BP set to deduct billions in coastal restoration payments from its US taxes…

Maybe I’m cursed by profession but I personally have no problem with the artful (from a tax standpoint) structuring of a civil settlement in such a way that maximizes related tax deductions thus minimizing future tax liability. Other folks are not so happy however:

BP could get billions in tax breaks on oil spill settlement ~ Jennifer Larino

The reason cited in the story is that BP admitted to criminal charges, which ironically, can actually enhance the probability that certain spill related professional fees like the lawyering can be deducted under IRC Section 162(a).   I can’t talk specifics from my own tax practice but here is an interesting blurb reprinted from the M&A Tax Report circa 2002:

Deducting Legal Fees for Criminal Defense ~ Robert Wood

It is a fairly complex area but when it comes to criminal racketeering, the answer is usually yes, especially if the defendant is convicted. Accardo v. Commissioner of Internal Revenue, 942 F.2d 444 (7th Cir. 1991) is an interesting case to learn where the IRS and the 7th Circuit made the cut in denying an attorney fees deduction for the successful defense of a criminal RICO prosecution:

This is where the paradox noted above creeps into the picture. The Commissioner (Br. 16) concedes that those defendants who were found guilty as a result of the same RICO prosecution could properly claim a deduction for legal fees under Section 162(a) “as expenses paid or incurred * * * in carrying on any trade or business,” because they were found to be engaged in the racketeering business. Section 162(a) does not draw any distinction between legitimate and illegitimate business enterprises. But since the jury acquitted taxpayer of involvement in the racketeering business, he could not claim a Section 162(a) deduction….

I imagine E&Y was consulted as the settlement was being drafted, in fact I’d rate it that as a certainty based on the after the fact chatter from the public interest groups.

Ummm, just take a victory lap, you deserve it

Most of the time there is a story behind the story you see on the Tee Vee News or read in the newspaper (IE the backstory) and that is the case with the following from Hammerman:

Appeals Court denies BP’s effort to keep claims payments stopped ~ Hammerman

I think I see a nugget in David’s story that tells me he is signaling his knowledge or at least is on the right track.  I like that.

The person responsible for the above reads this site, sometimes even sharing some insight. I have not covered the BP settlement litigation beyond the very early days.  Luckily for everyone, Jason over at American Zombie has tackled this immensely complex subject and has done a very fine job with it, better than the New York Times and certainly far better than the gasbags at 60 minutes. Here are two very recent must reads from AZ:

DHECC – Lionel Sutton Interview Part 1 – Corps Constructors

DHECC – Lionel Sutton Interview Part 2 – how the “go-to guy” became the fall guy

If State Farm is the true pinnacle of hard nosed corporate litigants then BP does not stand a chance here with the peanut gallery alone. You gotta love the PSC for being wise enough to see the genius in an idea from a member of the public that happens understands Federal Court Practice like few others. Now take that lap.

Environmental disaster specialist BP wants to stop playing, again

OTOH I can verify a jailbreak of subsistence claims once word got out. But the masters of disaster at BP crying foul?

BP presents evidence of fraudulent claims, demands temporary halt of claims payments again ~ Mark Schleifstein

Seems like just yesterday BP had some interesting conflicts of their own.

Throw me something Mister: Friday links

Bacchus rider banned after allegedly throwing jug of urine at a family on the parade route ~ Nola.com

Brother charged with murder in sister’s death ~ Christina Seube

More dead baby Dolphins in South Mississippi waters ~ Melissa Scallan

OIG Audit: Mississippi improperly diverted dollars meant to prevent alcohol-related crashes ~ Greg Gordon

River Birch prosecutors ask judge to dismiss Valerie Titus’ property claims ~ Manuel Torres

Tulane University hires former U.S. Attorney Jim Letten ~ John Pope

Senator Landrieu recommends Kenneth Polite as new chief federal prosecutor ~ Laura Maggi

Coast friends and family corruption roundup, sponsored by JaWa Investments LLC

This post is sponsored by JaWa Investments LLC ~ Purveyor of coastal crony capitalism since November 24, 2010

Janus takes unpaid leave as D’Iberville city manager ~ Mary Perez

Folks the picture included with Perez’s story of Scott Walker and Michael Janus smiling big after taking their 6% cut off the top tells the entire tale IMHO.

Speaking of the Walkers it appears Mama Walker is out as Ocean Springs School Board Prez.

Series of votes outs Walker and puts in new school board member ~ Karen Nelson

Now at this point I would like to point out the following post I authored last December:

Sunday Slabb: Before we take another step….

I mention this because of the Land Trust Board members that are reaching out in response to the criticisms directed to the organization on these pages.  The power of the medium lies not in the ability to ostracize, though I suspect those on the receiving end of the criticisms would beg to differ.  That said, it is the ability to help guide decision makers as a reflection of public opinion and a wealth of community expertise is where the true power of the Internet medium is derived.

It is along those lines that I asked the following questions of the Land Trust Board: Continue reading “Coast friends and family corruption roundup, sponsored by JaWa Investments LLC”

Yes Virginia, these new age Coastie politicians are rotten to the core.

Gulf Live file photo of politician Michael Janus

If memory serves Michael Janus and our fluffer Congressman are lifelong associates:

Michael Janus, a man who Congressman Steven Palazzo described as a “close friend of my family for years” was formally named Palazzo’s chief of staff on Thursday.

The families that politic together thieve together as well:

‘Oversights’ disclosed in $3M BP grant ~ Mary Perez

“The six council members knew nothing of the agreement until after the grant was received,” said city attorney W. Fred Hornsby III. The council could have chosen not to pay Maxwell-Walker, he said, but agreed to give the firm the standard 6 percent finder’s fee of $180,000 for the grant.

The payment to Maxwell-Walker was not discussed in an open council meeting, only in executive session, Janus said.

Rather than putting a resolution for payment on the budget, it was added to the Dec. 20, 2011, docket of claims with the city’s other bills.

And then there are the obvious conflicts of interest. D’Iberville Mayor Quave works at DMR and is paying his former boss’ son. Janus, the City Manager is in business with Scott Walker via JaWa Investments LLC, a name I thought funny considering the jabberwalk BS involved in terming all this a mere “oversight”. Continue reading “Yes Virginia, these new age Coastie politicians are rotten to the core.”

Hark did someone mention Buddy Caldwell and the Oil Spill????

Yesterday Melenda Deslatte and Michael Kunzleman at the AP did in fact.

Gulf Oil Spill Case: Buddy Caldwell, Louisiana Attorney General, Has Already Spent Nearly $24 Million ~ AP via The Huffington Post

I’ll let all you newbies out there in on a little secret. Slabbed was one of a select group of local blogs everyone in the National Media read during the oil spill, often times ripping off our material without any attribution. My own perspective is it is hard to respect anyone in the media that does not have the common decency to attribute where they got their story leads which is why I have such little respect for the national media.

So what in the heck does this all have to do with Buddy Caldwell and the Huff Po?  Mainly because on the “Around the Web” widget at the bottom of the story that I linked above, Slabbed’s previous coverage of Louisiana Attorney General Buddy Caldwell is linked at the #2 slot right below Bloomberg.  I personally think we should be #1.  😉

Well tickle my ass with a feather……. :mrgreen:

In our continuing episode of Magnum J.D. Baldwin v Costner: In fact Bull Durham, we’re all amused.

Folks in today’s update of the trial in Judge Feldman’s courtroom Bull Durham was on the stand last week and me thinks the pressure is getting to Costner, who could not read his testimony from a script like he did before Congress back in 2010. Here are a few snippets from 2 AP stories filed on the topic the the first of which detailed Bull’s testimony from last Thursday:

Actor Kevin Costner says he was heartbroken as he watched millions of gallons of oil spew into the Gulf of Mexico in 2010 and that he headed to New Orleans to see whether cleanup devices he helped develop could aid the recovery effort. Costner, who has been sued in a multimillion-dollar business dispute involving the devices, told jurors he was nervous. “My name is at stake,” he said.

Indeed it is as we’d all be disappointed if Bull is perceived as anything other than full of BS because that is all we saw back in 2010 when he showed up in this area like a fly on shit after the oil spill peddling useless centrifuge technology as a cure all for the Macondo well blowout. Bull has an interesting self concept of his contribution to combating the spill:

“I’m not just a celebrity,” Costner said during testimony. “I’m not just a person who opens doors.”

Continue reading “In our continuing episode of Magnum J.D. Baldwin v Costner: In fact Bull Durham, we’re all amused.”

In our continuing episode of Magnum J.D. Baldwin v Costner: The testimony of Patrick Smith

As told by 1450 AM the Voice of Dothan Alabama. Welcome aboard guys. A short snippet from the must read account:

In a June 8 text from Smith to Ted Skokos, an investor who ultimately bought out Contogorous’ shares in OTS, Smith wrote: “We had an amazing meeting with BP. We r on line. I have a buyout agreement from the partner we want out being drafted today.”

On June 10, Metairie, La., attorney Daniel Grigsby drafted the contract between BP and OTS for 32 centrifuges.

Smith testified that the order from BP for centrifuges was still “conditional,” as of June 10. The next day, June 11, Contogorous effectively sold his shares in OTS in a document Grigsby drafted.

Stay tuned.


In our continuing episode of Magnum J.D. Baldwin v Costner Day 2: There’s no business like show business…..

Today I’ll highlight some of the main stream media reporting on the trial and I am going to draw a sharp line and differentiate the reporting. First up though we need to examine what got everyone into Judge Feldman’s courtroom, one that is very plaintiff unfriendly if said plaintiff is an individual suing an insurance company.

Gullibility is a failure of social intelligence in which a person is easily tricked or manipulated into an ill-advised course of action. It is closely related to credulity, which is the tendency to believe unlikely propositions that are unsupported by evidence.

Classes of people especially vulnerable to exploitation due to gullibility include children, the elderly, and the developmentally disabled

I was tempted to sign into my wiki account and add the words “and National Media” because they made this lawsuit in a way back in 2010 by giving Costner huge amounts of free publicity when he showed up on the Gulf Coast like a fly circling a fresh cow pie after the oil spill. Notice I used the term “publicity” instead of “news” because the reporting was uncritical and 100% derived from controlled tests of Costner’s centrifuge technology, which were not previously commercially viable and was not used to any effect in the 2010 oil spill.

Simply put we had a ring side seat here at Slabbed when we highlighted the threatened lawsuit against Frank Levy on June 17, 2010 that was mentioned in so many of yesterday’s media reports on the civil suit. It was obvious to any local with half a brain this was the oil spill equivalent to a stock market pump and dump. But the media had stars in their eyes and made the Costner inspired scam “news” without a critical, second thought. Continue reading “In our continuing episode of Magnum J.D. Baldwin v Costner Day 2: There’s no business like show business…..”