Friday, January 16, 2015

DHECC - The Mamas, The Papas, and the orphaned children of the Gulf Coast

- "And no one's getting fat except Mama Cass..."

...and Juneau, the PSC, Louis Freeh, the court vendors....just not the people actually affected by the oil spill.

Tuesday, Kyle Barnett of the Louisiana Record published this nuclear bombshell:

McGladrey whistleblower claims Deepwater Horizon audit deeply flawed

Although it's been met with little fanfare in the mainstream media cycle, if this whistleblower's story is true it has the elements of an Arthur Andersen/Enron debacle.

Disclosure:  I was aware of the whistleblower's claims (as were other reporters who have followed this story) before Barnett published his post.  I have seen the whistleblower's original allegations and I can tell you they go much deeper than what Barnett was able to publish.  There are some highly salacious elements to the story that could possibly implicate a collusion between court vendor PwC (Pricewaterhouse Coopers) and McGladrey in how the audit was carried out....if you could even call it an audit....but I can't comment on all of it at the moment.

As Barnett pointed out, BP filed with Barbier's court to obtain the initial versions of the audit and was denied.  No surprise there, Barbier's only goal is to run interference for Juneau, the PSC, the Freeh Group and the chosen court vendors who are racking up millions while the people who have suffered the most along the Gulf have been orphaned in the wake of Act 495.

Barnett also notes the whistleblower's report calls out McGladrey team leader for the DHECC audit, Mark McNamee, for essentially running up the bill without a real game plan in place to accurately assess the success or failure of the settlement.  The whistleblower claims McNamee told the auditing team, "The client is willing to pay whatever costs that we incur during this engagement as long as we can get the job done."  McNamee also allegedly encouraged the McGladrey team members to stay in New Orleans on the weekends and yuck it up on the company expense account while filing billable hours to the DHECC.

There is second player mentioned in the whistleblower's complaint that was not mentioned in the Louisiana Record story, McGladrey Risk Advisor Service Manager, Jessica Batt.  Batt served as an executive member on the BP audit team and worked very closely with McNamee according to the information laid out in the ethics complaint.

Someone in the comment section of the LR story is obviously aware of the content in the whistleblower's complaint referencing Jessica Batt's complicity in helping McNamee run up the bill without having any real direction on the audit itself. While I can't go too deep into all of the allegations, I will mention a quote attributed to Batt by the whistleblower, "We don't want to have anything in writing that PwC (secondary auditors) could hold us to."

That quote is pregnant because according to the ethics complaint Jessica Batt may have had some inside knowledge as to exactly what issues PwC would have held McGladrey to due to the fact that she was married to a manager at PwC, Scott Batt (at the time of the audit that is).  The whistleblower points out that McGladrey's Code of Ethics prohibits their employees from "working on any audit where immediate family members are either employed by or have significant interest (investments, loans, etc.) of the entity that is being audited."  PwC would certainly have been a company examined in the audit being a court vendor for the settlement and the primary accounting firm processing claims in the DHECC.

The whistleblower also notes in the ethics complaint that he seriously doubts BP told McNamee to run up whatever costs were needed to "get the job done".

But what I think "Toots McGladrey" may be missing is that it most likely wasn't BP who stroked the blank check, it was more likely the actual client, Claims Administrator Pat Juneau.  When the initial drafts of the audit came in and suggested that upwards of 50% of the claims examined did not have proper documentation and could be considered "fraudulent" I suspect Juneau then made the offer to McNamee to run the bill up through the goddamn roof...13x the original estimate (see Louis Freeh)...  as long as the audit turned out benign.

It's no wonder Judge Barbier is blocking BP's attempt to see all the audit materials.  If the judge knew Juneau approved of the excessive billing, it could hang not only Juneau but Barbier himself and it's hard to imagine he wasn't aware of the progress of the audit and ballooning costs.

What's painfully apparent is that this settlement has been fucksnu'd to the point where the administrative costs by the court vendors have expanded into a completely alternate galaxy while the existing one the settlement was created for (to compensate the people of the Gulf Coast for the damages from the oil spill) is collapsing in on itself.  Act 495 and the energy and resources sucked out by the black hole (The Freeh Group and court vendors like McGladrey) have cannibalized the DHECC.

If these whistleblowers's allegations prove true, Pat Juneau should resign immediately.  McNamee should be deposed to find out exactly what Juneau told him regarding the audit and McGladrey's expenses.  Don't hold your breath on Freeh actually doing his job there but even an outside entity, preferably the FBI, should investigate the matter as it clearly suggests payroll fraud.  I suppose they'll get to that as soon as they finish with Double Bill Cassidy....not. 

Just to pour salt in the wound, I'll leave you with this recent comment by AZ reader and contributor In-Hale:

Anonymous has left a new comment on your post "DHECC - from Omega to the Alpha with love": 

After posting the $ 795 MILLION DOLLARS IN CLAIM OFFERS THAT VAPORIZED on Nov 22, 2014 little has changed. These were offers accepted but BP appealed and lost them they were just waiting on the processed payment. 

The Appeals Coordinator sent them back to the accountants for new calculations under Policy 495 and what does BP do?

Appeals the new offers!!!!

Today's stats 1/14/15 chart 7 demonstrates little to know appeals resolved with a spike in appeals filed.

Table 5 now has the gap between Accepted offers vs. Pay offers growing again to just under 400 million.

We now have another 158 Businesses receiving Exclusion Denials along with their employees and another 900 Businesses receiving Incomplete Denials.

I guess it’s now safe to say that the only thing this settlement resolved was BP liability. Based on the definition to even refer to calling this a settlement would be FRAUD.

Time to replace the PSC or expand it with qualified litigators. My research on the PSC shows little to no experienced members were included just a group of Monty Hall’s from Let’s Make A Deal that took door number 1 worth $600 million.



Anonymous said...

If Barbier was aware of the deal Juneau made with McNamee, he should be removed from the entire MDL, including the pending penalty phase, and referred to the DoJ. If he did not know, he should step down for incompetence.

Anonymous said...

Just like McNamee, Freeh knows better than to bite the hand that feeds him. Stay away from Juneau, serve up a shrimper or two every month and make millions.
In fact, it looks like McGladrey just copied what Freeh Group has been doing for the past year and a half.
Wonder who will be next to line up at this trough.

Clay said...

Another note:
Barbier has ruled BP spilled 3.19 million barrels. (Government said a smidge under 5 million barrels... Barbier just split the difference between the government and the BP #'s...

I'd call this the biggest courtroom victory for BP to date. Billions of dollars of liability wipped out for BP.

Also a very lazy ruling by Barbier. The government figure was put together by scientists and subject to peer review. BP's # wasn't.

Early on, I was impressed by Barbier. That's fading fast.

Anonymous said...

Note to BP:
Ease up on the Claims Administrator. Don't worry about the extra few hundred million he is spending on administration costs. You saved a few billion with 495 and a few billion more here.

Jason Brad Berry said...

I don't care what BP does.

Note to FBI: investigate Pat Juneau, the PSC, the Freeh Group and Judge Barbier

Anonymous said...

Sounds like a little redistribution by the court. Instead of the government and citizens getting the money for the damages suffered, PSC, Juneau, Vendors, Freeh and McGladrey get it.

Anonymous said...

I agree with Dambala! I was on the audit (term to be used loosely), it does not matter what BP Oil does / did, the claims was not meant to be a "free for all" nor a feeding frenzy for the sharks!

Anonymous said...

I agree, I don't care what BP does/did! I was on the audit (term to be used loosely) and the payment of claims was not meant to be a "free for all" - in including my employer McGladrey! We committed the same offense as those that filed fraudulent claims!

Anonymous said...

"Note to BP" was a satirical comment as if coming from the court.

Anonymous said...

"We committed the same offense as those that filed fraudulent claims"
And it was done with the full knowledge and approval of Juneau, Freeh and more than likely, Barbier. Time for all to go.

Anonymous said...

For Anonymous who was on the audit team can you shed some light on the QA department and the court vendors?

I’ve been working on claims from the beginning but it appears the QA dept. decides who gets paid.

We have hundreds of legitimate claims pending but we have some 50 plus going on 2 ½ years. They’ve been satisfied with all the required documents and every incomplete notice for breakouts answered, just waiting on the offers.

Q1. As you worked on the audit did you see the court vendor’s attempt to stall or delay claim payments?

Q2. Did you get a chance to see the combined hours billed by the court vendors on a single claim vs. the claimants pay out?

Because it really appears they are more concerned about billable hours to BP then getting claims resolved.

You also brought up the topic of filed fraudulent claims can you elaborate on this?

The Class Settlement included hundreds of thousands living in LA, MS, AL and parts of TX & FL. With only 53,000 unique claimants paid and just about 40% of them receiving a coastal claim worth $2,500 dollars.

Are you implying that the court vendors knowingly paid FRAUDULENT claims?


Anonymous said...

The McGladrey Client Experience.

At McGladrey, it’s all about our clients. We keep our focus on understanding what’s important to you, your business and your success.

This guides how we create a unique experience that meets your needs, expectations and preferences. And it’s how we measure the very real and tangible value you receive when working with McGladrey.

For us, it’s about establishing long-term relationships built on trust. Trust that you can rely on us to deliver the insights, services and resources you need to be successful. We believe that when our clients trust that we fully understand what’s important to them and back it up with action, they are more confident in the strategic choices they make.

I took the liberty of writing Mark's client experience endorsement of PJ.

Mark McNamee, Leader Risk Advisory Service, McGladrey “I think our client service team has just done an amazing job of getting a great understanding of Patrick Juneau’s business to make sure that we’re getting him what he needs, and even more -- trying to add value where we can.”

Anonymous said...

PWC video on corporate responsibility.

Very fitting and somewhat funny they agree it’s all about ME, when it should be about US the claimants. I think it’s time that they required every court vendors to reads sec: 4.3.7 – 4.3.8.

And for everyone who’s waiting on a payment watch this video the BP spill administration windfall has made some people happy just not us.

PwC plays a vital role in healthy and functioning capital markets through building trust, transparency, and consistency in business practices. In supporting and advising some of the world’s most important organizations, we have an opportunity to provide value that extends far beyond our client base and into the broader marketplace.

4.3.7. The Settlement Program, including the Claims Administrator and Claims Administration Vendors shall work with Economic Class Members (including individual Economic Class Members’ counsel and Class Counsel) to facilitate Economic Class Members’ assembly and submission of Claims Forms, including all supporting documentation necessary to process Claim Forms under the applicable Claims Processes. The Settlement Program, including the Claims Administrator and Claims Administration Vendors, shall use its best efforts to provide Economic Class Members with assistance, information, opportunities and notice so that the Economic Class Member has the best opportunity to be determined eligible for and receive the Settlement Payment(s) to which the Economic Class Member is entitled under the terms of the Agreement.

4.3.8. The Claims Administration Vendors shall evaluate and process the information in the completed Claim Form and all supporting documentation under the terms in the Economic Damage Claim Process to produce the greatest ECONOMIC DAMAGE COMPENSATION AMOUNT that such information and supporting documentation allows under the terms of the ECONOMIC DAMAGE CLAIM FRAMEWORK. -- Etc.

Anonymous said...

Brown & Greer Claims Administration page.

BrownGreer's claims administration services have been referred to by our clients as the "gold standard." Whether we are administering a voluntary settlement reached between parties or a class action settlement approved and ordered by a Court, our experience as lawyers and claims administrators combines practical and efficient claims processing with a keen understanding of the legal context and parameters governing its implementation. We administer and process claims for small and large inventories of claims, whether personal injury or financial, and we deliver efficient, fair and sound solutions.

BrownGreer is experienced in implementing a claims resolution plan. Claims administration is a skilled profession. We know how to control costs and avoid waste to enhance maximum return to claimants. Because we are lawyers, we understand the legal implications of every action of a claims facility. As claims administrators, we know how to determine and resolve claims fully, fairly and efficiently.


BrownGreer prides itself on using the latest and best technology available to maximize performance and efficiency. We rely on industry standards for reliability and conformity in relating to our external associates and partners. Our technology is one of the things that set us apart. We create interactive databases that allow for instantaneous exchange of information, eliminating costs associated with data entry, delays increasing the efficiency and ease with which vast amounts of information are shared. We establish secure web-based portals that allow for real-time data entry, ad hoc reporting by external users, access to information about claim status that is accessible to only the person authorized to access such data and automatic notification of deadlines that are accompanied by email blasts alerting parties to these deadlines and requirements.

BrownGreer boasts a team of seasoned software developers whose members work with our attorneys to identify every unique requirement of each project and then design, update and report from custom-built platforms. Our database applications not only track claim and litigation activity, they also serve as tools to trigger claim processing events or litigation activity. We can access more than a terabyte of pertinent information in seconds. We track litigation and claim activity for millions of claimants involving claims of billions of dollars.
No two claims administration or litigation tracking projects are identical.

Our ability to customize the tools to perform those tasks makes our work more efficient, our work and outcomes more predictable and our clients more successful and satisfied. Our experience designing and building claims databases means that when we customize a new client’s database, we do so efficiently. This kind of application flexibility and performance helps deliver the optimal results to our clients.

So it is true the ones that built the program can also build it to satisfy the needs of their clients remember B&G once worked for BP. The only gold in this settlement was for the court vendors for saving BP Billions, the current stats have more denied claimants then paid ones.

Anonymous said...

"I agree with Dambala! I was on the audit (term to be used loosely), it does not matter what BP Oil does / did, the claims was not meant to be a "free for all" nor a feeding frenzy for the sharks!"

Are you saying that the audit was a sham because the scope of the audit was limited in a way that wouldn't allow you to deem a claim fraudulent or unfounded if the claim met the requirements of the settlement but it was clear that the claimant really wasn't impacted by the spill?

Anonymous said...

``I agree with Dambala!`` should be printed on T-shirts.

Anonymous said...

Check this link out.

"Are you currently operating internationally or planning to expand your business overseas? Don’t let your company be the next big anti-corruption headline.

Attend our complimentary webcast on Tuesday, Oct. 8 to gain clarity around international regulatory compliance issues impacting your organization. McGladrey risk advisory professionals Mark McNamee, Rick Shriner and Jessica Batt will discuss recent regulatory trends and what your company can do to develop and sustain an effective anti-corruption compliance program."

Jason Brad Berry said...

Yeah I saw that...too rich.

Anonymous said...

A little justice has prevailed:

Mark McNamee, former Partner of McGladrey has been asked to leave the firm after a full investigation was conducted regarding a whistle-blower’s claim that Mark McNamee (Partner-In-Charge of Deepwater Horizon Audit) ran up a $14 million dollar tab and could not produce an audit report upon BP Oil’s request. The accounting firm (McGladrey) had to "buy-out" Mark's contract since technically, Partners are not "terminated".

McGladrey was the accounting firm hired to audit the Deepwater Compensation Program as it pertained to the BP Oil spill. Mark McNamee was instrumental in running up a $14 million dollar tab and then refused to deliver the audit report. The maximum estimate for the audit was $1.6 million dollars.

In addition, Jessica Batt - former Manager of McGladrey (worked alongside Mark McNamee and husband is still a Manager with PwC) was also asked to leave McGladrey and has since relocated with her husband to London where she is employed by Baker Tilly.