Patrick Juneau, court-appointed administrator of the BP Deepwater Horizon oil spill claims settlement program, came out swinging in a response to BP allegations that his payment program is rife with fraud, charging the company with making "spurious allegations of breaches of duty" and "broad, unfounded criticisms of the program's internal controls and fraud detection processes."
Juneau was responding to an Aug. 5 BP motion asking U.S. District Judge Carl Barbier to suspend payments in the claims program -- which has averaged payouts of $100 million a week -- until an independent investigation of fraud allegations involving the program by former FBI Director Louis Freeh is completed. That investigation is still underway.
BP has repeatedly raised allegations of improper payment of claims during the past few months. It filed an earlier request for Barbier to suspend the payments, which the judge rejected when BP could provide no evidence of improper payments.
The company also has asked the U.S. 5th Circuit Court of Appeals to overturn an earlier Barbier ruling upholding the way Juneau is approving large business claims, contending that the method is allowing many firms, including trial lawyers, to receive multimillion-dollar settlements without proof of actual damage from the 2010 Deepwater Horizon blowout or the ensuing three-month oil spill.
The company has increased its estimates of the cost of the settlement from $7.8 billion to at least $9.6 billion, and said it could go higher if Barbier's ruling is upheld. The company says it's already spent $42 billion in associated Deepwater Horizon costs, and has paid out or committed all but about $300 million of a $20 billion trust fund it had set up for court-related damages immediately after the accident.
But in their filing, Juneau's attorneys insist that BP has gone too far in its allegations that the claims payment program is improperly run. "Ultimately, BP asks the court to safeguard it from imagined harm at the expense of the settlement claimants without submitting any evidence that it has paid or will have to pay any improper claims as a result of the issues raised in its renewed motion," said the response filing.
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