BP Settlement Claims

Gulf Coast Disaster News

Is the BP Criminal Settlement Enough?

November 12, 2012, 12:14 pm

By Kate Sheppard

BP and the Department of Justice announced on Thursday that they had reached an agreement on a record fine stemming from criminal charges related to the 2009 Deepwater Horizon disaster.

BP pleaded guilty to 11 felony counts of misconduct and neglect related to the deaths of 11 workers on the oil rig, as well as one felony count of obstruction of justice for lying to Congress about the size of the spill. They also pled guilty to misdemeanor counts for violating the Clean Water Act and Migratory Bird Treaty Act.

But in exchange for the record fine, they won't face any criminal penalties. The SEC charges deal with complaints that the company lied to investors about the size of the spill in its filings as well. (The US federal court still needs to approve the settlement.)

DOJ has also charged the company and two BP supervisors with manslaughter related to the deaths. CBS News explains:

A federal indictment unsealed in New Orleans claims BP well site leaders Robert Kaluza and Donald Vidrine acted negligently in their supervision of key safety tests performed on the Deepwater Horizon drilling rig before the explosion killed 11 workers in April 2010. The indictment says Kaluza and Vidrine failed to phone engineers onshore to alert them of problems in the drilling operation.

Another indictment charges David Rainey, who was BP's vice president of exploration for the Gulf of Mexico, on charges of obstruction of Congress and false statements. The indictment claims the former executive lied to federal investigators when they asked him how he calculated a flow rate estimate for BP's blown-out well in the days after the April 2010 disaster.

Regarding the $4.5 billion settlement agreement, some are wondering if it goes far enough in penalizing BP. The public interest group Public Citizen argues that the fine announced today is little more than a "slap on the wrist" for the company, since it does not include any penalties for the criminal charges beyond the fines. Tyson Slocum, energy program director at Public Citizen, says that the agreement should have included sanctions on the company—like barring it from future government contracts or from obtaining new leases.

As the Wall Street Journal reported during the spill, BP is "the single biggest supplier of fuel to the Department of Defense, with Pentagon contracts worth $2.2 billion a year." That means that in two years, the US government pays BP just about as much money as the company has agreed to pay to settle the criminal complaint. In its announcement of the agreement, BP said it has not been advised of any intent to block the company from future contracts.

This is far from the first time BP has found itself in trouble with the law. The company previously paid record-breaking fines related to a March 2005 explosion at its Texas City refinery that killed 15 employees. And just a few days ago a subsidiary of the company was forced to pay compensation to Alaska for two 2006 oil spills on the North Slope.

"This is a habitual corporate criminal and this settlement will do absolutely nothing to deter corporate crime," Slocum said.

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