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Shell Oil to pay California $20 million over false claims



BY DALE KASLER: [email protected]: 23 Sept 2016


Shell and its Equilon Enterpises LLC affiliate were essentially caught double-billing the state fund

Shell Oil Co. and an affiliate have agreed to pay $20 million to California officials over false claims the companies submitted to a state-run underground storage tank cleanup fund, California officials said Friday.

As part of the settlement, state officials permanently rejected cleanup claims from Shell and the affiliate totaling as much as $150 million.

Andrew DiLuccia, a spokesman for the State Water Resources Control Board, said Shell and its Equilon Enterpises LLC affiliate were essentially caught double-billing the state fund. “They were getting reimbursement for cleanup costs from an insurer,” he said.

The dispute arose over California’s underground storage tank cleanup fund, which was created by the Legislature in 1989 and is operated by the state water board. The fund disburses grants of up to $1.5 million to owners of leaking tanks beneath gas stations and truck stops throughout California.

Officials with the state water board had challenged Shell’s claims starting in 2007. Then in 2010 a whistleblower sued Shell in Sacramento Superior Court, charging that the oil giant had been seeking reimbursement for costs that were already covered by insurance companies and other sources.

That case has now been settled. Shell and Equilon will pay the water board around $11.4 million and the California attorney general’s office about $4.9 million.

The rest of the settlement, around $3.4 million, will go to the whistleblower. The whistleblower’s identity wasn’t immediately known.

The cleanup fund “is a critical tool the state water board uses to protect public health and safety and the environment,” said Cris Carrigan, director of the board’s office of enforcement, in a prepared statement. “It is imperative that claimants not engage in bad faith or fraud.”

Officials with Shell weren’t immediately available for comment.

The water board said the Shell/Equilon agreement is the third settlement reached over “similar conduct by a major oil company.”

Dale Kasler: 916-321-1066, @dakasler

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