A federal judge denied the attempt by British Petroleum PLC (LON:BP) to freeze payments from its $8.2 billion oil spill settlement fund, as former FBI Director Louis Freeh continues to investigate alleged wrongdoing by fund lawyers.
BP has said that two lawyers working for the court-managed fund apparently accepted kickbacks from a law firm that has represented claimants to the fund, the Wall Street Journal reports.
“We see the freeze as a necessary complement of Judge Freeh’s investigation,” BP lawyer Jeff Frank said.
BP has previously said that some businesses have wrongfully claimed money from the $8.2 billion fund, with the number of claims rising 18 percent over the last six weeks. But Judge Carl Barbier denied BP’s request to suspend payments while the investigation is ongoing.
Although Barbier agreed that an internal investigation has apparently shown potential improper payments, he said a rigorous system of checks and balances made it hard for a single person to wrongly direct fund payments. “We would have to imagine some grand conspiracy over there involving dozens of people,” Barbier said.
One fund lawyer, Lionel Sutton, told the Journal that he didn’t take kickbacks for his work and had disclosed all his business dealings to the fund’s administrator.
Sutton and his wife, Christine Reitano, earlier resigned from their work with the fund.