Tuesday, July 02, 2013

Thieves in The Temple

I've spent the last few months trying to liberate information surrounding the Plaintiff Steering Committee (PSC) lawyers for the BP trial and the operations of the Deepwater Horizon Economic Claims Center (DHECC).  While pursuing the Wisner story I started receiving allegations from multiple, credible sources of widespread corruption within the DHECC claims process and, in particular, with some of the PSC lawyers using their positions to manipulate the claims process to their own personal and financial gain.

In the course of pursuing these allegations, I filed a FOIA request with the DHECC but they denied the request stating that the information I was seeking is not privy to the Freedom of Information Act.  When I originally posted the denial from the DHECC, I blacked out what I was requesting because I didn't want to divulge the information I was seeking until I had exhausted every avenue to obtain it.  While I have been unsuccessful in getting the information, I have been able to obtain some corroborating documents that don't necessarily confirm some of the allegations that I have received but they do provide a basis for at least one of the allegations against the PSC lawyers.

My FOIA request that was denied requested two things, A list of all the claims filed in the first four weeks of the claims center opening on June 4, 2012 and a list of the claimants and their respective attorneys who had previously filed with the DHECC but then opted out of the process.

Due to my admitted lack of knowledge of the American legal system, I did not understand that the information I was requesting violated the claimants' right to privacy in this matter....or so I'm told.

The reason I'm seeking this information is not to identify any particular claimant participating in the DHECC process but to identify the claims being represented by the attorneys who are also serving on the PSC and to see if the office of the DHECC has processed some, if not all, of these particular attorneys' claims ahead of everyone else's.  Also, to determine if these PSC attorneys are presently, or have previously, advised their own clients to "opt out" of the DHECC claims process.  

There have been two major allegations that I received regarding, at least some, of the PSC attorneys using their position to gain an unfair advantage in the claims process and these two items I requested would provide very basic information that could confirm or deny the first of the two allegations.  This particular allegation is that, at least some, of the PSC lawyers manipulated the DHECC claims process to have their clients' claims processed ahead of other claimants.

So far, none of my sources are willing to go on the record to back up these allegations but I have been provided with some information that leads me to believe there is fire underneath the smoke.

I was told by three separate sources that a single PSC law firm received over $24 million out of $30 million in client claims processed in the first round of payments from the DHECC upon opening in June of 2012.

As it turns out the number is closer to 27 million but I'll get to that in a minute.

If true, this is a clear violation of the claims process.  When the DHECC was being structured by Judge Barbier during the transition period from Feinberg's Gulf Coast Claims Facility (GCCF), in item #10 of this order on March 8, 2012  he mandated that all claims should be paid in the order they are received:

10.  New claims may be filed during the Transition Process until such time as the Court Supervised Claims Program is established and operational as set forth above. New claims submitted shall be processed and evaluated in the order they are received. Non-deficient claims previously pending with the GCCF shall be processed and evaluated prior to any new claims filed after the creation of the Transition Process.

Now, aside from the allegations that the PSC lawyers had their claims pushed to the top, I was contacted by an anonymous source that told me there is rampant corruption inside the DHECC office among some of the CPA's working there.  I was even told of possible bribes being taken by employees of the DHECC to move claims ahead of others, regardless of the order they were filed.

I was also told that claims which didn't have private legal representation were being treated with less importance than the claims that were submitted by law firms.  This is in direct violation of the March 8, 2012 order by Judge Barbier.

The entire purpose of the creation of the DHECC and the appointment of the PSC lawyers under multi-district litigation guidelines was for these chosen lawyers to represent all affected parties making claims against BP.  A claimant shouldn't have to hire a private lawyer in order to get his/her claim processed as long as the claim is submitted properly and the accounting is done according to spec.

That last item...the accounting...and "filed according to spec."....is the pickle.

There is a formula that all claimants must follow in order for their claims to be filed expeditiously.  It involves previous tax filings and other factors but what's important to note is that this alchemy was created by the PSC lawyers in the creation of the DHECC.  No doubt, they pulled heavily from the formula already established by their predecessor, the Gulf Coast Claims Center (Feinberg), but what's important to note is that the new formula was created by the PSC lawyers and by the time the DHECC office opened in July of 2012, if you had prior knowledge of exactly what this formula is, you had a much better chance of getting your claims processed before the the poor schmucks who had to file their information in the dark.  If your claim doesn't fit neatly into the prescribed formula, it gets kicked out and shelved.

This formula was/is incredibly valuable.  Prior knowledge of this formula was/is incredibly valuable.

It was so valuable, I believe it was sold through a specific accounting firm (I do know who the alleged firm is) acting as an agent for at least one of the PSC law firms before it was made available to the public.  I even have a number....50k.  For 50,000 bucks, you (most likely a huge law firm with multiple claims) could get access to the exact accounting formula you needed to process your claims ahead of every other claim that would inundate the DHECC.  The "bribe" was channeled through the accounting firm and eventually to at least one of the specific PSC law firms who created the formula to begin with.

Why do I believe this?  I believe it because I have three, independent...unfortunately anonymous (at this point).....sources who told me the exact same story.  One of the sources even claims to have seen the accounting firm make the offer in person.  I believe there were numerous accounting firms, as well as law firms, along the Gulf Coast that were approached with this offer but I have been unable to get any of these folks to go on the record and confirm this.

Understandably so, they have a lot to lose (their clients' claims) by coming forward and potentially damaging the DHECC process.  If they don't play ball and the DHECC is suspended, they and their clients lose.  They may be disgusted by the situation but in the interest of their clients and their own best interest...they capitulate.

Alright, in terms of hard evidence to support these allegations, I have this document I want to present.

This is the first filing made by Patrick Juneau, the DHECC Claims Administrator.  It shows that $26,295,186 was paid out in the first round of payments.  Of 582 payments that constituted that amount, $24,617,700 out of $26,295,186, went out to VoO claimants, the Vessels of Opportunity program.

That is an inordinate amount of money going out the door to a single claim "category" on the first round of payments.  It's important to remember that the claims coming in to the office were supposed to be processed in the order they were received per Judge Barbier's order issued on March 8, 2012.  I find it hard to believe that every claim in the VoO program was filed ahead of every other claim in the DHECC process.  My question is why was this block of claims processed ahead of everyone else's?

If you recall, I received more than one tip that the PSC attorneys' personal plaintiff's claims were being processed ahead of other claims in the DHECC and that three different sources specified that a PSC attorney had "24 million in claims" processed in the first round of payments, ahead of all the other claims.  I am positive they are referring to this $24,617,700 payed out to the VoO program claimants.

The reason I filed the FOIA was to find out exactly whose claims were being paid out first and who their corresponding attorneys were.  If a PSC law firm was on the receiving end of that 24.6 million, right out of the gate,  I think my bullshit meter just slammed against the peg.

However, the answer may lie in how the claims are being processed instead of what order they are filed.

If other claims were/are being shelved because they didn't/don't meet the exact accounting formula established by the PSC laywers, that could be an explanation as to why their own clients' claims were getting fast tracked ahead of everyone else's.  That's convenient....for the private clients of the PSC attorneys....not so convenient for everyone else who didn't have the wherewithal to hire an accountant or law office that understood the exact formula.

If the PSC lawyers (one firm or all) were auctioning off that information through a second party accounting firm...a filter/agent...that would be pretty shitty.  They were handed the keys to the kingdom as multi-district ligation attorneys by Judge Barbier to basically write the rules to the DHECC.  If they were auctioning off access to those rules before the office opened...and let me be very clear...that is the allegation I have received from multiple sources...that creates a "pay to play" situation.

These specific PSC attorneys were, reportedly, not only using their position to profit above the table by having their own clients' claims pushed to the front, they were also profiting under the table by selling the formula to law firms eager to have their claims payed out ahead of everyone else's.

At this point, perhaps you're asking yourself, "What difference does it make if these lawyers got themselves and their clients paid first?  BP's nose is being held to the grindstone by Barbier and Mr. Fed and even if my claim hasn't been paid yet, it is guaranteed to be paid, eventually."

In fact, I've heard that exact statement from the mouths of some very powerful attorneys who currently have client's claims pending in the DHECC.  They scoff at my suggestion that the claims process may be grinding to a halt and are confident the BP money train wil continue to chug on down the line.

To that end...I would offer this perspective.  BP is a global proxy company for England.  They constitute a very significant portion of the British economy.  They are the global definition of "too big to fail".

When this settlement process started with Feinberg and the GCCF, there was a number established by both parties on what the inevitable payout should be....20 billion.  When the process was shifted from the GCCF to the DHECC, I'm told there was literally an envelope delivered to one of the PSC law firms with a new number on it.  That number was the new ceiling and I believe it would coincide with the original 20 billion dollar ceiling established at the origin of the GCCF.  So subtract what the GCCF paid out, 6.2 billion, and I think you can get a pretty good idea at the number in that envelope handed to the PSC lawyers.

I believe...I don't know...that the claims that are currently queued in the DHECC office far surpass the ceiling established by BP.  I believe the PSC lawyers knew full well the ceiling would collapse and if their claims were purposely pushed to the top, ahead of the natural order of the claims received in the office, well...you see my point.

This breach of protocol is compounded by the fact that this group of lawyers, the PSC, were established to represent all claimants in the BP settlement process, not just their private clients.  So as a claimant, I shouldn't even need to hire a personal lawyer as the PSC attorneys were appointed by a federal court as multi-district litigators to serve me in the claims process.

The second part of my FOIA request was to find out which claimants had "opted out" of the DHECC settlement process.  If we have personal clients of the PSC lawyers that are opting out of the DHECC claims process...the claims process these very lawyers designed and were appointed to oversee....you know we have a problem and the allegations in this post take on much more weight.

Although I'm unable to confirm it, I've been told that one of the PSC's group of clients, five oyster farms here in Louisiana, received a whopping settlement of 600 million dollars that was processed very early on.  That would constitute 1/5 of the 20 billion dollar ceiling on one set of claims alone.  I would love to see what portion of claims have gone to PSC lawyers' private claimants in contrast to other claimants.  Unfortunately, that information appears to be unattainable.

Perhaps this post is so much piss in the wind as most of the information needed to examine these allegations seems to be inaccesible to the public.  But to add weight to my words,  I want you to take note that BP has started a PR campaign to portray themselves as the victim of a "feeding frenzy" claims process that has arisen over the spill:

How BP Got Screwed on Gulf Oil Spill Claims

It seems, to me, the machinations to grind this claims process to a halt are well under way.

One other thing I want to point out is that these PSC lawyers were moved to "class action status" by Barbier AFTER the DHECC process was in full swing.  That's a big deal and the subject of another post.  In the meantime, chew on this stuff for a while and I'll keep digging.




Anonymous said...

That special envelope is possessed by two people: Steve Herman and Carl Barbier.

I am told....

Anonymous said...

By " special envelope" are we taking the accounting recipe/formula for claim payment that Jason claims was sold like a commodity to law firm for 50 K?

Anonymous said...

No. We are talking about the amount BP will pay in settlements until they reserve the right to blow up the whole deal. So, you see how important knowing the formula becomes now?
Get your claim paid as soon as possible because this thing will blow up! The fuse has been lit in my opinion.