BP’s $4 Billion Plea Deal Approved by Court

Posted January 29, 2013 in Criminal Law Government by

The Deepwater Horizon rig in flames

Anchor-handling tugboats battle the blazing remnants of the off shore oil rig Deepwater Horizon. A Coast Guard MH-65C dolphin rescue helicopter and crew document the fire aboard the mobile offshore drilling unit Deepwater Horizon, while searching for survivors. Multiple Coast Guard helicopters, planes and cutters responded to rescue the Deepwater Horizon's 126 person crew. Image source US Coast Guard - 100421-G-XXXXL.

A federal judge accepted a guilty plea agreement with BP, settling the company’s criminal charges related to the 2010 Deepwater Horizon drilling rig explosion that killed 11 people and spewed roughly five million barrels of crude oil into the Gulf of Mexico. The deal was approved despite requests for harsher penalties from injured rig workers and families of those who were killed.

BP pleaded guilty to 14 counts, including 11 felony counts of seaman’s manslaughter and one count of obstructing congress. Though separate manslaughter charges are pending against two BP well site leaders, the plea agreement does not include jail time for any executives or workers. BP will pay a total of $4 billion in criminal penalties, submit to government monitoring and serve five years probation.

At least 30 people with personal connections to the explosion provided victim impact statements to U.S. District Court Judge Sarah Vance, several asking her to impose tougher penalties or reject the plea agreement and send BP to trial. Courtney Kemp-Robertson, whose husband was killed in the explosion, said in her statement that only a public trial would reveal the details needed to reform the oil exploration industry and get justice for the victims. But Vance agreed with the Department of Justice that the plea agreement is sufficient.

“The plea agreement imposes severe corporate punishment, appropriately reflects the criminal history of other companies with the BP group of companies, the serious nature of the instant offenses, and the impact of the Macondo blowout and spill on the Gulf Coast and our nation as a whole; and deters BP and other deep-water drillers from permitting such a catastrophe to occur in the future,” wrote Assistant Attorney General Lanny A. Breuer in the Justice Department’s last filing on the plea deal.


Fines Piling Up

More than half of BP’s $4 billion in penalties, which includes the largest single criminal fine in U.S. history, will go to the National Fish & Wildlife Foundation for ongoing cleanup and conservation efforts along the Gulf Coast. More than $1 billion will go to the U.S. Coast Guard’s Oil Spill Liability Trust Fund, and $350 million will fund conservation studies at the National Academy of Sciences.

The $4 billion payment is neither the beginning nor the end of BP’s financial obligations to victims of the explosion and oil spill. BP says it has already spent more than $24 billion on cleanup and compensation for victims, including a $20 billion victim trust fund it was ordered to establish in 2010.

Numerous civil claims against BP have also been consolidated into a single civil action that is scheduled to go to trial on Feb. 25. BP estimates that its total payments and penalties related to Deepwater Horizon will eventually reach $42 billion.

But so far, BP’s debts and penalties haven’t interfered with its ability to do business. And this latest $4 billion dollar fine isn’t likely to, either, as BP is allowed to pay it in installments over the next five years.

BP netted a $16 billion profit in 2011 and analysts expect 2012 profits of more than $17 billion when it reports its earnings next month.

What do you think of the BP plea deal? Is $4 billion a slap on the wrist or an appropriately hefty sum? Should prosecutors have brought charges against BP executives? Share your thoughts in the comments section below.

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