Pay czar Feinberg turns from bankers to BP
As U.S. public outrage turns from banker pay to the massive BP oil spill, the government is again calling in a man with a reputation for dealing with sticky financial situations -- Kenneth Feinberg.
Feinberg gained national attention when dispensing hundreds of millions of dollars to victims of the September 11, 2001 attacks. His latest role will be to oversee a $20 billion special fund that BP Plc has agreed to set up to pay damage claims from the spill.
The new role comes as his responsibilities as the Obama administration's pay czar diminish.
Feinberg, an arbitration lawyer, was brought in as "special master" for compensation in June 2009 as public anger simmered over big bonuses awarded at taxpayer bailed-out firms like American International Group.
Feinberg, who has a booming voice and a flair for the dramatic, has navigated that minefield well, by most accounts.
He has been hailed for soothing the egos of Wall Street executives clutching on to big paychecks, while still looking tough to a general public shocked by massive payouts to firms on a government lifeline.
One statistic cited by his admirers to show his success -- 84 percent of the top earners at bailed-out firms under Feinberg's scrutiny have stayed with the companies, as of March.
Feinberg is not without his detractors. Bank of America blasted his pay rulings last year, saying they were causing other firms to poach its workers. Anastasia Kelly quit her job as AIG's general counsel in protest over pay curbs Feinberg imposed.
The Next Challenge
But the scope of Feinberg's high-profile pay czar job has lessened as more big firms have paid back taxpayers. As he takes on his new role, Feinberg still has to issue in the comings weeks his findings from his review of past compensation at 419 firms that received bailout funds, including JPMorgan Chase and Goldman Sachs.
Feinberg's latest challenge takes him away from Wall Street and back to Main Street anguish.
Millions of gallons of oil have gushed into the Gulf of Mexico since an April 20 explosion of an offshore rig killed 11 workers and ruptured a BP well.
The spill, the biggest in U.S. history, has soiled 120 miles of U.S. coastline, imperiled multibillion-dollar fishing and tourism industries, and killed birds, sea turtles and dolphins.
It has also turned on the tap for what is certain to be a long outpouring of damages claims. The escrow fund agreed to by the Obama administration and BP follows complaints from Gulf Coast residents that the claims process was too long and complicated and that BP was paying out too little money.
Feinberg is no stranger to high-stakes emotions and payouts. He was adept in handling the September 11th victims' fund and the fund for victims of the 2007 shootings at Virginia Tech, according to people who worked with him.
When news of Feinberg's new role hit on Wednesday, New York Senator Charles Schumer was quick to sing his praises.
"The victims can be confident that real help is on the way with someone as fair, diligent and sympathetic as Ken Feinberg running this fund," Schumer said in a statement. "I believe when Feinberg completes his mission here, the people in the Gulf will feel the same way."
Feinberg declined to comment.
Feinberg, the son of a tire merchant, has been on the Washington scene for decades.
Feinberg, who is 64, has described himself as an "average student at rough-and-tumble Brockton High School" in Massachusetts, but excelled at the University of Massachusetts.
After college, Feinberg entertained the idea of pursuing an acting career. His father told him to play Hamlet in front of juries instead. He attended law school at New York University.
Despite his regular forays into high-profile work for the government, he maintains his private law practice, Feinberg Rozen LLP, located a couple of blocks from the White House.
[Source: By Karey Wutkowski, Reuters, Washington, 16Jun10]
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