OLD Media Moves

BP to pay fine, pleads guilty to charges

November 16, 2012

Posted by Liz Hester

BP Plc agreed to pay a record $4.5 billion fine and plead guilty to federal charges for its handling of the 2010 oil spill at the Deepwater Horizon rig in the Gulf of Mexico.

Frankly, it’s about time somebody admitted wrongdoing when something catastrophic happens. Eleven people died, and it took three months to cap the well.

From the Wall Street Journal:

Under the agreement, BP said it will plead guilty to 11 felony counts of “seaman’s manslaughter” relating to the deaths aboard the drilling rig, admitting that its workers were negligent when they misinterpreted a key well safety test.

The company also will plead guilty to one felony count of obstruction of Congress stemming from false information it gave about the rate that oil was leaking from the well.

In addition to the settlement Thursday, three former BP employees were charged by a federal grand jury with felonies in the incident, two of them for allegedly failing to carry out a critical safety test properly.

Here’s a bit more detail on the fines, charges and what’s next from the New York Times:

While the settlement dispels one dark cloud that has hovered over BP since the spill, others remain. BP is still subject to other claims, including billions of dollars in federal civil claims and claims for damages to natural resources.

In particular, BP noted that the settlement does not resolve what is potentially the largest penalty related to the spill: fines under the Clean Water Act. The potential fine for the spill under the act is $1,100 to $4,300 a barrel spilled. That means the fine could be as much as $21 billion.

In addition to the 11 felonies related to the men killed in the accident, the company agreed to plead guilty to one misdemeanor violation of the Clean Water Act and one misdemeanor violation of the Migratory Bird Treaty Act.

BP also acknowledged that it had provided inaccurate information to the public early on about the rate at which oil was gushing from the well.

The company agreed to plead guilty to one felony count of obstruction of Congress over its statements on that issue. It also agreed to pay a civil penalty of $525 million to the Securities and Exchange Commission, spread over three years, to resolve the agency’s claims that the company made misleading filings to investors about the flow rate.

It’s nice to see executives being held responsible for actions that ultimately result in the deaths of 11 people and the loss of billions of dollars from decrease fishing, tourism and other industries. These men were negligent, and they’re being held accountable for not properly doing their jobs and then for lying about it. Congratulations, Justice Department.

I’m also glad to see the media covering the story with in-depth pieces, not just summarily writing up the news releases. Coverage from the business media included quotes from oil industry experts and analysts, the World Wildlife Fund and other environmental groups, as well as a statement from BP.

Reuters even talked to the lawyers for one of the oil workers:

The lawyers for Bob Kaluza, the BP well manager aboard the rig who faces manslaughter charges, condemned the case against the four-decade oilfield veteran.

“Bob was not an executive or high-level BP official. He was a dedicated rig worker who mourns his fallen co-workers every day,” Shaun Clarke and David Gerger said in a statement.

Kaluza faces two kinds of charges related to the workers’ deaths: Involuntary manslaughter, a broad statute covering individuals whose reckless disregard leads directly to loss of life; and seaman’s manslaughter, reserved for those employed on ships whose misconduct results in death.

It’s never easy to see such widespread destruction to the environment, incomes and families. But I am glad to see the Justice Department holding a company accountable for actions. Now if only it can figure out how to make charges stick to the people at the top since they’re the ones setting the culture. And maybe this will deter other executives from cutting corners. We’re all depending on it.

Subscribe to TBN

Receive updates about new stories in the industry daily or weekly.

Subscribe to TBN

Receive updates about new stories in the industry.