More Information on BP and Feinberg

There was a post earlier about the relationship between BP and Kenneth Feinberg.  As it was presented, “In essence, the question is whether there is something improper about him getting paid by BP to write [an expert opinion] letter [about the relationship between BP and Feinberg Rozen].”  At the time, I agreed that it seemed to be much ado about nothing, and I agreed with the expert opinion, because Feinberg appeared to be free of a lawyer-client relationship with BP and free of any control by BP.

I just received a telephone query and some emailed materials from a public interest lawyer who is concerned about some new information that has come to light.  She says that the written contract between BP and the law firm, Feinberg Rozen, was filed in court for the first time last week.  According to the contract, it was signed on January 6, 2011, and was made effective June 15, 2010.  She is interested in getting expert advice about the ethical implications of the new information.

I explained to her that I have cut back my consulting and testifying to pro bono work in death penalty and Guantanamo cases; that I would take a quick look at whatever she sent; and that I would post on LEF to see whether another ethics person would be willing to work with her.  If anyone wants to get involved in an interesting and important piece of work, please email me at [email protected].

Here is what I have found in a quick review of the lawyer’s comments and of the contract itself.  Because of the nature of my review, I cannot vouch for all the facts stated, but they do appear to me to be accurate.

1.  Although Mr. Feinberg was asked by BP and the White House together to administer the claims process, the contract is a private one, signed only by BP and Feinberg.  The only role the government has under the contract is that DOJ must approve Feinberg Rozen’s termination by BP if BP chooses to do that.  BP’s power to terminate is otherwise quite broad.  Also, Feinberg Rozen’s fee of $850,000 per month is to be paid through January 15, 2011.  After that date, any compensation to Feinberg Rozen must be agreed to by BP in advance of each successive calendar quarter.  The public interest lawyer commented that BP might consider F-R’s success in limiting or resolving BP’s liability to claimants to be relevant to the forthcoming amount of  F-R’s compensation.

2.  The contract recites that Feinberg Rozen is an independent contractor and that there is no lawyer-client relationship between the parties.  However,  the contract also recites that Feinberg is “acting through and as a partner of Feinberg Rozen.”  Also, the contract recites the law firm’s obligations to BP, which expressly includes such lawyer-client obligations as confidentiality and an absence of any conflicts with the interests of BP on the part of the law firm.  (One might think that the rights of the claimants who were harmed by BP’s activities in the Gulf, which F-R is establishing on their behalf, constitutes a conflict with the interests of BP.)

3.  The contract refers to subcontractors, including, specifically, Worley, which is evaluating claims.  The lawyer who called me has been trying to obtain the Worley subcontract, but has not been successful.  However, the Feinberg Rozen contract also recites that all subcontractors are subject to the same obligations as the law firm, including confidentiality on BP’s behalf.  Also, any subcontractor must be approved in advance by BP.

4.  The releases that Feinberg is obtaining from claimants assigns all of their claims to BP.  On termination of the contract, all of F-R’s files in the matter are to be turned over to BP, with no restrictions on their use.

There appears to be more.  Also, the entire set of transactions is a complex one, and a significant number of claimants might already have relinquished their rights without the benefit of independent services by lawyers who have had access to all of the information about the nature and extent of the relationship between BP and the Feinberg Rozen law firm.