BP to Pay Record Criminal Fines

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According to a recent article on fuelfix.com, BP has agreed to pay over $4 billion to the U.S. government to resolve all criminal claims stemming from the 2010 Gulf of Mexico rig explosion and oil spill. It is by far the largest criminal penalty in American history. Additionally, at least three BP workers were expected to face criminal charges in connection with the disaster and its aftermath. A criminal complaint filed by the Justice Department singled out two BP well-site leaders for the failure of a pressure test on BP’s blown-out well, and a BP executive for providing government officials with flow estimates that were lower than what the company actually knew at the time. The complaint itself charged BP with seaman’s manslaughter and other counts, but did not specify charges against individuals.

As part of its plea deal, BP said it has agreed as a company to plead guilty to 11 felony counts of misconduct or neglect of ships officers relating to the deaths of the 11 workers on the Deepwater Horizon drilling rig. BP will also plead guilty to one misdemeanor count under the Clean Water Act; one misdemeanor count under the Migratory Bird Treaty Act; and one felony count of obstruction of Congress. BP also said it will pay $525 million to settle Securities and Exchange Commission claims stemming from the disaster. That money will be paid over three years. In a filing in federal court in New Orleans, the SEC charged that BP “materially misrepresented and understated the estimated range of flow rate of oil leaking from the well in three public filings furnished to the commission,” and also omitted material information from the public filings regarding its own internal data, estimates and calculations indicating that the flow rate estimate contained in the filings was “unjustifiably” low.

Thirteen of the 14 criminal charges relate to the accident itself and are based on the negligent misinterpretation of the negative pressure test conducted on board the Deepwater Horizon, BP said. The remaining criminal count pertains to two BP communications made to a member of Congress during the spill response about flow rate estimates. BP has been accused of intentionally underestimating how much oil was flowing for weeks after the disaster. The negative pressure test allegation that BP admitted has ensnared several BP officials, including two well-site leaders involved with the blown-out well. Allegedly, one of BP’s representatives on the Deepwater Horizon voiced concern about the well pressure test hours before the rig exploded. That was BP well-site leader Donald Vidrine. Vidrine’s attorney, Robert Habans, said Thursday he has been in contact with a government official about his client. But Habans would not say whether his client will be charged, saying it’s premature “until I see the existence of charges.” Shaun Clarke, an attorney for BP well-site leader Robert Kaluza, said he is waiting to see if his client is charged. The complaint also singles out David Rainey, a former BP vice president in charge of exploration in the Gulf of Mexico. It said all three would be “separately charged.”

BP has also agreed to a term of five years’ probation. Pursuant to the terms of the plea agreement, BP has also agreed to take additional actions to further enhance the safety of drilling operations in the Gulf of Mexico. The resolution also provides for the appointment of two monitors, both with terms of four years, BP said. It is not clear if BP’s partners involved in the disaster, Deepwater Horizon rig owner Transocean and cement contractor Halliburton, also would resolve any criminal liability they might face. BP’s Macondo well blew out in the Gulf off Louisiana in April 2010, spewing nearly 4.9 million barrels of oil, according to government estimates that to this point BP has disputed. It was the worst offshore oil spill in U.S. history. Eleven rig workers were killed when the Deepwater Horizon drilling rig exploded.

If you or someone you know has been injured in an oil rig explosion or an oil spill, contact the attorneys at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner by calling (713) 222-7211 or 713-222-7211.