BP oil spill settlement to reimburse millions Louisiana paid to politically connected law firms

By Louisiana Record reports | Oct 8, 2015

NEW ORLEANS – BP will pick up at least some of the legal bills the state of Louisiana incurred as part of a five-state settlement for the 2010 Deepwater Horizon oil spill, according to recent court order.

The order to pay the legal bills was included in a series of documents filed this week in U.S. District Judge Carl Barbier’s court that provides a framework for BP’s $18 billion settlement offer with the five Gulf Coast states affected by the oil spill. An appendix attached to a court order separate from the finalized settlement agreement has BP putting $20 million toward what Louisiana Attorney General Buddy Caldwell’s office has said is a $58 million legal bill to pursue state claims against the oil company. The amount for legal fees is in addition to the $6.8 billion the state is set to receive if Barbier approves the settlement agreement.

Much of Louisiana's legal costs were racked up by 11 private law firms Caldwell contracted to help the state with the case. The proposed settlement shows those 11 law firms that were selected through no-bid contracts combined for $28 million in legal fees over the five-year period following the oil spill.

Caldwell, who faces re-election to his seat in November, has faced criticism over the years for hiring dozens of outside law firms to perform legal work on behalf of the state. Much of this work has been awarded without being opened to public bid and has gone to Caldwell’s campaign contributors.

In the case of the BP settlement, state campaign finance records show that eight of the 11 outside firms contributed a combined $186,000 to Caldwell's election efforts.

Those eight firms include Usry, Weeks, & Matthews of New Orleans, whose lead partner, T. Allen Usry was Caldwell’s campaign manager in 2011. Campaign finance records show that the Usry firm's relatives and employees have given $115,000 to Caldwell’s political campaigns. State records show the Usry firm received $7.11 million in legal fees from the state for assisting in the case against BP.

Another firm with close ties to Caldwell is Shows, Cali & Walsh of Baton Rouge, whose lead partner E. Wade Shows has served as Caldwell's campaign treasurer. State records show that employees of the Shows firm have given at least $15,000 to Caldwell’s past campaigns. For its work on the BP matter, the law firm received more than $660,000.

Employees of Covington-based Henry Dart, Attorneys at Law PLC have given at least $35,000 to Caldwell's campaigns and the law firm in turn has billed $3.28 million to the state in connection with the BP case.

Campaign finance records reveal several other law firms working on the BP oil spill case have political and campaign finance ties to Caldwell, including New Orleans-based Spears & Spears; Mandeville-based; New Orleans-based Galloway, Johnson, Tompkins, Burr & Smith; solo practitioner Ceila R. Cangelosi, of Baton Rouge, and St. James-based The Edwards Group.

At more than $58 million, Louisiana’s legal bill is higher than any other Gulf Coast state’s legal costs related to the oil spill settlement. Court documents show Florida came in second, spending $52 million in legal fees, while the other three affected states — Alabama, Mississippi and Texas — spent a combined $26 million.

BP’s agreement to pay legal fees is provided for in an order separate from the pending settlement that has already been signed by Judge Barbier. The order stipulates that $20 million will be paid to Louisiana and in return, the state will give up all rights to additional legal fees.

In a press release issued this week, Caldwell's office said Louisiana's case against BP was handled at “absolutely no cost to taxpayers.” The press release does not mention the difference between the $20 million BP has been ordered to pay for Louisiana's legal costs and the $58 million the Louisiana Attorney General’s Office maintains was spent on the case.

Caldwell spokesman Aaron Sadler said the remaining balance in legal costs are incorporated in the pending settlement agreement and will be paid out over two years.

“The balance of $38.25 million will be paid in two equal installments–one in 2016 and the other in 2017,” Sadler said. “These payments are made pursuant to the terms of the Consent Decree.”

Sadler, however, did not respond to a request to point out specific language in the 360-page Consent Decree document relating to such payments.

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