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Restrictive guidelines governing claims for lost revenue leave many Louisiana businesses gasping for survival.

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Moratorium Leaves Small Businesses Between Rock and Hard Place

Restrictive guidelines governing claims for lost revenue leave many Louisiana businesses gasping for survival.

I have arrived in the nation’s capital to spread the word of the continued economic destruction in the Gulf of Mexico. Tomorrow (Tuesday), I will meet with staff in the offices of Louisiana Senators Mary Landrieu and David Vitter and Rep. Charles Boustany to relate my story and to discuss concerns going forward. I have been honored to be a constituent of these legislators, especially since the spill, as they have vocally opposed the moratorium and stood up for Louisiana and the entire energy sector in this trying time. I appreciate their support and the support of everyone who has opposed policies that are costing thousands of jobs.
 
While here, I also hope to share my story with the President’s Oil Spill Commission tomorrow as one of their seven witnesses during the public comment period. There is a different story unfolding in the Gulf than that which is being portrayed on television. The payment claims process continues to aid residents for hardships verifiable through long paper trails, but for some small businesses, this process has proven to be undoable. Businesses like mine across the Gulf continue to suffer massive revenue shortages, while it appears that BP’s bottom line has recovered nicely.
 
The claims process is faulty in the way it determines impact. The initial spill lost the state of Louisiana—and the entire South coast—thousands of tourists, directly affecting hotels, restaurants, local shops, and anyone else who profits from the tourism industry. It also directly affected fishermen, by polluting their product and putting their jobs on hold. But businesses like mine were not affected until the government response took effect.
 
When the President issued his blanket moratorium for six months, every order at Oilfield CNC Machining LLC, the business I run with my wife in Broussard, was cancelled. The lucrative energy sector, which generates the demand on which we rely, suddenly went dry. Though the offshore moratorium has officially been lifted, I continue to suffer from a 50% decrease in business as a result of the permitting freeze. To a specialized company like mine, which provides machine parts for offshore drilling rigs, this response has been nearly a deathblow. But still, I have not seen a dollar from BP.
 
When the process first began, we painstakingly pulled together what we assumed was the necessary paperwork to receive a check from the compensatory fund. Apparently, illustrating a decline in business was not sufficient to receive payment. I had to show receipts of cancelled orders from clients to receive payment. This proved difficult as companies not wanting to show a direct link to BP were reluctant to pass on the paperwork I needed. Additionally, unrealized orders that failed to come in because of the moratorium have no paperwork; they simply didn’t occur. And since this damage was caused by the ban on offshore drilling resulting from the oil spill, but not the oil spill directly, my claim was rejected. I have considered reapplying, but the work of bothering potential clients for obscure records of transactions that didn’t occur could cost future business, and seems to be a waste of time, as the claims will likely be rejected again anyway. So when BP comes on television and tells me they are doing everything they can to fix this disaster, all I can do is disgustedly turn the channel. And I am not alone.
 
In September, with the heat still on BP from national media and an angry public, they rejected only 125 claims for compensation. Now, that number has jumped above 20,000. Additionally, the funds people are receiving are nowhere near equal to their losses. Stories like that of Dean Blanchard’s seafood restaurant on Grand Isle, which was reimbursed less than 15% of their over $3 million in losses, abound in the region. Unfortunately, companies like mine, and the others that have been victimized and tossed aside, do not have the $93 million that BP has to spread our point of view across the country through ads. So for small businesses, the nightmare continues as the government withholds permits for drilling, and BP withholds payments to compensate for their cavalier safety approach. At the outset of 2010, the sky appeared to be the limit for my upstart business. Now sandwiched between an un-mandated government policy of business destruction, and a tight-pocketed international corporation, I feel as if I and others in my situation are bringing a new meaning to the phrase, ‘stuck between a rock and a hard place.’

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Thomas Clements is co-owner of Oilfield CNC Machining LLC in Broussard, Louisiana, which specializes in machining quality metal parts for oilfield equipment used on offshore drilling rigs.

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