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Administrator opens probe of spill claims lawyer

Saturday - 6/22/2013, 12:28am  ET

FILE - In this April 21, 2010 file aerial photo, the Deepwater Horizon oil rig burns in the Gulf of Mexico more than 50 miles southeast of Venice, La. A lawyer working for the court-appointed administrator to review claims as part of the multibillion-dollar settlement over BP's Gulf oil spill has been accused of receiving payments from a law firm representing a claimant, allegations that were discussed in a closed-door meeting Thursday, June 20, 2013, with a federal judge overseeing the case, a BP official with direct knowledge of the situation told The Associated Press. (AP Photo/Gerald Herbert, File)

MICHAEL KUNZELMAN
Associated Press

NEW ORLEANS (AP) -- For months, BP has complained that a Louisiana attorney who is administering its settlement with tens of thousands of Gulf Coast businesses and residents has made decisions that expose the company to what could be billions of dollars in fictitious claims arising from the 2010 oil spill in the Gulf of Mexico.

Now the court-appointed administrator himself is investigating allegations that could provide the London-based oil giant with fodder for its argument that it hasn't gotten a fair shake from the claims-processing team.

Lafayette-based lawyer Patrick Juneau confirmed Friday that he has opened an internal investigation of alleged misconduct by one of his staff attorneys, Lionel H. Sutton III.

Sutton resigned Friday morning, Juneau spokesman Nick Gagliano told The Associated Press.

A report outlining the allegations, a copy of which was obtained by the AP, accuses Sutton of "writing polices" that benefited himself and other plaintiffs' lawyers. It does not elaborate.

Prepared by Juneau's office, the report also says a "confidential source" who contacted Juneau's security chief accused Sutton of trying to influence a claim filed by a New Orleans-based law firm. The same firm allegedly paid Sutton a portion of settlement proceeds for claims he had referred to it before he went to work for Juneau.

Juneau provided the report to U.S. District Judge Carl Barbier during a meeting in his chambers Thursday. The administrator has pledged to thoroughly investigate the claims involving Sutton, who started working for his office in November 2012, according to the report.

Both BP and claimants "rightfully expect fairness and objectivity from this claims process," Juneau wrote.

"Our goal is to operate in an efficient, transparent and fair manner. All allegations are taken seriously and investigated thoroughly."

But in its own statement Friday, BP said only a "comprehensive and independent investigation will ensure the integrity of the claims process."

Sutton acknowledged in an email late Thursday that he had been told he was suspended "pending an investigation of an anonymous allegation against me."

"I have not been made aware of the substance of the allegation or the status of the investigation," Sutton wrote. "Once this is resolved, I would be happy to discuss it all with you."

According to the report, Sutton denied the allegations when Juneau discussed them with him.

"Sutton advised Juneau that he did not retain any interest in the claims or clients and the allegations were 100 percent incorrect," the report says.

But the report also cites passages from a string of email exchanges in which Sutton allegedly asks about his cut of nearly $500,000 in settlement payments to an individual who had filed several seafood-related claims.

In response to a lawyer who emailed him in January 2013 and asked him about his fee, Sutton allegedly responded, "They sent you the check for my fee. The total fee on (the claimant) was 10k (+ or -). They sent you 5 for me and kept the other 5."

Jonathan Andry, a lawyer at the firm that allegedly paid Sutton, didn't immediately respond to messages left at his office and with his answering service.

BP attorney Mark Holstein, in a letter to the judge Friday, said it's possible no further investigation into the matter would have happened had the company not pushed the issue with Juneau by requesting a meeting this week.

"It is undisputed that the CSSP first became aware of the Sutton allegations at the end of May 2013, yet it appears that Mr. Sutton's emails were not locked down, searched and reviewed for almost three weeks..." he wrote, referring to the Court Supervised Settlement Program.

Juneau's office determined that "the Andry Law Group/Andry Lerner L.L.C., had 675 claimants, businesses or individuals that had at least completed a claims form and/or registration form" with the claims database, the report said.

The report indicates that Juneau's security head, David Welker, notified the FBI's New Orleans division about the lawyer's alleged misconduct. Welker until recently was the special agent in charge of the FBI office in New Orleans.

An FBI spokeswoman in New Orleans declined to comment Thursday.

Before the allegations even surfaced, BP PLC had sued to block what could be billions of dollars in settlement payouts to businesses over the spill. The company has accused Juneau of trying to rewrite the terms of the deal and asserts that he has made decisions that expose the company to fictitious losses that were never contemplated in the settlement.

Barbier, who is overseeing the massive settlement, appointed Juneau last year and has upheld his decisions for calculating payments. BP has appealed, and the 5th U.S. Circuit Court of Appeals is scheduled to hear the case in July.

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