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BP to pay $4-billion criminal fine in Deepwater Horizon spill

Two supervisors for the oil company have been charged with manslaughter in the rig explosion that killed 11 workers. The firm could pay still more in civil claims.

November 15, 2012|By Bettina Boxall and Ronald D. White, Los Angeles Times
  • An oil slick from the 2010 Deepwater Horizon disaster is seen from the Chandeleur Islands in the Gulf of Mexico. BP will pay a $4-billion criminal fine in the spill.
An oil slick from the 2010 Deepwater Horizon disaster is seen from the Chandeleur… (Carolyn Cole, Los Angeles…)

Laying the blame for the deaths of 11 oil rig workers in the Deepwater Horizon explosion and Gulf of Mexico spill on BP, federal prosecutors announced Thursday that two BP supervisors had been charged with manslaughter and the company would pay a $4-billion criminal fine, the largest in U.S. history.

"Those deaths were in fact unnecessary," Atty. Gen. Eric H. Holder Jr. said in New Orleans, adding that the federal investigation continued into the 2010 disaster and the nation's biggest offshore oil spill. "Our work is far from over."

The charges, contained in a criminal settlement with BP and an indictment handed down by a federal grand jury, paint a picture of a corporation that placed "profit over prudence," said Assistant Atty. Gen. Lanny Breuer.

PHOTOS: Oil spill timeline

Not only did the BP supervisors on board the rig the night of the explosion fail to take steps to prevent the blowout when they realized they were losing control of the deep-sea well, company executive David I. Rainey later lied to Congress about the size and severity of the spill, prosecutors said.

"As part of its plea agreement, BP has admitted that, through Rainey, it withheld documents and provided false and misleading information in response to the U.S. House of Representatives' request for flow-rate information," the Justice Department said.

The explosion on the night of April 20, 2010, unleashed a gush of oil from broken equipment on the seabed that continued for nearly three months off the Louisiana coast. More than 200 million gallons of oil were spilled, shutting down commercial fisheries, destroying the summer beach season along part of the coast and fouling coastal wetlands.

Still to be settled are federal civil claims for the spill's environmental damage that could cost BP billions of dollars more. Justice Department officials said negotiations with the company had so far failed to produce an agreement that could avert a civil trial scheduled for February.

Also, a federal judge in New Orleans has not yet approved an estimated $7.8-billion settlement with about 120,000 plaintiffs in a civil suit by fishermen, beachside property owners and business owners, among others.

As part of BP's settlement of criminal charges, prosecutors said BP had agreed to plead guilty to felony manslaughter, environmental crimes and obstruction of Congress, and would pay the record $4 billion in criminal fines and penalties.

About $2.4 billion of that will go to environmental restoration in the gulf. The company will pay an additional $525-million civil penalty to the Securities and Exchange Commission for misrepresenting the size of the spill in SEC filings.

Robert M. Kaluza, 62, of Henderson, Nev., and Donald J. Vidrine, 65, of Lafayette, La. — the highest-ranking BP supervisors on board that night — were charged with 11 felony counts of seaman's manslaughter, 11 felony counts of involuntary manslaughter and one violation of the Clean Water Act in a federal indictment unsealed Thursday. Rainey, 58, of Houston, a former BP executive who helped oversee the spill response, was charged with obstruction of Congress and making false statements to law enforcement officials.

Lawyers for Kaluza blasted the government case. "After nearly three years and tens of millions of dollars in investigation, the government needs a scapegoat," attorneys Shaun Clarke and David Gerger said in a statement. "Bob was not an executive or high-level BP official. He was a dedicated rig worker who mourns his fallen co-workers every day."

At the height of the spill, then-BP Chief Executive Tony Hayward was forced to step down, in part for commenting, "I'd like my life back," during the frenetic cleanup period when oil was washing ashore in Louisiana and many livelihoods were in ruins.

In a statement, Bob Dudley, BP's current chief executive, said the company deeply regretted the loss of life. "From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the gulf. We apologize for our role in the accident, and as today's resolution with the U.S. government further reflects, we have accepted responsibility for our actions."

Chris Jones, whose younger brother Gordon Jones died in the fiery explosion, was not satisfied with BP's mea culpa.

"The fact that BP is finally admitting that it is responsible is not shocking; the amount of money it is paying in fines is not shocking," said Jones, a litigation attorney in Baton Rouge, La. "What is shocking is that it has been three years since this happened and not once has a representative of BP said to us, 'I'm sorry for your loss.' It's par for the course."

"BP is simply going to sign a check for billions of dollars, then continue to do business in U.S. waters and make money for its shareholders," he said. "But Gordon wasn't able to live a day after April 2010."

British BP can easily absorb the $4.5-billion settlement, analysts said.

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