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BP's Oil Spill Settlement Is Engulfed in Fraud

Smoke rises in 2010 from a controlled burn near the site of the BP Deepwater Horizon oil spill in the Gulf of Mexico
Smoke rises in 2010 from a controlled burn near the site of the BP Deepwater Horizon oil spill in the Gulf of MexicoPhotograph by Derick E. Hingle/Bloomberg

Look under rocks, and you’re likely to find worms. Dig into a multibillion-dollar legal settlement, and you’ll probably discover financial shenanigans. That’s proving the case with the BP-claims mess in the Gulf of Mexico.

Quick review: As I reported in a recent Bloomberg Businessweek cover story, the private claims process following BP’s 2010 Gulf spill led to some pretty far-fetched demands for oil-company dough. BP, which has already paid out more than $25 billion in damage claims and cleanup costs, asked the presiding federal judge, Carl Barbier of New Orleans, to intervene. He declined, but in early July he appointed former FBI Director Louis Freeh to investigate. The next day, I predicted that based on my brief exposure to the court records, Freeh would have a field day.