Government Claims Administrator Testifies in Watts Trial
The first week of the British Petroleum (BP) oil spill fraud trial of San Antonio plaintiffs attorney Mikal Watts and six co-defendants generated few headlines beyond the Gulfport, Miss. federal courthouse where U.S. District Judge Louis Guirola Jr. is presiding over proceedings expected to last six weeks.
The indictment of Watts, a nationally known tort attorney and Democratic Party donor who hosted President Obama at his Dominion estate for a 2012 fundraiser, his brother David, and five others generated major headlines in 2015, but last week’s trial court proceedings were overshadowed by the Republican National Convention in Cleveland and a wave of civilian killings that stretched from Munich to the Middle East.
Jury selection from a pool of 76 potential jurors took place Monday and Tuesday with both sides exercising strikes to end up with a seven man, five woman jury, all white save for one Black juror. Judge Guirola instructed the jury not to make any judgments about Watts’ decision to serve as his own attorney, a move that generated considerable talk in the legal community in the weeks leading up to the trial.
Self-representation is rare in major criminal cases even among the most successful attorneys. Watts, however, is pressing ahead, relying in part on the fact his brother David and the other co-defendants are represented by legal counsel.
Opening arguments began Wednesday morning, giving both parties an opportunity to present an overview of a case involving tens of thousands of supposed Gulf Coast claimants seeking damages resulting from BP’s massive Deepwater Horizon oil spill in the Gulf of Mexico about 42 miles off the Louisiana coast in 2010.
Assistant U.S. Attorney Jerry Rushing told jurors the government would prove that Watts and his fellow co-defendants engaged in a conspiracy to falsify claims related to the 2010 BP oil spill. Rushing opted for brevity, summarizing the 72-count indictment against seven defendants in the span of 15 minutes.
Watts did not make an opening argument before the jury. Instead, Mike McCrum, one of San Antonio’s premier criminal defense lawyers and a former federal prosecutor, delivered a 90-minute opening argument on behalf of David Watts, a senior employee of the Mikal Watts law firm, that, in effect, was made on behalf of all the defendants.
To sum up the case in a single sentence, the government seeks to prove that the Watts team engaged in a massive conspiracy to falsify claimants and collect millions of dollars from BP on their behalf, while Watts and the defendants will argue that they were duped by others working on their behalf to register and verify claimants.
McCrum told jurors that the Watts firm acted appropriately when it paid contractors more than $10 million to document proof of claims by a pool of Gulf residents that eventually grew to 41,000 claiming property or lost income damages after the BP oil spill.
“Mikal Watts and his investors and Mikal Watts’ law firm got scammed,” McCrum told the jurors, asserting that bank records obtained after the indictments show a spending spree on the part of the subcontractors who spent lavishly at strip clubs, casinos, and condos, as well as on automobiles, clothing, restaurants, bars, and even cigars.
The decision to have McCrum deliver the opening argument appears to indicate that Watts will mount a coordinated defense, each of them playing different but complementary roles from the defense table.
“I have made the decision to defend myself, knowing that my active involvement in the trial on a day-to-day basis would best enable me to defend myself,” Watts said. “By order of the court, I have no other lawyer defending me. However, Mike McCrum, while defending my brother, is an outstanding backstop to clean up any messes I may inadvertently leave behind.”
How the jury responds to the contradictory prosecution and defense accounts could depend, in part, on how they view the BP oil spill and its aftermath, which had a major environmental and economic impact on the Gulf Coast states.
Eleven workers on BP’s offshore oil rig disappeared and were never found, and five million barrels of crude oil poured into Gulf waters, on to environmentally sensitive shorelines, and into coastal estuaries. Emergency workers struggled for 97 days to cap the well. It’s considered the worst oil spill in U.S. history and is said to have cost BP more than $62 billion in losses.
Watts and six co-defendants originally were indicted on 95 charges of conspiracy, wire and mail fraud, and identity theft in the aftermath of the oil spill, although Judge Guirola dismissed 22 of those charges in pretrial proceedings.
Watts’ co-defendants include his brother David Watts and Wynter Lee, both employed by his law firm; BP claim field representatives Hector Eloy Guerra of Weslaco, Texas and Gregory Warren of Lafayette, La.; and Thi Houng “Kristy” Le and her sister-in-law, Thi Hoang “Abby” Nguyen, both of Grand Bay, Ala. Warren and Le set up a BP claims office in the Biloxi, Miss. area.
BP officials said the company agreed to pay $2.3 billion in compensation for property and economic losses based on records submitted by Watts and his firm, part of a larger $9 billion settlement that covered such losses by business and individuals in multiple Gulf Coast states.
BP then filed a civil lawsuit against Watts and his law firm in December 2013, asserting that half of the thousands of names submitted for claims were fictitious or falsely made. That civil suit was stayed while a criminal investigation into the same charges was underway. That investigation culminated in the October indictments.
Government-appointed BP Claims Administrator Kenneth Feinberg, a nationally respected lawyer who has played the same role in the wake of a number of major disasters involving massive damages, was the first witness called by the government after opening arguments concluded Wednesday.
The D.C.-based attorney formerly supervised claims funds arising from the 2016 Pulse Nightclub shooting in Orlando, the 2013 Boston Marathon Bombing, the Sept. 11, 2001 attacks on the Twin Towers, and three other targets that together claimed 2,996 lives, left more than 6,000 others injured, and caused billions of dollars in property damage.
Starting in 2010, Feinberg led the Gulf Coast Claims Facility. He was appointed to expedite the backlog of claims stemming from the BP oil spill. During cross-examination by McCrum, Feinberg said he was skeptical that Watts’ firm had somehow managed to secure agreements to represent 41,000 people claiming damages.
“How can 41,000 people be represented by one firm?” Feinberg asked rhetorically. “We want to see before we calculate damages and pay the money, we want to see that, in fact, those people, fisherman or whatever, are, in fact, represented by the Watts law firm.”
Feinberg has worked with Watts on other major cases, but said he was unaware of cases brought by the Watts firm that were certified to include tens of thousands of individual plaintiffs, including the Watts firm case counts where the firm successfully represented tens of thousands of clients at once, such as the Trans Union case where Watts represented 80,000 claimants; the Syngenta GMO corn litigation case where he represented 47,000 claimants; the RUK case with 25,000 claimants, and the FEMA case, where Watts represented 31,000 claimants.
Feinberg said he knew of Watts’ “very high” success rate, but that he couldn’t comment on those cases. He did agree that Watts is recognized as a leading member of the nation’s trial bar.
“Never good to ask a question like this, but I might as well,” Mikal Watts said in his cross-examination of Feinberg. “Mr. Watts was well-known around the country as a lawyer?”
Watts: “Was I seen as a fraudster?”
Watts: “Had you ever heard one word that I would purposely submit false or fraudulent claims prior to BP?”
By Friday afternoon 16 witnesses had been called by the prosecution and were cross-examined by the defense. The second week of the trial is expected to begin Monday when the prosecution calls several Vietnamese-speaking individuals to the witness stand, with certified translators on hand to translate their testimony.