An investigation led by former FBI Director Louis Freeh cleared the BP claims administrator of misconduct in handling settlement payouts from the 2010 oil spill within the Gulf of Mexico on Friday, but found a range of his staff took kickbacks for referrals.
BP has said the multibillion-dollar settlement is being mishandled by Louisiana lawyer Patrick Juneau and called for an independent inquiry into allegations against a lawyer working for the administrator.
Judge Carl Barbier, who's overseeing the civil case on the spill in New Orleans federal court, named Freeh a âspecial masterâ handling the probe in July.
Freeh found there was no evidence that Juneau âengaged in any conflict of interest, or unethical or improper conduct,â although he couldn't say an identical of some employees.
âDespite the clear ethical âtone at the topâ and sound written policies established by Mr. Patrick Juneau, hundreds his key executives and senior attorneys engaged in conduct which the Special Master finds to be improper,â Freeh said contained in the 93-page report.
Freeh found Louisiana lawyer Lionel Sutton, often called âTiger,â received a âreferral feeâ of around $40,000 to pass a claimant to another lawyer while working for the administrator. The probe also named Christine Reitano, another administration office employee, who worked with Sutton on the deal.
Juneau placed Sutton on administrative leave when the allegations first surfaced and he later resigned.
BP said Freehâs report confirmed its suspicions of fraud and unethical conduct within the claims process and company spokesman Geoff Morrell said âimmediate steps must be taken to prevent it in due course.â
But Juneau said the incidents were isolated and that the report found no evidence that the two employees âdirectly manipulated the valuation of claims.â
âWe will continue the job of processing claims,â said Juneau.
The program was designed to compensate victims of the April 20, 2010 explosion of the Deepwater Horizon drilling rig and rupture of BPâs Macondo oil well, a disaster that killed 11 people and led to the largest U.S. offshore oil spill.
BP has already incurred about $42.4 billion of charges with regards to the disaster. It originally expected the payout program to cost $7.8 billion, but has said the bill could be much higher.
The company considers Juneauâs payout formula too generous and believes it compensates those who weren't harmed.
BP is awaiting a call by a federal appeals court on its challenge to the payment formula, which U.S. District Judge Carl Barbier in New Orleans had previously rejected. Barbier on July 19 rejected an earlier BP request to suspend payouts pending Freehâs review. The judge also oversees a consolidated civil lawsuit against BP and its contractors over the spill.
The case under Barbier is in re: Oil Spill by the Oil Rig âDeepwater Horizonâ contained in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179. The appeal is âBP Exploration & Production Inc et al. vs Lake Eugenie Land & Development Inc, et al.â contained in the U.S. Court of Appeals for the Fifth Circuit, No. 13-30329.