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Feds weigh a criminal probe of BP

The focus is on whether the oil company skirted safety regulations and misled the U.S. government about its ability to respond to a blowout.

May 28, 2010|By Richard A. Serrano, Tribune Washington Bureau

Reporting from Washington — — A team of top federal prosecutors and investigators has taken the first steps toward a formal criminal investigation into oil giant BP's actions before and after the drilling rig disaster off Louisiana.

The investigators, who have been quietly gathering evidence in Louisiana over the last three weeks, are focusing on whether BP skirted federal safety regulations and misled the U.S. government by saying it could quickly clean up an environmental accident.

The team has met with U.S. attorneys and state officials in the Gulf Coast region and has sent letters to executives of BP and Transocean Ltd., the drilling rig owner, warning them against destroying documents or other internal records.

Underscoring the gravity of the inquiry, the team is headed by Assistant Atty. Gen. Ignacia Moreno of the environment and natural resources division and Assistant Atty. Gen. Tony West, who heads the Justice Department's civil division.

The move by federal prosecutors represents an escalation in the government's involvement in the oil spill — from coordinating the environmental cleanup to searching for possible criminal violations.

The Justice Department's inquiry is a standard preliminary step taken to determine whether a formal investigation is warranted. But even in this early stage, it has the earmarks of one of the largest investigative undertakings of the Obama administration.

In one sign of its potential scope, the Obama administration has asked for $10 million to be set aside to pay for the investigation. President Obama, in a letter May 12 to House Speaker Nancy Pelosi (D- San Francisco), said the funding was needed "to hold BP, and other responsible parties in this spill, accountable for the crisis."

Oil company officials said they were conducting an internal review and had been sharing information with the government. The companies also have pledged to help clean up the oil spreading along the gulf and pay for damages.

"I understand people want a simple answer about why this happened and who is to blame," said BP Chief Executive Tony Hayward.

Assistant Atty. Gen. Ronald Welch said federal investigators were pushing ahead with their inquiries.

"The Department of Justice will take all necessary and appropriate steps to ensure that those responsible for this tragic series of events are held fully accountable," Welch said in a letter Tuesday to Sen. Barbara Boxer (D-Calif.), who chairs the Senate Environment and Public Works Committee.

Welch said the team had put the companies on notice about the investigation.

"The department has sent formal demands to British Petroleum, Transocean and other companies to ensure the preservation of potentially relevant information," he said. "These letters invoke federal requirements for preserving evidence in anticipation of litigation."

He said the team had spoken with attorneys for BP and Transocean "to ensure they are complying with these demands."

Welch was responding to concerns from Boxer after she said testimony and evidence presented to her committee suggested possible "illicit activities" involving the oil spill.

In a May 17 letter to Atty. Gen. Eric H. Holder Jr., Boxer asked him and his department to "review this matter with respect to civil and criminal laws related to false statements to the federal government."

In describing the oversight work of her committee, Boxer said the panel had uncovered statements by BP that now appeared to be "false and misleading."

As an example, she identified a February 2009 document from BP to the federal Minerals Management Service. In it, she said, BP evaluated the company's ability to respond to a blowout.

BP said in the document that an oil spill would have little or no effect on fish habitats because the company would use "proven equipment and technology" to respond to a blowout and spill and quickly contain the damage, Boxer said.

"In the wake of the Deepwater Horizon oil spill," Boxer wrote in her letter to Holder, "it does not in any way appear that there was 'proven equipment and technology' to respond to the spill, which could have tragic consequences for local economies and the natural resources of the Gulf of Mexico."

She also noted that after the oil rig explosion, BP said in a May 10 statement that all of its techniques underway to stop the spill "involve significant uncertainties because they have not been tested in these conditions before."

"BP said they were ready for this spill if it occurred," Boxer said in a committee statement. "Clearly they were unprepared — and dangerously so."

On Thursday, one of BP's top officials on the rig on the day of the explosion, Robert Kaluza, invoked the 5th Amendment against self-incrimination and refused to testify at a separate Coast Guard inquiry in Louisiana.

The company defended Kaluza, saying in a statement: "Bob is a dedicated, hardworking, conscientious man. Bob did no wrong on the Deepwater Horizon, and we will make damn sure that this comes out at the appropriate time."

richard.serrano@latimes.com

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