NEW YORK, Sept 6 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 in the Gulf of Mexico on Friday, but found some 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 is overseeing the civil case on the
spill in New Orleans federal court, named Freeh a "special
master" handling the probe in July.
Freeh found there was no evidence that Juneau "engaged in
any conflict of interest, or unethical or improper conduct,"
although he could not say the same of some employees.
"Despite the clear ethical 'tone at the top' and sound
written policies established by Mr. Patrick Juneau, many of his
key executives and senior attorneys engaged in conduct which the
Special Master finds to be improper," Freeh said in the 93-page
Freeh found Louisiana lawyer Lionel Sutton, known as
"Tiger," received a "referral fee" 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 Freeh's report confirmed its suspicions of fraud and
unethical conduct within the claims process and company
spokesman Geoff Morrell said "immediate steps need to be taken
to prevent it in the future."
But Juneau said the incidents were isolated and that the
report found no evidence that the two employees "directly
manipulated the valuation of claims."
"We will continue the job of processing claims," said
The program was designed to compensate victims of the April
20, 2010 explosion of the Deepwater Horizon drilling rig and
rupture of BP's Macondo oil well, a disaster that killed 11
people and resulted in the largest U.S. offshore oil spill.
BP has already incurred about $42.4 billion of charges
related to the disaster. It originally expected the payout
program to cost $7.8 billion, but has said the bill could be
The company considers Juneau's payout formula too generous
and believes it compensates people who were not harmed.
BP is awaiting a decision 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
Freeh's 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
"Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010,
U.S. District Court, Eastern District of Louisiana, No.
10-md-02179. The appeal is "BP Exploration & Production Inc et
al. vs Lake Eugenie Land & Development Inc, et al." in the U.S.
Court of Appeals for the Fifth Circuit, No. 13-30329.