Justice Department Considering Using FCA to Recover Losses in Deepwater Horizon Disaster

Published on July 26, 2010

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Justice Department Considering Using FCA to Recover Losses in Deepwater Horizon Disaster

Washington, D.C. July 26, 2010.  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 the 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 taxpayer 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.”

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