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Bloomberg reports: "BP won final approval of a $4 billion guilty plea that resolves all criminal charges against the company related to the 2010 Deepwater Horizon oil spill in the Gulf of Mexico."

The $4 billion in fines and penalties sanctions BP for its mishandling of the Deepwater Horizon drilling rig which killed 11 workers and sent millions of gallons of oil spewing into the Gulf of Mexico and surrounding wetlands. (photo: Charlie Riedel/AP)
The $4 billion in fines and penalties sanctions BP for its mishandling of the Deepwater Horizon drilling rig which killed 11 workers and sent millions of gallons of oil spewing into the Gulf of Mexico and surrounding wetlands. (photo: Charlie Riedel/AP)



BP Pleads Guilty to Manslaughter, Pays $4 Billion

By Jef Feeley, Allen Johnson Jr, Bloomberg News

30 January 13

 

P Plc (BP/) won final approval of a $4 billion guilty plea that resolves all criminal charges against the company related to the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

U.S. District Judge Sarah S. Vance in New Orleans concluded today that BP Exploration & Production Inc., a unit of London- based BP, can take responsibility for the charges tied to the biggest offshore oil spill in U.S. history, including 11 counts of felony seaman's manslaughter.

The BP unit's plea is a "reasonable disposition" of the charges, Vance said at a court hearing. The $4 billion in fines and penalties "appears reasonably calculated" to properly sanction BP for "the serious consequences" of its mishandling of the Deepwater Horizon drilling rig, she said.

The plea includes a record $1.26 billion criminal fine and monitoring of the company's future drilling operations. It doesn't resolve separate civil claims by the U.S. and states bordering the gulf that allege BP violated pollution laws. Among them is $17.6 billion in potential penalties for environmental violations. BP also faces potential fines by affected states.

11 Fatalities

The blowout and explosion on the Deepwater Horizon off the coast of Louisiana killed 11 workers and sent millions of gallons of oil into the gulf and surrounding wetlands. The spill prompted President Barack Obama to impose a moratorium on deep- water drilling and later forced BP to agree to spend at least $7.8 billion to settle lawsuits over the incident.

Under the terms of the plea, BP will be on probation for five years and can pay the fines and penalties within that period, Vance said today.

"The Deepwater Horizon explosion was a national tragedy that resulted in the senseless deaths of 11 people and immense environmental damage," Assistant Attorney General Lanny A. Breuer of the Justice Department's Criminal Division said in an e-mailed statement. " BP has received just punishment for its crimes leading up to and following the explosion."

Company Apology

BP officials apologized at today's hearing for the deaths of the workers on the rig and accepted responsibility for wrongdoing in connection with the spill.

"BP knows there is nothing we can say to diminish their loss, but I am here to express our apology for their loss on behalf of the entire company," Luke Keller, a vice president in BP's U.S. unit, told family members of the dead rig workers at today's hearing. "Our guilty plea makes clear that BP understands and acknowledges its role in that tragedy, and we apologize."

The April 2010 Macondo well blowout sent almost 5 million barrels of oil spewing into the gulf, according to a U.S. government report. The accident sparked the filing hundreds of lawsuits against BP and its partners, including Transocean Ltd. (RIG), the Vernier, Switzerland-based owner and operator of the drilling rig, and Houston-based Halliburton Co. (HAL), which provided cementing services on the facility.

Private Claims

BP agreed in March to pay at least $7.8 billion to resolve private plaintiffs' claims for economic loss, property damage, and spill- and pollution-related injuries. Thousands of plaintiffs opted out of the accord, and their claims are proceeding toward trials. The settlement came just days before a scheduled trial on liability for the spill.

Injured rig workers and relatives of the men killed in the explosion sent Vance more than a dozen letters urging her to reject BP's plea deal. Many victims told the judge they wanted the company to apologize and face a more severe punishment.

Keith Jones, a Baton Rouge attorney whose son, Gordon, was killed in the 2010 rig explosion, urged Vance to reject the plea saying it let the oil company off too easily.

'Petty Cash'

"$4 billion is a huge amount of money to you and me. It is not to BP," he told the judge. "It is petty cash to BP. Their stock went up after this plea deal was announced." BP's estimated revenue for 2012 was $353.6 billion, according to data compiled by Bloomberg.

Buddy Trahan, a Transocean employee who survived the blast, told Vance he hadn't received any compensation from BP despite suffering severe injuries.

"The government has caught the bank robber and cut a deal with the bank robber and left the people shot in the bank robbery to fend for themselves," he said.

The BP unit also pleaded guilty today to one misdemeanor count under the Clean Water Act, one misdemeanor count under the Migratory Bird Treaty Act and one felony count of obstruction of Congress, under terms of the agreement.

Contract Bar

The misdemeanor plea under the Clean Water Act triggered debarment of the facility where the violation occurred, meaning that it would be prevented from entering into new contracts or leases with the U.S. government, BP said in statement. Scott Dean, a BP spokesman, declined to comment beyond the statement.

The Environmental Protection Agency in November suspended BP and its units from winning new government contracts because of the company's "lack of business integrity" tied to the spill. The temporary ban doesn't affect existing contracts.

The EPA didn't say how long the ban would be in place. Suspensions generally last for fewer than 18 months or until the end of legal proceedings. BP was the U.S. Defense Department's biggest fuel supplier in 2011. That year it won awards valued at about $1.35 billion, a 33 percent boost from $1.02 billion the previous year, according to data compiled by Bloomberg.

Largest Penalty

The criminal penalty provided for in the settlement is the largest in U.S. history, eclipsing the $1.195 billion paid by Pfizer Inc. for marketing fraud in 2009.

Today's plea has no effect on criminal charges against two BP well-site leaders accused of involuntary manslaughter, seaman's manslaughter and Clean Water Act violations over their supervision of drilling operations on the rig.

Prosecutors contend the men had multiple indications that the well wasn't secure and "failed to maintain control" of it, according to court filings. A third BP official was charged with obstruction of justice for misleading lawmakers about the size of the spill.

As part of today's plea, BP officials admitted that a senior executive withheld documents, provided false and misleading information in response to the U.S. House of Representatives' request for flow-rate information, and manipulated internal estimates to understate the amount of oil flowing from the well, prosecutors said.

Different Numbers

BP officials publicly stated that 5,000 barrels of oil a day was flowing into the gulf. Experts concluded later that the figure was more than 60,000 barrels a day, the government said.

BP still faces as much as $17.6 billion in potential fines for alleged Clean Water Act violations and demands by the U.S. and gulf states for enough money to restore the region's coastline and waters to their condition before the spill.

U.S. District Judge Carl Barbier has scheduled a nonjury trial starting Feb. 25 in his New Orleans court, where he will apportion civil liability among BP and the other companies involved in the disaster.

Transocean officials said earlier this month that the rig owner agreed to pay more than $1.4 billion, including a $400 million criminal penalty, to end a federal criminal probe over its role in the explosion and spill.

Transocean will plead guilty Feb. 14 to one misdemeanor count of violating the Clean Water Act and agree to five years' probation, prosecutors said in a Jan. 3 filing.

The case is U.S. v. BP Exploration, 2:12-cr-292, U.S. District Court, Eastern District of Louisiana (New Orleans).

 

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+26 # MEBrowning 2013-01-30 08:19
It must be nice to have enough money to throw at any problem, whether it's lying under oath or killing people or mass-murdering animals or screwing up the ocean for generations. Just once, I'd like to see some corporate wrongdoers end up in jail.
 
 
+25 # Trueblue Democrat 2013-01-30 09:02
Right you are, MEBrowning.

Too big to fail has now morphed into too big to jail.
 
 
+21 # WestWinds 2013-01-30 08:34
Only 4 billion? What a croc! The damage done by BP not only being irresponsible for cutting corners to save a few thousand dollars by omitting the cement safety collar, but their blatant efforts to hide how much oil was actually spilled (so no one could properly assess the full extent of that damage,)by pouring who know how many millions of dollars and gallons of a highly toxic dispersant, which is banned in England, into Gulf waters killing off sea life and destroying coastal fishing in all of the lands surrounding the Gulf Coast, and they get to walk away with only 4 billion dollars in reparations? 400 billion would be closer to it. So here again (just like the Valdez spill that they never cleaned up,) we have some errant corporation cutting corners and getting away with a slap on the wrist while we have to shoulder the death of untold sea life and shore birds, the loss of coastal family businesses, and the mess that some foreign OIL company has left for all the rest of us to deal with. Let BP go back to England and make a mess in her waters and stay the hell away from America. Shame on whatever court handed down this joke of a decision.
 
 
+17 # Regina 2013-01-30 10:25
They're still paying megabucks for their cozy ads about how gloriously clean the Gulf resorts are, including all the seafood. That money should be going to clean the Gulf waves, not foul the airwaves.
 
 
+9 # Todd Williams 2013-01-30 12:29
Yes, I vacation in Gulf Shores, AL and have seen the direct result of BP's criminality. Tar balls are still be cleaned from the beach and despite the TV commercials, I won't touch the locally-caught seafood with a ten-foot pole. BP has affected and destroyed the lives of millions of citizens and this is all the punishment they get? Shame of this court.
 
 
+2 # Glen 2013-01-31 08:27
Todd, I have relatives in Orange Beach, and found, when there last month, that folks are continuing to register for payment due to the oil leak. The government representatives are more than willing to allow for even those who did not have true damage to property due to oil. They are being compensated for the danger in the water from both oil and the chemical clean up.

I say go for it. BP should pay for the rest of their existence for any and all damage to any environment.

Then there are the predatory vultures that have sued BP after setting up an office "for the people", guaranteeing they will get you money, but you must pay them 20%. Never miss a chance for a disaster to make money, is their obvious attitude.

I don't eat seafood there, either.
 
 
+21 # Charles3000 2013-01-30 09:32
I thought manslaughter carried a jail sentence. If corps are people then BP should have to serve jail time. I would be satisfied if they put all of the directors, all of the officers and all of the stockholders in jail for a few years.
 
 
+16 # DaveM 2013-01-30 09:34
Okay....BP is "on probation" for five years. What are the terms of this probation? And if (or should I say when) they violate it, who goes to jail?

Has anyone ever heard of a manslaughter case where an individual has received a fine and probation? I have not.
 
 
+16 # Billbb 2013-01-30 09:40
Wait a minute. I'm generally opposed to the death penalty but as long as it's on the books -- and as long as BP as corporation is legally a citizen -- why don't we execute BP?

I don't understand this.
 
 
+6 # Skeptical1247 2013-01-30 09:42
WHen only BP shareholders pick up the immediate tab for a complete joke of a fine, with BP customers picking up the final tab with a few months of increased gas prices, staged whenever Energy Execs feel like lying about the laws of supply and demand to justify the rape, when executives are held harmless for acts of murder by depraved indifference, then this disgusting crap is guaranteed to continue and to re-occurr. Our justice system is sick joke corrupted beyond repair. I fear that Class Warfare Part Two is a few years off, but inevitable if corrections in the government and justice system are not instituted... Anybody with a brain and a basic sense of right and wrong has to be angered by this crap. So, the race is on to ensure that education is co-opted and apathy the predominant social characteristic. The Corporatists are doing a fine job so far.....
 
 
+10 # grouchy 2013-01-30 10:43
Same kind of sleazy deal happened in the Alaska spill. The art of these scams is to wait until the outrage cools down a bit, then send in the lawyers for the corporation and the lawyers for our government (that tends to NOT represent the needs of us citizens) who will settle the deal with a slap on the hand, then negotiate another much better reduced deal after even more time passes. Pretty neat if you are a massive Petro Greedhead organization! THE CORPORATIONS OWN US!
 
 
+8 # angelfish 2013-01-30 11:15
It's NOT enough!
 
 
+8 # Smiley 2013-01-30 11:43
A fine and probation for 11 counts of manslaughter and destruction of life and economic value beyond calculation.

When corrupt deals like this happen, how can we expect anyone have any respect for our justice system?
 
 
+9 # reiverpacific 2013-01-30 12:13
Another slap on the wrist for a company that has been criminal since it's time as the "Anglo-Iranian Oil Company" which instigated the US/UK overthrow of Mohammad Mossadegu in 1953 and set that country and the middle east on a path of socio-political theocracy and dysfunction still in effect.
If they were "People" as big corporations are alleged to be, they'd get life or worse for all they've done to the planet and it's many creatures, two legged, four legged, winged, finned and inert.
There is no punishment severe enough in these times for BP and their ilk, as dissolution takes political will and courage on a large front and it just ain't there.
 
 
+6 # Texan 4 Peace 2013-01-30 17:38
The Supreme Court decided that corporations are "persons." Last I checked, a real person couldn't get out of a manslaughter charge by paying a fine.
 
 
+4 # USA2012??? 2013-01-31 06:37
The bigger question should be: "Despite the record penalty of $4 billion how much money did BP still make after destroying the United States territory of the Gulf of Mexico?

Also, who were the American Politicians that worked with BP to diminish the policing powers that were in place to avoid such a catastrophe: have they been held accountable as well?
 
 
+2 # hoodwinkednomore 2013-02-03 02:13
BIG OIL = the end for Earth
 

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