BP Agrees to Record Criminal Penalties for U.S. Oil Spill

NEW YORK | Thursday, November 15th, 2012 9:30pm EDT

BP pleaded guilty on Thursday for the explosion and oil spill at the site of its Deepwater Horizon oil rig in the Gulf of Mexico two years ago.

BP Agrees to Record Criminal Penalties for U.S. Oil Spill 01

The oil giant is ordered to pay $4.5 billion in penalties, the largest such levy in U.S. history, and plead guilty to felony misconduct in the Deepwater Horizon disaster, which resulted in the worst U.S. offshore oil spill ever. Photo: B69D/Flickr

The reached agreement announced on Thursday includes a $1.256 billion criminal fine, the largest corporate criminal penalty in U.S. history.

However, the settlement wouldn’t solve some issues such as the considerable federal civil claims against the company at the same time.

As Reuters reports, Donald Vidrine and Robert Kaluza, BP drilling managers who oversaw operations on the Deepwater Horizon rig, were charged with 23 criminal counts including manslaughter.

David Rainey, a former vice president of the company in charge of the exploration, was charged with felony obstruction of justice for allegedly lying to Congress and federal law enforcement officials about the amount of oil leaking from the well.

“BP lied to me. They lied to the people of the Gulf. And they lied to their shareholders, and they lied to all Americans,” said Representative Ed Markey, the top Democrat on the House Natural Resources Committee who led investigations at the time of the spill.

Attorneys for all three men announced their intentions to fight the charges. Reid H. Weingarten and Brian M. Heberlig, attorneys for Rainey, slammed the oil company for acquiescing to the government’s charges.

“We are profoundly disappointed that the Department of Justice is attempting to turn a tragic accident and its tumultuous aftermath into criminal activity,” the attorneys said in an emailed statement.

“We are even more disappointed that BP has succumbed to the pressure and agreed to this extortionate settlement. Mr. Rainey did not commit the crimes charged in the indictment, period. We intend to vigorously defend him at trial and are confident he will be exonerated of these baseless charges.”

The company itself said it was prepared to do battle to minimize future claims.

“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,” said Bob Dudley, chief executive, in a statement posted to the company’s website.

“From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. 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.”

Carl-Henric Svanberg, BP’s chairman, added that the resolution was “in the best interest of BP and its shareholders.”

“It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims,” Svanberg said.

David M. Uhlmann, director of the Environmental Law and Policy Program at the University of Michigan and former head of the Justice Department’s environmental crimes section, called the plea agreement “a fair resolution” of DOJ’s criminal investigation.

The specialist went on, saying that by emphasizing worker deaths and obtaining the largest criminal fines in U.S. history, the agreement was “appropriate given the scope of the tragedy.”

“There are questions that could be asked about why the investigation took so long, whether the fine should have been larger, and why BP is being given five years to pay its penalties.”

He continued, adding: “which normally occurs only when a defendant does not have sufficient financial resources to make immediate payment.”

The Gulf of Mexico disaster took lives of 11 workers. The mile-deep Macondo oil well then spewed 4.9 million barrels of oil into the Gulf over 87 days, polluting shorelines from Texas to Florida and eclipsing in severity the 1989 Exxon Valdez spill in Alaska.

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