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Thursday, November 15, 2012

BP Will Plead Guilty and Pay Over $4 Billion



HOUSTON — BP, the British oil company, said on Thursday that it had agreed to pay $4.5 billion in fines and other penalties and to plead guilty to 14 criminal charges related to the rig explosion two years ago that killed 11 people and caused a giant oil spill in the Gulf of Mexico.

In a rare instance of seeking to hold individuals accountable for company misdeeds, the Justice Department also filed criminal charges against three BP employees in connection with the accident.

“This is unprecedented, both with regard to the amounts of money, the fact that a company has been criminally charged and that individuals have been charged as well,” Attorney General Eric H. Holder Jr. said at a news conference in New Orleans to announce the settlement.

The government said that BP’s negligence in sealing an exploratory well caused it to explode, sinking the Deepwater Horizon drill rig and unleashing a gusher of oil that lasted for months and coated beaches all along the Gulf Coast. The company initially tried to cover up the severity of the spill, misleading both Congress and investors about how quickly oil was leaking from the runaway well, according to the settlement and related charges.

While the settlement dispels one dark cloud that has hovered over BP since the spill, it does not resolve what is potentially the largest penalty related to the incident: the company could owe as much as $21 billion in pollution fines under the Clean Water Act if it is found to have been grossly negligent. Both the government and BP vowed to vigorously contest that issue at a trial scheduled to begin in February.

Under its deal with the Justice Department, BP will pay about $4 billion in penalties over five years. That amount includes $1.256 billion in criminal fines, $2.394 billion to the National Fish and Wildlife Foundation for remediation efforts and $350 million to the National Academy of Sciences. The criminal fine is one of the largest levied by the United States against a corporation.

BP also agreed to pay $525 million to settle civil charges by the Securities and Exchange Commission that it misled investors about the flow rate of oil from the well.

In addition, the company will submit to four years of government monitoring of its safety practices and ethics.

“All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident, as well as the impact of the spill on the Gulf Coast region,” Robert W. Dudley, BP’s chief executive, said in a statement. “We apologize for our role in the accident, and as today’s resolution with the U.S. government further reflects, we have accepted responsibility for our actions.”

A broader settlement that would have resolved the Clean Water Act claims failed to win agreement from some parties, in particular the state of Louisiana. BP and the government now intend to go to trial on those claims in February.

The government charged the top BP officers aboard the drilling rig, Robert Kaluza and Donald Vidrine, with manslaughter in connection with each man who died, contending that the officials were negligent in supervising tests to seal the well.

Prosecutors also charged David Rainey, BP’s former vice president for exploration in the Gulf of Mexico, with obstruction of Congress and making false statements for understating the rate at which oil was spilling from the well.

As part of its plea agreement, BP admitted that, through Mr. Rainey, it withheld documents and provided false and misleading information in response to the House of Representatives’ request for information on how quickly oil was flowing. While Mr. Rainey was publicly repeating BP’s stated estimate of 5,000 barrels of oil a day, the company’s engineering teams were using sophisticated methods that generated significantly higher estimates. The Flow Rate Technical Group, consisting of government and independent scientists, later concluded that more than 60,000 barrels a day were leaking into the gulf during that time.

Lawyers for all three men charged denied that their clients had committed any criminal wrongdoing.

“This is not justice,” Mr. Kaluza’s lawyers, Shaun Clarke and David Gerger, said in a statement. “After nearly three years and tens of millions of dollars in investigation, the government needs a scapegoat.”

Mr. Holder, the attorney general, said that the government’s investigation was continuing and that other criminal charges could be filed.


7 comments:

mugabe said...

GAW -

Good for you!

chicken little said...

It is 7:22am. I have yet to have coffee. I turn on my tv to Bloomberg and see a woman from Brown university that is speaking to tell us that: "part of the problem is we don't have enough kids in college." Then when they ask her about student DEBT, she says: "I don't have a problem with that. When you look at their lifetime earnings of $500,000 to a MILLION dollars over their lifetime, I think graduating with debt isn't a big deal."

And people wonder why I am 'cranky'?

Perhaps our biggest problem isn't just politicians---it's EDUCATORS.

I say this as my 3rd grade granddaughter is learning geometry...but not learning the concepts to make it interesting or how to use it. Just how to tag rays, angles, etc. Oh, yes, that will really stick with her. PRACTICAL KNOWLEDGE rules, IMO and THAT is why you have geniuses who don't go to college who invent, who produce, who read and understand concepts and philosophies who can change the world...and why these 'educated' people like Bernanke don't get it.

chicken little said...

Congratulations, GAW. That is using your smarts and your common sense.

Mammoth said...

One more congrats for you, GAW. Nothing wrong with moving up in the world as long as you don't accomplish this by using your fellow human beings as rungs as you climb the ladder of success.

Mammoth said...

CL, do you want to make geometry have meaning for your granddaughter? Then show her how to measure the height of a tree by doing the following:

Have Hubby cut a stick that is the same length as your granddaughter's arm. Go outdoors and pick out a tree, and have her hold her arm straight out, with the stick held in a vertical position facing the tree.

Tell her to walk either towards the tree or away from it, until the top of the stick aligns with the top of the tree.

Presto - she is now standing (approximately) the same distance from the tree, as that tree is tall. Get out a measuring tape and measure her distance to the bast of the tree, which will gouve you it's height.

Now, bring her back inside and have her draw a picture showing her holding the stick, and the tree itself.

THIS is Geometry and your granddaughter is learning the utility of an equilateral triangle!

chicken little said...

Mammoth--that is PERFECT. And we have the grandkids again next week I can do that. I copied it off so I don't forget the instructions. Thank you.

Her grandfather made an octagon with folds for all the symmetrical angles for her. At least we are trying to come up with ideas.

I was thinking today that when she is ready to graduate high school, my advice may be for her to look around and see what it is that people really NEED and then come up with some way to provide it with cost efficiency.

Queenbee said...

Mammoth what a great and practical idea. Thank you for sharing.