The Justice Department is expected to announce on Wednesday that it is joining several civil lawsuits against oil giant BP as a way of gaining access to legal documents that could be used in the government’s ongoing investigation into the Gulf Coast oil spill earlier this year, the Wall Street Journal reported.
An estimated 4.9 million barrels of oil spilled into the Gulf of Mexico, prompting the suits. Eleven people were killed in the incident.
The Journal reported, “By joining the private litigation, Justice Department lawyers are positioning themselves to play a major role in the coming litigation, including depositions of key witnesses” which “could aid the government’s continuing probe into the disaster aimed at building a civil and possibly a criminal case against the companies involved.”
On Wednesday, Attorney General Eric Holder will speak at the White House Forum on Environmental Justice.
UPDATE: During the White House Forum on Environmental Justice, Assistant Attorney General Ignacia Moreno was asked what DOJ is going to do about the oil spill. She responded: “On Deepwater Horizon we’re on it.”
Thad Allen, the retired Coast Guard admiral who has become the federal government’s point man on the Gulf of Mexico oil spill, briefly met with Attorney General Eric Holder and his staff at Justice Department headquarters on Tuesday to update the nation’s top federal prosecutor on the latest developments in response to the spill.
After the meeting, Allen held his daily news briefing in the conference room on the seventh floor of the Robert F. Kennedy building. Employees removed the Justice Department emblem on the front of the podium, raised the insignia that hangs in the backdrop and the moved the department’s flag offstage.
“If you’re wondering why I’m in the DOJ building, I like to…circulate among the cabinet officers and make sure that there aren’t any issues that I need to be dealing with,” Allen said. “I had a brief meeting with the Attorney General and his staff, it was a very, very good meeting.”
There was no particular focus to the meeting with the Attorney General, Allen said, but they discussed issues the government faces in the Gulf Coast region.
They did not talk about the criminal investigation during the meeting, Allen said.
“We did not discuss the investigation per se,” Allen said, noting there were “a number of areas where our interests cross” on the issue of the oil spill.
“I’m not indicating there’s anything being walled off,” Allen said. “We just had a very general discussion about the issues that are going on down there. It just was a private discussion between myself and the Attorney General.”
Holder has been criticized in recent weeks for his announcement last month that the Justice Department is conducting a criminal investigation into those responsible for the oil spill. The Washington Post editorial board called his handling of the probe “odd.” But Holder has defended his announcement, arguing the extraordinary circumstances made it “appropriate to let the American people know that the federal government was understanding what was going on.”
The Attorney General visited the Gulf Coast region for the second time since the spill last week.
Allen, who as National Incident Commander reports to President Barack Obama and Homeland Security Secretary Janet Napolitano, said at the briefing that the government would allow BP to extend for 24 hours a pressure test on the capped well after they determined that a nearby seepage of oil is not related to the test.
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The Washington Post editorial board on Friday criticized Attorney General Eric Holder for his response to the oil spill, calling his announcement that the Justice Department had opened a criminal probe into the matter “odd” and “discomfiting.”
Last month, Holder traveled to the Gulf coast and, during a press conference, said the DOJ had opened a criminal investigation of the spill. Holder declined to say which companies were being investigated.
The announcement was unusual: Justice Department officials almost always decline to confirm or deny the existence of a criminal investigation. According to the U.S. Attorneys manual — the document that governs the behavior of DOJ attorneys in the field — prosecutors can only confirm probes when officials determine that an extraordinary event justifies public acknowledgment.
“In matters that have already received substantial publicity, or about which the community needs to be reassured that the appropriate law enforcement agency is investigating the incident, or where release of information is necessary to protect the public interest, safety, or welfare, comments about or confirmation of an ongoing investigation may need to be made,” the manual states. “In these unusual circumstances, the involved investigative agency will consult and obtain approval from the United States Attorney or Department Division handling the matter prior to disseminating any information to the media.”
One week before Holder announced the probe, Assistant Attorney General Ronald Weich wrote Sen. Barbara Boxer (D-Calif.) that “consistent with long-standing policy, we neither confirm nor deny the existence of such an investigation,” The Post noted.
In addition, the editorial also was critical of Holder’s appearance at a meeting between White House officials and representatives from BP.
Associate Attorney General Thomas Perrelli, who lead the White House negotiations that resulted in a multibillion-dollar victims’ compensation fund, was “perfectly capable of ensuring that the fund agreement passed legal muster,” the editorial said, and Holder’s presence “inevitably raised the specter of the criminal probe — and the possibility that it could be used to pressure BP on the size and terms of the fund.”
Administration officials pointed out that Holder attended with other Cabinet secretaries and left the meeting before substantive negotiations had begun.
Because he handles both criminal and civil aspects of an issue, the Attorney General “must take great care to avoid even the appearance of conflict,” wrote the editorial board.
“Mr. Holder may not have crossed that line in the gulf oil matter, but he has come close.”
Read the full editorial here.
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Attorney General Eric Holder promised on Thursday that U.S. taxpayers would not have to bear any costs associated with cleaning up the oil spill in the Gulf of Mexico.
“I can make this pledge to the American people that the American people will not pay a dime for the cleanup of the Gulf region and that BP will be held responsible for all the damages that have occurred,” Holder told reporters at a news conference on Thursday. “We will take whatever steps are necessary to make sure that… occurs,” Holder said.
On Wednesday, Associate Attorney General Thomas Perrelli said that the prospect that BP PLC may try to go into bankruptcy or split into several companies to prevent paying the full damages “is an issue of real concern to us because we want to make that the responsible parties truly have the wherewithal to compensate the American people for the damage done.” Perrelli said the Justice Department was reviewing its options.
But a Justice Department official, speaking on the condition of anonymity, told Dow Jones on Thursday that DOJ is not preparing to seek an injunction to block BP from paying dividends to shareholders, but the department has not ruled out seeking an injunction in the future.
Associate Attorney General Thomas Perrelli said Wednesday that the Justice Department continues to closely monitor the oil spill in the Gulf of Mexico and will use all possible means to hold those responsible accountable for the damage.
Perrelli testified before the House Transportation and Infrastructure Committee in support of the Obama administration’s proposal to lift the cap on liability for economic damages incurred following oil spills. Under the 1990 Oil Pollution Act, liability is capped at $75 million.
But Perrelli said that while the Oil Pollution Act is the primary vehicle for addressing liability, it is not the only means of seeking compensation.
“It is important to remember that OPA expressly preserves state and other federal mechanisms for pursuing damages for injuries caused by such incidents and for assessing penalties for the underlying conduct that may cause such disasters,” Perrelli said in prepared remarks.
Perrelli also noted that there are at least three recognized exceptions to the cap, including when there has been negligence.
BP has promised it will not limit itself to the $75 million cap and will pay all legitimate claims. Perrilli said the Justice Department expects BP to uphold that commitment.
At least one member raised concerns because BP qualified its pledge by saying it would pay “legitimate” claims. But Perrelli told the committee that “legitimate” is not a legal term.
“The term ‘legitimate,’ as I’ve heard it, has been used by BP. It’s not a statutory term,” Perrelli said. “Our view is that the scope of damages that is available under OPA is quite broad…and we anticipate pursing BP and other responsible parties for a wide range of damages.”
Perrelli also said the Justice Department was concerned that BP may try to go into bankruptcy or split into several companies to prevent paying the full damages.
“It is an issue of real concern to us because we want to make that the responsible parties truly have the wherewithal to compensate the American people for the damage done,” Perrelli said. “We are reviewing our options, and hope to be able to report back to you soon with the action we’ll take.”
Attorney General Eric Holder has assembled a team of lawyers from the Civil Division and the Environment and Natural Resource Division who have experience with the legal issues that arise out of oil spills and other environmental disasters, Perrelli said.
“President Obama, the Department of Justice, and the entire administration are committed to ensuring that those responsible for this tragic series of events are held fully accountable,” Perrelli said.
Perrelli’s full remarks are embedded below.
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This post has been corrected.
Former Deputy Attorney General Jamie Gorelick has been retained by British oil giant BP PLC to prepare the company to respond to congressional inquiries related to the oil spill in the Gulf of Mexico, Greenwire reported Wednesday.
“We have been retained to help the company respond to the numerous congressional inquiries that are underway,” Gorelick, now of Wilmer Cutler Pickering Hale and Dorr LLP, said in an e-mail to Greenwire. “We have not been retained to advocate for any position.”
Apart from the congressional inquiries, Attorney General Eric Holder said on Tuesday that the Justice Department had opened a criminal probe into who was responsible for the oil spill, but declined to name the target. Investigators are considering both civil actions and criminal charges, Holder said.
Gorelick served as Deputy Attorney General under then-Attorney General Janet Reno during the Clinton administration. Gorelick also sat on the bipartisan Sept. 11 Commission.
BP has worked with Gorelick before; she was a lobbyist in 2007 when she helped BP respond to an inquiry from the House Energy and Commerce Committee, according to Greenwire.
Kenneth Green, resident scholar at the American Enterprise Institute, told Greenwire that Gorelick’s knowledge of the Justice Department will help BP steer “the ins and outs of the process. You want an inside player for that.”
The company that owned and leased the Deepwater Horizon rig to BP, Transocean Ltd., has recruited Skadden Arps Slate Meagher & Flom, while Halliburton Co. — which worked on the rig — has hired Patton Boggs LLP, Greenwire reported.
Another DOJ veteran, former Deputy Attorney General Mark Filip of Kirkland & Ellis LLP, is coordinating BP’s response to Justice Department inquiry and civil response alongside Kirkland & Ellis partners Richard Godfrey, Andrew Langan, John Hickey Jr. the Wall Street Journal’s Law Blog reported. Thomas Milch of Arnold & Porter LLP is coordinating BP’s interactions with environmental regulators.
Gorelick is well known at the Justice Department where she preceded Eric Holder who took over from her as deputy attorney general in 1997. Since then Gorelick has become known as one of Washington’s best connected lawyers and lobbyists, with close ties to Democratic administrations.
During Barack Obama’s presidential campaign, Gorelick was part of an informal group of lawyers, including Gregory Craig, the former White House Counsel and Walter Dellinger, a former acting Solicitor General in the Clinton years, who met occasionally to discuss possible legal strategies if Obama was elected.
Gorelick was thought in legal circles to be angling for the Attorney General’s job if Obama won, but legal insiders regarded the possibility of such an appointment remote. That was because of her association with Federal National Mortgage Association, the government-backed financial institution, commonly known as Fannie Mae, that was established to pump money into the home lending market and plummeted to near ruin when the subprime mortgage market collapsed.
Although she had no prior banking or financial experience, Gorelick was named Fannie Mae’s vice chairman from 1998 to 2003. In 2002 she told an inteviewer that Fannie Mae was safely managed, but regulators said a year later that the institution was undermined by serious accounting irregularities and had unrecorded losses of $9 billion.
The financial manipulations had created a false picture of prosperity and stability that led to hundreds of thousands of dollars in bonuses for Gorelick and other top executives. A government oversight report in 2006 found that between 1998 and 2002 she had been paid more than $25 million.
An earlier version of this story said that Gorelick would lead the legal team responding to the Justice Department investigation. Gorelick will deal with the congressional inquiries into the BP spill, while other lawyers, now noted above, will deal with civil challenges and the Justice Department probe.
At a news conference Monday, Attorney General Eric Holder said that investigators have several good leads regarding the failed car bombing attack in New York City’s Time Square on Saturday night.
While it was too early to call it a terrorist attack, Holder said there was no doubt the car bombing was an attempt to spread terror.
“We have some good leads and the investigative work has begun,” Holder said, declining to indicate whether any suspects had been questioned.
The Attorney General was hesitant to credit the attacks to the Taliban in Pakistan, which has claimed responsibility.
“I know that group in the past has claimed responsibility for incidents that (they) ultimately were not connected to,” said Holder.
Justice Department involved in BP probe
Holder also said he thought it was prudent to dispatch a DOJ team to the site of the oil spill off the coast of Louisiana.
“We’re down there to insure that BP is held liable for their responsibilities in the spill that has occurred,” Holder said. “We are part of an ongoing monitoring and investigation along with our partners at the DHS.