Tuesday, January 20, 2015

DHECC - would the real Pat Juneau please stand up?

Yesterday, BP filed an appeal in the 5th Circuit in respect to their original motion to remove Patrick Juneau as Claims Adminstrator of the Deepwater Horizon Economic Claims Center.  The motion was denied by Judge Carl Barbier.

The appeal cites Juneau's conflict of interests which he failed to disclose upon being interviewed for the claims administrator position.  It also singles out his involvement in the Omega Protein claim where he lobbied Kenneth Feinberg, former head of the Gulf Coast Claims Facility, to pay out a $45 million dollar claim (the largest payout in the history of the settlement to date) to a Houston-based company, Omega Protein.

Juneau also billed the state of Louisiana for the time he spent lobbying for this non-Louisiana based corporation...which should constitute payroll fraud to the state of Louisiana.

The appeal offers a few more details on the Omega claim than we (AZ readers and the public) were previously aware of such as the fourth item on page 38:
"Appellees downplay Mr. Juneau's advocacy for an individual claimant by asserting that Mr. Juneau was "merely inquiring" about the claim (Omega Protein).  Class-Br. 35; Juneau Br. 52-53.  The evidence refutes that characterization.  Mr. Juneau pressed Mr. Feinberg to contact the claimant's president, and peppered Mr. Feinberg with urgent emails until Mr. Feinberg finally informed him the claim had been paid.  At a minimum, discovery would be warranted into the nature of Mr. Juneau's intervention with this, and potentially other, claims."

This has echoes of the Corps Constructors claim.  In Juneau's response to the motion to remove him, he addressed the Corps Constructors issue on page 31 as follows:
"Also, despite characterizing Mr. Sutton's credibility as "certainly questionable", BP relies on his statements in the ""American Zombie" interview to allege that Mr. Juneau wrongfully expedited the claims of a friend's son.  The CSSP and Mr Juneau receive numerous calls from claimants who feel their claims are taking longer than they expected.  The program always has tried to respond to these inquiries, but not with the object of improperly expediting a claim."
Sounds nice but HE DID EXPEDITE THIS CLAIM.  It's not simply an issue of taking phone calls from claimants about the status of their claims or inquiring to Brown and Greer about the current status of a claim (as he stated he was doing with Omega and Feinberg).....he actually had Lionel Sutton tell Brown and Greer to expedite this claim.  There's a world of difference between checking on a claim and moving it out of its place in a queue.

DHECC - Lionel Sutton Interview Series - Corps Constructors 1 from Jason Berry on Vimeo.

Juneau's explanation regarding Corps Constructors is as opaque as his explanation regarding Omega appears to be.

There are so many non-answers in Juneau's response, it's laughable.  Particularly his Corps Constructors excuse but also his excuse for lying under oath to Special Master Louis Freeh regarding his previous involvement with the settlement process.  This recent appeal calls that perjury issue out as well.  

On page 5 of Juneau's response he also claims in his position as the special master/claims administrator that he is not a "justice, judge, or magistrate judge of the United States".  He stated to BP and the Court, that he had no judicial power or authority.  This recent appeal counters that assertion on many different levels but I want to point out something the appeal fails to mention.

In Christine Reitano's breech of contract suit against the DHECC for her termination, Pat Juneau claimed quasi-judicial immunity in Judge Barbier's court which places him squarely in the role as a court official.   Item number 9, page 3:
9. As Claims Administrator of the Court Supervised Settlement Program, Mr. Juneau enjoys quasi-judicial immunity for his actions taken as Claims Administrator, and he intends to raise the federal defense.  See Young v. Selsky, 41 F.3d 47, 51 (2d Cir. 1994) (quasi-judicial immunity has been extended to individuals who perform duties "closely associated with the judicial process" and who "perform tasks that are inextricably intertwined with the judicial process.")

This argument was made in Reitano's case as both a reason to move the case from state to federal court (Barbier's court where the case was stayed and put in a black hole) and also to provide immunity for Juneau from being deposed.  But with BP, Juneau is now arguing he has no judicial title or powers and can't be held to that standard.

Judge Barbier, himself, even told Lionel Sutton in open court that lying to Juneau was the same as lying to the Court.  Here are Barbier's exact words from the last hearing:
"'A lawyer shall not knowingly make a false statement of fact to a law or tribunal.'  Well, Mr. Juneau may not be technically a tribunal, but he is a Court-appointed claims administrator.  And as far as I"m concerned, if a lawyer, particularly a lawyer who is working for him, makes a false statement to my Court-appointed claims administrator, as Mr. Sutton has admitted he made on several occasions, that's the same as making a false statement to the Court."
This is a clear violation of the rules of professional conduct to argue opposite positions in the same case under the same set of facts...otherwise known as a positional conflict.  Both Barbier and Juneau appear to have done exactly this, or at least Juneau argued and Barbier accepted the argument.

I wonder where they went to law school.

I suppose you can put your judge hat on when it's convenient then take it off when it's not?  Like over appz and entrees?


Anonymous said...

Barbier found that Sutton violated Rule 3.3, which covers statements made to a tribunal, for making a false statement to "my" Court-appointed claims administrator. Two months later, while asserting that he is not bound by any code of conduct, Juneau tells the 5th circuit court of appeals that he is not a "judicial employee" "merely" or otherwise. That he is only a "third-party contractor that is not paid or employed by 'the Judicial Branch'."

So with regard to Sutton's actions, Juneau is the equivalent of a tribunal, but with regard to his own actions, Juneau is not even the equivalent of the tribunal's employee. Really?

What it be easier to just say that the rules don't apply to Patrick Juneau.

Anonymous said...

AZ, help a confused reader out. Why is BP filing motions seeking to get Juneau removed - knowing he is being protected by Barbier - when the both of them were on board with 495? 495 seems like a pretty sweet deal for them, why would they want to rock that boat?

Jason Brad Berry said...


I would never pretend to know what BP's motivations are. They have baffled me from the beginning.

What's clear to me now is that they've certainly gained a tremendous amount of leverage over the PSC and Barbier irrespective of their intent to remove Juneau.

See, the problem with this story is that everyone is an asshole....there are no good guys. BP is an asshole, Juneau is an asshole, Barbier is an asshole, Freeh and the court vendors are assholes....and most importantly the PSC are assholes. Their real priority is simply to enrich themselves, not seek retribution and justice for the people who have been harmed by the oil spill.

What's happened is that the PSC got their shit paid first and well with the full knowledge and consent of Juneau and Barbier. They didn't fight 495 that hard because they already got theirs, they expedited their own claims with Juneau and Barbiers' knowledge....it's all the suckers that didn't have an inside track that have to deal with 495 and Freeh's scrutiny now.

Juneau has already gotten his...at least $7 million in salary to date...I'm sure more it's more than that. His only goal is to keep the appearance of propriety and keep the gravy train flowing for himself and the crony contractors he's surrounded himself with as window dressing. That's become painfully apparent with the revelations from the McGladrey whistleblower but it was already apparent with the bullshit "investigation" conducted by Louis Freeh.

Freeh...that fucker "prosecuted" his way into a $3 million/month contract with a glorious expense account. After hyping up evidence on the Thonn claim and falsely accusing Christine Reitano he then methodically "leveraged" Odom and Fisher out of the picture and took over. But Freeh's presence has also served BP well as the claim processing has ground to a halt.

Barbier...I think he is simply trying to salvage what's left of his reputation by presenting the appearance of impartiality after having been painfully partial in hiding the transgressions of the PSC and Juneau. As Clay pointed out in the previous comment section, he just capitulated to BP by ruling they only spilled 3.19 million barrels, the median between what the government claimed they spilled and what they claimed they spilled. As Clay pointed out that's wiping out billions in liability to BP.

I think he's doing this because he's compromised himself so badly by trying to protect and hide all the indiscretions of Juneau, Herman, Fayard and the rest of the PSC. I think if BP wanted to, they could not only take down Juneau but irreparably tarnish Barbier's reputation due to his actions in trying to protect the "good ol' boys" as Joe Nocera put it.

Now...what the fuck is BP up to? I have no idea. Their actions have made little to no sense to me from the beginning. If they really want to take Juneau out they could do that right now on this McGladrey issue simply by asking the FBI to investigate the matter on the basis of false billing and payroll fraud.

If the allegations the whistleblower have made are true, McGladrey not only needs to press the issue themselves and have McNamee deposed to find out exactly what Juneau told him, they eventually need to come clean with BP and the public as to what their internal investigation has uncovered. This whole issue could be fatal for this multi-national company, McGladrey....at the very least it severely dings their reputation. They need to rectify the matter internally and return any money they have found to be illegally billed (and if the story is true it's going to be a shitload).


Jason Brad Berry said...


In fact, I think it may be prudent for McGladrey to return the entire 14 million plus expenses to the DHECC due to the fact that the "audit" has been called bogus by not only the whistleblower but at least one other commenter claiming to be a McGladrey employee who worked on the project. All this...IF...they are telling the truth.

If what the whistleblower said happened, actually happened, it could have been a scenario where McNamee conducted the whole scam independently, without the knowledge of his superiors at McGladrey. It's a stretch but they may not have known what he was doing down here in the swamp. If that's the case, they should return the DHECC's (and by proxy BP's) money.

I"m actually still willing to give McGladrey the benefit of the doubt on that one because I've been writing about shit like this for so long I know that 9 times out of 10 corruption within a government or corporate system happens with a handful of people and not the body whole. The whistleblower coming forward would seem to be a testament to that.

My biggest fear is that McGladrey tries to cover the whole thing up. But that could only happen with the consent of BP.

Those type of corporate games are way above my pay grade but then again everything is above my pay grade because I don't get paid. Regardless, I can pretty much bet you that if BP asks the FBI or even the SEC to investigate the matter independently of McGladrey these government entities would be obliged to do so.

This scenario has the trappings of an Arthur Andersen/Enron scenario depending on how McGladrey handles it. For their sake, I hope they follow their own ethical code.

Jason Brad Berry said...

And if the whistleblower read this comment, I would be curious to hear what your next step is if McGladrey dismisses your ethics complaint.

Anonymous said...

"Barbier... I think he is just trying to salvage what's left of his reputation"

Too late.
He allowed Juneau to avoid Reitano's state claim by arguing that he is entitled to judicial immunity and then allows Juneau to avoid BP's claim by arguing that he is not connected to the judiciary in any manner.
Sadly, there is nothing left to salvage.

Clay said...

"Now...what the fuck is BP up to? I have no idea."

Having serious leverage on a judge that has your balls in a vice sounds like pretty good motivation.

Once BP plays the corruption card against Barbie (I mean REALLY plays it, like Barbier & Juneau at lunch on the cover of the Wall Street Journal), it can't be played again. It'd be a one shot deal.

The spillrate ruling is about the best possible outcome BP could have reasonable asked for You talk about Freeh stealing $3m/month like it's a lot of money... For an international oil company, that's seat cushion money, not a billion dollars, that's real money. Off the top of my head, I think Barbier just saved BP enough money to pay for their Mad Dog Phase 2 project. And on pretty thin legal footing, too.

One minor quibble: "This whole issue could be fatal for this multi-national company"...

Um, BP is in some trouble, but Macondo is #3 on the list. #1 and #2 (not sure which is actually worse) is oil prices at half what it was this summer and TNK-BP (Russia). If oil prices were high and business in Russia were still going strong, Macondo would be a speed bump, nothing more. I'm still skeptical of calling this life-threatening to BP. Sucking chest wound at worst.

Also, what's up with BP saying they could only afford $2.3 B fine?
They sold Texas City refinery for at least $2.4B:

Jason Brad Berry said...

"Um, BP is in some trouble,"

No...I mean McGladrey. The 14 milli is chump change but a farcical audit and fraudulent billing are potentially deadly.

Anonymous said...

You asked what BP is up to or doing?

Delaying claims with bullshit arguments read below.

And why are we missing the Dec monthly court report Pat?

Don't want anyone to know you wiped out $795 million in offers but your court vendors got paid for doing the work?

Appeal Panel Decision 2014-723

BP has again appealed a BEL award to a realtor on the same grounds that have been asserted in a multiplicity of other appeals. In almost boilerplate fashion, BP asserts that as a cash accounting basis entity, Claimant reports spikes in commission income in certain months that should be matched at Step One of Policy 495 to reallocate it over the several months that to a near certainty it took in earnings activities to produce the revenue. It also again asserts that instead of using the AVM methodology chosen by the vendors to roughly match revenues and expenses, the vendors should have resorted to the use of the Professional Services methodology. It argues for a remand to perform further matching and alternatively proposes a much lower award, admitting in footnote that its math is based upon assumptions unavailable from the record. This record has been reviewed de novo.

Sufficient matching was done by the vendors in the second step of Policy 495, by subjecting Claimant to the seven criteria denoted therein. This is all that is required. The vendors exercised their allowable discretion in choosing AVM over Professional Services as a methodology, the latter which does not include realtors as one of the enumerated entities that mandate its use. There is nothing different in this record from the facts and arguments addressed and denied in many other essentially identical appeals on this issue. As such, the award must be chosen and affirmed.

BP lost this appeal.


Anonymous said...

According to news reports, BP has dismissed this appeal.