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?

DHECC - from Omega to the Alpha with love

An interesting item about the Omega claim story has popped up after a public records request to the Louisiana Economic Development (LED) office.

On September 2, 2010, Chairman, CEO and President of Omega Protein, Joe von Rosenberg, sent an email and enclosed memo to the Secretary of the LED, Stephen Moret.  In it he mentions that he will be in Baton Rouge the coming Tuesday evening to attend an event for Governor Bobby Jindal.

As fate would have it, Omega made a $5000 donation to the Republican Party of Louisiana the day after that Jindal soiree on September 7th, 2010.  DHECC Claims Administrator Pat Juneau was cc'd in subsequent emails from the LED and shortly after that the Omega Claim was paid out.

It appears LED is who asked Juneau to contact Feinberg about the Omega claim and I suppose the $5000 donation to Jindal was a small pittance to get a $45 million payday.

It's an interesting snapshot of how the machine works.

DHECC - cheap fish swim deep

So much has happened since I last posted I don't even know how to catch up.  I apologize for the absence but I've had a lot going on in my personal life and I simply haven't had the time to devote to AZ.  Hopefully I can get back in the saddle and get in a new groove.

Since we last rapped here on AZ, Judge Carl Barbier not only denied BP the right to see the 14 million dollar McGladrey audit commissioned by Claims Administrator Pat Juneau, he also denied BP's motion to dismiss Juneau's tenure as the Claims Administrator in spite of Pat's prior involvement with the BP settlement and the GCCF previous to the formation of the DHECC.  Juneau outright lied about that involvement, twice, in order to hop on the DHECC gravy train and milk it for as much as he and his PSC cohorts could muster.

None of these issues seemed to bother Judge Barbier too much.

Regarding the McGladrey audit, the Judge made up some bullshit excuse to deny it's disclosure to BP by claiming that Juneau has not even had the opportunity to see the final audit, himself.  That's funny stuff.  What Juneau saw was the initial "versions" of the audit and he freaked the fuck out because they were going to expose just how much corruption has occurred in the settlement, particularly by the PSC members (more on that in the next post).  I suppose the Judge wants to give Juneau the opportunity to pay McGladrey an extra 14 million of BP's own money to water down the existing audit and cover up the indiscretions of the PSC.    

At this point I think someone needs to remove Barbier from the settlement for his own good.  He's gone so far off the legal reservation to protect Juneau and the PSC from being exposed for their unethical and ILLEGAL actions, I don't think he even realizes how this is going to mar the legacy of the Louisiana judicial system much less his own personal legacy as a federal judge.  His myopic perch on Poydras has blinded him to the long term damage he's doing to his own reputation, as well as Louisiana, all to protect these rotten bastards who are gaming the system without worry of retribution thanks to him hiding them all behind his robe.

These guys are chomping up wads of settlement cash like Pac-man on meth while the ghosts chasing them: Blinky, Pinky, Inky and Clyde, are being held in a perpetual shade of blue by Judge Barbier.

Also, the Andry/Lerner firm, Christine Reitano and Lionel Sutton all stood before Barbier a little over a week ago to plea their case against Louis Freeh's allegations of wrongdoing. Sutton admitted to lying about accepting the Thonn referral fee from AndryLerner.  For some reason this admission garnered the headlines for most MSM outlets, including The Advocate,  with a caveat noting "...it absolved administrator Patrick Juneau of wrongdoing."  Really?  What, exactly, did it absolve Juneau of?  Not knowing Sutton had made the Thonn referral?  No...not.

The irony is too thick.  Barbier absolves Juneau of any wrongdoing because he claimed BP knew he had represented the State before he jockeyed to become the DHECC Claims Administrator.  But then he turns right around and chastises Sutton for the exact same scenario.  If Sutton lied, his lie was no less grand than Juneau's lie....and Juneau lied under oath.

Sutton lied to his wife...and he admitted that in the hearing.  If he lied to Juneau about accepting the referral fee it's a small drop in the bucket compared to what Juneau himself has done.

If you've been following the blog you should already know that Christine Reitano had no fucking idea that her husband, Lionel, had accepted a referral fee for the Thonn claim.  I've stated as much, and so did Lionel in his interview with me, numerous times.  Reitano also informed Pat Juneau of this but he saw fit to fire her anyway.  I'm a little confused as to why people think this was some great revelation, including the local MSM.  I've stated this ad nauseam and I'll state it again.....Christine Reitano is innocent of anything Louis Freeh accused her of.  The headline of that hearing should have been "DHECC employ absolved of allegations made by Special Master Louis Freeh" not "Lionel Sutton lied!!!".  

The PSC and Pat Juneau, however, are guilty as sin of everything I've accused them of here on AZ and I'm about to lay out yet one more damning piece of evidence against Mr. Juneau that dives deep into Louisiana politics and gives us a snapshot as to why so many people are bending over backwards to hide this guy's transgressions, including a federal judge.  Stay with me here.

Something smells fishy

Before Pat Juneau came on as the DHECC Claims Administrator he had been hired by the State of Louisiana as a legal consultant regarding the State's damages and claim against BP for the oil spill.  Juneau originally claimed that he had nothing to do with the ongoing settlement, a prerequisite in order for him to get hired as the Claims Administrator.  He also made the same assertion, under oath, to Louis Freeh in a deposition.  The latter was clearly perjury but Juneau argued that the statements in the deposition had been "taken out of context" and that he had not lied.  That's laughable in my opinion but of course the Judge agreed and absolved Juneau of any conflict of interest because apparently BP knew that Juneau had represented the State before they agreed to hire him as the CA.

Putting all this aside, one incredibly interesting revelation that came up in this investigation was that while under contract with the State of Louisiana, Pat Juneau billed the state for helping to expedite the claim of a private company under Feinberg's GCCF.  Actually that information was liberated through a Public Records Request to the state for Juneau's billing records (hat tip K).

As it turns out, this wasn't just your run of the the mill claim...it was the largest claim paid out by Feinberg, a whopping $44.8 million smackeroos to a single company.

Well, at least a good ole' Louisiana company was getting compensated by BP for the oil spill, you say?  Uh...actually....no.  Turns out this company isn't even a Louisiana-based corporation.

The company Juneau went to bat for and landed the 44.8 mill is Omega Protein, a Houston, Texas based corporation.  Omega harvests Menhaden, also known as Pogies here in the Gulf, a fish that is considered one of the "lifelines" of the Gulf marine ecosystem.  Pogies are one of the most critical links in the Gulf food chain as they procreate en masse and serve as the staple diet for most of the larger Gulf fish and sea creatures.  Omega farms these fish and then grinds them down for various commercial purposes including cat food, fish meal, plant food and nutritional pills.  In fact, Omega is the largest harvester of Pogies in the country constituting up to 80% of the entire national Pogie catch coming from the Gulf and East Coasts. Pogie fishing has traditionally been unregulated but Omega has pulled so many from the Gulf waters, conservation agencies have recently been forced to regulate catches.

Omega also has an interesting political history.  The company cast its first net in Virginia circa 1913 and later moved to Houston.  In 1973 former President George H.W. Bush's company, the Zapata Corporation, bought Omega and later took it public in an IPO announced in 1998.

Omega does have plants in Louisiana, Abbeville and Cameron (closed in 2011), that employ about 550, mostly seasonal, workers.  Their largest plant is in Moss Point, Mississippi, a shipyard that employees about 1000 workers. I've been told by some of my peeps in the fishing industry that the bulk of Omega's workforce are not simply "seasonal" workers but undocumented as well.

The $44.8 million was a massive windfall for Omega; the company's annual income only averages about $177 million.  In fact, the BP spill turned out to be a boon for Omega as it resulted in a 40% rise in prices for their products in 2010 and 2011.  They even ended up catching 90% of their projected catch in 2010 while the Macondo well was still spewing oil out into the Gulf.  Omega's CEO Joe von Rosenberg was ecstatic with the GCCF payout and as the CBS article notes above he was quick to let his stockholders know about it.  It must have worked because shortly after the 44.8 mill landed in their bank account their stock price rocketed out of the cellar where it was hovering between 4 and 6 dollars a share to over 14 dollars a share where it's currently at after a few dips over the years.

Good on Omega, huh?  Louisiana power brokers like Pat Juneau go to bat for guys like this and they end up re-capitalizing the entire company from a single lawsuit.  A rising tide raises all boats right?

Well....we live in Louisiana and we all know by now that what's good for Texas is almost always at the expense of our own state and Omega is no exception.  Shortly after landing the BP payout Omega shut down its Cameron, LA plant and consolidated it with the Abbeville, LA., and Moss Point, MS., plants.

But let's quit obsessing Omega and turn to the real issue...the question here is why would Pat Juneau use his leverage with Feinberg and the GCCF to get a Houston company paid before everyone else and paid extremely well?  The bigger question is....how could he possibly have billed the State of Louisiana to do this?  That's a felony, ya' know?  You can't bill the State to work on a private company's claim, much less one from Texas.  Was he asked to do this by a state official?  Governor Jindal?  Louisiana Attorney General Buddy Caldwell?  A Jindal crony like Garret Graves?  If any of these guys had Juneau expedite a private claim on the State's dime it's an even bigger issue than if Juneau did it for his own reasons and I think it's something the Louisiana State Legislative Auditor should investigate PDQ.

And to help them with that investigation (don't hold your breath) I'll offer some extra tidbits of 411 that may help the legislative auditor's office figure out exactly what happened and if Pat Juneau deserves to be criminally charged for billing the State to expedite Omega's claim.

Juneau's invoices show that he was communicating with several of Governor Jindal's cabinet members right before he lobbied Feinberg on behalf of Omega.  As fate would have it, right before they submitted their claim, Omega donated $5000 to the Louisiana Republican Party:

http://www.ethics.state.la.us/CampaignFinanceSearch/ShowEForm.aspx?ReportID=21108

They also donated $2,000 directly to Bobby Jindal in 2009.   Also, $5,000 to Mary Landrieu and $1,000 to Louisiana Attorney General Buddy Caldwell back in 2007.

But what's really interesting is Omega's ties to PSC lawyers.  PSC lawyer Jeffrey Breit of Virginia Beach, VA., represented Omega ship captains in a suit against BP.

Phillip Cossich Jr., PSC Member from the law firm Cossich, Sumich, Parsiola and Taylor, also represented Omega several times in the past and even cited those cases in his application to be named a member of the PSC.

It's pretty apparent that Omega has deep connections to the "Good Ole' Boy" network down here in paludal-ville.  Still, the question is how did Juneau get away with billing the State for helping these guys get a 44.8 million dollar payout?  Our tax dollars were used to help a Texas company make a buttload of cash, how is that?

And here's an even better question....was there a direct quid pro quo from Omega to Juneau?  Did Juneau get a referral fee directly from Omega in any way shape or form for his efforts to get them paid and paid better than anyone else in the settlement?

The beat goes on 

This game is so rigged....it's disgusting.  How many Louisiana fisherman have yet to see a dime from the settlement while Juneau helps this Houston company pull down a 45 million dollar windfall?

In the hearing last week, Judge Barbier, in a moment of dudgeon, asked Lionel Sutton, "What year did you graduate law school?"  That's really cute....I would love to ask Barbier the same question.  His robe is only going to fan out so far in his attempt to hide these guys and their illicit behavior.

He is standing in a cesspool and I'm not sure he realizes that it's only going to keep rising.  Forget wrinkled robe...this one is stained through and through.  

DHECC - Proof positive of claims being expedited by the PSC

For the past year and a half I've been reporting on issues that have occurred with the BP oil spill multi-district litigation settlement and the Claims Office of the Deepwater Horizon Economics Claims Center (DHECC).

From the beginning, I was approached by multiple sources that made claims of fraud and manipulation within the DHECC process.  Most of the allegations involved issues that were instigated by members of the Plaintiff Steering Committee (PSC)....the lawyers chosen to represent all the class claimants along the Gulf Coast in their lawsuit against BP.

Typically...frustratingly..... almost every one of my sources refused to go on the record and I've had a difficult time providing hard proof of the allegations.

My luck changed last week.

Allegations

There are two main issues I've been researching regarding the misconduct of specific PSC members:

1.  The allegation that some PSC firms sold access to the claim "formula" before the claims office opened.  In fact, it now appears some of the PSC firms entered into joint venture agreements with other law firms around the Gulf Coast without disclosing the nature of their involvement to either the claimants or the claims office.

2.  That members of the PSC had their own private claims expedited before other claimants who had filed ahead of them.

The Rules of the Settlement

Before I get to the evidence, I want to point out again that by order of Federal Judge Carl Barbier, the claims which come into the DHECC must be processed 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.

A Breach of the Settlement?

Last week, I received an unmarked envelope in the mail that contained a series of email exchanges between employees of the Claims Office and other DHECC officials.  Among those involved in the conversation included Claims Administrator Pat Juneau, court vendor Brown and Greer, and members of the PSC.

These emails clearly suggest that PSC members were not only expediting their own claims, they were actually issuing directives to the employees of the Claims Office.  In fact, it looks like they were even holding back specific claims from being processed for political reasons.

Keep in mind the PSC lawyers are supposed to be representing all the claimants in this settlement process, not just their own personal clients.

Trying to get answers

A year ago in March of 2013, I filed a FOIA request with the DHECC in an effort to find out if any PSC members had expedited their own claims within the office.  My request was denied:

A little help

After the denial, I drafted a personal letter to Judge Barbier asking him to redact claimants' private information and make the claim data public so the public could be assured the process was operating according to the standards he had ordered:

The DHECC - Examining the "Claims" - Part 1

Judge Barbier never responded to my letter.

I made contact today with the Claims Office and requested an interview with Claims Administrator Pat Juneau.  My interview request was denied but he did agree to provide statements and facts to any questions I had.  I responded by asking him (via email) if he was aware of any claims that may have been expedited in the office, particularly ones that were being represented by PSC attorneys.  This was his response:

"The Deepwater Horizon Claims Center processes claims as they are submitted. 

In the early stages of the process prior to the Fairness Hearing, and at the request of all parties, the Claims Administration Office had to select sample claims from each claim type that had the required and sufficient documentation to determine the accuracy of the claims process. 

Following this sample selection for the Fairness Hearing, claims are processed as they are received. " 

I replied and asked him exactly how many claims were used in the sample selection and what specific time period this sampling occurred.  I didn't receive a response as of my publishing this post. 

The Evidence

The first email exchange I received in the anonymous package is from PSC attorney Calvin Fayard to former Claims Office employee Christine Reitano with a carbon copy sent to Claims Administrator Pat Juneau.

ITEM 1:

Fayard email exchange request to expedite

As you can see the claim # is blacked out, so I am unable to identify what claim Fayard was asking to be expedited.  But note that Fayard says "Pat mentioned for members of the PSC to send along claim numbers for claims that have been filed and ARE LARGER (emphasis mine) claims that perhaps could be looked at more quickly."  Juneau then responds and orders Reitano to contact Brown and Greer with a request to expedite Fayard's claim.

ITEM 2:

The second email goes even further into the process and features directives dictated to the Claims Office by two PSC members, Steve Herman and Jim Roy:

Email exchange with Herman and Roy directives

The first directive in this email states that the Claims Office should only expedite three of the PSC members requested claims, across two or more claim types.

The second directive in this email is very interesting in that it orders the Claims Office to review and expedite roughly 24 claims across different claim types for six of the law firms that were considered major objectors at the time:  Rick Kuykendall, Sher Garner, Smith Stag, Farrel & Patel, Brent Coon and The Buzbee Law Firm.

It's not clear why Herman and Roy would have ordered the objectors' claims to be expedited along with their own but one possibility is that it could have been a tactic to eliminate these law firms' objector's status against the settlement.

I contacted three of the six objectors firms, two of them confirmed for me, off the record, that they were unaware their claims had been expedited.

One firm, Brent Coon, confirmed, on the record, that he was unaware any of his claims had been expedited.

After looking at the email exchange, Coon also called my attention to the relevance of the 3rd directive which orders the Claims Office to cease and desist reviewing the "class representative" claims (i.e., Lake Eugenie).  Apparently the PSC wanted to hold up these claims because if they were processed too early it would negate their ability to qualify as a "class rep claim".  Coon suggested that if the PSC had those claims sequestered without the consent of the claimants, that could be as big an issue as having their own claims expedited.

And I would also note Odom's curious response to the Herman and Roy directives:

"There was a question regarding item 3 of your email from the accountants.  Are they supposed to stop processing all claims for Class Representatives?  I assume this would be all of the PSC?  If so, what are the accountants supposed to tell the Class Representatives that have been calling them?  What happens to the claims?"

Directives 1, 2 and 3 in this email show a pattern by the PSC to manipulate the claims process as defined by the court.  The other interesting revelation of this email is that is demonstrates that the Claims Office was apparently taking directives from the PSC members with Pat Juneau's knowledge and consent.  It's not the PSC's role to give directives to the Claims Office.

ITEM 3:

The third email exchange contains an actual matrix from Brown and Greer of 409 claims per law firm and claim type that were expedited previous to September 27, 2012:

Email exchange with expedited claim matrix up to Sept. 27, 2012

 

That's 409 claims that were expedited for both the PSC firms and objectors (with at least three of them unaware this had happened).  There are obviously other law firms on the matrix but I have no idea why these particular law firms' claims were expedited.

In the email exchange, Bill Atkinson of Brown and Greer states that they didn't know which three claims to expedite for each objector (per the PSC request) so they just randomly chose the objectors' claims.  This would seem to validate the assertion by the objectors I spoke with that they had no idea that their claims had been expedited.

Sampling?

I suppose it is possible that these claims mentioned in the emails were expedited as part of the sampling process but that doesn't seem likely.  Please note I did not show Juneau the emails.  Had he agreed to the interview I would have shown them to him to get his immediate response.  I point this out to note that his response was not directly to the emails but the general question of whether or not claims, particularly PSC member's claims, had been expedited.  Also note that he never actually said claims had been expedited but his answer suggests some were for the sampling process alone.

The claims in these emails don't appear to be part of a sampling process and there is no mention of sampling associated with them in the email chain.  There are a number of other reasons the sampling suggestion wouldn't make sense.  I contacted two lawyers familiar with MDL claims processes (not associated with the DHECC) and they brought up the following points:

- The entire reason a Claims Administrator is appointed is to avoid having the PSC members calling the shots within the office.  The Administrator is supposed to be an unbiased arbitrator in the MDL process.  The fact that they selectively chose PSC firms' and objectors' claims to sample would not make sense and it's highly unlikely that BP would have agreed to this.  I suppose we'll find out if BP people read this post.

- The whole reason for conducting a sample in the first place is questionable considering Feinberg had already been processing claims in the GCCF for some time.

- Why were over 400 claims used for a sampling process and why were they specifically chosen from PSC filings?  It would make more sense to pull the first 10 to 20 claims from each claim type.  Plus, the PSC samples were most likely all accurate as they understood the filing requirements better than most.  This would tilt the sampling process negating the reason to conduct one in the first place.  The whole purpose of running a sample would be to discover potential problems.

- Juneau suggested the sample claims were pulled "in the early stages of the process" before the fairness hearing.  This fairness hearing did occur approximately one month (November 2012) after these emails exchanges but it seems unlikely they would be sampling claims in the 11th hour, four months after the Claims Office opened for business in June of 2012.  Also, if there was a sample that occurred, you would think Juneau should have reported the results in a spreadsheet to the Court and especially in preparation for the fairness hearing.  I haven't been able to find any such report (if anyone is aware of that report please contact me).

- Why did Calvin Fayard specify that the PSC members were allowed to expedite "larger" claims?  If you were conducting an accurate sample, it seems you would want all type of claims across the spectrum.

If all these claims were expedited for sampling purposes, the sampling process itself needs to be questioned.

A Blind Eye?

The revelations provided in the emails are not a surprise to me.  What is a surprise to me is that Special Master Louis Freeh hasn't addressed these issues.  He must have this email chain as he obtained Christine Reitano and David Odom's DHECC email databases during his investigation.  I must assume he is aware of the issues and he recognizes that they are a clear violation of the terms of the settlement.

In my opinion, these revelations are much more serious than the single claim, Thonn, that Freeh focused on in his first report.  I believe the issue he mentioned on page 60 of the first report is much more serious than the Thonn claim as well because it suggests actual fraud occurred in respect to the seafood claims....allegedly by an unnamed PSC firm.

In fact, expediting a claim (for the Andry Law Firm) is exactly the charge Freeh levied against Lionel Sutton.  Here we have 409 claims that were expedited, many for PSC members.  Is this not worthy of investigation?

The possibility for selective prosecution is of great concern here, as is the overall fiduciary duty to the class claimants by the PSC attorneys.  I believe these issues need to be addressed and explained by Louis Freeh, the PSC attorneys, Pat Juneau and in particular Judge Carl Barbier....they simply can't ignore this.

The Real Problem

The processing of claims has recently slowed to a near halt.  Many of the claimants who properly filed claims are now being asked to go back and meet new requirements that didn't exist at the beginning of the program.  IF PSC attorneys got their own clients paid ahead of other class claimants it is a clear fiduciary breach under MDL standards.

Many of the hard working people of the Gulf Coast...the shrimpers, the oyster fishermen....the people who have suffered the most from this disaster have yet to receive compensation while it appears these PSC attorneys have paid themselves first.  I'm going to introduce AZ readers to some of these folks down the road.

Contrary to Mr. LeCesne's opinion....I believe this is a very big deal.

Attribution note:  This website is under a Creative Commons license and any reference to this post and its material should follow the CC guidelines.

The entire email exchange referenced in this post can also be obtained at the following link but if republished it must be attributed to the American Zombie blog and/or "independent, investigative journalist, Jason Brad Berry":

http://www.scribd.com/doc/211748455/DHECC-Master-Email-Exchange-regarding-expedited-claims-of-PSC

DHECC - The 2nd Freeh Report - Yaaawwwnnn.......

Here it is.

But don't waste 30 minutes out of your Friday night reading it....trust me it's not worth the time.

The unnamed PSC firm continues to remain unnamed and the rest of it is yawn inspiring.  I think somebody needs to pay me 3 million dollars a month to do this job...my posts are much more revealing and I can add and subtract at least to a 12th grade level.

I'm working for the next 42 hours for about .003% of his monthly pull so I don't have a lot of time right now to comment on it and I've only browsed it.  I'll get back to you over the weekend.

UPDATE:  In the meantime it looks like David Hammer and WWLTV have picked up the scent on this story...that makes me happy:

More alleged misconduct in BP oil spill settlement program

I want to draw your attention to the comments made by Blaine "Much Ado About Nothing" LeCesne:

Freeh acknowledged to Barbier that he has ties to law firms representing BP, including Kirkland and 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 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. 

Now don't get me wrong, I think LeCesne is as full of shite as a Christmas goose when it comes to his role as an apologist for the PSC attorneys that pull his strings....most notably Fayard (not Stuart Smith as BP claimed)....but I completely agree with him on this issue of Freeh having the capacity to absolve himself of any conflict of interest and there's a good reason why.

I was going to wait to write about this in another post but since Hammer brought it up I want to air it out now.

Freeh cleared himself of any conflict of interest with Williams & Connolly business in this letter:

Williams & Connoly Freeh conflict letter to Barbier

Here's the issue...if Kirkland and Ellis (BP's attorneys) or even BP themselves are referring business to The Freeh Group and/or Pepper Hamilton (Freeh has financial interest in both companies) then a quid pro quo scenario could be present in respect to what Freeh is doing in the claims office.

Remember, the whole reason Feinberg's GCCF was shut down and the DHECC was opened to supplant it was because Judge Barbier ruled that Feinberg was not an unbiased party after it was discovered he was being paid on a commission basis by BP, among other issues.

Now we have a guy in Freeh who was hired to investigate fraud that has systematically picked off the top five people in the claims office while sliding in over 40 of his own employees to do...what?  Nobody's sure.

One thing we do know is that he's clawing back claims.  If he is being rewarded by BP or Kirkland and Ellis through new business referrals there is a clear quid pro quo.  I don't understand how in billy hell Judge Barbier could justify collapsing the GCCF and now allow Freeh to take over the claims office under these circumstances.  And I especially do not understand how Barbier is allowing Freeh to absolve himself as LeCesne pointed out.

More later.

"But what do I know? I'm from New York."

That's Joe Nocera's closing sentence from a July 19th article in which he blatantly shills for the multi-national oil company, BP.  Joe wants us to believe that poor BP is getting "skewered" by our "good ol' boy" trial attorneys way down here in the dirty south.  Apparently he has a "deus ex machina" view from his office in "Big ole' " New York City.  (I feel like I'm writing dialogue for Mr. Haney in a Green Acres episode)

Nocera drives the point home in today's NYT opinion article:

Lawyers' Business Model

...he feels the need to justify his moral obligation to tort reform by pointing out the injustice he's witnessed in the mass litigation against Dow Corning for health effects caused by silicone breast implants.  I can't imagine the horrors this man has faced.

I guess he's trying assure us that he "understands" mass litigation and all the issues involved, particularly with this case, the BP oil spill.

Rest assured dear NYT reader...he has no agenda here other than to ward off the enormity of New Orleans' trial attorneys onslaught against this poor, little, multi-national, oil company, BP.

And rest assured, according to Joe, if Feinberg was still in the driver's seat...everything would be right as rain:

"But, to me, the question of whether BP can afford to pay is irrelevant. BP is the best example I’ve ever seen of a company that actually tried to find a better way. Immediately after the spill, it set up a claims process to get money into victims’ hands quickly, without having to file a lawsuit. Though that process had its critics, it worked. Of the $11 billion BP has paid out in claims, $6.3 billion was paid through that process."

And Joe knows that this claims process was "working"......because....he's from New York....

Right.

Well...I'm from Louisiana.  I've been covering the effects of this spill from the moment it happened.  Perhaps I don't have that wonderful panoptic view New York City provides, but I have seen a lot of what's actually happening on the Gulf Coast in the wake of this man-made disaster.  

I've seen a lot of suffering.  I've seen a lot of struggle.  I've seen a lot of death and destruction.

I see that it is still very fucked up.

But don't take my word on the matter, let's go back to June of 2012 and take a look at what a Louisiana fisherman had to say about how well the GCCF/Feinberg process was working for the "good 'ol boys" down here on the Gulf Coast:

George Barisich from Jason Berry on Vimeo.

So, I'm no big-city, New York, swinging dick...but I'm gonna go ahead and take a shot at answering Nocera's question about what he knows.

I think he knows two things:

1.  Jack

2.  Shit

Sounds of the Jungle

The jackals are snapping at each other's heels while the media monkeys are howling in the trees.

I just read this NYT commentary by Joe Nocera which is either half-informed or fully-twisted.  I'm voting on the latter.  I can't decide whether there are worms in my meat or there is still some meat left on the bone after the worms got a hold of it....welcome to the BP settlement.

According to Nocera, Saint Feinberg "spent more time turning down bogus claims than he did approving payments to victims."

Oh yeah?

Nocera backed that thesis up by linking to this story from "the trusted voice of the people", Bloomberg, in June of 2010:

BP Victims' Fund to Fight Bogus Claims, Feinberg Says

I'm not sure why Joe decided to republish the aforementioned article about Mr. Feinberg.  There is no hard data to support the claim he's making and he's neglecting to point out that Feinberg was dismissed after Gulf Coast folks and blogs like this one pointed out that he was actually getting paid on a commission basis by BP.  We also uncovered that he had multiple contracts with other oil companies.  Would Joe have us believe that Feinberg was a champion against corruption?

Funny, seems like I remember another headline that was almost identical to the one Nocera mentioned above....let's dig back in the crypt and see if we can find that....

A Hybrid?

In that AZ post, I called out a Huffington Post article published seven months after the Bloomberg article Nocera referenced:

Gulf Oil Spill Fund Fraudulent Claims top 7,000

Sounds outrageous right?  Well, if you actually read the story instead of the headline you'll see that at that time it was written, only eight out of 7,575 claims that were being investigated were actually found to be fraudulent.  Now read that headline again and tell me if it's misleading.

The story Nocera references from Bloomberg, as well as the Huffington Post story, have no substantial data or facts to back up the claim that there were "a multitude of bogus claims" filed.  To this date there is NO SUBSTANTIAL DATA supporting this allegation of massive fraudulent claims filed against BP.

Why is that?

Hang on...I may have an answer when I explain how the claims are actually being processed.

In the meantime, Nocera makes the statement that Feinberg actually spent more time, "turning down bogus claims than he did approving payments to victims"  What criteria is he basing that statement on?  Did he hear that personally from Feinberg?

Feinberg was actually processing individual claims himself?  He was spending his personal time finding bogus claims?

Fuck no, he wasn't.  Nor was he transparent about the nature of the how the claims were being processed in the first place.  Granted, I'm just a lowly blogger, but I put in multiple calls to his office in D.C. to find out exactly what was going on...all to no avail.

Since then, I have put a lot of the pieces of the puzzle together.  Here's a possible reason why there is no substantial data to back up the fraud allegations by Feinberg and the mainstream media (who just love to throw this allegation of rampant, fraudulent claims out with no corroborating evidence).

What happens when you file a claim?

The first step in the processing of these claims under the GCCF, as well as the DHECC (in the present), goes through a company called Brown and Greer.  They developed a modeling software system that all claims are run through before they ever land on a desk.  Their computational modeling agent weeds out claims before a set of human eyes (accountant/claims processer) ever sees it.  This company, Brown and Greer, is actually a company that specializes in collecting data in class action situations like this in order to mitigate risk for clients.

Remember that last sentence (future posts).

At what point they created their modeling solution for this specific case...BP....I have not been able to determine.  I just know that they had the modeling software in place before the GCCF was created and they were hired by Feinberg to be the first "filter" for processing the incoming claims.  I've been told, but haven't been able to determine, they were hired by BP to create the modeling solution before they were hired by Feinberg.

Now, after the GCCF collapsed and the DHECC was formed, Brown and Greer was hired by Barbier, Juneau and team as a court vendor, to do the exact same thing they were doing with the GCCF.  Their software modeling process is where the rubber meats the road in the BP claims process.  Before any DHECC accountant sees a single claim, it has already been processed by Brown and Greer's modeling agent.

You know where this is going, huh?

I have been informed of three instances, documented separately, where the modeling agent was "misinterpreting" the claims in favor of lower payments for BP.  And this isn't just a single claim...I'm talking mass groups of claims may have been misconstrued by the modeling agent in order to either lower the payout according to the "zone" in which a claim was filed, or a mass amount of claims have actually been kicked out and re-queued by the modeling agent.  If kicked out, it would take another 120 days to process that claim before it even made it to an actual accountant's desk at the DHECC.

There is one confirmed case of a claim, over a year old, that was filed with all of the required information and has yet to be processed.

This evidence has been documented and will be forthcoming.  If not on this blog...on another independent online resource.

Kind of right, kind of wrong

In his defense, let's look at what Nocera did get "half-ass" right.

The PSC lawyers are gaming this system in a way that would make the most legendary Louisiana "gamers" jealous:

"So a group of lawyers — known as the Plaintiffs’ Steering Committee — persuaded their clients to skip the Feinberg process and sue BP. And in March 2012, BP settled with those lawyers."

Yes and no.  Actually more no than yes.

It wasn't only the "PSC" lawyers that were skipping the Feinberg process to sue BP independently...there were many other lawyers representing private claims other than these few PSC lawyers.  And to say that "BP settled with these lawyers on March 2012" is a joke...what they agreed to was an MDL case that would supplant the collapsed GCCF/Feinberg settlement process.    How that transpired and how these particular lawyers were named to the PSC was dictated by a single federal judge, Carl Barbier.  BP wasn't offering a settlement to "all" the lawyers who had private claims against them.

"As a condition for settling, the plaintiffs’ lawyers insisted that Feinberg be replaced by Patrick Juneau, a good-ol’-boy plaintiffs’ lawyer himself. "

Yes...he got that exactly right...adjectives and all.  What he may or may not know...is Juneau's very cozy connections to some of the PSC attorneys (I'm sure AZ commenter, Kevin, will be happy to expound).  I suspect Joe does know some of this and that is what he is alluding to.

"Over the ensuing months, the company had come to realize that Juneau’s interpretation of such concepts as “revenue” and “earnings” was, er, unique. So unique, in fact, that businesses that not only weren’t affected by the BP disaster but hadn’t even suffered losses were getting millions of dollars."

Yes...this is true...but what has yet to surface is exactly who these businesses were that benefitted FIRST, and who their "good-ol'-boy" connections, and even legal counsel, were.  I believe the bread crumbs...or filet mignon cuts, if you will....lead directly back to the PSC lawyers.

"Suddenly, BP was facing the prospect of paying tens of billions of additional dollars to people who had no justifiable claim on the money."

Perhaps...but what Nocera is failing to understand is that those people in the claims process were pushed ahead of thousands of other people along the Gulf Coast who did deserve to be compensated...and they still haven't been compensated.  

"When BP, which is based in London, complained to Judge Carl Barbier, who is overseeing all of the BP litigation in New Orleans, it got nowhere. Do I need to mention that Barbier is himself a former Louisiana plaintiffs’ lawyer? In fact, he was once the president of Louisiana Trial Lawyers Association. How cozy is that?"

Yes, I concur, 100%, on this sentiment.  But I doubt Joe has any idea how deep that rabbit hole goes.    

"Yet its efforts to do right by the Gulf region have only emboldened those who view it as a cash machine."

Yes, again.  But Mr. Nocera fails to mention that those assholes, he's previously called out, wedged themselves in between the cash machine and the people who are actually suffering from this oil spill.  And that...is what boils my blood about this commentary and the entire settlement in general.

A zombie beef  

Here's my thesis, a response to this NYT opinion by Nocera:

Yes...the PSC lawyers are greedy assholes gaming the system....but so is BP.  They are all greedy assholes and the people that are truly suffering are the hard-working, not-so-greedy, people of the Gulf Coast.    

When he labels his headline, "Justice, Louisiana Style",  he's implying that the entire state of Louisiana is intent on fucking over this poor, little, multi-national oil company, BP.  

Well, this poor, little company that is being taken advantage of has decimated the economy, ecology and culture of this state....and the damage continues to this day, with no end in sight.  If Mr. Nocera wants to fly down here and take a tour of the Louisiana coast, I'd be happy to show him the damage that has been done and what continues to unfold.  I can pull up over 100 blog posts on this blog, and others, that document it...much of it on video.  More importantly, I can drive him to the people that are suffering and show him the irreparable damage that's been done to our environment.

A distinction needs to be drawn between the lawyers/judge(s)/politician(s), that comprise the PSC/DHECC vis-a-vis the hard working people of the Gulf Coast, Louisiana folk, in specific.  These two classes of people mix like oil and water (forgive me).

What we have in this article, is a monkey howling in a tree, throwing turds at one pack of hyenas in defense of another pack.  Never mind the slaughter that's taking place underneath.

In respect to the PSC lawyers, the judges, the politicians and the defendant, BP.....they are all assholes...all of them.  I wish someone would write about that in the paper "everyone who's anyone" reads.  

  

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.

    

    

Comment(s) Bump - March 24, 2013 - PLEASE READ

Anonymous has left a new comment on your post "A little help": 

Having firsthand knowledge of the DHECC, I know that claims are not handled in any particular order or manner. 

PSC attorney firms and other attorneys have direct access to DHECC decision makers, whereas on the other hand, the DHECC and their representatives’ instruct its staff not to publish phone numbers and other contact information to the general pubic.

Because these attorneys have direct access to accountants responsible for reviewing and processing claims, they are having their claims paid in ridiculous proportions compared to other claimants.

Accountants behind the scenes largely ignore claimants not represented by attorneys, in clear violation of an agreement that is supposed to be fairly administered to all claimants similarly situated. 

Accounting firms reviewing claims have no incentive for expediency or results, but only to bill as many hours as they can, while often preforming redundant tasks, in hopes this boondoggle will last as long as possible.

A travesty indeed, unless you are a PSC attorney, or another law firm who is well connected… 

And this one:

Kevin has left a new comment on your post "A little help": 

Anon:

Are the PSC firms representing opt-out claimants? Are the PSC firms receiving attorney's fees for assisting the claimants you describe in your comments above? 

I'm gonna let you chew on these for a little while before I post any further on the matter.  I will leave you with this order issued by Judge Barbier on March 8, 2012 regarding the transition from the Feinberg process to the DHECC.  Please note item number ten:

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.

These issues are directly related to the FOIA request I filed.  I will expound later in the week.  Suffice to say I believe there is a lot the public should be concerned about regarding the operations of the DHECC and the role some of the PSC attorneys have played in its structure and operations.

This is going to get much uglier, you'll want to stay tuned.

The Wisner Fund - Battle for the Bayou - Part 2

In the wake of the BP oil spill, it became apparent that the structured settlement process set up by the Obama administration was a woefully inadequate method of dealing with the enormous amount of damage the Macondo spill unleashed on Louisiana and the Gulf Coast. 

President Obama’s handpicked arbitrator, Kenneth Feinberg, was officially ruled  “not neutral” by Federal Judge Carl Barbier in February of 2011.  Before Barbier ever smacked that gavel, the blogosphere pointed out that Feinberg had clear conflicts of interest.  We were also the first to ask if Feinberg was working on a commission based salary...turns out he was.

The solution to reboot the claims process was to create a “Plaintiffs Steering Committee (PSC)”.   These qualified lawyers would be selected by Barbier to represent the people along the Gulf Coast who had been decimated by the ongoing effects of the BP spill.  Hence, Barbier issued a request for attorneys residing in the states affected by the spill to submit resumes to in order to win a spot on the PSC. 

The list of Babier’s appointees are contained in this pretrial order:

PSC attorney appointments

I actually obtained the resume submissions to Barbier back in December of 2010 per a public records request.  I found it interesting that at least one of the PSC appointee’s, Calvin Fayard, resume was nowhere to be found in the documents I received (we found it...see update #1 at the very bottom).  I invite everyone to take a look and see if I missed something.

PSC Resume submissions  

Any person or business filing a claim against BP is not forced to join the PSC process.  They still have the right to file claims independently against BP and for entities that were affected most heavily by the spill, that would seem to be the logical path.  

Also, public entities are not allowed to join the PSC structured settlement, they must arbitrate independently of the Plaintiff Steering Committee process.

Three of these PSC attorneys were also lucky enough to be chosen by the City of New Orleans to represent the City’s case against BP for damages from the oil spill.  The City hired a team of 4 law firms in total to represent them in their case against BP.   

In this post, I will refer to these attorneys as the “joint venture” attorneys or JV attorneys.  

Who are the JV attorneys?  

The three law firms currently representing the city that also have members on the PSC are:   Herman, Herman, Katz and Cotlar;  Fayard and Honeycutt;  Domengeaux, Wright, Roy & Edwards.  

Also, the firm Leger & Shaw is part of the JV attorney team but they do not have a member of their firm serving on the PSC. 

The JV attorneys were officially hired by the City of New Orleans on December 21, 2011.

No conflict here.  Wait...there's a conflict here!

In July of 2010, The Wisner Trust Advisory Committee hired the law firm, Waltzer and Wiygul, to represent the trustees’ claims against BP for the damage caused by the oil spill.  

No RFP (Request for Proposal) was used to hire Waltzer & Wiygul.  At the time Waltzer and Wiygul was hired, the committee members considered the trust to be a private entity, not public.  

In fact, the heirs to the property still consider the entity to be private. 

Last spring, around March and April of 2012, it became very clear that the mayor’s office was intent on removing Waltzer and Wiygul as the Wisner counsel for the BP case and replacing them with the JV lawyers that had been hired to represent the city.    

As council for the Wisner trust, W & W would have little hesitation in taking Wisner’s case against BP to trial instead of simply seeking a quick settlement. The firm has a rich background dealing with environmental issues, in fact, they represent the local branch of the Sierra Club. While a lengthy trial process may be what’s best for the Wisner property to get proper compensation, it may not be the most attractive scenario for the City of New Orleans interests in its litigation process with BP.

In fact, one entity could be used as a bargaining chip to benefit the other.

The mayor’s office claimed that there was a conflict of interest between the City of New Orleans and Waltzer and Wiygul because the firm was representing a company who had a lawsuit against the city in the closure of the Old Gentilly Landfill.

However, in a an email dated July 7, 2010, previous to the mayor's office claim of conflict, then city attorney, now federal judge, Nannette Jolivette Brown, officially waived any potential conflict in the matter on behalf of the City.

Coincidentally, Brown also served as the New Orleans sanitation director under the Morial administration from 1994 to 1996, overseeing the closure of the Old Gentilly landfill.   

Small world, huh? 

How many lawyers does it take to screw in a light bulb?

Initially, there was an effort to have the JV (PSC) attorneys work with Waltzer and Wiygul to deal with the BP case.  Even though the JV attorneys had not officially been brought on board for Wisner, the lines started to become blurred on their involvement with the process.  

So much so, that on June 8, 2012 then Treasurer/Secretary, Cathy Norman, issued a letter to one of the JV attorneys, Steve Herman, asking him to define what role the JV attorneys believed they were playing on behalf of the trust.  The JV attorneys had not officially been hired by a majority vote of the Advisory Committee, yet instances were occurring where they seemed to be arbitrating on behalf of the Wisner trust in their case against BP (more on this in a minute).

Fate or fait accompli?   

The issue was becoming increasingly contentious but the majority of the committee members were intent on keeping Waltzer and Wiygul on as the trust’s council for the BP litigation.  

Then a fortuitous turn of events took place that would turn the tide towards the agenda of the Mayor’s administration. 

It started with  the Tulane appointee to the committee, Dr. Sandra Robinson, abruptly resigning her post in October of 2011.  Robinson was then replaced by Tulane with a new appointee, Anthony P. Lorino, who attended his first meeting in January, 2012 along with newly appointed committee member for the mayor, Michael Sherman.

Dr. Everett Williams was the committee appointee for LSU but due to personal issues beginning in the Fall of 2011, he was unable to attend the meetings so his alternate Stacy Gerhold-Marvin began to attend the meetings in his stead.  Gerhold-Marvin took a very active role in her duties, even traveling down to the land to see it firsthand.

In spite of her dedicated involvement, Gerhold-Marvin was abruptly removed from her role as the alternate for LSU less than 24 hours before a scheduled meeting in June of 2012.  

Upon her removal by Interim CEO of the LSU Health Care Services Division, Dr. Roxane Townsend, the committee seat was filled by former LSUHC Vice-Chancellor for Clinical Affairs, Ron Gardner, with Dr. Everett Williams being moved to the alternate position.

Secretary Treasurer and Land Manger of the Wisner Trust, Cathy Normand, spoke with Dr. Townsend about the sudden removal of Gerhold-Marvin . Townsend told Norman that Michael Sherman had called her and told her that Gerhold-Marvin was being “disrespectful and disruptive” in the committee meetings.  (I have tried to contact Dr. Townsend to confirm the phone call took place and find out what the exact impetus for Gerhold-Marvin’s removal was but I have so far been unsuccessful.)  

It’s worth noting that there were no previous complaints by any of the other committee members that Gerhold-Marvin was being disruptive in the meetings.  However, she did not agree with the Mayor’s intent to remove Waltzer and Wiygul and this reportedly led to some heated discussions in the committee meetings.  

I asked Michael Sherman if he contacted Roxane Townsend and lobbied her to remove Gerhold-Marvin from her role with the committee.  He confirmed that he did call Townsend about the LSU appointee position but he said his concern was that Gerhold-Marvin was not an employee of “LSU proper” and he felt the committee needed a new representative to fill the position.  I asked him if he told Townsend that Gerhold-Marvin was being “disruptive and disrespectful” in the meetings but he declined to comment about the matter on the record.

The stars align

 In the July  31, 2012 regular meeting of the committee a motion was made by Michael Sherman to fire Waltzer and Wiygul and replace them with the JV attorneys that were already representing the city in the BP litigation.  Gardner seconded the motion and it was subsequently passed in a 3 to 2 vote with Sherman, Gardner and Lorino voting yea, and the dissenting votes coming from Wisner heir appointee, Michael Peneguy, and Salvation Army appointee (alternate), Ed Buddy.

The way the meeting transpired is interesting.  I was told by an attendee of the meeting that Sherman called a short recess immediately before  the motion to remove W & W was introduced.  Sherman, Lorino and Gardner then “huddled” in the hallway outside with Gardner eventually breaking away from the group to take phone call.  When the meeting was reconvened, Sherman immediately made the motion to fire W & W with Gardner seconding it and the vote was cast. 

Interestingly enough, all of the JV attorneys that were being proposed for the job showed up at this meeting, 

Public:  To be or not to be... 

At this point I want to remind readers that in my previous post, where I laid out my discussion with Ryan Berni and Michael Sherman, they were stressing to me that their primary goal with the Wisner Trust is to create a greater level of transparency as they view the trust to be a public entity.  In our discussion, I asked Sherman if he believed he was behaving as if the entity was public and if he was following the guidelines of Louisiana’s Open Meetings Law.  He responded that he believed he was.

My original concern was that it appears he was influencing committee member's decisions regarding the trust, outside of the official meetings.  I was under the impression that the Open Meetings Law prohibited him from contacting other committee members outside of the meetings but I misunderstood the law when I originally posed this question to him in our meeting.  

What the law actually states is that he can contact other members of the committee individually but he cannot create a quorum of the committee outside of the official meetings to discuss Wisner issues.  This is known as a “roving quorum” and the Open Meetings Law strictly forbids it.  

So Sherman was correct in that he had not violated the Open Meetings Law by contacting other members of the committee outside of the meetings

However,  in the particular instance of the “huddle” that took place in the hallway during the recess from the committee meeting....if Lorino, Gardner and Sherman were discussing their intent to issue a motion to remove Waltzer and Wiygul and replace them with the JV attorneys, the three of these men conspiring together, outside of the meeting, would constitute a roving quorum.

  

One ring to litigate them all

With the 3 to 2 vote, some of these JV attorneys are not only serving on the Plaintiff Steering Committee, as well as representing the City in litigation against BP for the oil spill, they are now representing the Wisner Trust to boot.  This begs the question, “Does hiring these lawyers (without an RFP mind you) to represent the Wisner Trust litigation against BP constitute a conflict of interest?”

There are numerous issues that would call a conflict of interest into play but the fact that some of the lawyers are on the PSC and representing the city simultaneously raises questions of conflict unto itself.  Now they have been hired to represent one of the most critical plaintiffs in the entire realm of the BP oil spill litigation, the Wisner Land Trust.  

What is in the best interest of the City is not necessarily in the best interest of the Wisner Trust and it’s hard to imagine that the JV lawyers could separate those interests when bargaining with BP.  

One would think there is a shortage of law firms in South Louisiana.

Previous to the special Advisory Committee meeting that resulted in the removal of Waltzer and Wiygul,  Joel Waltzer was asked by the JV attroneys to attend an informal meeting with Soren Giselson (Herman, Herman, Katz and Cotlar) and Caroline Fayard (Fayard and Honeycutt) to discuss a possible joint venture between the JV attorneys and Waltzer & Wiygul.  Waltzer asked Cathy Norman to attend the meeting along with him. 

In that meeting, held on July 15, 2012, Fayard told Norman that all the city has to do is get the votes on the committee and they could put whoever they want in as counsel.  She also stated that  the trust would “Live by the by-laws and die by the by-laws.”   

Two weeks later, Sherman made the motion in the scheduled July meeting to remove Waltzer and Wiygul. 

This document is Norman’s account of the meeting with Fayard and Giselson.

Back to the conflict of interest thing

Cathy Norman asked the Louisiana State Bar Association for a legal opinion on whether or not the city’s choice of JV attorneys could have potential conflicts of interest in their multiple roles.  LSBA attorney, Eric Barefield, replied by saying a possible conflict could exist.  His summary:

Based on the limited account of the facts presented, we believe there is a concurrent conflict of interest present and , although Rule 1.7(b) may allow what the trustee has proposed, we believe you should be mindful of the risks and fully explain to all involved persons the potential for problems in this situation.  Prudence may suggest that you consider the benefits against the potential risk and the option to avoid the conflict altogether by not using the lawyer for the city, or if needed, finding another, completely different, distinct lawyer to serve as co-counsel for the trust and its beneficiaries. 

The JV attorneys responded to that opinion with their own opinion from attorney Basile Uddo which stated that there was no clear conflict of interest.

Coincidentally, Basile Uddo also serves on the Plaintiff Steering Committee ethics counsel.  

The final decision came down to Federal Judge, Carl Barbier...the same judge overseeing the BP case and the same judge who originally chose the attorneys that comprise the PSC.  He concluded that “..at this time there is no conflict of interest” clearing the way for this group of JV lawyers to represent both the Wisner Trust and the City of New Orleans in their respective cases against BP.

(PLEASE SEE UPDATE 2 BELOW)

At what time do we recognize a conflict of interest?

Even before the motion was made to fire Waltzer and Wiygul, it seems the JV attorneys had taken it upon themselves to arbitrate on behalf of the Wisner Fund.  

In the letter Cathy Norman drafted to the City's JV attorney, Steve Herman, on June 8, 2012,  she asked him to define what role, if any, he believed he was serving on behalf of the Wisner Donation in the pending BP litigation.  Herman responded two days later (response is in the above link).  

In that response Herman states, "'...we' ( I assume he is referring to his own law firm) have not been asked to become involved in the operation or management of the Wisner Donation."

Perhaps not being asked to become involved and becoming involved are two separate matters?

Three days later, Herman went so far as to inform BP counsel, via email, of decisions that were made in an executive session of the Wisner Trust Advisory Committee.  This information was privileged and Herman may have violated attorney-client privilege laws by sharing it with BP lawyer, Mark E. Holstein, in a an email transmission at 1:56 PM on June 08, 2012:

Cathy Norman recognized the ethical breach and immediately informed the Committee members at 4:37 PM, June 8, 2012:

Robert Wiygul followed with a warning to the JV lawyers that the information was confidential:

Steve Herman then responded with an apology stating that he wasn’t aware the executive sessions were privileged information: 

Even accepting Herman’s explanation that he wasn’t aware the information was privileged, why would he be sharing a plaintiff’s private deliberations with the defendant, BP?  Especially if three days earlier he stated that he had not been asked to become involved with the Wisner Trust issues.  It not only causes concern for the ethical actions of Herman's counsel in the Wisner case, it brings into question his interactions with BP as a member of the Plaintiff Steering Committee and his role as an attorney for the City.  

Amazingly, at 8:07 PM, June 12, 2012, Steve Herman again made contact with a BP attorney, Nathan Block, regarding Wisner matters and cc’d Michael Sherman on the exchange:

Cathy Norman then forwarded this email exchange to the entire Advisory Committee to inform them of Herman's actions:

So before Herman's firm had been officially instated as Wisner attorneys and even after he had personally been asked not to inform BP attorneys of Wisner’s actions, Herman again forwarded Wisner information to BP lawyers.

This exchange of privileged information also brings up the question as to how Herman was obtaining the information in the first place.    

I asked Michael Sherman if he was informing Steve Herman of decisions being made in the executive meetings of the Advisory Committee and he declined to comment stating it is a matter of litigation and that he was restricted from commenting.  

Sherman did point out that all the Advisory Committee members have the right to have their own attorneys present at the meetings and they have the right to share information that has transpired in the meetings with their attorneys.  

However, in this case, I am not sure that Herman or any of the other JV attorneys were officially representing Michael Sherman in his capacity as a City employee or as the Mayor’s appointee to the Wisner board.  I would assume a city attorney should be providing that service, not Steve Herman who was serving as an independent contractor for the city with the specific purpose of litigating the City’s economic case against BP.  

If Steve Herman was serving as Sherman's council in his role on the Wisner Trust Advisory Committee, was he billing the city for these services independently of his role as JV attorney trying the BP case?  

Regardless, the information that Herman had about the Wisner actions in the executive meeting was privileged and should never have been shared with the defendant, BP.  

I asked Michael Sherman if he was aware that Steve Herman had provided BP with this privileged information from the executive meeting and he once again declined to comment due to pending litigation.

It appears a plaintiff’s privileged information has been traded by an attorney acting as the plaintiff’s counsel (even though he officially wasn’t) to the defense attorneys in what is quite possibly the largest civil case in American history.  The implications of this issue are staggering....so staggering....I don’t even want to speculate on the repercussions.   

Transparency?

I’ve piled a lot of information into this post and I don’t want to overdo it but there is one last item I want to bring up here in Part 2.  

Ryan Berni and Michael Sherman stressed to me that the goal of the Mayor’s administration with the Wisner trust is to increase transparency because they believe the trust is a public entity.  As I pointed out in 1.5, this administration has made significant efforts to inform the public of the fund.

Berni also stressed to me that the administration was intent on fulfilling public records requests.  I then presented him with this public records request submitted by the law firm, Simon, Peragine, Smith & Redfearn, at the request of the Wisner Trust Advisory Committee that has gone unfulfilled since February of 2011.  The city responded to Peragine that they had received the request but they never actually fulfilled it.

    

Ryan said he was unaware of this particular request but that he would look into it.  Sherman was not serving on the Advisory Committee at the time the request was made, but he was made aware of the issue by Advisory Committee members in official meetings.  

I also told Mr. Berni that I have spoken to other journalists who have filled multiple public records requests with the City that have gone unanswered.  He told me he would look into it and stressed that this administration had made great strides in fulfilling PRR’s in comparison to the previous administration but that they still face manpower challenges in fulfilling all of them. 

Along those lines, I have requested information from Mr. Berni that will show where the 2.4 million dollars in funds mentioned in Part 1 went when the City received it from the Wisner account.  We will address that in Part 3 but it may take some time for me to get that information. 

....and....it's Carnival time so don't expect much out of me til we hit lent.   

Update 1:  I was sent Calvin Fayard's application in email...it is here.  But, I can't find Roy's either...anon, were you able to find Roy's application?

Update 2:  I am being told, per email, that the JV attorneys never presented Judge Barbier with the Louisiana State Bar Associations legal opinion. They only provided him with the opinion presented by Basille Uddo.  So Barbier may have issued his opinion without seeing the LSBA's original opinion.  I am going to try and confirm this but in the meantime, check out the first comment by Kevin in the comment section.