On the heels of British oil giant BP’s appeal to New Orleans court to reassess the terms of its compensation deal with local businesses, they have set up a hotline for people to report allegations of fraud. BP promises that “tips that lead directly to an indictment, a recovery of money paid, or the denial of a claim because of fraud or corruption may entitle the reporter to a reward”. The oil company claims it is being forced to pay hundreds of millions of dollars in inflated or fictitious settlements from the 2010 Deepwater Horizon disaster. The hotline offers “a reliable resource for people who want to do the right thing and report fraud or corruption,” BP said Monday in a news release.
BP originally made payments from the $20 billion Gulf Coast Claims Facility (GCCF) set up by former chief executive Tony Hayward in June 2010 after a meeting with President Obama. In 2012, compensation was moved to the court-supervised settlement programme (CSSP).
BP claims the launch of the hotline was “particularly timely” because the CSSP spends substantially less than the GCCF on combating fraud. “This seems inappropriate given that the GCCF’s fraud detection program enabled it to identify more than 7,000 claims as ‘multi-claimant scams or even efforts at criminal fraud’,” it said.
“The launch of the hotline comes as federal law enforcement officials are clamping down on cases of fraud and other abuses in the claims process. In recent months, US attorneys in Florida, Alabama and Louisiana have secured guilty pleas and convictions against multiple individuals for attempting to defraud the claims process and take money to which they are not entitled under the law,” BP said.
U.S. District Judge Carl Barbier, who is overseeing the oil spill trial, issued an order earlier this month appointing Louis Freeh, a former federal judge and director of the Federal Bureau of Investigation, to lead a review of the claims settlement program.
Lafayette lawyer Patrick Juneau, the court-appointed claims administrator, said last month that his office would investigate allegations of misconduct by an attorney on his staff. Barbier, in his court order, said Freeh’s role would include “fact-finding as to any other possible ethical violations or other misconduct.”
An appeals court is now considering BP’s claims that Juneau has misinterpreted the claim agreement. Lawyers for the plaintiffs argued this month that BP had agreed to the scheme and was now suffering “buyer’s remorse”.
The Raw Story
Blog post by Louisiana maritime lawyer, Gordon, Elias & Seely.