The attorney Ken Feinberg makes a good living off big problems.
When General Motors CEO Mary Barra let slip at a Congressional hearing yesterday that she had consulted Feinberg over how to deal with the company’s 6-million car recall, it was both a savvy way to show that she was taking the problem seriously—but also an admission that the company may be liable for significant financial damages. GM is under increasing scrutiny for failing to fix faulty ignition switches, a problem that is linked to 13 deaths. It recently emerged that the company has been aware of the problem since 2001.
Feinberg has become the go-to hire for big companies or government officials who need to divvy up limited cash for exceptional damages.
Terrorist attacks. After the 9/11 attacks, the US government put Feinberg in charge of distributing some $7 billion to victims of the attack. Despite the high emotion surrounding valuing the loss of a loved one—Feinberg’s memoir of the time was titled What is Life Worth?—he was able to earn the admiration of some of his critics in fairly distributing damage payments. Feinberg also handled victims’ compensation following the Boston Marathon bombings.
An environmental catastrophe. After a BP oil rig exploded and pumped oil into the Gulf of Mexico, Feinberg was put in charge of a $20 billion fund to pay off the victims of the crisis in Louisiana, Mississippi and other affected states. Local politicians said he was not being generous enough, and a federal judge eventually ruled that Feinberg—whose salary was being paid by BP—wasn’t independent, and replaced him with a local attorney.
Paying the people America loves to hate. When taxpayers bailed out the financial system, the Obama administration wanted to keep tabs on how much executives were being paid, and put Feinberg in charge of stopping excess compensation. He was initially able to force some companies to cut pay by millions, but by 2010 was left wagging his finger as Citigroup, Goldman Sachs, Bank of America, and JPMorgan Chase paid their executives excessively but not illegally.
If anyone can navigate the situation that GM finds itself in—with its liability complicated by its 2009 bankruptcy, relationships with suppliers and a mishandled public response to the latest problem—it’s probably Feinberg, who has handled plenty of messes.
“I must tell you every time I do one, you say to yourself, ‘God I hope this is the last one,’” he said last year.