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Former BP Exec May Face Macondo-Related Charges for Obstructing Congressional Probe

A New Orleans federal appeals court has ruled a former BP plc executive may face charges that he obstructed a Congressional investigation into the Macondo well blowout in 2010.

The U.S. Court of Appeals for the Fifth Circuit on Monday reversed a ruling issued in May 2013 by U.S. District Judge Kurt D. Engelhardt concerning allegations that David Rainey failed to disclose information that the oil spill estimates may have been much higher than disclosed (see Daily GPIMay 22, 2013). Englehardt ruled in favor of Rainey in a pre-trial motion (United States of America v. David Rainey, U.S. District Court, Eastern District of Louisiana, No. 12-29).

The federal government failed to allege knowledge of a pending Congressional investigation, and the law Rainey was charged under did not apply to Congressional subcommittee investigations, Englehardt had ruled. A three-judge panel of the Fifth Circuit disagreed and said the law applied to Congressional subcommittees.

BP last Friday asked District Judge Carl Barbier in New Orleans to require some businesses to make restitution plus interest for what it called windfall payments. Barbier, who is overseeing the multi-district litigation, also was asked to impose an injunction to prevent businesses from spending excess sums awarded for the Macondo mishap.

Allowing the overpayments to stand would create discrepancies in the claims administration process, BP lawyers said. "There is no public interest in permitting dissipation of assets to which claimants had no right," they told Barbier. BP has continued to criticize claims administrator Patrick Juneau for misinterpreting the settlement agreement, allowing some recoveries without proof that the spill caused actual losses.

The U.S. Supreme Court in June rejected a request by BP to suspend payments for Macondo-related claims while the producer separately appealed the original claims settlement agreement (see Daily GPIJune 9).

Barbier earlier this year directed Juneau to change policy in reviewing claims applications, and ensure they match revenues with costs to calculate financial losses.The revised policy won court approval in early May and could lead to "dramatically different calculations of lost profits," according to the filing.

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