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.