WASHINGTON (Bloomberg)—U.S. Associate Attorney General Thomas Perrelli asked Kenneth Feinberg to take a “second look” at emergency assistance claims denied by the $20 billion oil-spill damage fund he administers on behalf of BP P.L.C.

Mr. Perrelli, in a later sent Friday to Mr. Feinberg's Gulf Coast Claims Facility, urged the mediator to re-examine denied claims and speed payment of interim damage claims to “insure 2011 is not a lost season” for Gulf Coast tourism and seafood businesses that already lost most of their 2010 profits to the largest offshore oil spill in U.S. history.

“When a small business files for its interim claim every three months, and then waits 90 days for the claim to be resolved, its cash flow is already running six months behind—at the very moment when it needs to be getting back on its feet and investing in its future,” Mr. Perrelli said in the letter.

Mr. Feinberg administers the $20 billion fund established by BP to handle claims arising from the April 20 explosion of its well in the Gulf of Mexico. States, businesses and individuals suing BP over the spill allege that Mr. Feinberg may be shortchanging some claimants.

Cheap settlements

Mississippi Attorney General Jim Hood this week claimed London-based BP is using the fund to stall payment of interim damage claims and pressure “financially desperate” oil-spill victims into accepting quick, cheap settlements that block them from suing later on.

U.S. District Judge Carl Barbier in New Orleans, who is overseeing environmental, economic loss and personal injury claims, said Wednesday that Mr. Feinberg can’t claim he’s an independent administrator and must fully disclose his ties to BP when communicating with potential claimants.

Mr. Perrelli on Friday urged Mr. Feinberg to make the fund’s process for continuing to pay interim damage claims “efficient, fair and straightforward” to help individuals “attempting to keep their businesses alive in the face of significant uncertainty.”

Daren Beaudo, BP’s spokesman, didn’t immediately respond to requests for comment on Mr. Perrelli’s letter.

In an e-mailed statement, Mr. Feinberg thanked Perrelli “for his constructive suggestions during the public comment period and we’ll take them under advisement.”

The case is In Re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, 10-md-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

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