A Review of the Nigerian Energy Industry

BP sues lawyer on alleged Macondo fraud

BP 118 December 2013, News Wires – BP has sued a plaintiff’s lawyer active in the compensation process for the 2010 Macondo disaster, alleging that a $2.3 billion agreement aimed at helping seafood hands affected by the oil spill contained thousands of phony claims.

The UK supermajor has accused attorney Mikal Watts of inflating estimates of damages and inventing up to half of his 40,000 clients using fake social security numbers. BP made the claims in a civil lawsuit filed on Tuesday in district court.

Watts, who is also a major political donor to Democratic candidates, stepped down from the plaintiff’s steering committee and federal agents raided his San Antonio office earlier this year as part of a federal investigation, the San Antonio Express-News reported.

Messages left for Watts at his office and that of lawyer Mike McCrum, who has previously represented him, were not immediately returned on Tuesday.

BP seeks to suspend the dispersal of money in the Seafood Compensation Programme fund until the matter can be investigated further and money returned if warranted.

“Tens of thousands of Mikal Watts’ ‘clients’ have proved to be phantoms,” Geoff Morrell, BP’s senior vice president for US external affairs, said in a statement.

“BP is not going to stand idly by and allow payments to proceed without first addressing the fraudulent conduct.”

The company has increasingly pushed back against ballooning compensation costs and what it calls evidence of fraud as it seeks to atone for the 2010 blowout, explosion and spill in the Gulf of Mexico, which killed 11 workers and dumped almost 5 million barrels of oil into the sea.

BP has also has sought to modify painstakingly negotiated compensation agreements,to the chagrin of district court judge Carl Barbier, who said the oil company acknowledged that some fraud could occur and signed on to the agreements anyway.

Federal judge Carl Barbier upheld the original compensation formula, but earlier this month an appeals court ruled in a 2-1 panel vote that the District Court was wrong to do so.

BP originally projected that the settlement would cost around $7.8 billion while this summer upping its estimate to $9.6 billion.

According to BP, about $1 billion has been paid out of the Seafood Compensation Programme fund so far.

Watts has filed 648 claims for individual crew members, of which 40% listed Social Security numbers belonging to another living person, while 5% belonged to a dead person. About 13% were “dummy” numbers or incomplete.

Of the claims, only eight were deemed eligible and 17 still pending, according to BP.

Earlier this month BP alleged that court-appointed judge Patrick Juneau approved a $173,000 payment to an escort service under the claims programme.


– Upstream

In this article

Join the Conversation