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Have you heard about the compensation fund set up to pay for costs associated with environmental damage?  Or about how there has been so much fraud (tens of millions of dollars worth), that independent authorities have been forced to come in and demand restitution from the fraudsters?

No.  I am not talking the Deepwater Horizon Economic Claims Center, set up after BP agreed to a sweeping class action settlement to compensate victims of BP’s oil spill. And no, I am not talking about all of the alleged hucksters with Southern accents all up and down the Gulf Coast that BP has complained about and who, according to BP, were so devious and rampant that the former director of the FBI, Louie Freeh, had to be called in to investigate things.  I am talking about the “Ohio Petroleum Underground Storage Tank Release Compensation Board” which administers the “Ohio Petroleum Underground Storage Financial Assurance Fund.”  And the alleged fraudster (to the tune of over $50 million) is . . .  wait for it . . . wait for it . . . BP.

Here’s a little background.  The Fund was set up by authorities in Ohio to provide financial resources to pay for the costs of corrective action for accidental releases of petroleum from underground storage tanks.  The Fund, however, is not an insurance company.  Instead, the Fund is only a financial resource of last resort, available to help remediate petroleum contamination when an applicant does not have insurance or resources to otherwise pay for cleanup.

That last point is critical — when an applicant does not have insurance or resources to otherwise pay for cleanup.  BP has asked this Fund — set up to compensate and pay for environmental cleanup — to pay BP over $50 million.  BP already received $33 million and has another $22 million in reimbursements pending.  One problem.  The State of Ohio alleges that BP collected from both its insurance companies and the Fund.  In other words — BP double-dipped.

The Ohio Attorney General’s Office recently sued BP to recover the $33 million that BP received already from the Fund and to keep it from collecting the additional $22 million in the hopper.  The Ohio AG alleges that BP “made materially false and misleading statements to the Board and concealed material information that was required to be disclosed by those participating in the Fund . . .”  Those false and misleading statements appear to be centered on its insurance coverages.  “BP did not fully disclose its complex insurance program, which included hundreds of insurance policies through commercial, mutual and captive insurers, to the Board in its applications for eligibility or in many of its claims applications for reimbursement.”  It is also alleged that BP also did not advise about coverage-in-place agreements, insurance reimbursements, insurance coverage settlement agreements and monies received from commercial, mutual and captive insurers, “despite the board’s right of subrogation and entitlement to indemnification.”

After filing the lawsuit, Ohio State Attorney General Mike DeWine stated, “BP has to follow the same rules as other businesses and can’t engage in misconduct without consequence.”  Perhaps Mr. DeWine has been snowed in and has missed what has been going on along the Gulf South for almost the last five years.  If anything, BP has proven that it absolutely believes that the rules do not apply to it.

BP, of course, claims that it has done nothing wrong.  According to company spokesman Jason Black (where’s Geoff Morrel when you need him?), “BP acted at all times in good faith and believes its dealings with Ohio state underground storage tank fund have been proper.  BP plans to defend itself against the allegations in the complaint.”

Okey dokey then.  We can take BP’s word for it — or call in the FBI.  Too bad Louie Freeh is otherwise occupied.

 

2 Comments

  1. Gravatar for Rebecca D Knowles
    Rebecca D Knowles

    Mr Whaley,

    If you want to reveal fraud and discover truths, Louis Freeh is NOT your man. Investigate your "investigators" before YOU become a victim of fraud!

  2. Gravatar for Ron
    Ron

    Rebecca: I think the author's comment about Mr. Freeh was just a wise crack. His main point, obviously, was to contrast (a) BP's moral outrage and charges of widespread “fraud” against BEL claimants whose claims actually fit the agreed settlement, with (b) BP's assertion that it acted in "good faith" in response to charges of fraud associated with its double recoveries for the same cleanup expenses from its insurers and from various states' underground storage tank funds.

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