July 28, 2010
Feinberg to Disclose Compensation for Administering BP Fund
The Associated Press reports that Ken Feinberg announced on Tuesday that he will disclose BP's compensation to him for administering the $20 billion BP oil-spill claims fund, after he had previously stated such information would be "confidential" and "between [him] and BP." Feinberg now concedes the "perception of a conflict." Feinberg also said the he might request that than an outsider "with great credibility" set his salary. (H/t to Ted Frank of the Center for Class Action Fairness for apprising me of this development.)
On Sunday, July 18, I posted about the possible conflict of interest for Feinberg, arguing that he should disclose his compensation and seek a federal judge to assess his billable hours and rate, as is routinely done in class-action fee requests by class counsel. My post triggered a short article by Forbes and a post on Legal Ethics forum. I doubt my post had anything specifically to do with Feinberg's decisionmaking, but I'm happy that he has decided both to disclose his compensation and to seek a reputable third party to oversee his compensation, rather than BP (presumably, BP will agree to whatever the third-party determines). As I mentioned in my earlier post, I never meant to call into question Feinberg's integrity; rather, I urged this path as a way to help the success of the fund by removing any possible conflict of interest, and I expect that both Feinberg and BP will be happy to put this issue behind them.
UPDATE -- A Forbes article today discusses my prior blog post and Feinberg's recent decision to disclose his compensation.
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