More alleged misconduct in BP oilspill settlement program

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wwltv.com

Posted on January 17, 2014 at 11:32 PM

Updated Monday, Jan 20 at 11:17 AM

David Hammer / Eyewitness News
Email: dhammer@wwltv.com | Twitter: @davidhammerWWL

NEW ORLEANS -- The lawyers implicated in a report about possible misconduct inside the BP claims process fired back Friday at the former FBI director who investigated them.

 The Andry Law Firm, principals Jon Andry and Gibby Andry and Jon Andry’s partner Glenn Lerner all filed answers to former FBI Director Louis Freeh’s report from September, which found Jon Andry and Lerner used payments to a claims administration official to exert special influence over the processing of their client’s claims and the Andry Law Firm’s own loss award.

But after the Freeh report came out, the lawyers got the court to make Freeh turn over hundreds of pages of investigative records that Freeh had kept under wraps. The Andrys and Lerner argue that those findings actually undercut the conclusions made in Freeh’s report.

“At the end, what the Special Master uncovered was the payment of referral fees to Sutton for referring Casey Thonn – a client that Sutton’s law firm had represented and whose claims it had developed before Sutton went to work for the (Claims Administrator’s Office) – to AndryLerner LLC, and nothing more,” Lerner’s filing said. “Based on these mere fee payments, which are permitted under the Louisiana Rules of Professional Conduct, the Special Master (Freeh) asks the Court to conclude that Lerner, Andry and Sutton developed and carried out a nefarious plan to corrupt the claims process to advance their own self-interests. But there is absolutely no evidence to support that logical leap.”

Another document from Freeh’s investigation shows that the Andry Law Firm’s own $7.6 million claim was unnecessarily delayed for months because of a clerical error by the claims office. But because of the ties between Jon Andry and Sutton, Freeh still concluded that the Andrys improperly expedited the payment and were wrong to make inquiries about the award’s status during the appeal process. Freeh recommends that the law firm’s award should be disallowed under the “unclean hands doctrine.”

What’s more, the implicated lawyers complain to the court about how BP has characterized the Freeh findings in paid advertisements, including ones in The New York Times, Washington Post and Wall Street Journal that conflated Jon Andry’s two law firms and asserted that Freeh had “confirmed” fraud in the settlement program.

It’s the latest example of BP’s ability to affect legal proceedings with an extensive national advertising campaign featuring attacks on oil spill claimants.

Ever since U.S. District Judge Carl Barbier hired Freeh as special master last summer, to look into allegations of abuse within the settlement facility, BP has been able to turn questions about a few claims and a couple of claims administration officials and cast wider aspersions on the validity of the settlement as a whole.

A new BP ad goes after the Andry Law Firm by name, in spite of settlement confidentiality rules. It says the Andry Law Firm's $7 million loss was based on a "contingency fee" for work done 10 years earlier, when the firm didn't even exist. WWL-TV’s sources say that was payment from the old tobacco settlement that just happened to expire around the time of the spill.

The problem is that BP has already made this argument under the appeals process and a panel of judges ruled that BP’s own settlement justified the award to the Andry firm.

BP has gained some traction with similar ads, including one that WWL-TV first exposed as a thinly veiled attack on celebrity New Orleans chef Emeril Lagasse.

BP hoped that people would find it morally reprehensible for anyone to collect for losses that BP considered to have been due to factors other than the spill, regardless of what its settlement says.

But it hasn’t always gone that way, particularly in the Gulf South. When The Times-Picayune wrote an editorial against BP’s attack on Lagasse, BP Vice President Geoff Morrell, a former Defense Department spokesman, chided the newspaper.

The oil giant has also attacked Loyola University and its law professor Blaine LeCesne because LeCesne dared to say the Freeh findings were not as significant as BP was making them out to be.

BP suggested that LeCesne and Loyola were motivated by money to oppose BP because plaintiffs’ lawyer Stuart Smith is a major donor to Loyola, his alma mater.

LeCesne laughed at BP’s attack on him and then questioned how Freeh’s conclusions about the Andry Law Firm jibed with the rest of his investigative record.

“There's only half the story being told,” LeCesne said. “And when the full story is told you see that (Jon and Gibby Andry) were really doing what they are required to do as attorneys and there was really nothing improper whatsoever about those inquiries.”

There have been similar questions about Freeh’s impartiality in earlier investigations, like the Penn State child abuse scandal.

“When the Freeh Report came out a lot of people feel it was greatly flawed in that they made a lot of conclusions that were not based on facts and not based on evidence,” said Pro Football Hall of Famer Franco Harris, who played at Penn State in the early 1970s.

Harris says Freeh decided ahead of time to ruin his old coach Joe Paterno's reputation, despite what the facts actually said.

“You have to understand, the people that hired (Freeh) had their own narrative, and these were the people (on the Penn State University Board of Trustees) that fired Joe Paterno. And these are the same people that during the six months before the Freeh report came out, they had a number of excuses; they changed it three or four times on why they fired Joe Paterno.

“Now, with the Freeh Report, they (can) substantiate why they fired Joe Paterno.”

Michael Chertoff, the former U.S. Secretary of Homeland Security, similarly accused Freeh of catering his investigations to fit the needs of the entity paying him. Freeh did a report in 2012 for Wynn resorts against a Japanese gaming company that had a 20-percent stake in Wynn. Wynn’s board used Freeh’s report to justify stripping Japanese entrepreneur Kazuo Okada of the shares.
Chertoff came back a year later and called Freeh's findings "not credible" and "seemingly advocacy-driven."

Freeh acknowledged to Barbier that he has ties to law firms representing BP, including Kirkland & Ellis and Williams & Connolly. He also disclosed that his former law partner, Stanley Sporkin, was serving as BP America’s ombudsman.

But in each case, Freeh has definitively stated there was no conflict of interest. LeCesne said it shouldn’t be Freeh’s place to conclude that.

“I think that there's at least a specter of a potential conflict and I hope something is done rather than to simply accept Mr. Freeh's unilateral conclusion, without explanation, that he's not biased,” LeCesne said.

And Freeh is not the only person with control over the BP settlement who has possible conflicts of interest. U.S. 5th Circuit Court of Appeals Judge Edith Clement is the member of the board of the Foundation for Research on Economics and the Environment, a conservative think-tank that supports private-sector solutions to environmental problems. The foundation is backed by Big Oil and used to pay for junkets for judges.

The federal Judicial Conference ruled in 2010 that it was unethical for federal judges to sit on the foundation’s board, and one judge actually resigned from the board. Clement and two other federal judges did not.

She has not recused herself from the BP case. In fact, she has played a prominent role in the battle over the implementation of the settlement when she went beyond what even BP initially sought and directed Barbier to reconsider whether claimants should prove that their losses were actually caused by the spill. She is part of a three-judge appeals court panel that still has control over that question.
Clement did not respond to a request for comment.

WWL-TV also left email and phone messages with Freeh’s offices in New Orleans, Washington, New York and Delaware but received no response. BP declined to comment.


 

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