Justice Department Considering Using False Claims Act to Recover Losses in Deepwater Horizon Disaster

Assistant Attorney General
Tony West confirmed that the U.S. Department of Justice was "considering
all avenues of redress against the potentially responsible parties,"
according to a letter released today
by the National Whistleblower Center. The letter specifically mentions
the False Claims Act ("FCA"). The letter is in response to a letter from NWC urging
the government to use the FCA to hold responsible parties accountable
for losses suffered by the taxpayers as a result of the Deepwater
Horizon disaster.

In a letter to the Executive Director of the National Whistleblower
Center, Assistant Attorney General West praised the "important
contributions" of whistleblowers (referred to as "relators under the
FCA) "in assisting the United States" in recovering "taxpayer funds."
West stated:

This public-private partnership has
proved a successful tool for the recovery of public funds and for
rewarding relators who bring allegations of fraud to the government.
Indeed, since January 2009 more then $3.6 billion was obtained under the
Act's qui tam provisions, and relators were awarded more than $497 million for their efforts in helping government pursue these recoveries.

The FCA was originally signed into law by President Abraham
Lincoln, and was recently strengthened by Congress in 2009 and 2010.
The law covers corporations that obtain oil and gas leases from the
United States, and provides for the payment of treble damages if a
company violates the FCA. Qualified whistleblowers that provide
original information concerning such violations are entitled to
mandatory monetary rewards between 15% and 30% of any monies recovered
by the United States pursuant to an FCA case.

Stephen M. Kohn, the Executive Director of the National
Whistleblower Center praised Assistant Attorney General West's
response:

It is not enough to simply slap BP on
the wrist by making them pay fine and clean up costs. BP owes U.S.
taxpayers treble damages, and they must be made to pay up.

The FCA is powerful tool, protecting
and rewarding employees who expose violations of environmental law and
government lease agreements. Under the FCA, every corporation involved
in drilling under a federal government lease can be held accountable to
the taxpayers for treble damages if they violate the terms of those
leases or if they made false statements to obtain a lease. This
liability stretches beyond the Deepwater Horizon disaster. Workers, who
risk their jobs and careers to expose violations of leasing obligations,
including violations of safety and environmental standards, are
entitled to significant monetary rewards if their claims are covered
under the FCA. We are encouraged that the Justice Department is
considering using the FCA as
one of its legal tools for protecting Americans from economic and
environmental disaster in the Gulf Coast.

Attachments:

Letter from Assistant Attorney General West to NWC (July 20, 2010)

Letter from NWC to Attorney General