$4 Billion BP Oil Spill Criminal Settlement Approved By Judge

By: From CBS News, Posted by Ralph Hipp
By: From CBS News, Posted by Ralph Hipp


NEW ORLEANS (From CBS News) -- A federal judge on Tuesday approved an agreement for BP PLC to plead guilty to manslaughter and other charges and pay a record $4 billion in criminal penalties for the company's role in the 2010 oil disaster in the Gulf of Mexico.

U.S. District Judge Sarah Vance also heard testimony from relatives of 11 workers who died when BP's blown-out Macondo well triggered an explosion on the Deepwater Horizon drilling rig and started the spill.

BP agreed in November to plead guilty to charges involving the workers' deaths and for lying to Congress about the size of the spill from its broken well, which spewed more than 200 million gallons of oil. Much of it ended up in the Gulf and soiled the shorelines of several states. The company could have withdrawn from the agreement if Vance had rejected it.

Neither the Justice Department nor BP presented arguments to the judge before her decision in New Orleans.

The deal doesn't resolve the federal government's civil claims against BP. The company could pay billions more in penalties for environmental damage.

BP separately agreed to a settlement with lawyers for Gulf Coast residents and businesses who claim the spill cost them money. BP estimates the deal with private attorneys will cost the company roughly $7.8 billion.

For the criminal settlement, BP agreed to pay nearly $1.3 billion in fines. The largest previous corporate criminal penalty assessed by the Justice Department was a $1.2 billion fine against drug maker Pfizer in 2009.

The criminal settlement also includes payments of nearly $2.4 billion to the National Fish and Wildlife Foundation and $350 million to the National Academy of Sciences.

In a court filing before the hearing, attorneys for BP and the Justice Department argued that the plea agreement imposes "severe corporate punishment" and will deter BP and other deep-water drilling companies from allowing another disaster to occur.

The Justice Department has reached a separate settlement with rig owner Transocean Ltd. that resolves the government's civil and criminal claims over the Swiss-based company's role in the disaster.

Transocean agreed to plead guilty to a misdemeanor charge of violating the Clean Water Act and pay $1.4 billion in civil and criminal penalties. U.S. District Judge Jane Triche Milazzo has scheduled a Feb. 14 hearing to decide whether to accept that criminal settlement. A different judge will decide whether to accept Transocean's civil settlement.

CBS News correspondent Mark Strassmann spoke with widowed Shelley Anderson. She appeared in court Tuesday to speak on behalf herself, her daughter Lacy and son River -- now seven and four respectively -- because her husband, Jason, was killed in the explosion while working as a rig supervisor.

"When I told my son, River, that I had to be here and I had to go and do this for daddy, he got very excited," Anderson told Strassmann outside the court. "His face lit up; 'I want to go see Daddy, too. I want to go see my daddy.' And I had to explain to him that I was coming here to do something for Daddy, but that daddy wasn't going to actually be here and that we would never, ever see him again."

Many relatives of rig workers who died in the blast submitted written statements that were critical of BP's deal. Twenty-eight-year-old Gordon Jones' family members said BP's sentence should include a personal, face-to-face apology to his widow and children by BP executives. A brother of Jones also had urged Vance to consider stiffer penalties that prohibit or limit the company's ability to operate in U.S. waters.

Vance, however, said she couldn't get involved in plea negotiations and only could impose a sentence that adheres to the agreed-upon terms if she accepted it.

Also killed were Jason Anderson, 35, of Midfield, Texas; Aaron Dale "Bubba" Burkeen, 37, of Philadelphia, Miss.; Donald Clark, 49, of Newellton, La.; Stephen Ray Curtis, 40, of Georgetown, La.; Roy Wyatt Kemp, 27, Jonesville, La.; Karl Kleppinger Jr., 38, of Natchez, Miss.; Keith Blair Manuel, 56, of Gonzales, La.; Dewey A. Revette, 48, of State Line, Miss.; Shane M. Roshto, 22, of Liberty, Miss.; and Adam Weise, 24, Yorktown, Texas.

While in general the penalty is being touted as a record amount, environmental advocates and many others felt it does little to dissuade companies such as BP from taking outsized risks to land outsized profits.

"This is a miniscule settlement, " said Tyson Slocum, director of Public Citizen's energy program. "It's a cost of doing business. If this were an individual, the keys would be thrown away. But we give enormous leniency to corporate defendants."

Slocum cited another unhappy result of the settlement: The government went to huge expense gathering evidence in the course of preparing its criminal case, and typically in a result such as this one that information is sealed from the public.

He thinks that in such cases there should be criminal penalties for high-level executives, not just mid-level managers, an argument like the one made about top level bank executives who caused the financial crisis. And, he said, such companies should be barred from getting government oil leases for at least five years.

"There need to be real sanctions," he said.

Four current or former BP employees have been indicted on separate criminal charges. BP rig supervisors Robert Kaluza and Donald Vidrine are charged with manslaughter, accused of repeatedly disregarding abnormal high-pressure readings that should have been glaring indications of trouble just before the blowout.

David Rainey, BP's former vice president of exploration for the Gulf of Mexico, was charged with withholding information from Congress about the amount of oil that was gushing from the well.

Former BP engineer Kurt Mix was charged with deleting text messages about the company's spill response.

A series of government investigations have blamed the April 20, 2010, blowout on time-saving, cost-cutting decisions by BP and its partners on the drilling project.

The oil spill itself was the largest U.S. history. Nearly three years after oil began gushing from the sea floor of the Gulf of Mexico, a large percent of the crude remains unaccounted for. New research suggests that as much as one-third of the oil released is still in the Gulf and is mixed with deep ocean sediments through a phenomenon known as the "dirty bathtub."

© 2013 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.


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