The National Whistleblowers Center (NWC) is urging the Obama administration to use a law signed by President Abraham Lincoln against BP, as a method to circumvent any limits on damages it can seek from the company.
NWC recently wrote a letter to U.S. Attorney General Eric Holder requesting the federal government used the False Claims Act to hold responsible parties accountable for losses suffered by taxpayers as a result of the Deepwater Horizon explosion and oil spill in the Gulf of Mexico.
Under the False Claims Act, there are no firm caps or limitations on the amount of damages BP might owe to U.S. taxpayers; to the contrary, the law mandates “treble damages” for violations, meaning BP would owe U.S. taxpayers three times the amount of all damages caused by its false claims.
“Holding BP accountable under this law should fully pay for the clean up and the economic damages for which the cap would not cover,” wrote Stephen M. Kohn, the NWC's executive director, in the letter.
The law attaches liability to any false or fraudulent claim presented to the United States. Kohn states the law is applicable because BP made several such claims including overstating BP' s preparedness to deal with a major leak; understating the dangers posed to the environment by an uncontrolled leak; and making false statements like listing a national wildlife expert who the company would rely upon for its compliance obligations even though this person had died four years prior to the plan's submission.
Also, the False Claims Act authorizes whistleblowers to step forward and assist the government. The law has a provision that empowers any worker, subcontractor or agent with direct information of fraudulent conduct by the company to file allegations confidentially with the Attorney General's Office.
In the past, the U.S. Justice Department has used the False Claims Act to police the medical and pharmaceutical industry and already has collected more than $25 bilion through its whistleblower provision.
Additionally, qualified whistleblowers that provide information concerning violations are entitled to mandatory monetary rewards between 15-30 percent of any damages awarded.
In fact, such a strategy is being considered by the Obama administration.
A letter to the NWC from U.S. Assistant Attorney General Tony West indicates all legal options are possible, including using the False Claims Act.
“I can assure you that the Department of Justice is dedicated to recovering any losses it sustains as a result of the oil spill, and is considering all avenues for redress against the potentially responsible parties,” West wrote.
“The department appreciates the important contributions of relators in assisting the United States to recover taxpayer funds under the False Claims Act's … provisions,” West added. “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.”
Since January 2009, more than $3.6 billion was obtained using the law and whistleblowers have received more than $497 million for their efforts, the letter stated.