BP to pay largest criminal penalty in history for Gulf spill
NEW ORLEANS (AP) - Two men who worked for BP during the 2010 Gulf oil spill disaster have been charged with manslaughter and a third with lying to federal investigators, according to indictments made public Thursday, hours after BP announced it was paying $4.5 billion in a settlement with the U.S. government over the disaster.
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 counts 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 disaster.
Earlier in the day, BP PLC said it would plead guilty to criminal charges related to the deaths of 11 workers and lying to Congress.
"This marks the largest single criminal fine and the largest total criminal resolution in the history of the United States," U.S. Attorney General Eric Holder said at a news conference in New Orleans.
Holder said the settlement and indictments aren't the end of federal authorities' efforts and that the criminal investigation is continuing. Holder says much of the money BP has agreed to pay will be used to restore the environment in the Gulf.
The day of reckoning comes more than two years after the nation's worst offshore oil spill. The settlement includes nearly $1.3 billion in criminal fines - the biggest criminal penalty in U.S. history - along with payments to certain government entities.
"We believe this resolution is in the best interest of BP and its shareholders," said Carl-Henric Svanberg, BP chairman. "It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims."
The settlement, which is subject to approval by a federal judge, includes payments of nearly $2.4 billion to the National Fish and Wildlife Foundation, $350 million to the National Academy of Sciences and about $500 million to the Securities and Exchange Commission. The SEC accused BP of misleading investors by lowballing the amount of crude spewing from the ruptured well.
London-based BP said in a statement that the settlement would not cover any civil penalties the U.S. government might seek under the Clean Water Act and other laws. Nor does it cover billions of dollars in claims brought by states, businesses and individuals, including fishermen, restaurants and property owners.
Holder also said a civil lawsuit will go ahead in February seeking billions more in civil penalties.
A federal judge in New Orleans is weighing a separate, proposed $7.8 billion settlement between BP and more than 100,000 businesses and individuals who say they were harmed by the spill.
BP will plead guilty to 11 felony counts of misconduct or neglect of a ship's officers, one felony count of obstruction of Congress and one misdemeanor count each under the Migratory Bird Treaty Act and the Clean Water Act. The workers' deaths were prosecuted under a provision of the Seaman's Manslaughter Act. The obstruction charge is for lying to Congress about how much oil was spilling.
The penalty will be paid over five years. BP made a profit of $5.5 billion in the most recent quarter. The largest previous corporate criminal penalty assessed by the U.S. Justice Department was a $1.2 billion fine imposed on drug maker Pfizer in 2009.
Before Thursday, the only person charged in the disaster was a former BP engineer who was arrested in April on obstruction of justice charges. He was accused of deleting text messages about the company's response to the spill.
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 counts 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 disaster.
Earlier in the day, BP PLC said it would plead guilty to criminal charges related to the deaths of 11 workers and lying to Congress.
"This marks the largest single criminal fine and the largest total criminal resolution in the history of the United States," U.S. Attorney General Eric Holder said at a news conference in New Orleans.
Holder said the settlement and indictments aren't the end of federal authorities' efforts and that the criminal investigation is continuing. Holder says much of the money BP has agreed to pay will be used to restore the environment in the Gulf.
The day of reckoning comes more than two years after the nation's worst offshore oil spill. The settlement includes nearly $1.3 billion in criminal fines - the biggest criminal penalty in U.S. history - along with payments to certain government entities.
"We believe this resolution is in the best interest of BP and its shareholders," said Carl-Henric Svanberg, BP chairman. "It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims."
The settlement, which is subject to approval by a federal judge, includes payments of nearly $2.4 billion to the National Fish and Wildlife Foundation, $350 million to the National Academy of Sciences and about $500 million to the Securities and Exchange Commission. The SEC accused BP of misleading investors by lowballing the amount of crude spewing from the ruptured well.
London-based BP said in a statement that the settlement would not cover any civil penalties the U.S. government might seek under the Clean Water Act and other laws. Nor does it cover billions of dollars in claims brought by states, businesses and individuals, including fishermen, restaurants and property owners.
Holder also said a civil lawsuit will go ahead in February seeking billions more in civil penalties.
A federal judge in New Orleans is weighing a separate, proposed $7.8 billion settlement between BP and more than 100,000 businesses and individuals who say they were harmed by the spill.
BP will plead guilty to 11 felony counts of misconduct or neglect of a ship's officers, one felony count of obstruction of Congress and one misdemeanor count each under the Migratory Bird Treaty Act and the Clean Water Act. The workers' deaths were prosecuted under a provision of the Seaman's Manslaughter Act. The obstruction charge is for lying to Congress about how much oil was spilling.
The penalty will be paid over five years. BP made a profit of $5.5 billion in the most recent quarter. The largest previous corporate criminal penalty assessed by the U.S. Justice Department was a $1.2 billion fine imposed on drug maker Pfizer in 2009.
Before Thursday, the only person charged in the disaster was a former BP engineer who was arrested in April on obstruction of justice charges. He was accused of deleting text messages about the company's response to the spill.
I hope some of this money will go to the families of the 11 dead oilrig workers. Or will they have to file their own civil suit?
I'd like to know where all this money goes...who benefits - the country or some obscure section of government?  It's all fine and dandy to fine but gouging is not...we are paying ridiculous sums of money at the pumps so over fining BP does not help us there....so who, how, where, what, when does this money go?Â
Making 30 billion a quarter profits, you think they care?
"BP will plead guilty to obstruction for lying to Congress"
BP didn't lie to Congress. Some people within BP lied to Congress. Are these people being charged as individuals? And who are the people being charged with manslaughter? Executives? Mid-level employees? Fines should be assessed against the individuals responsible. Let the former CEO pay back his bonuses for the past five years.
 @Max Quinn Totally agree.  The thing about  ""BP will plead guilty to obstruction for lying to Congress" --  is that corporations have the same level of rights as an individual (totally insane, and really gives power to some collections of persons that otherwise would never have such rights or power).  But I do totally agree that here and now individuals within BP should be faced with criminal and civil justice to be held responsible for their wrongdoings.  Similarly, in the long term, I would like to see corporate entities not hold rights on par with individuals in the US.  Stripping that power away would do a lot to keep problems from like this one from occurring in the first place.
Imagine if you killed eleven people and your punishment was forfeiture of a few months' profit. Sounds like a great racket.
Doesn't matter until some of the executives who knowingly made bad decisions get fined and/or jail time. Corporations should not be considered people.Â
mere pennies in their bucket of black gold.
The people who lost their livlihood will never see a dime, the government will take the "fine" and use it for........who knows what.
They'll just raise the price of gas to pay for the fines.
 @Kennyboy yeah and we will cahse BP out of this country, there no longer here in Longview/keslo..well at least not ath that I have seen
IT IS ABOUT FREAKING DAMN TIME!