BP Gulf Oil Spill Probe: $4.5 Billion Settlement Isn't the End, Says AG Holder

BP Gulf Oil Spill SettlementBy MICHAEL KUNZELMAN

NEW ORLEANS -- 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.

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14 Comments

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gmydogbud

How much of that money will the people who live, own businesses and who lost their employment receive or will all this money go to the government?

November 17 2012 at 7:12 AM Report abuse +1 rate up rate down Reply
freethedems2012

Estuaries along the Gulf Coast have been destroyed. They are the beginning of all sea life.

November 16 2012 at 5:30 PM Report abuse +1 rate up rate down Reply
nocnurzfred

Is this the same SEC that has bungled things time & again? Prior to the Macondo well explosion, this was described as possibly the largest find in the Western Hemisphere ever. Does anybody believe all the oil gushed out of that sucker? They put a band aid on it, and we all know that band aids are not meant to be permanent. Who is going to deal with this disaster when [not if] that band aid gives way? Redrill & empty this monster before it comes back to haunt the Gulf abain.

November 16 2012 at 9:35 AM Report abuse +1 rate up rate down Reply
bocavert

There seem to be 2 important points ignored. One that oil, or mining for that matter should not be allowed in "at risk or sensitive areas", Who makes that determination? Second point is that not only do we subsidize these behemouth companies, we obviously under tax them; allowing for cleanup, disaster or slush funds. In my opinion no entity should be allowed to be so big not to fail. Tax the excess profits out of them, let them become competitive in the market with smaller entities or companies. Why should the wealthy and powerful be granted all the breaks?

November 16 2012 at 8:19 AM Report abuse rate up rate down Reply
dquandle

Hoping we extract at least $30 billion more out of the vile criminal company and grind it into the ground.

November 15 2012 at 11:56 PM Report abuse -3 rate up rate down Reply
billybuttlooker

I wonder if the republicans are going to apologize for the way the goverment treated them again

November 15 2012 at 8:37 PM Report abuse -1 rate up rate down Reply
1 reply to billybuttlooker's comment
freethedems2012

The Dumbercraps should.

November 15 2012 at 10:00 PM Report abuse +1 rate up rate down Reply
Gilbert

And now the Replicans in Congress will pass some sneaky piece of tax legislation that allows BP to write off the payment as a business loss, to get all the money back. So in the end the TAXPAYERS get stuck with the bill for the cleanup.

This has been done before on many occasions with other Corporations that had to make large settlements with the U.S. Goverment.

November 15 2012 at 6:58 PM Report abuse -1 rate up rate down Reply
1 reply to Gilbert's comment
freethedems2012

Malarkey

November 15 2012 at 10:00 PM Report abuse rate up rate down Reply
lucitee

PLEASE tell me why the hell our Government gets awarded BILLIONS of dollars, on top of Billions SUPPOSEDLY still reserved for folks affected by the BP Oil spill? And most of it YET to be given to those who lost so much? Where is THAT money, and who is in charge of it, and how much has been reluctantly, red-taped to the max, and resentfully doled out? And what will happen to the latest Gpvernment "windfall"? We KNOW that a huge amount of all revenues we have coming into our COFFERS will be sent to Radical Countries for weapons to blow our dumb brains out! IF these BP charges had been decided in a CIVIL Court, (which it should have been), the "settlement" would/could go to the families who lost their loved ones, their livelyhood! WHO made the decision to make it a Federal Case? BP's felonies were committed against the coastal STATES and its people! NOT our Government! IT was reimbursed by BP! If you truly need an answer of why the Federal Court got involved, you haven't "been here" in awhile have you?

November 15 2012 at 6:22 PM Report abuse +1 rate up rate down Reply
1 reply to lucitee's comment
dennyinusa

I will help you understand article, next time read article before ranting.

Federal government imposes fine to recoup money spent on coastguard and other government agencies that were on hand for cleanup, capping well, also to pay for investigating what went wrong, court cost for criminal and civil trails, etc.

They damaged the environment, people’s lives and other businesses. If people have health problems they will be claiming disability and Medicaid. If businesses shut down you have more people getting food stamps and welfare.

They are still seeing affects of Exxon oil spill in Alaska. BP will not be there for these people 5-10-20 years from now.

This has costs taxpayers a lot of money. I expect are reps, to recoup as much as possible from people who were at fault. The government agencies and federal government represent the people of USA that includes you.

This disaster was caused by corporations not the government agencies or the people of USA.

State and individual are not included in this settlement. Read below.

“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.”

“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.”

November 15 2012 at 9:07 PM Report abuse -1 rate up rate down Reply
bobbsafe

I don't see why BP should even be ALLOWED to drill in our waters. We have plenty of off shore capabilities that we don't need them over here. That Gulf Spill will never be 100% overcome. Why would we allow them to try it again? I woulkd like to see a turn "back to American" for everything - including manufacturing. So what if we are not as "cheap" as China - we need to get some sense of "American done and made" again.
The more I hear of TV ads with the phony Brittish accent - to make it sound "special" - the less i want to see BP back drilling in OUR waters. We do not NEED that anymore.

November 15 2012 at 5:41 PM Report abuse -1 rate up rate down Reply
1 reply to bobbsafe's comment
s.kohanski

You've been bobbing on too much donkey dorkage

November 15 2012 at 6:00 PM Report abuse rate up rate down Reply
cynthiahoffmann

Gosh O gee willikers, ... I wonder who is going to pick up the cost of this,......,

November 15 2012 at 5:17 PM Report abuse rate up rate down Reply