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Targets in BP settlement inquiry assail findings

Last Modified: Friday, December 27, 2013 1:55 PM

Michael Kunzelman / Associated Press

NEW ORLEANS (AP) — Nearly six months after a federal judge appointed former FBI director Louis Freeh to investigate alleged misconduct inside the settlement program for compensating victims of BP's 2010 Gulf oil spill, the targets of his inquiry are questioning his independence and trying to rebut his findings.

Lionel "Tiger" Sutton III, a lawyer whose resignation from the staff of claims administrator Patrick Juneau spawned the investigation, urged U.S. District Judge Carl Barbier last week to throw out a scathing report that Freeh issued in September. The report concluded that top members of Juneau's staff, including Sutton, engaged in conduct that was improper, unethical and possibly criminal.

Sutton's lawyer, Michael Walsh, argued in a Dec. 18 court filing that Freeh doesn't have any evidence that his client broke any laws or had a conflict of interest during his work on the settlement.

"When one is able to see through the innuendo, out of context statements, factual mistakes, incorrect assumptions, faulty legal analysis, lack of evidence, self-dealing and fantasies that make up the Freeh report, the conclusion is clear. At no time did Sutton commit any crime or knowingly violate the written terms of his Employment Agreement or the Settlement Agreement," Walsh wrote.

Freeh's report also accused two private attorneys, Glen Lerner and Jon Andry, of using Sutton's position in the settlement program to benefit their clients' claims. In return, the report said, Sutton received more than $40,000 in fees for referring a claimant to their law firm before he joined Juneau's staff.

Lerner's lawyers said there is no evidence that Sutton tried to provide any "improper advantage" to any of the clients that Lerner and Andry represented.

"The evidence shows that the payments made to Sutton were not the product of any agreement among the three lawyers, but were made based on a good faith understanding that Sutton was entitled to the payments and that his receipt of them had been disclosed and approved by Mr. Juneau," they wrote earlier this month.

Also cited in Freeh's report is Sutton's wife, Christine Reitano, who worked as a lawyer on Juneau's staff. Freeh said Reitano had a conflict of interest when she recommended that a vendor for the settlement program hire her husband. Additionally, Freeh questioned Reitano's truthfulness when she denied having a role in arranging the payments to her husband from Lerner and Andry's firm.

Juneau fired Reitano in June, shortly after her husband resigned.

Freeh recommended disqualifying Sutton, Reitano, Andry and Lerner from representing anyone with spill-related settlement claims and called for the Justice Department to investigate whether they broke any laws.

Barbier allowed the four attorneys to respond in writing to the report's allegations before he rules on Freeh's recommendations.

Reitano's attorney, Mary Olive Pierson, argued in a Dec. 16 court filing that Freeh's investigation methods are "unexplained and incomplete."

"Mr. Freeh made no effort at objectivity and his report was obviously result driven," Pierson wrote.

In an interview, Pierson said Freeh is BP's "man on the job."

"He is running the claims office now," she said. "BP is getting exactly what it wants."

Before Barbier appointed him to lead the investigation, Freeh disclosed that he is a partner at a law firm that is working on an unrelated case with lawyers for Kirkland & Ellis, a firm that represents BP.

Andry's lawyers questioned Freeh's impartiality and said they need more information about his connection to the firm to determine if he should be disqualified from leading the investigation of the settlement program. One of Andry's attorneys, Lewis Unglesby, said Freeh's "one-sided presentation of the facts" omits and misstates evidence that would clear Andry of any wrongdoing.

"Mr. Freeh's report reads more like a BP opinion than a measured, objective evaluation of all the evidence," Unglesby wrote.

Barbier ultimately rejected Andry's request for more information after Freeh said he already has "fully and accurately" disclosed any relationships with the parties and their attorneys.

Freeh's investigation isn't done. In an advertisement that ran Monday in three major newspapers, BP said Freeh is expected to issue his next report shortly after Jan. 1.

"With new problems constantly surfacing, his findings on the integrity of the claims process are now more important than ever," the ad says.

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