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DOJ Cautiously Indicates False Claims Act May Be Used to Recover Deepwater Horizon Disaster Damages

The National Whistleblowers Center (NWC) recently wrote a letter to Attorney General Eric Holder urging the Department of Justice (DOJ) to use the False Claims Act (FCA) to recover the most money possible for losses sustained after the Deepwater Horizon oil rig explosion.  The NWC told Mr. Holder: “When false claims impact the welfare of the entire Gulf Region, the False Claims Act is the appropriate and best legal instrument to enforce true accountability.”

Assistant Attorney General Tony West responded to the NWC’s letter, and the NWC was quick to praise the response which indeed does mention the False Claims Act.  The NWC stated that they were “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.”

However, a closer read of Mr. West’s letter reveals no such indication that the DOJ is considering using the False Claims Act to recover economic damages resulting from the BP oil spill.  His letter stated that the DOJ is “considering all avenues for redress against the potentially responsible parties.”  Mr. West then expressed gratitude towards whistleblowers for helping to recover large amounts of fraudulently withheld money over the last few years.  However, mentioning the BP oil spill and the FCA in the same paragraph hardly amounts to stating that the DOJ is considering using the FCA in this instance, which itself would have been a tepid response.  If the FCA is to be used against parties responsible for the disaster in the Gulf, it will likely take more pressure from the public, and more information from whistleblowers who have knowledge of any fraud that took place.