NEW OR­LEANS–BP is balk­ing at pay­ing more than US$130 mil­lion in fees for the court-su­per­vised ad­min­is­tra­tor of its multi­bil­lion dol­lar set­tle­ment with Gulf Coast busi­ness­es and res­i­dents af­ter the 2010 Gulf oil spill.A fed­er­al mag­is­trate has sched­uled a hear­ing to­day for BP to show why it shouldn't be or­dered to fund claims ad­min­is­tra­tor Patrick Juneau's pro­posed third-quar­ter bud­get.

In a let­ter Mon­day, a BP claims of­fi­cial said the com­pa­ny can­not de­ter­mine if Juneau's bud­get re­quest is rea­son­able with­out more doc­u­men­ta­tion. The of­fi­cial al­so claimed the set­tle­ment pro­gramme has been plagued by poor pro­duc­tiv­i­ty and ex­ces­sive costs.Sep­a­rate­ly, BP has asked a judge to sus­pend all set­tle­ment pay­ments while for­mer FBI Di­rec­tor Louis Freeh in­ves­ti­gates al­leged fraud in the pro­gramme.

BP Plc said Mon­day it has dis­cov­ered new ev­i­dence of fraud and con­flicts of in­ter­est in the pro­gramme that is pay­ing bil­lions of dol­lars to busi­ness­es and res­i­dents who claimed they were harmed by the 2010 Gulf of Mex­i­co oil spill.The oil com­pa­ny made the dis­clo­sure in a fil­ing with the US Dis­trict Court in New Or­leans as part of a re­newed ef­fort to sus­pend the pay­outs un­til Freeh, the court-ap­point­ed mon­i­tor, fin­ish­es in­ves­ti­gat­ing the pay­out pro­gramme.

BP said it learned with­in the last week that two lawyers re­view­ing ap­peals of dis­put­ed claims were part­ners at law firms rep­re­sent­ing claimants be­fore the Court Su­per­vised Set­tle­ment Pro­gramme (CSSP), and thus had ap­par­ent con­flicts of in­ter­est.It al­so said it learned through its fraud hot­line of al­le­ga­tions that a work­er at a Mo­bile, Al­aba­ma spill claims cen­tre helped peo­ple sub­mit fraud­u­lent claims in ex­change for a share of the set­tle­ment amounts. BP said the CSSP sus­pend­ed two em­ploy­ees in con­nec­tion with this mat­ter.

"BP should not have to face the sub­stan­tial risk of ir­repara­ble harm from im­prop­er pay­ments," the com­pa­ny said.Tem­porar­i­ly halt­ing pay­ments un­til Freeh fin­ish­es his re­port is "mod­est re­lief" that will at most "slight­ly de­lay" pay­outs, which have been run­ning at US$93 mil­lion a week, it added.Juneau, the Louisiana lawyer who ad­min­is­ters the pay­out pro­gramme, pre­vi­ous­ly an­nounced an in­ter­nal probe of al­le­ga­tions that a for­mer work­er in the pay­out pro­gramme re­ferred claimants to lawyers in ex­change for a share of pay­ments.

Juneau said in an email on Mon­day af­ter BP's lat­est fil­ing: "As has been the case since day one, we have in­ves­ti­gat­ed all al­le­ga­tions brought to our at­ten­tion, and un­til our in­ves­ti­ga­tion is com­plete, we will not and should not com­ment."The pro­gramme was de­signed to com­pen­sate vic­tims of the April 20, 2010 ex­plo­sion of the Deep­wa­ter Hori­zon drilling rig and rup­ture of BP's Ma­con­do oil well, a dis­as­ter that killed 11 peo­ple and re­sult­ed in the largest US off­shore oil spill.

BP has al­ready in­curred about US$42.4 bil­lion of charges re­lat­ed to the dis­as­ter. It orig­i­nal­ly ex­pect­ed the pay­out pro­gramme to cost US$7.8 bil­lion, but last week boost­ed its es­ti­mate to US$9.6 bil­lion and said it could go much high­er.The com­pa­ny con­sid­ers Juneau's pay­out for­mu­la too gen­er­ous and be­lieves it com­pen­sates peo­ple who were not harmed. About US$3.1 bil­lion has been paid so far, the pro­gramme's Web site shows.

BP is await­ing a de­ci­sion by a fed­er­al ap­peals court on its chal­lenge to the pay­ment for­mu­la, which US Dis­trict Judge Carl Bar­bi­er in New Or­leans had pre­vi­ous­ly re­ject­ed.Bar­bi­er on Ju­ly 19 re­ject­ed an ear­li­er BP re­quest to sus­pend pay­outs pend­ing Freeh's re­view. He al­so over­sees a con­sol­i­dat­ed civ­il law­suit against BP and its con­trac­tors over the spill.

AP