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BP to Plead Guilty, Settle Criminal Charges for Deepwater Horizon Disaster


Updated 5:15 p.m.

BP admitted that their part in the Deepwater Horizon oil disaster was criminal today.The oil company is set to plead guilty to criminal charges brought against them for the Big Oozy, and pay $4 billion in fines over the next five years, as part of an agreement with the U.S. Department of Justice. A total of 14 charges were brought against the company by the DOJ today, and three BP employees were charged in connection with the disaster and spill - including two rig employees who will now face manslaughter charges.

 

The charges include 11 felony counts of Misconduct or Neglect of Ships Officers relating to the loss of 11 lives; 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. One of the charges involve communications to members of Congress that effectively lowballed the amount of oil that was spilling into the Gulf.

 

"This marks both the largest single criminal fine, and the larget total criminal resolution in the history of the United States," U.S. Attorney General Eric Holder said today at a news conference in New Orleans.

 

More than half of the fine money will be redirected to Gulf Coast states for enviornmental restoration. This includes rehabbing and restoring coastal ecosystems, barrier island restoration and river diversion projects off the coast of Louisiana that are part of the coastal master plan. $1.2 billion of the $2.4 billion headed for the Gulf Coast will fund Louisiana enviornmental restoration projects. Another $350 million will be used to fund improved oil spill prevention and response efforts in the Gulf.

 

The Restore Act, which mandates that 80 percent of civil penalties paid to the government for the disaster must be return to Gulf Coast states, does not apply in this case. However, Holder said the Justice Department structured the criminal penalties in a way that was in keeping with Congress' desires for the fines.

 

"We looked to the restore act as a rough guide to apportion what each state would receive under this criminal investigation," Acting Associate Attorney General Tony West said.

 

U.S. Sen. Mary Landrieu, Congressman Cedric Richmond and New Orleans Mayor Mitch Landrieu all applauded the money's allocation to the states.

 

"This is a tough and robust penalty that is more than three times larger than any other past settlement, and is structured in a unique way to leverage private funds, maximizing the settlement dollars," Mary Landrieu said in a statement. "I am encouraged that the Justice Department is respecting the spirit of the RESTORE Act by sending nearly $2.4 billion of the fine money to the Gulf Coast and $1.2 billion specifically to Louisiana."

 

BP will also have to employ a monitor that oversees safety standards and other rig practices and an ethics monitor. Both monitors will be reqiured to be with the company for four years.

 

The two people charged with manslaughter were the highest ranking supervisors aboard the Deepwater Horizon. Robert Kaluza, 62, of Henderson, Nev., and Donald Vidrine, 65, of Lafayette, were charged with 23 counts of involuntary manslaughter and seaman's manslaughter in connection with the deaths of the 11 rig workers who perished in the wake of the explosion.

 

"In the face of glaring red flags that the well was not secure, both men failed to take necessary actions to prevent the blowout," said Assistant U.S. Attorney Lanny Breuer.

 

The rig supervisors could face up to 10 years in prison for each count of involuntary manslaughter, and eight years for each count of seaman's manslaughter.

 

A third BP employee, 58-year-old David Rainey, was charged with obstruction of Congress for purposefully misleading the government about the amount of oil that was spilling into the Gulf. Rainey concocted his own system that produced an estimate that 5,000 barrels of oil were spilling per day. In fact, some estimates indicated about 50,000 barrels of oil were flowing from the Macondo well. Rainey concocted documents and flat-out lied about the amount of oil that was gushing into the Gulf, forming the basis for public pronouncements that BP was making about the amount of oil flowing into the Gulf.

 

BP will also face a $520 milion penalty from the Securities and Exchange Commission because they mislead investors about the amount of oil.

 

"The eyes of the world were on BP in the spring and summer of 2010," said Robert Khuzami. "The company had the opportunity...Instead BP chose to mislead the public."

 

Rainey could face up to five years in prison.

 

Holder and other U.S. Department of Justice officials repeatedly referred to the settlement as historic, and far-reaching.

 

"Everything that were are capable of doing in the criminal sphere we have done today,"  Holder said. "This is unprecdented."

 

But not everyone was pleased with Holder.

 

“Today's announcement of a proposed settlement between BP and the US government fails every aspect of the commonly accepted notion of penalty," Greenpeace senior investigator Mark Floegel said in a statement. “This proposed settlement would not hold the guilty accountable for their actions. This fine amounts to a rounding error for a corporation the size of BP."

 

Despite today's settlement with BP and the individual settlement reached earlier this year, this doesn't end the government's prosecution of the Big Oozy. Civil penalties against the company are still pending, which could amount to much more than today's penalties.

 

At the heart of those fines are whether or not BP was guilty of negligence or gross negligence in the eyes of the law. The federal government has made plain that they will attempt to charge BP with gross negligence. However, BP appears prepared to go to trial to defend against the charge. Holder indicated that settlement talks about civil penalties are stalled. 

 

"We have not reached a number that i consider satisfactory," Holder said.

 

The trial is slated to begin in February, immediately following Carnival season.

 

Justice officials also left open the possibility that there would be more criminal charges against BP employees, saying only "the investigation is ongoing."




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