BP Tries To Avoid Payments For Deepwater Horizon Disaster By Accusing Gulf Businesses Of Fraud


BP is balking at the amount of money it owes businesses affected by the Gulf oil spill. The oil giant is doing everything it can to bring it down.

The oil company is claiming that it has had to pay hundreds of millions of dollars to businesses that exaggerated or invented losses from the 2010 disaster. Theodore Olson, BP’s lawyer, told an appeals court last week that BP — which, despite the spill, is still one of the most profitable companies in the world — was suffering “irreparable injustices” from these these fictitious losses.

To cut down on this alleged fraud, BP is eliciting the public’s help. The company recently set up a a hotline for reporting fraudulent claims relating the the Gulf oil spill, a tool it calls “a reliable resource for people who want to do the right thing and report fraud or corruption.” According to BP, callers can receive a reward if the claim they report leads to an indictment, recovery of money or denial of a claim. BP also placed full-page ads in the Wall Street Journal, New York Times and Washington Post last month that accused lawyers and politicians of encouraging businesses to submit dishonest claims.

“Whatever you think about BP, we can all agree that it’s wrong for anyone to take money they don’t deserve,” the ads read. “And it’s unfair to everyone in the Gulf — commercial fishermen, restaurant and hotel owners, and all the other hard-working people who’ve filed legitimate claims for real losses.”

BP’s tactic of skirting payments isn’t original among oil companies: in the 25 years since the Exxon Valdez spill, Exxon still hasn’t paid the $92 million it owes to the state of Alaska and Department of Justice for wildlife recovery — in fact, they’ve been fighting the claims since the spill occurred. BP, too, is taking its case to court, alleging that a claims administrator for the 2012 settlement miscalculated losses from businesses. A lawyer who helped administer the settlement, Lionel H. Sutton III, is under investigation for misconduct, and on Tuesday BP also asked a judge to halt all payments while the investigation is underway.

It’s not just claims of business losses BP is looking to stymie, however: the company is also trying to reduce the payment it owes from Clean Water Act fines. BP is claiming that because, by its estimates, 10 percent of the oil spilled in the Deepwater Horizon explosion was broken up by dispersants and therefore did not reach the surface of the water, that oil shouldn’t be accounted for in BP’s fines. The amount of money BP owes in Clean Water Act fines is still being debated: the U.S. government estimates that 4.1 million barrels of oil entered the water during the Gulf spill, which would make the maximum fine BP faces BP faces $17.6 billion. BP, on the other hand, argues that only 2.46 million barrels of oil entered the water, and that 10 percent of that water was dispersed — an amount that, if found to be accurate, would lower BP’s maximum fine to $9.5 billion.

As BP squabbles over the amount it owes, scientists struggle to determine the true environmental — and economic — impact of the Gulf oil spill. Sick fish with low liver weights and discolored patches are still showing up off the coast of Louisiana, along with crabs with lesions and fungal or bacterial infections. Groves that used to be home to mangroves and marsh grass — habitats for brown pelicans, terns and roseate spoonbills — in Barataria Bay, LA still haven’t recovered three years after the spill. Tar balls are still washing up on Louisiana beaches, and oyster fisherman are still turning up with empty nets. And just last month, a 40,000-pound tar mat, made of oil residue and wet sand, was unearthed off a Louisiana beach.

17 Responses to BP Tries To Avoid Payments For Deepwater Horizon Disaster By Accusing Gulf Businesses Of Fraud

  1. Superman1 says:

    “Theodore Olson, BP’s lawyer,” Ah, yes, where have we heard that name before? “Ted Olson is an American attorney who served as an Assistant Attorney General in the Reagan administration (1981-1984). Democrats allege Olson was part of the Arkansas Project, which aimed to damage and end the presidency of Bill Clinton during the 1990’s. In private legal practice, Olson later successfully represented presidential candidate George W. Bush in the Supreme Court case Bush v. Gore.” A smooth transition to BP!

  2. jodelay says:

    I am certainly no fan of oil companies in general or of BP in particular, but I think it is disingenuous to equate BP’s compensation efforts to those of Exxon’s. In contrast to Exxon’s fight-to-the-death strategy following the Valdez disaster, BP immediately set up a $20 billion fund to immediately compensate victims. I do not hold that this fund is necessarily sufficient, but neither do I accept that every claim made against BP is valid, as this article implies, with its binary reasoning. It is naive to suggest that no fraudulent claims are being filed against BP. In fact it is important to point out that bad-faith claims ultimately injure those with rightful claims.

  3. Suzanne Chesney says:

    I knew they would never pay, and that the TV adds they are running were propaganda. They are dishonest, cheats!

  4. Cat McNulty says:

    BP — Clean Up your mess and Pay for the damages caused by your incompetence and carelessness!

  5. Mulga Mumblebrain says:

    Out of the sewer and into the cess-pit.

  6. Rose says:

    Stop feeding the beast. Petition to transfer fossil fuel subsidies to clean energy. Let our taxes work to mitigate the problem, not compound it. Sign today!

  7. Terrence Delgado says:

    BP are the ones committing fraud. Give them 2 choices, Pay up or go to jail for polluting the environment They should also have their drilling leases revoked

  8. Terrence Delgado says:

    They set up a $20 billion fund because they knew they were wrong. They also knew that there was more damage than $20 billion. If you know anything about business dealings, they always give a low offer first, before negotiations. Were there any negotiations at all. I don’t remember hearing of any.

  9. deb says:

    yes…the very same ted olson whose wife was aboard Flight 77 when it crashed into the Pentagon on Sept. 11 (his birthday, btw). the very same ted olson who argued before the supreme court that same sex couples have a constitutional right to marry. some people just don’t fit a one-dimensional profile.

  10. Mulga Mumblebrain says:

    His wife’s tragic fate is totally irrelevant, and Reptilians can be gay, too. Not great as exculpations, I’m afraid.

  11. Mulga Mumblebrain says:

    BP accusing others of fraud. Now that’s ‘world-class’ projection.

  12. james corbett says:

    In the end, BP will pay a small fraction of the real costs. More importantly, none of the BP executives responsible for the deaths of the workers on the platform, will serve time in jail. Get drunk and kill somebody–go to jail. Let your greed kill a half a dozen people, and get a bonus for tamping down the outrage.

  13. james corbett says:

    If “corporations are people,” then they are people with incredible life spans. BP can use their legal team to delay and delay until the real humans recognize that they’ll be dead before they get recompense–so BP knows they will settle. The ONLY way a corporation can be held accountable is through the CRIMINAL justice system. These people murdered people through negligence, destroyed huge swaths of the Gulf environment, and anybody who expects they’ll pay their fair share without somebody going to jail is naive. Like the banks, BP is too big to be held accountable. Of course, they do have money to propagandize taxpayers with television “public service announcements” explaining what a great neighbor BP is to the Gulf. What we need, at least, is a return to the Fairness Doctrine so that “on controversial issues of public importance, broadcasters mush seek out and broadcast contrasting points of view.” Since the Doctrine was tossed under Reagan, corporations have had free reign to propagandize voters with one sided bullsh*t.

  14. Jay says:

    It is not a “Spill”, it is a “Disaster”. Language Counts.

  15. Joe Romm says:

    That’s what the headline says.

  16. Hugh says:

    oystermen don’t use nets…for posterity’s sake, drop oyster from the penultimate sentence!

  17. Darryl says:

    I live in New Orleans. A cursory look at the sheer volume of corruption prosecutions will tell you its a very different culture from other parts of the country. Pretty much every small business that could, even those that experienced no adverse consequences from the Deepwater Horizon spill, has applied for payouts from BPs shareholders. Medical clinics, accountants, real-estate agents, car dealerships, you name it.

    There of course were economic harms, and some worthy compensation applicants. However, if you think everyone here will be honest at the prospect of payouts totalling several-fold the annual seafood and tourism revenue, you haven’t lived here.

    Since 2011, as in years prior to the 2010 spill, the major anthropogenic stressor has been the anoxic dead zone from Midwest fertilizer runoff. We’d appreciate if Iowa set up a compensation fund as well.