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UPDATED: BP Agrees to Largest Criminal Penalty in History for Oil Spill — 2 Employees Face Manslaughter Charges

Nov. 15, 2012 11:20am Becket Adams

Oil Producer BP Reportedly hit with Record Breaking Fine for Gulf Coast Oil Spill

BP Oil Spill (AP)

Oil giant BP has agreed to pay the largest criminal penalty in U.S. history, totaling billions of dollars, for the 2010 oil spill in the Gulf of Mexico, a person familiar with the deal said Thursday.

It is being reported that BP will plead guilty to 11 felony counts and that the fine could be as much as $4.5 Billion, according to Bloomberg.

The person, who spoke on condition of anonymity because they were not authorized to speak on the record about the deal, also said two BP PLC employees face manslaughter charges over the death of 11 people in the explosion of the Deepwater Horizon oil rig that triggered the massive spill.

The person said BP will plead guilty to obstruction for lying to Congress about how much oil was pouring out of the ruptured well. The person declined to say exactly how much the fine in the billions of dollars would be.

The Deepwater Horizon rig, 50 miles off the Louisiana coast, sank after the April 20, 2010, explosion. The well on the sea floor spewed an estimated 206 million gallons of crude oil, soiling sensitive tidal estuaries and beaches, killing wildlife and shutting vast areas of the Gulf to commercial fishing.

The spill led to a moratorium on deepwater drilling while officials and the oil industry rushed to figure out how to clean up the mistake.

BP’s “environmentally-friendly” image was shattered, and independent gas station owners who fly the BP flag claimed they lost business from customers who were upset over the spill. BP chief executive Tony Hayward stepped down after the company’s repeated gaffes, including his statement at the height of the crisis: “I’d like my life back.”

Former BP CEO Tony Hayward speaks during recovery operations at the Deepwater Horizon oil spill site in the Gulf in this May 28, 2010 photo (AP)

The cost of BP’s spill far surpassed the Exxon Valdez spill in 1989. Exxon ultimately settled with the U.S. government for $1 billion, which would be about $1.8 billion today.

The government and plaintiffs’ attorneys also sued Transocean Ltd., the rig’s owner, and cement contractor Halliburton, but a string of pretrial rulings by a federal judge undermined BP’s legal strategy to pin blame on them.

At the time of the explosion, the Deepwater Horizon was drilling into BP’s Macondo well. The rig sank two days later.

After several attempts failed, engineers finally were successful in capping the well on July 15, 2010, halting the flow of oil into the Gulf of Mexico after more than 85 days.

The disaster also created a new lexicon in American vocabulary — such as top kill and junk shot — as crews used innovative solutions to attempt to plug the spewing well with pieces of rubber. As people all over the world watched a live spill camera on the Internet and television, a seemingly impotent Obama administration dealt with a political headache, in part because the government grossly underestimated how much crude was spilling into the Gulf.

President Obama was harshly criticized for his slow response to the spill (AP)

U.S. District Judge Carl Barbier in New Orleans was assigned to oversee tens of thousands of court claims spawned by the explosion. A trial date was set, but Barbier postponed it so BP could hammer out a deal with attorneys for Gulf Coast shrimpers, commercial fishermen, charter captains, property owners, environmental groups, restaurants, hotels and others who claim they suffered economic losses after the spill. Relatives of workers killed in the blast also sued.

In a pretrial court filing, the Justice Department said it would argue that BP’s actions and decisions leading up to the deadly blowout amounted to gross negligence.

“We do not use words like ‘gross negligence’ and ‘willful misconduct’ lightly,” an attorney for the Justice Department, the same agency headed by Eric Holder, wrote.

“But the fact remains that people died, many suffered injuries to their livelihood, and the Gulf’s complex ecosystem was harmed as a result of BP and Transocean’s bad acts or omissions,” the attorney added.

The Justice Department opened a criminal investigation of the spill. The only person facing charges so far is former BP engineer Kurt Mix, who was arrested in Texas in April on obstruction of justice charges. Mix is accused of deleting text messages about the company’s response to the spill, not what happened before the explosion.

(AP)

BP also sued Transocean (and vice versa), although some of those cases were settled last year. BP has collected at least $40 billion in damages from Transocean.

And there are still other claims against BP from financial institutions, casinos and racetracks, insurance companies, local governments and losses caused by a government-imposed moratorium on drilling after the spill.

None of those are covered by BP’s proposed settlement with the private lawyers.

A series of government investigations have spread blame for the disaster.

In January 2011, a presidential commission found that the spill was caused by time-saving, cost-cutting decisions by BP, Halliburton, and Transocean that created unacceptable risk. The panel didn’t point blame at any one individual, concluding the mistakes were caused by systemic problems.

In this June 23, 2011, photo, crews work to clean up oil from the Deepwater Horizon oil spill washed ashore at Pensacola Beach in Pensacola, Fla. (AP)

In September 2011, however, a team of Coast Guard officials and federal regulators issued a report that concluded BP bears ultimate responsibility for the spill. The report found BP violated federal regulations, ignored crucial warnings and made bad decisions during the cementing of the well a mile beneath the Gulf of Mexico.

BP has repeatedly said it accepts some responsibility for the spill and will pay what it owes, while urging other companies to pay their share.

BP waived a $75 million cap on its liability for certain economic damage claims under the 1990 Oil Pollution Act, though it denied any “gross negligence.”

Follow Becket Adams (@BecketAdams) on Twitter

The Associated Press contributed to this story. All photos courtesy the AP. This story has been updated.

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Comments (34)

oldincarolina
Posted on November 16, 2012 at 10:11am
What is this about Obama and the Chicago thugs having something to do with the BP oil spill ?
It IS a known fact that Obama hates oil drilling and oil ..

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Capt-Dax
Posted on November 16, 2012 at 8:00am
The key is to follow the money trail.

JoAnne Moretti, along with a team of investigators, delved into records which pointed to a paper trail connecting the major players in this disaster–BP, Deep Water Horizon, Halliburton, Citigroup, Goldman-Sachs, the U.S. Government, and a company called ‘NALCO.’

A few recognizable names of individuals involved in the paper trail also surfaced–Warren Buffet, George Soros, John Holdren, Tony Rezko….and Barack Obama.

The chief executive of BP sold £1.4 million of his shares in the fuel giant weeks before the Gulf of Mexico oil spill caused its value to collapse.

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/7804922/BP-chief-Tony-Hayward-sold-shares-weeks-before-oil-spill.html

There is a boot on the throat of the press:

Conservative Examiner has also learned that the few authorized journalists and photographers that are allowed in the area have been instructed by the Feds not to write anything critical of the Obama Administration’s response–or shall we say the lack thereof–to the crisis. Photographers have also been instructed to limit photographs of the devastation

http://www.examiner.com/x-37620-Conservative-Examiner~y2010m6d6-More-on-fallout-from-ObamaBP-Gulf-oil-disaster

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Junter
Posted on November 16, 2012 at 1:02am
4.5 billion? yawn… Just a drop in the bucket for BP. All smoke and mirrors to convince US citizens our government doesn’t work for the elite class. Are you convinced?

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ginger100
Posted on November 16, 2012 at 12:06am
BP responsible for 11 deaths and fined 4.5 billion. US gov won’t own up to fast and furious, Benghazigate and who knows what else. To our armed forces and border patrol, you got no cover yourfcked

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Carefreeflyer
Posted on November 15, 2012 at 7:59pm
The incompetent Obama administration never made it a Civil Lawsuit. Thus all the money goes to the Government to be squandered by incompetent bureaucrats, instead of the thousands of businesses and lives that have been destroyed.

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oldincarolina
Posted on November 15, 2012 at 5:02pm
Had the government regulators been doing their job the way they were supposed to there probably never would have been an oil leak/explosion. Just sayin’

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American_Made
Posted on November 15, 2012 at 3:25pm
Well I guess know we know how he is going to get additional revenue. Fine companies unreasonable amounts of money for us to pay in raised cost at the pump. Either this moron has absolutely no idea how economics works or he knows he is screwing the American public and most people are big enough idiots they cannot comprehend the fact they are getting screwed.

Over time large companies like this that get these big fines from the EPA or governments just pass it off as a cost of doing business to the consumer. That would be you and I. See that Denny’s is now charging a 5% surcharge to cover Obastard care? That’s what happens and that will happen here as well.

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- jaemd
  Posted on November 15, 2012 at 3:41pm
  You might want to recall that 11 people died in that accident, an accident that wouldn’t have happened if people had observed the safety protocols. If you think that’s fine, then have the guts to come out and say so. Personally, I’m happy to see the individuals who caused that accident held responsible for those deaths. I’m also glad to see the company that allowed such lax practices – even encouraged them – to pay a penalty in both money and public shame. Maybe, just maybe, the next company will think twice before cutting corners because they don’t want to have to go through the hassle that BP did. And maybe other workers won’t have to die such needless deaths in the future.
  
  Report this comment
truthsurfer
Posted on November 15, 2012 at 2:10pm
This barak omuslims sign to oil companies drill here and you will go to prison, another shakedown by the kenyan regimes.

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Go Glenn
Posted on November 15, 2012 at 1:51pm
Obama is a more powerful judge than the judge in the case. He got $20Billion out of them for cleanup just by saying “You oil bad……..earth good……..you pay big time!!!!”

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raderby
Posted on November 15, 2012 at 1:26pm
when is someone in the WH going to charged with manslaughter?

BENGHAZI

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- flipp457
  Posted on November 15, 2012 at 4:08pm
  9/11 was an inside job… why don’t you cry that the truth be uncovered
  
  Report this comment
YOUR NOT GETTING MY GUNS
Posted on November 15, 2012 at 12:51pm
Where were the federal inspectors while this was being built? Your would think there would be a team of them overseeing this operaton. Why didn’t they catch the faulty materials? Just asking

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moreteaplease
Posted on November 15, 2012 at 12:44pm
“The person said BP will plead guilty to obstruction for lying to Congress….”
——————————————————-
I can think of quite a few people who should be run up on this same charge. Too funny.

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- Bob
  Posted on November 15, 2012 at 3:34pm
  A truer statement has never been made!
  
  We have elected the enemy, AGAIN!?
  
  Report this comment
Anonymous T. Irrelevant
Posted on November 15, 2012 at 12:36pm
“a seemingly impotent Obama administration dealt with a political headache, in part because the government grossly underestimated how much crude was spilling into the Gulf.”
==============================================
How about an ABSENT President? I seem to remember him playing golf and taking a vacation and doing nothing about CLEANING the spill, just stopping drilling, which doesn’t do a THING to stop an oil spill. He got his photo ops and got the hell out of Dodge, because he was clueless on how to lead.
OTHER people did his job, that he took credit for, and the Gulf ultimately took care of itself.

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- rd11ok
  Posted on November 15, 2012 at 2:50pm
  Not to mention that Obama used this ordeal to suspend drilling which is still way below where it should be TODAY!
  
  Report this comment
- TexVet61
  Posted on November 15, 2012 at 3:43pm
  I hate this freaking idiot
  
  Report this comment
Cavallo
Posted on November 15, 2012 at 12:28pm
How much will my gas have to go up to cover this fine that is funneled directly to government coffers?

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- moreteaplease
  Posted on November 15, 2012 at 12:46pm
  That same question came to my mind as well.
  
  Report this comment
banjarmon
Posted on November 15, 2012 at 12:12pm
Gulf oil spill and Sandy…..and he was still elected in a fraudulent election…SHAME on those who voted for him!!!

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- encinom
  Posted on November 15, 2012 at 12:40pm
  A hurricane and BP’s oil spill is Obama’s fault. Deranged much?
  
  Report this comment
- Spyderco
  Posted on November 15, 2012 at 1:10pm
  BP happened, Obama said no more drilling. Then he went to Brazil and told a Soros company that we want to buy from them. This is like Broadwell’s snatch, a bit fishy.
  
  Report this comment
RJJinGadsden
Posted on November 15, 2012 at 12:11pm
Anybody here want to delude him/her-self into believing that the people most effected will receive even a dime of this money? Only lawyers and governments will enrich themselves from this.

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Steve28
Posted on November 15, 2012 at 11:57am
So how many billion does it take to punish a company and whose getting rich off this? Now how much will all gas cost to cover potential 50 billion accidents. I agree they and maybe some others dropped the ball, but maybe if they made it possible for drilling on Federal land and in lower depth areas these risk would be more manageable.

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- Anonymous T. Irrelevant
  Posted on November 15, 2012 at 12:45pm
  It will never happen with this administration, they HATE oil, even though it is a natural product of the earth. I heard that Obama just signed an order to stop drilling in the West.
  http://weaselzippers.us/2012/11/09/obama-admin-unveils-plan-to-close-1-6-million-acres-of-federal-land-slated-for-oil-shale-development/
  
  Report this comment
drphil69
Posted on November 15, 2012 at 11:53am
“The well on the sea floor spewed an estimated 206 million gallons of crude oil, soiling sensitive tidal estuaries and beaches, killing wildlife and shutting vast areas of the Gulf to commercial fishing.”

Yes, and how bad would it have been if obama had allowed containment to be moved from New England, or accepted help from foreign govts? But instead, he hid behind “rules and regs”… but they never bother him when he writes his exec orders…

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Nevermind
Posted on November 15, 2012 at 11:52am
muffythetuffy

Natural gas production is next. Secession is the only answer.
**********

Well since most of the Governors said that they will not support secession then you only have 1 answer…Leave the USA!! If you dont like our system of free and faire elections then go someplace else. The USA dont need a bunch of sore losers that will speak of secession just because the GOP didnt win the white house. Go wipe your tears, pack a bag and get out of the USA!! Freaking traitor

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Militiaofone
Posted on November 15, 2012 at 11:50am
Maybe this is really eco-terrorism?

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contkmi
Posted on November 15, 2012 at 11:32am
BP got shafted and railroaded. The administration lied.

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- muffythetuffy
  Posted on November 15, 2012 at 11:42am
  OBAMA WILL INSURE NO OIL COMPANY WILL DARE TO DRILL ONE DROP OF OIL IN OR NEAR THE US.
  
  Natural gas production is next. Secession is the only answer.
  
  Report this comment
- Government_Goodies
  Posted on November 15, 2012 at 11:47am
  Muffy. Meds will help.
  
  Report this comment
- Pork_Anvil
  Posted on November 15, 2012 at 11:55am
  @Muffy: secession, yes. Please leave.
  
  And PS, LOL @ secession!
  
  Report this comment
- themachinist239
  Posted on November 15, 2012 at 12:01pm
  Yes poor BP. They shouldn’t have to pay for the 11 lives lost, the thousands of people they put out of work, the permanent damage to the habitat, or for the clean up efforts, right? The law is the law and they will right the wrong the only way they know how; with their wallets.
  
  In fact, BP can afford it now more than ever due to their tax rate being cut by 4% and their ability to use their projected profit losses and cleanup expenses as a tax write-off.
  
  “Steve Ellis, vice president of Taxpayers for Common Sense, who examined the company’s annual report, said that’s like having extra money in the bank because BP didn’t have to fork that amount over to Uncle Sam.” (http://www.foxnews.com/politics/2011/04/22/bp-cut-tax-13b-losses-spill/)
  
  So
  How do you think they were “shafted”? Should companies not be held responsible for egregious offenses like this? Should they be invincible?
  
  Report this comment

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