BP is hit with a record $4.5bn penalty over Gulf spill damage
Oil giant pleads guilty on 14 counts Managers face manslaughter charges
BP will pay the biggest criminal penalty in US legal history by some distance after reaching a $4.53bn (£2.9bn) settlement with American authorities over the Gulf of Mexico spill.
Two men who worked for the oil giant at the time of the disaster are, meanwhile, facing involuntary manslaughter charges, while a third was yesterday charged with lying to federal investigators and obstructing an enquiry into the spill by the US Congress.
In its settlement, which remains subject to court approval, the FTSE 100 oil giant agreed to plead guilty to 14 counts of criminal misconduct to resolve all federal criminal charges and claims by the Securities and Exchange Commission (SEC) relating to the Deepwater Horizon spill in 2010, which killed 11 workers and spilled nearly 5 million barrels of crude oil into the Gulf of Mexico.
Penalties agreed as part of the deal will see BP paying $4bn to the Department of Justice and $525m to the SEC and will increase the charge it is taking to cover the costs of the spill to $41.95bn. The fine dwarfs the previous record US criminal penalty when Pfizer, the pharmaceutical company, paid $1.3bn in 2009 for marketing fraud relating to pain medicine.
Bob Dudley, BP's chief executive, said: "We apologise for our role in the accident, and as today's resolution with the US government further reflects, we have accepted responsibility for our actions."
The deal does not cover federal civil claims, including damages from the Clean Water Act, federal and state natural resources damages claims or outstanding private civil claims.
Separately, a federal inducement unsealed in New Orleans charged the two highest ranking BP supervisors who were on board the ill-fated rig on the day of explosion with 23 criminal counts, according to US Attorney General Eric Holder.
Speaking in New Orleans, he said: "I want to be absolutely clear that today's resolution [with BP] does not mark the end of our efforts. In fact, our criminal investigation remains ongoing – and we'll continue to follow all credible leads and pursue any charges that are warranted."
The Department of Justice named the two supervisors as BP well site leaders Robert Kaluza and Donald Vidrine. They are alleged to "engaged in negligent and grossly negligent conduct", violating, according to the Department, statues related to involuntary manslaughter and seaman's manslaughter, and the Clean Water Act.
David Rainey, a former BP executive who was vice president of exploration for the Gulf of Mexico, was also charged yesterday in a separate indictment. He allegedly lied to investigators and obstructed a Congressional inquiry. In its settlement, BP admitted that the 58 year old "manipulated internal estimates to understate the amount of oil flowing from the well," according to the Department. The company further admitted that, while Mr Rainey was preparing manipulated estimates, its internal teams were reporting what were said to be "significant higher estimates"
As part its agreement, BP is pleading guilty to 11 felony counts of "misconduct or neglect of ships officers" relating to the lives lost. It is also pleading guilty to one misdemeanour count under the Clean Water Act, one misdemeanour count under the Migratory Bird Treaty and one felony count of obstruction of Congress.
BP has also agreed to take actions to improve the safety of its drilling operation in the Gulf of Mexico, which is enforceable by court. These include third-party auditing and verification of its risk management process, extra staff training and measures to improve the functioning of blowout preventers and cementing.
The deal is a relief to BP, removing a key uncertainty over how much the spill will cost the company. However, it falls short of BP's hopes that it could resolve all of its outstanding civil and criminal actions, including damages claims or outstanding private civil claims. BP could be liable for a maximum penalty of $5.4bn under the Clean Water Act alone, a figure which could rise to $21bn if the company is found to be grossly negligent, a claim it has denied. If that happened, the total cost of the spill to BP could soar way beyond $41 bn since the group has only set aside $3.5bn to cover penalties relating to the Clean Water Act.
The fines announced yesterday far outstrips outstrip BP's last major settlement with the Department of Justice in 2007 when it paid out about $373m to resolve three separate inquiries into a 2005 Texas refinery explosion, an Alaska oil pipeline leak and fraud for conspiring to corner the US propane market.
BP's shares fell by 0.35p to end the day at 425.4p.
BP $4.53bn (Gulf oil spill, 2012)
GSK $3bn (various drugs, 2012)
Pfizer $2.3bn (Bextra, 2009)
Enron $1.5bn (improper trading, 2005)
Johnson & Johnson $1.1bn (Risperdal, 2012 )
US indictments: The BP managers facing charges
Mr Rainey was the former BP Vice President in charge exploration in the Gulf of Mexico. The 58 year old, who was part of the unified command handling the spill, is charged with false statements to law enforcement officials and of obstructing a Congressional probe into the spill. The allegation is that he was manipulating estimates that played down the size of the leak. If convicted, he faces a maximum penalty of five years behind bars on each count.
Robert Kaluza and Donald Vidrine
Mr Klaus and Mr Vidrine were Well Site Leaders – or the highest ranking BP supervisors on the Deepwater Rig when the explosion occurred in April 2010. They are alleged to have ignored what the Department of Justice called "clear indications" that oil and gas were flowing into the rig well. In doing so they failed to take steps to head-off the blowout. This is alleged to have resulted in the loss of control of the well, "resulting," prosecutors allege, "in catastrophe".
A conviction would see the two men each face up to 10 years in prison on each of the of 11 seaman's manslaughter counts, up to 8 years on each of the 11 involuntary manslaughter counts and up a year behind bards on count of violating the Clean Water Act.
Diving in at the deep end is no excuse for shirking the style stakes
- 2 Why I'm on the brink of burning my Israeli passport
- 4 War is war: Why I stand with Israel
- 5 Blackest is the new black: Scientists have developed a material so dark that you can't see it...
Ian Thorpe gay: Olympic swimmer comes out in Parkinson interview
Stephen Fry ‘criticises Operation Yewtree in dinner party rant’ calling for tougher laws to deter false sex abuse allegations
Israel-Gaza conflict: ‘Sderot cinema’ image shows Israelis with popcorn and chairs 'cheering as missiles strike Palestinian targets'
Israel-Gaza conflict: Israeli air strike destroys home for the disabled killing two women residents
Israel-Gaza conflict: Israeli PM says conflict may 'continue for a long time' as hundreds of Palestinians flee their homes
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Australia facing international condemnation after turning around Sri Lankans at sea
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...