ones that are more substantial — business interruption claims, lost profit claims — claims that require more corroboration, more analysis. Those claims will take a bit longer. But, again, we hope to get them done in an expeditious way.
CAVUTO: Is it your sense that you’re under more pressure to get money paid out quickly than you were either in dealing with the 9/11 Victims Fund or the Agent Orange-related funds, that — that there is particular time of the essence pressure here?
FEINBERG: No. I would say that in all of these large, complex cases, as — as Governor Barbour told me last week, time is the enemy. And I think in all these cases — I recall in 9/11 — as you do — the angst and the frustration in delaying payments to people in very desperate financial straits.
CAVUTO: But you had to make some very tough choices in making those payments to 9/11 victims' families and separating what, you know, a dead broker’s family should be getting versus a dead fireman’s family should be getting. Those are very tough choices. And — and I’m wondering whether you will be using the kind of math here, whether those who have more income on the line as a result of — of money missed because of this versus someone who has less money on the line?
FEINBERG: Absolutely. That’s the whole system. There’s $20 million to distribute. People who lost more, businesses that lost more suffered a greater financial loss, more business interruption, can corroborate their claim, we plan to pay full compensation. That’s different, obviously, than a wage earner working on a ship who lost wages, but the wages aren’t as great as the — as the business. That’s part of the system that we live and we work under.
CAVUTO: Technically, Mr. Feinberg, you're working at the behest of the Obama administration and, in the most technical sense, being paid by BP.
It’s weird, right?
FEINBERG: I’m working independently. Both the Obama administration and BP decided together that I should create an independent claims facility. The entire cost of the facility — the entire costs associated with me, my staff, are funded entirely by BP.
FEINBERG: How could it be otherwise?
How could it be otherwise?
FEINBERG: You can’t ask the people of the Gulf to pay for this. You can’t ask the state or federal government to chime in. This is strictly a BP, 100 percent financial obligation.
CAVUTO: No, the only reason why I mentioned it, Mr. Feinberg, is you’ve heard the criticism from those who’ve looked at this — not to you directly, sir — but Republican Representative Joe Barton comes to mind, referring to this as a shakedown.
What do you say?
FEINBERG: Oh, I don’t think this is a shakedown. I think this is BP stepping up to the plate. It’s a big company and it’s decided it’s in its own interests, as well as the people in the Gulf, to come up with an alternative to the traditional judicial litigation system.
CAVUTO: So this $20 billion that the company set aside — and I believe it’s $5 billion per year, Mr. Feinberg — what if your damages or your payouts are exceeding that every year?
What if they are exceeding $5 billion every year?
Are there — are there allowances for that?
FEINBERG: My understanding — my understanding is that BP will replenish the fund to make sure that there’s sufficient liquidity in the — in the independent claims facility to pay claims at any time during any course of the year, once those claims are deemed valid.
CAVUTO: So even if they were to eclipse $20 billion in the first year?
FEINBERG: That is my understanding.
CAVUTO: OK. You know, there have been many Democrats in Congress, Mr. Feinberg, who said the $20 billion isn’t enough. I know you’ve just started this, so I apologize in advance for maybe the simplistic nature of this question.
But is it your gut that the $20 billion will be enough to cover it?
FEINBERG: I don’t have the slightest idea yet, as I get into this project, whether or not — 20 — $20 billion is a lot of money. I mean, BP, to its credit, has already paid out $100 million. That’s not part of the $20 billion. But it’s put up $20 billion. And I have no reason to doubt that if I need more than $20 billion, it will be there. Whether I will need it or not is very premature.
CAVUTO: But is it your understanding, sir, that if it is not enough, that BP will keep paying out more?
FEINBERG: That is correct.
CAVUTO: OK. A lot of it is contingent, I guess, on — on, ultimately, the company getting this darned thing capped.
How will that change the dynamics of what you have to do, if and when it succeeds in doing so?
FEINBERG: It makes a big difference, Neil. Until the oil stops leaking, it’s very hard to calculate the damage. So here I am trying to develop a prompt, efficient system for paying out valid claims and it’s a very hard thing to do when the oil continues to leak, because you can’t get a handle around the total loss. And the sooner that gets done, the easier it will be to administer this facility.
CAVUTO: There have been many critical of this setup, Mr. Feinberg — not, again, you — but this setup, saying it is essentially a — a blank checkbook and BP will have to keep writing checks. And unforeseen as it would seem now that a company could go broke constantly writing these checks, do you envision the possibility that lawsuits and responsibilities could build to the point that it pushes BP to bankruptcy?
FEINBERG: Absolutely not. That would be a horror. If BP ever were - - was unable to pay valid claims because of bankruptcy, that would be a disaster for the — for BP, it would be a disaster for the people in the Gulf, it would be a disaster for the economy of the Gulf. I think that is not an option.
And I must say, to those who criticize this fund as somehow driving BP toward the brink, I would only add that this fund is — is, in one sense, a very important lifesaver for BP. Claims should not into this facility. The alternative is to litigate against BP in court for a decade or more. You don’t know if you’re going to prevail. You’ve got to give your lawyer 40 or 40 percent contingency.
It seems to me that this facility — independent facility — is a win for the people of the Gulf and, frankly, a win for BP, as well.
CAVUTO: BP officials, sir, have said that while they’re eager to pay any and all good claims that have merit — I’m paraphrasing here — I think they drew the line at moratorium-related damages on what was a White House sort of a six month freeze on offshore drilling. They’ve not been black and white on the issue, but I suspect what they’re saying is that when you take up damages, damages incurred by those who were affected by the freeze on drilling might be treated differently.
Are you under that impression?
FEINBERG: Yes, they’re treated very differently. It’s not an impression, it’s a fact. The White House or the administration and BP agreed to set aside $100 million — not part of the $20 billion escrow fund — to deal with these so-called moratorium claims.
CAVUTO: Yes, but we could blow through $100 million...
FEINBERG: It’s not on my watch.
CAVUTO: We could blow through $100 million very quickly, right?
Especially if BP is saying we’re not sure about this moratorium responsibility.
FEINBERG: It’s my understanding the $100 million has been agreed upon. It’s not part of my watch. The moratorium claims will be paid separately by BP.
CAVUTO: OK. So just to be clear, sir, then you’re not responsible for anyone who comes to you and says, Ken, I’ve got these damages that I can prove very substantially that are a direct result of the freezing of drilling in and around the Gulf?
That’s not your department.
CAVUTO: OK. Only...
FEINBERG: It’s not on my watch.
Do you have any indication as to whether eventually they will be part of your watch?
FEINBERG: It’s up to the two parties that set up this facility. If they want to bring those claims in, they can bring the claims in. But right now, the $100 million is not part of the $20 billion, it’s not part of my jurisdiction, it’s a separate claims process.
CAVUTO: All right. I know you’re a numbers cruncher and a very good lawyer at that.
Any thoughts on Tony Hayward going to a yachting race this weekend off the British coast, far from the Gulf Coast?
FEINBERG: Neil, I’ve got enough problems administering this new, independent fund without questioning whether or not it was wise for anybody to do whatever they did over the weekend. I’ve — I’ve got to focus on the matters at hand.
CAVUTO: Because it does — the only reason why I mention it, Ken, is it does call into question the seriousness of the company and its resolve to handle all of this litigation when the company higher-ups don’t seem to be full bore into it.
FEINBERG: I can assure you firsthand, as I sit here today in Houston, BP takes this independent claims facility very, very seriously. There is a huge amount of money involved. There are a huge number of claims to be considered and processed. There is nothing more important, as I can see it, at least, for BP, than making sure that this facility works and that eligible claims are paid properly and in full.
CAVUTO: OK. So when the White House and Congress seem to make a — a kicking dog of BP, too much so?
FEINBERG: I — you’ll have to ask them. I’m moving ahead with this facility and trying to process the claims.
CAVUTO: All right.
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