Rehabilitating a Reputation after a Catastrophic Spill

Rehabilitating a Reputation after a Catastrophic Spill

BP, formerly known as British Petroleum, is an oil and gas company based in the United Kingdom, with global operations and 84,000 employees in 2012. It finds, extracts, transports, refines, and sells oil and gas products and has been a highly profitable company with pre-spill profits of $14 billion in 2009. Headquartered in London, BP is the second largest company in the U.K. and its brand was ranked 83rd in the world according to industry firm Interbrand. It owns oil and gas exploration rights, oil and gas fields, refineries, pipelines, large crude carrier ships, and gas stations and other oil-based products all over the world. Its chief executive officer, Tony Hayward, a geologist, was appointed from within BP’s administrative ranks in 2007.

BP’s Safety Record
Before the Deepwater Horizon oil spill there were a number of U.S. safety and environmental incidents involving BP operations that caused some to question whether BP put profit ahead of other considerations.

BP was held responsible for a 2005 Texas City, Texas, oil refinery explosion that killed fifteen workers and injured 170; the company agreed to pay $21 million in federal fines for more than 300 safety violations. The Occupational Safety and Health Administration found more than 700 violations in a follow-up inspection in 2009, and BP agreed to pay $50.6 million for safety violations it had failed to correct following the 2005 refinery explosion. BP paid $13 million for 409 new safety violations discovered in 2009. As a result, the company invested $1 billion on safety and infrastructure improvements. One investigative report said that the Texas City disaster “was caused by organizational and safety deficiencies at all levels of the BP Corporation.” Just weeks before the Deepwater Horizon disaster, the news media reported the same Texas City refinery plant accidentally released 500,000 pounds of toxic chemicals into the skies over a forty-day period before the mistake was discovered by workers.

A number of negative environmental incidents involving BP-owned oil wells and pipelines had occurred in Alaska. In 2006 the biggest Alaskan oil spill ever happened after a section of the 800-mile Trans-Alaska pipeline corroded and leaked more than 5,078 barrels (267,000 gallons) of crude oil into Prudhoe Bay, Alaska; another smaller leak was discovered a few months later. As a result of the leaks, BP paid $25 million in fines and was ordered to correct the problems. A smaller oil– water mixture leak occurred in 2009 during a pressure test of a pipeline at BP’s Lis-burne Processing Center. A 2010 investigation by ProPublica revealed various parts of the Alaskan North Slope pipelines were in such bad shape that 148 sections were labeled as in “imminent danger” of rupturing.

Deepwater Horizon Explosion
Technological advances in oil drilling and climbing oil prices made the Gulf of Mexico an attractive source for oil. According to the U.S. Energy Information Administration, the Gulf accounted for about 28 percent of America’s domestic crude oil production and 15 percent of its natural gas in 2011.

In the Gulf of Mexico, BP operated eight so-called “deepwater” projects. It is the largest leaseholder with more than 650 “lease blocks” in waters greater than 1,250 feet, according to BP’s website. Each of these sites pump out about 250,000 barrels of oil daily. Some deepwater oil projects operate in depths up to 6,000 feet. Floating oil rigs can have hundreds of workers and are like self-contained cities.

Deepwater Horizon, located forty-one miles off the coast of Louisiana, was an exploratory well operating at a water depth of about 5,000 feet. The well itself was 18,000 feet deep.

On April 20, 2010, at 10 p.m., an explosion occurred on the Deepwater Horizon, killing eleven workers and injuring seventeen others; 115 were rescued. The explosion was attributed to a number of factors but involved the failure of cement barriers, the “blowout preventer,” a large valve designed to seal off the oil well at the wellhead, and the undetected release of hydrocarbons. Oil and gas leaking from the massive rig burned out of control for three days; Deepwater Horizon then sank.

The oil leak was located at the bottom of the sea floor where the wellhead joined the well. According to government investigations, Deepwater Horizon gushed for eighty-four days releasing nearly five million barrels of oil (200 million gallons), with about 62,000 barrels per day released, according to the Unified Command, making it the biggest oil spill in history. The blame was placed on BP, which had contracted with other companies to build the well that it operated. Eventually, the gigantic oil spill reached the Gulf shoreline and affected wildlife, the environment, and the economies of several states, especially Louisiana, Mississippi, Alabama, and Florida. The spill caused massive damage to the shrimping and fishing industries, tourism, and businesses connected to tourism as oil washed ashore in tar balls and thick sticky slicks. Massive oil plumes beneath the water’s surface were also detected in the Gulf.

Deep Waters
As a result of the explosion and subsequent spill, BP was coping with an unprecedented disaster: trying to cap a well that had defied all sophisticated technological safeguards to prevent such an environmental catastrophe. Something like this had never happened before, and BP, as well as the entire offshore oil industry, struggled to find solutions to complex problems. Unlike ground wells that could be capped relatively easily, a deepwater well was an entirely different matter. Work had to be conducted with remotely operated robotic submersibles. Several attempts failed to stop the oil flow, including pumping first mud, then concrete into the well shaft to plug the well. BP tried lowering a large container over the well to siphon off the oil, but this failed when the container filled with ice crystals in the frigid subsea. In early June 2010 a loose cap was placed atop the blowout preventer; finally, in mid-July a tighter cap was affixed and closed off the leak. Eventually, five months after the explosion, the well was declared “dead” when a new relief well pumped in enough drilling mud and concrete to seal off the gusher.

In addition to the problem of sealing the well, numerous other issues caused concern and media scrutiny.

Chemical dispersants were used to break up the oil so that it could be oxidized much more easily by microbes that could consume the oil. About 1.84 million gallons of chemical dispersants were used in the Gulf of Mexico; nearly half were applied at the site of the wellhead on the ocean floor, which had never been done before. Scientists did not know for sure what detrimental effects, if any, would be caused by the use of dispersants in deep waters or on coastal shorelines.

BP’s oil spill response and cleanup efforts were coordinated with the federal government’s national response team comprising sixteen federal departments and agencies, including the Department of Homeland Security, Environmental Protection Agency, and Federal Emergency Management Agency. The Coast Guard directed the response, which included more than 47,000 workers and more than 6,400 vessels at its peak.

BP’s Missteps
BP made a number of missteps during this crisis, some minor and others major. But taken together, they made it easy for environmentalists, politicians, media pundits, and others to cast BP as a fumbling, uncaring, and greedy multinational company that put profits ahead of everything. Here are some of the most memorable examples:

Shifting the Blame
Soon after the rig explosion, BP repeatedly placed the blame on Transocean, the rig owner, for the accident. A news release issued by BP the day after the explosion, headlined “BP Offers Full Support to Transocean after Drilling Rig Fire,” said BP “operates the license on which Transocean’s rig was drilling an exploration well,” to make clear the rig was owned by Transocean. In another news release issued April 29, nine days after the explosion, the company said “BP, as operator of the MC252 lease, continues to work around-the-clock on Transocean’s subsea equipment”—again directing attention to Transocean. BP spokesman Andrew Gowers said: “This accident took place on a rig owned, managed and operated by Transocean. It involves the failure of a piece of equipment on that rig. So the unfolding events do not arise from a failure of BP’s safety systems.”

However, Hayward’s media interviews were what people were really paying attention to. Even after President Barack Obama said May 1, “BP is responsible for this leak and will be paying the bill,” Hayward was intent on shifting the blame away from BP. In a widely repeated exchange with ABC’s Good Morning America host George Stephanopoulos on May 3, 2010, Hayward said:

This wasn’t our accident. This was a drilling rig operated by another company. It was their people, their systems, their processes. We are responsible not for the accident, but we are responsible for the oil and for dealing with it and cleaning the situation up.

Similar quotes provided by Hayward also appeared in many other news stories. To many Americans, this was splitting hairs and seemed like an attempt to escape responsibility for the disaster. When Stephanopoulos asked for clarification as to whether or not BP was responsible, Hayward said:

The drilling rig was a Transocean drilling rig. It was their equipment that’s failed. It’s their systems and processes that were running it.

Well, we are clearly focused on minimizing the overall impact. We’re a big company and we intend to deal with this. We take this responsibility incredibly seriously. We absolutely will prevail and we will deal with it.

Concern for Victims
BP didn’t win any friends with its corporate business-as-usual attitude toward victims. A week after the explosion, reports surfaced that BP was requiring cleanup workers and people affected by the spill to sign waivers that would limit BP’s liability, as well as confidentiality agreements in order to get financial relief. In the May 3 ABC interview, Hayward said: “Yeah, we’ve done that. That was an, an early misstep … frankly. We were using a standard contract. We’ve eliminated that.”

The interview occurred on the same day that BP announced its 135 percent first quarter profit of $5.6 billion. To many, BP looked like it was trying to escape its stakeholder responsibilities by distancing itself from the crisis. This gave the appearance that it was trying to protect its financial assets while many Americans were suffering greatly from the disaster. This did not play well with the public, especially when news stories had already revealed BP’s healthy 2009’s pre-spill $14 billion profit. While other companies connected with the Deepwater Horizon did later contribute financially to the overall settlement, it was BP who shouldered the lion’s share of the settlement costs.

Two days later, in an interview with The Times of London, Hayward said that victims would try to scam the system for profit:

Mr. Hayward reiterated a promise that BP “will honour all legitimate claims for business interruption.” Asked for examples of illegitimate claims, he said: “I could give you lots of examples. This is America—come on. We’re going to have lots of illegitimate claims. We all know that.”

Quotes like these undermined Hayward’s credibility and diminished the thoughtful gestures of concern that were expressed in one of BP’s early news releases:

“We are determined to do everything in our power to contain this oil spill and resolve the situation as rapidly, safely and effectively as possible,” said Group Chief Executive Tony Hayward. “We have assembled and are now deploying world-class facilities, resources and expertise, and can call on more if needed. There should be no doubt of our resolve to limit the escape of oil and protect the marine and coastal environments from its effects.”

Scrambling for Solutions
BP’s response indicated that the industry’s impressive drilling technology in deep waters did not extend to the technology for dealing with a blowout like Deepwater Horizon. BP scrambled to figure out a way to stop the oil from gushing into the Gulf. It took multiple and what appeared to be somewhat clumsy efforts to finally plug the well after eighty-seven days of leaking.

There were also questions about the safety of using dispersants underwater, which had not been done before, and on such a mammoth scale. The number of unknowns and the lack of a response plan to deal appropriately with the crisis left people wondering about BP and the oil industry’s priorities.

Changing Information
Originally, BP officials speculated that 1,000 barrels of oil were leaking daily. This estimate was increased nine days later to 5,000 barrels per day after mounting pressure from the Coast Guard and experts to change the flow rate. By May 14, 2010, a BP director told MSNBC that 5,000 barrels was a “good estimate” and that estimates by others of 70,000 barrels per day were “scaremongering.” A month later a government panel said the flow rate was 60,000 barrels per day. By June the government was reporting that the spill “was spewing the equivalent of the Exxon Valdez disaster into the Gulf every two weeks or less.”

A Reuters article said that documents submitted by BP to Congress showed that the well could flow as much as 100,000 barrels per day. While it is not unusual for information to change as better evidence becomes available during a crisis, the ever-shifting estimates of oil flow did not build confidence in BP’s ability to handle the situation or trust in its sources.

Transparency
In addition to its changing information, which didn’t inspire confidence, BP was in defensive mode with mounting cleanup costs and legal suits. A day before Hayward testified to a Congressional hearing BP created a $20 billion set-aside fund for victim compensation, a figure that would later grow substantially. At a June 17, 2010, Congressional hearing fifty-nine days after the rig explosion, Hayward refused to answer many questions, infuriating lawmakers looking for answers on behalf of frustrated and upset constituents. Hayward, however, having been coached by legal and media advisers, responded cautiously or not at all.

When asked about the decisions that ultimately led to the rig explosion, Hayward responded: “I was not part of the decision-making process on this well. I had no prior knowledge.” He also refused to speculate on the causes of the blowout until investigations had been completed. He did discuss BP’s lines of inquiry that included the cement casing of the well, the well control procedures, and the blowout preventer.

The investigation’s leader, Congressman Bart Stupak, told Hayward: “The committee is extremely frustrated with your lack of candor. You are the CEO. You have a PhD. We hope you have more candor in your responses.” Even Republican members were unhappy. “You are copping out,” said John “Phil” Gingrey (R-Ga.) “It seems like your testimony has been way too evasive.”

An example of the level of frustration expressed by members of Congress during this highly publicized hearing took place between Rep. Peter Welch (D-Vermont) and Hayward.

CEO’s Words and Actions
What captured the most negative attention, however, was BP’s CEO Tony Hayward’s words and actions. The British geologist-turned-executive did not have the ability to muster or sustain the necessary concern and compassion required by a slow-motion and lengthy crisis such as Deepwater Horizon.

In addition to trying to shift the blame to others, as previously described, BP tried to minimize the extent of the damage. Hayward said to The Guardian on May 14, 2010: “the Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume.” In an interview with Sky News on May 18, 2010, Hayward said: “It is impossible to say and we will mount, as part of the aftermath, a very detailed environmental assessment but everything we can see at the moment suggests that the overall environmental impact will be very, very modest.”

However, the biggest foot-in-mouth moment came on May 30, 2010, in front of many reporters: “The first thing to say is I’m sorry. We’re sorry for the massive disruption it’s caused their lives. There’s no one who wants this over more than I do. I would like my life back.”

Two days after testifying before Congress and refusing to answer many questions related to the Deepwater Horizon incident, Hayward was seen on a yacht off the Isle of Wight.

Media Coverage
Media coverage was intense. According to a study by the Pew Research Center’s Project for Excellence in Journalism, the spill was one of the top three stories in the mainstream press during a fourteen-week period; it took the top spot for nine weeks. However, the news coverage never exceeded 22 percent of the “news hole.”

The most intense news coverage by the mainstream media occurred from April 20 through July 28, when the story “accounted for 22 percent of the news hole, almost twice as much coverage as the No. 2 story, the economy, at 12 percent.”

The report said “on Twitter, it was among the top five most tweeted topics twice during those fourteen weeks. And videos about the spill made the list of most viewed news videos on YouTube three times.”

While the news media was playing a major role in reporting the crisis, the public interest was even greater. The Pew research found that between April 26 and May 23, respondents who said they were “very closely following events in the Gulf” ranged between 44 percent and 58 percent. Even as news media coverage began to subside, during the June 28 to July 25 time period, “the percentage of those paying very close attention remained at near peak levels—between 43 percent and 59 percent.”

Media relations became a problem as BP officials became too busy or were shielded from providing necessary access to reporters.

An Associated Press story June 11, 2010, noted that BP officials had drifted away from daily news media briefings that allowed questions. Due to time constraints, fewer briefings and more teleconferences were offered that “limited the ability to ask questions and the number of questions that could be asked.” The article also said

In Houston, where BP has set up a U.S. command center, company PR officials have grown weary of reporters going directly to engineers and other higher-ups for information, at times trying to insist media go through them first.

Spokesman Robert Wine said in an e-mail to The Associated Press that media visits to the Houston center are “very carefully controlled and sparingly arranged” by design.

“The rooms that are shown are full of the teams who WILL make a difference on the result of this crisis,” Wine wrote. “Every second they are not helping with media visits is time they are not doing the ‘day job.’”

It was inevitable that news media and experts compared the BP Deepwater Horizon blowout to another infamous industry disaster, the 1989 Exxon Valdez oil spill in Prince William Sound, Alaska. The oil tanker spilled at least 260,000 barrels (11 million gallons) of crude oil on a remote and sensitive ecosystem that is still recovering. That spill covered 11,000 square miles of ocean and 1,200 miles of coastline. It was the worst manmade environmental disaster in U.S. history at the time; more than 100,000 seabirds died and the pink salmon population was severely impacted. Exxon’s cleanup and litigation costs ran to about $3.5 billion, or $6.3 billion when adjusted for inflation, according to CNN.

Spillcam
While many BP critics praised the company for providing a live video feed of the gushing well leak, posted May 19 on a Congressional website, the images did not come voluntarily. According to Congressman Ed Markey (D-Ma.), BP waited thirty-eight days after the spill to provide the feed to Congress. The live video stream, from BP’s remotely operated vehicle submarines, allowed people the chance to see for themselves what was happening and determine the spill’s flow rate. The eerily silent video from 5,000 feet below the sea was disconcerting to watch without explanatory documentation and served as an unsettling and constant reminder of the work ahead. PBS developed an oil leak meter widget on its website that allowed viewers to adjust the leak rate or use suggested flow rates estimated by the Department of Energy, BP, and other experts to determine estimated total gallons leaked.

Information Campaign
BP’s information campaign to inform stakeholders and redeem its reputation began early in the crisis. BP used its own website, Facebook, Twitter, YouTube, and Flickr accounts to push out unified messages summarizing BP’s latest updates about the leak, oil containment, cleanup efforts, and health, environmental, and claims issues. British-based Ogilvy & Mather worked with BP and the Deepwater Horizon Response center, according to Media Bistro. By June 21, 2010, AdWeek reported that the company’s Facebook page, BP America, had only 25,000 fans and its Twitter account had just 14,800 followers two months after the explosion.

AdWeek said BP bought key search terms (“BP,” “oil leak,” “oil spill”) to use in targeted online ads guiding people using search terms about the spill to BP’s online information sites.

BP bought full-page ads in The Washington Post and The New York Times May 25, 2010. Entitled “Gulf of Mexico Oil Spill Response. What We’re Doing. How to Get More Information,” the text-only ad’s only graphic element was a small BP sun logo in the upper-right corner to identify its owner. It began:

Since the tragic accident on the Transocean Deepwater Horizon rig first occurred, we have been committed to doing everything possible to stop the flow of oil at the seabed, collect the oil on the surface and keep it away from the shore.

BP has taken full responsibility for dealing with the spill. We are determined to do everything we can to minimize any impact. We will honor all legitimate claims.

This is an enormous team effort.

The advertisement included an update on the oil spill response and thanked the efforts of “nearly 24,000 people working with BP full-time or as volunteers” to solve the problem. It provided phone numbers for shoreline oil issues, impacted wildlife, claims information, and website addresses for BP and the government/BP information sites.

The Congressional committee overseeing the BP investigation announced that BP spent $93 million on public relations in the first three months of the spill, double its normal advertising budget. Its regular corporate image advertising was pulled after the spill.

While Twitter was still relatively new to the corporate world, it was embraced by BP for communicating with stakeholders, albeit after a slow start.

BP had started using Twitter four months before the Deepwater Horizon spill, @BP_America. Nine days after the rig explosion, BP created a separate Twitter account called @Oil_Spill_2010. Researchers Walton et al. (2012) examined BP and the Unified Command’s 1,142 tweets transmitted via Twitter between April 29 and September 19, 2010. Using the Timothy Coombs SCCT framework, their research found that 55 percent of the tweets used ingratiation, concern, and compassion message strategies while 35 percent used justification, minimization, and excuse message strategies. Walton et al. found many tweets included a link to another web page, an online video, news article, press release, or government report. About one month after the explosion, BP created a blog that encouraged followers to use the blog to file complaints, which reduced traffic on its Twitter account. In July, the U.S. government took control of the Twitter account and the name changed to @Restore_TheGulf.

BP’s Facebook site, BP America, created in June 2009, began posting information May 2, 2010. It was merged for a time with the Unified Command Joint information Center’s “Deepwater Horizon Response” Facebook page where all of the federal government agencies were working together with BP to meet crisis information needs. By October 2010, it had returned to its own Facebook presence: a BP messaging platform. Facebook was the most visible of the social media channels; however, BP did not use it as a two-way communication tool to engage its stakeholders in a conversation. Rather, BP posted many messages, links, photos, and updates.

Advertising Campaign
By June 2010, BP had selected a Washington public affairs firm, Purple Strategies, owned by two Republican and Democratic strategists, for its U.S. campaign, instead of its longtime agency WPP’s Ogilvy & Mather, according to The Wall Street Journal. BP also hired American Anne Womack Kolton for its U.S. media relations. Kolton, also a political insider, was a former U.S. Energy Department official and aide to former Vice President Dick Cheney, according to The Wall Street Journal.

The news media and blogosphere were full of criticism in early June 2010 about the new series of image ads that were just rolling out. One crisis communication expert, Timothy Sellnow, a communication professor at the University of Kentucky, seemed to sum up BP’s situation best in a Greenwire report:

“The primary story throughout the process became the solution of the week,” Sellnow said. “As each of these solutions failed to work, the urgency [to stop the leak] went up.”

“From a public relations standpoint the story got away from them and became one of science and became one of consistent and persistent failures,” Sellnow added. In the process, he said, the company failed to show compassion for people early on.

“A scientific explanation to someone whose livelihood is threatened is of very little merit,” Sellnow said. “They want to know, what are you going to do to compensate me.

“You can’t win the hearts and minds of people by solely emphasizing science,” Sell-now added. “You need to show a concern for the people and their needs.”

The new American strategists seemed to have a better handle on the American psyche. The television, radio, and print campaign that emerged focused on what BP was doing for those affected by the crisis. Most of the early commercials featured BP workers and Gulf Coast natives (or at least employees with convincing southern accents).

BP’s video commercials and messages were high-quality productions that featured BP officials, BP workers, volunteers, and citizens of the Gulf. The campaign’s commercials aired frequently on national television and were available on BP’s You-Tube channel, created May 18, 2010. BP early on discovered Iris Cross, a community outreach director in Louisiana, who was born in New Orleans; her family still lived there. The television commercial “BP Gulf Coast Update: Our Ongoing Commitment” received more than a million hits on YouTube. Another commercial called “Gulf of Mexico Response: Communities” earned nearly 377,000 views. It was easy to see why people identified with Cross; she was a youngish American from the region and her concern for people seemed genuine.

Recovery
By fall of 2010, with the oil well capped and the majority of the beach cleanup finished, BP was faced with the daunting task of restoring Gulf Coast businesses and BP’s reputation in America. The Gulf Coast restoration would take years and a true sustained commitment from BP in words and actions were needed. The following are some BP actions that can be analyzed from the recovery phase of the crisis:

· Sponsored scientific Gulf Coast and oil spill research

· Image advertising

· Olympic sponsorships

· Tourism support and promotion

· Community support initiatives

· Risk management changes

· Communication (social media, website, etc.).

Financial Implications
While the acute crisis phase lasted eighty-seven days—the time between the rig explosion and final closure of the well—the negative consequences continued for years as investigations and lawsuits were filed and settled. To meet anticipated costs related to the oil spill, BP sold $35 billion in assets in 2012, and by March 2013 the company had spent $24 billion in cleanup/response costs and claims payments to individuals, businesses, and governments.

The financial impact on BP for litigation and fines was estimated between $41.9 billion and $59.4 billion by Bernstein Research, according to The New York Times. Here are additional details of the spill’s financial consequences:

· In November 2012, BP pleaded guilty to the U.S. Department of Justice to fourteen crimes including manslaughter and environmental misconduct/neglect, which resulted in $4.5 billion in penalties. Part of the settlement required BP to appoint two monitors for safety and ethics issues and go on five years’ probation. Two BP employees aboard the drilling rig were charged with manslaughter related to the rig explosion deaths.

· As part of BP’s settlement with the U.S. Department of Justice in November 2012, BP admitted to providing inaccurate information to the public regarding the rate of oil released from the well, which resulted in a $525 million civil fine to the Securities and Exchange Commission for misleading investors.

· A federal civil claim for environmental fines under the Clean Water Act and the Natural Resources Damage Assessment, representing the U.S. Justice Department, Gulf states and private individuals, sought to prove that BP acted with “gross negligence and willful misconduct” instead of simple negligence. If proven true, it would quadruple the fines from $5.1 billion to $21 billion, depending on the final determination on how much oil was spilled.

· A class action lawsuit (Plaintiffs’ Steering Committee) by 100,000 individuals and businesses claiming economic and medical damages from the spill could cost BP much more than its estimated $7.8 billion.

Two other companies involved with the oil spill, Transocean and Halliburton, which operated the Deepwater Horizon oil rig, pleaded guilty to violating the Clean Water Act and paid $1.4 billion in civil and criminal fines. Halliburton, which provided the cement that failed in the well, was also under investigation. These companies were also involved in the federal civil claim under the Clean Water Act and Natural Resources Damage Assessment which could result in billions more in fines and penalties.

BP had agreed to create a $20 billion compensation fund shortly after the disaster occurred. The resulting claims settlement, representing about 100,000 claims, did not have a cap. BP had estimated that it would pay out $7.8 billion in claims. However, that figure could go higher.

BP was back in the news in 2013 when its lawyers sought to change the terms of the court-supervised settlement claiming that some claimants’ losses were not spill related despite the fact that BP set the guidelines for the affected economic loss zones and the percent of decline and incline in revenue needed to prove the claim.

BP placed full-page ads in The New York Times and The Wall Street Journal to further their case. Critics of BP noted that it was delaying and denying claim payments based on minor technicalities in order to frustrate legitimate claims.

U.S. District Judge Carl Barbier, the settlement judge, refused to temporarily shut down the settlement program to accommodate an internal investigation into alleged settlement fraud. Barbier was quoted in a July 2013 Associated Press article criticizing BP’s continued tactics to evade its responsibilities after one lawyer who worked for the claims administrator Patrick Juneau was accused of misconduct:

“I find the recent attacks on Mr [Patrick] Juneau’s [the lawyer administering the claims] character are highly offensive, inappropriate,” Barbier said.

Barbier said he found it “especially offensive” that BP CEO Robert Dudley claimed during an interview televised by CNBC on Thursday that the settlement process has been “hijacked.”

“Personal attacks, hyperbole and use of such language in my opinion crosses the line,” he said.

In a Huffington Post article, BP spokesman Geoff Morrell said the company disagreed with Barbier’s ruling to continue settlement payments during the internal investigation of alleged fraud by the lawyers administering the claims.

Morrell said the company would review its legal options. “There is a material risk that payments going out the door have been and continue to be tainted by possibly fraudulent or corrupt activity, and BP should not be forced to bear the risks of improper payments pending the outcome of Judge Freeh’s investigation,” Morrell said in a statement.

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