iNVEZZ, Monday, September 9: BP (LON:BP) has won a partial victory in its fight to curb compensation payouts related to the 2010 Gulf of Mexico oil spill after an independent investigation found evidence of a plot to “corrupt” the process, The Sunday Times has reported.
The British oil and gas major has complained that the $7.8bn (£5bn) fund for victims of the oil spill set up last year has been improperly used to satisfy fictitious or inflated compensation claims filed with the court-appointed administrator Patrick Juneau alongside legitimate claims.
Now, the investigation led by former FBI director Louis Freeh, who was appointed in July to look into claims of alleged fraud in the settlement programme, has found evidence that “three attorneys worked together to corrupt a settlement process, written and administered in good faith”, The Sunday Times has reported. Freeh suggested that the findings be sent to the US Department of Justice.
While the findings are not enough to halt payments, they support BP’s case that the settlement for the accident at the company’s well off the Louisiana coast that killed 11 workers and released more than four million barrels of crude in the Gulf of Mexico, has been used by some plaintiffs - based on the interpretation of the settlement terms by Patrick Juneau - to receive payouts they did not deserve. In his report, however, Freeh cleared Juneau of engaging in any "conflict of interest, or unethical or improper conduct."
The report by Freeh has found that Lionel Sutton, one of the administrator’s senior attorneys, had “repeatedly served as the undisclosed, inside ‘agent’ ” for a law firm that had promised him referral fees on cases that it brought to the administrator, The Sunday Times wrote. Sutton had denied wrongdoing.
Although the investigation report confirms what the British energy group has suspected: that “there has been fraud and unethical conduct within the facility itself and among various claimants and their lawyers”, as BP spokesman Geoff Morrell has put it, it does not recommend a halt to the settlement process. The findings “should not prevent the [settlement programme] from fairly and efficiently processing and paying honest and legitimate claims in a timely manner,” Freeh wrote, as quoted by The Sunday Times.
He went on to conclude that “immediate steps have to be taken” to prevent the misuse of the court-supervised administration of the compensation settlement in the future. Freeh also said that his probe is continuing with the aim to produce recommendations for strengthening anti-fraud measures within the settlement programme's operations.
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