Lawyer Accused of Defrauding BP Oil Settlement Hosts Biden Fundraiser

Lawyer Accused of Defrauding BP Oil Settlement Hosts Biden Fundraiser

Joe Biden attended a fundraiser hosted by a high-profile trial lawyer, once accused of defrauding the British Petroleum (BP) oil spill recovery effort, during a recent campaign swing through Texas.

The former vice president traveled to the Lone Star State on Friday for a series of events meant to bolster his standing ahead of Super Tuesday. Among the scheduled rallies and town halls was a little noticed fundraiser in San Antonio, Texas, with Democrat power brokers. The event, attended by a bevy of special interests, was hosted by Mikal Watts, a well connected trial lawyer.

Watts, who unsuccessfully sought the Democrat nomination for U.S. Senate in 2008 on a pro-life and anti-gay marriage platform, is a prolific campaign donor. Since 1992, Watts has steered more than a million to Democrat candidates and causes. Included on the list of elected officials he has backed are President Barack Obama, former Rep. Beto O’Rourke (D-TX), and Sen. Elizabeth Warren (D-MA). Warren, in particular, benefited from a $25,000 donation the trial lawyer gave to a federal PAC supporting her reelection campaign in 2018.

Apart from being known as top-dollar political donor, Watts is also one of the country’s most sought after trial lawyers. Watts has fought and won numerous multi-million-dollar settlements against the giants of corporate America, like Ford Motor Company and TransUnion. One of those cases, however, nearly ended with the trial lawyer, himself, behind bars.

In September 2015, Watts was indicted by federal prosecutors on 66 charges of mail fraud, wire fraud, and identity theft. Along with his brother and several associates, Watts was accused of “fabricating” thousands of clients when filing a damages suit against BP in the wake of the Deepwater Horizon oil spill. The allegations stemmed back to 2013 when the oil company accused Watts in federal court of fraudulently conspiring to drive up settlement costs related to the spill.

The New York Times reported on BP’s claims when they were first made 2013:

Mr. Watts has since [2010] filed 43,976 claims under a separate compensation program intended to address claims that had been excluded from the settlement agreement. In examining those claims, the company said it found that 40 percent of the claims used Social Security numbers that belonged to someone other than the person supposedly making the claim; 13 percent gave incomplete numbers or obvious fakes such as 000-00-0001. Five percent of the numbers belonged to dead people.

BP’s initial lawsuit led to the Secret Service raiding Watts’ law office in San Antonio in search of proof of widespread fraud. The raid and further investigation led to Watts’ indictment in 2016. When announcing their case, prosecutors alleged a significant portion of the 41,000 fisherman Watts claimed to represent along the coasts of Louisiana, Mississippi, and Texas were either made up or had their identities stolen for the suit.
When the indictment was first released, it drew public notice because one of the clients Watts purportedly represented, a fisherman named “Lucy Lu,” was in actuality a dog.

In making their case, prosecutors cited that fact and emails Watts’ brother sent him in 2010 indicating there were irregularities in the personal information provided by their clients. Prosecutors argued Watts ignored such troubling signs because he was motivated by greed, especially the desire to receive an appointment to the steering committee of lawyers that would represent all the oil spill victims in court. Securing the post would make Watts eligible to receive a cut of the final settlement.

Regardless if he knew his client list was inflated, Watts was appointed to the steering committee, partially because he represented a sizable chunk of the overall plaintiffs. In 2012, the steering committee negotiated a settlement worth $2.3 billion with BP. It is uncertain how much Watts netted from the suit, although the cut of each lawyer on the steering committee is estimated to have been upwards of $40 million.

Despite the appearance of wrongdoing, Watts and his associates were acquitted by a jury in August 2016. The jury’s decision came after Watts argued the government was unable to prove he had knowingly submitted false client names. Watts further claimed his firm had outsourced finding clients for the BP suit to a group from Mississippi, which he claimed had misspent resources.

After being acquitted, Watts returned to his law practice and his life as a top political donor. Before supporting Biden, the trial lawyer was a strong backer of Beto O’Rourke’s failed presidential candidacy.

It is unclear if Biden knew about Watts’ history before allowing him to host a fundraiser on his behalf. As vice president, Biden was a key player in the cleanup efforts surrounding the BP oil spill.

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