BP to pay record fine in Gulf oil spill; 2 to face manslaughter charges
BP said Thursday that it will pay $4.5 billion in a settlement with the U.S. government over the massive 2010 oil spill and will plead guilty to felony counts related to the deaths of 11 workers and lying to Congress.
The figure includes nearly $1.3 billion in criminal fines — the largest such penalty ever — along with payments to several government entities.
Meanwhile, a source close to the case confirmed to CBS News Thursday that two BP employees will also face manslaughter charges over the 11 deaths in the explosion of the Deepwater Horizon oil rig that triggered the massive spill.
“We believe this resolution is in the best interest of BP and its shareholders,” said Carl-Henric Svanberg, BP’s Chairman. “It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims.”
The settlement includes payments of nearly $2.4 billion to the National Fish and Wildlife Foundation, $350 million to the National Academy of Sciences and about $500 million to the Securities and Exchange Commission.
London-based BP PLC said in a statement that the settlement would not include civil claims under the Clean Water Act and other legislation, pending private civil claims and state claims for economic loss.
The charges BP will plead guilty to include 11 felony counts of misconduct or neglect of ships officers, one felony count of obstruction of Congress and one misdemeanor count each under the Migratory Bird Treaty Act and the Clean Water Act. The 11 counts related to the workers’ deaths are under a provision of the Seaman’s Manslaughter Act.
The obstruction charge is for lying to Congress about how much oil was pouring out of the ruptured well.
Attorney General Eric Holder was scheduled to discuss the settlement at an afternoon news conference in New Orleans.
BP made a profit of $5.5 billion in the third quarter.
The largest previous corporate criminal penalty assessed by the Department of Justice was a $1.2 billion fine imposed on drug maker Pfizer in 2009.
The Deepwater Horizon rig, 50 miles off the Louisiana coast, sank after the April 20, 2010, explosion. The well on the sea floor spewed an estimated 206 million gallons of crude oil, soiling sensitive tidal estuaries and beaches, killing wildlife and shutting vast areas of the Gulf to commercial fishing.
Nelda Winslette’s grandson Adam Weise, of Yorktown, Texas, was killed in the blast. She says somebody needs to be held accountable, even if it doesn’t end her family’s pain.
“It just bothers me so bad when I see the commercials on TV and they brag about how the Gulf is back, but they never say anything about the 11 lives that were lost. They want us to forget about it, but they don’t know what they’ve done to the families that lost someone,” she said. The spill exposed lax government oversight and led to a temporary ban on deepwater drilling while officials and the oil industry studied the risks, worked to make it safer and developed better disaster plans.
BP’s environmentally-friendly image was tarnished, and independent gas station owners who fly the BP flag claimed they lost business from customers who were upset over the spill. BP chief executive Tony Hayward stepped down after the company’s repeated gaffes, including his statement at the height of the crisis: “I’d like my life back.”
The cost of BP’s spill far surpassed the Exxon Valdez spill in 1989. Exxon ultimately settled with the U.S. government for $1 billion, which would be about $1.8 billion today.
The government and plaintiffs’ attorneys also sued Transocean Ltd., the rig’s owner, and cement contractor Halliburton, but a string of pretrial rulings by a federal judge undermined BP’s legal strategy to pin blame on them.
At the time of the explosion, the Deepwater Horizon was drilling into BP’s Macondo well. The rig sank two days later.
After several attempts failed, engineers finally were successful in capping the well on July 15, 2010, halting the flow of oil into the Gulf of Mexico after more than 85 days.