BP Urges Judge to Reject Budget Request

Company also reorganizes U.C. communications, external affairs

Geoff Morrell

NEW ORLEANS -- BP has urged a federal judge to reject a $111 million budget request by the court-supervised administrator of the company's multibillion-dollar settlement with Gulf Coast businesses and residents following its 2010 Gulf oil spill, reported the Associated Press.

In a court filing Wednesday, BP attorneys said claims administrator Patrick Juneau refused to cut his office's fourth-quarter budget request by at least $25.5 million after the company complained that it was excessive.

Last month, U.S. District Judge Carl Barbier ordered the London-based oil giant to pay more than $130 million for Juneau's third-quarter budget despite the company's objections.

BP said Juneau's latest budget proposal isn't reasonable, either, and shouldn't be approved. The company claims Juneau's office has failed to adequately manage its outside vendors' inflated expenses.

Juneau's office "is operating from the mistaken view that a budget item should be included unless BP can conclusively show it is not necessary," BP lawyers wrote. "The proper presumption should be the exact opposite. Unless there is objective evidence that an expenditure is necessary, it should not be included in the budget."

Barbier appointed former FBI Director Louis Freeh in July to conduct a broad review of the settlement program, including allegations that a lawyer who worked on Juneau's staff accepted a portion of settlement payments for claims he had referred to a New Orleans law firm.

Freeh issued a report last week that cleared Juneau of any wrongdoing and said the investigation found nothing that warranted shutting down payments to victims of the oil spill.

But it concluded that top members of his staff engaged in conduct that was improper, unethical and possibly criminal. The report also says Freeh's work is "ongoing" and will result in recommendations for strengthening the settlement program's operations and anti-fraud measures.

BP noted that Freeh's report found that BrownGreer, a settlement program vendor averaging $15 million in monthly fees, has resisted efforts to control its costs. The company claims Juneau's fourth-quarter budget allocates millions of dollars to BrownGreer without sufficient detail to evaluate whether all of those expenses are warranted.

"BrownGreer's unsupported cost estimates are particularly suspect given Special Master Freeh's statement, among others, that BrownGreer has 'resisted' efforts to 'control costs and to create efficiencies,'" BP lawyers wrote.

In other company news, BP announced the appointment of Geoff Morrell to the position of senior vice president in charge of the newly formed U.S. Communications & External Affairs organization.

Communications & External Affairs is a consolidation of three previously existing teams within the company–U.S. Communications, which Morrell previously led, as well as Government and Public Affairs and Federal & International Affairs.

In this new role, Geoff will be responsible for oversight of all of the company's internal and external stakeholder engagement in the United States, including outreach to employees, media and government officials. He will also oversee BP America's community affairs, charitable and political giving programs.

"BP is America's biggest energy investor and our reach and influence should be commensurate to that," said BP Group CEO Bob Dudley. "Over the past two years, Geoff has quickly established our U.S. Communications team as a forward-leaning, assertive voice for the company. I expect he will soon do the same with the entire Communications & External Affairs team."

"As we continue to address the political and legal challenges we face in the United States, we have consistently conveyed BP's commitment to America and the contributions we make to the nation's economy and energy security," said BP America chairman and president John Minge. "I look to Geoff and his team to ensure that this message is delivered with absolute clarity day in and day out."

Morrell takes on his new responsibilities immediately. Prior to joining BP in September 2011, Morrell spent four years as Pentagon Press Secretary, acting as chief spokesman for Defense Secretary Robert M. Gates and the United States Military. He had previously worked as a White House correspondent for ABC News and held other reporting assignments at both the network and local levels.

BP--with U.S. operations based in Chicago, Houston and Blaine, Wash.--is the nation's second-largest producer of oil and gas. It markets more than 15 billion gallons of gasoline every year United States to consumers through more than 11,000 branded retail outlets and supplies more than four billion gallons of fuel annually to fleets, industrial users, auto and truck manufacturers, railroads and utilities. With headquarters in London, BP is the single, global brand formed by the combination of the former British Petroleum, Amoco, Atlantic Richfield (ARCO) and Burmah Castrol.