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Subscribe to RSSBP agreed to pay the largest criminal fine ever brought against a single corporation; the U.S. government in turn agrees not to press more charges against the oil company responsible for the 2006 oil spill. NBC's Pete Williams reports.
Updated at 2:45 p.m. ET: BP will pay approximately $4.5 billion and plead guilty to manslaughter and other criminal charges as part of a settlement with the U.S. government over the deadly Deepwater Horizon rig explosion and massive oil spill in the Gulf of Mexico in 2010, the London-based oil giant and federal officials said Thursday.
The settlement total, to be paid out over five years, includes more than $1.25 billion in criminal fines -- the largest such penalty ever.
In addition, two BP employees have been indicted on manslaughter charges and a BP executive has been indicted on charges he lied to authorities about his work estimating the Gulf spill rate.
At an afternoon news conference in New Orleans, U.S. Attorney General Eric Holder called the wide-ranging settlement "the latest step forward in our ongoing efforts to achieve justice for those whose lives and whose livelihoods were impacted by the largest environmental disaster in the history of the United States."
He said the settlement amounts mark "both the largest single criminal fine … and the largest total criminal resolution" in U.S. history.
BP has agreed to plead guilty to 11 counts of felony manslaughter, one count of felony obstruction of Congress and violations of the Clean Water and Migratory Bird Treaty Acts, Holder said.
The agreement, subject to court approval, resolves all federal criminal charges and all claims by the Securities and Exchange Commission against the company stemming from the explosion and leak, the largest accidental marine oil spill in history.
“All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf coast region,” Bob Dudley, BP’s group chief executive, said in a statement announcing the settlement.
Lee Celano / Reuters, file
A hard hat from an oil worker lies in oil from the Deepwater Horizon oil spill on East Grand Terre Island, Louisiana in this June 8, 2010 photo.
“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.”
“We believe this resolution is in the best interest of BP and its shareholders,” added 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.”
In addition, a federal indictment unsealed Thursday charges David Rainey, who was BP's vice president of exploration for the Gulf of Mexico, with obstruction of Congress and making false statements. He is accused of lying to federal investigators when they asked him how he calculated a flow rate estimate for BP's blown-out well in the days after the disaster.
Two BP well site leaders, Robert Kaluza and Donald Vidrine, were indicted on manslaughter and involuntary charges, accused of disregarding abnormal high-pressure readings that should have glaring indications of trouble just before the deadly blowout.
Rainey's lawyer said his client did "absolutely nothing wrong." And attorneys for the two rig workers accused the Justice Department of making scapegoats out of them.
"Bob was not an executive or high-level BP official. He was a dedicated rig worker who mourns his fallen co-workers every day," Kaluza attorneys Shaun Clarke and David Gerger said in a statement, The Associated Press reported. "No one should take any satisfaction in this indictment of an innocent man. This is not justice."
Before Thursday, the only person charged in the disaster was a former BP engineer who was arrested in April on obstruction of justice charges, according to AP. He was accused of deleting text messages about the company's response to the spill.
The Deepwater Horizon rig, 50 miles off the Louisiana coast, sank after the fiery 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.
On the docks in Louisiana, fishermen and oystermen say the effects of the BP oil spill remain today. NBC's Anne Thompson has more.
After several attempts failed, engineers finally managed to cap the gushing well on July 15, 2010, halting the flow of oil into the Gulf after more than 85 days.
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.
Thirteen of the 14 criminal charges to which BP plans to plead guilty pertain to the accident itself and stem from the negligent misinterpretation of a negative pressure test conducted on board the Deepwater Horizon, BP said. The company said it acknowledged this misinterpretation more than two years ago when it released its internal investigation report.
The remaining criminal count of obstruction pertains to allegations that company officials lied to Congress about how much oil was pouring out of the ruptured well during the spill response.
As part of its resolution of criminal claims with the U.S. government, BP will pay $4 billion in installments over five years and has also agreed to five years’ probation.
The amount includes about $1.25 billion in criminal fines, nearly $2.4 billion to be paid to the National Fish & Wildlife Foundation and $350 million to be paid to the National Academy of Sciences.
BP said it will also pay the SEC $525 million over three years to settle all securities claims.
The $1.25 criminal penalty is the largest in U.S. history, eclipsing the nearly $1.2 billion paid by Pfizer Inc. for marketing fraud related to its Bextra pain medicine in 2009, according to Bloomberg and AP.
BP has also agreed to take more steps to boost safety of drilling operations in the Gulf of Mexico, including third-party auditing and verification, training and well control equipment and processes such as blowout preventers and cementing.
Under U.S. law, companies convicted of certain criminal acts can be debarred from contracting with the federal government. BP says it has not been told of any intent by government agencies to suspend or debar the company in connection with the plea agreement.
Still pending is a separate civil court action in which the federal government contends BP was grossly negligent in causing the spill. “We’ve been in negotiations with BP. We have not reached a number that I consider satisfactory to resolve those claims that we have,” Holder said.
The criminal deal announced Thursday with the Justice Department is also separate from a March settlement in which BP agreed to pay $7.8 billion to more than 100,000 businesses and individuals who say they were harmed by the spill.
The Associated Press contributed to this report.
PhotoBlog: Cat Island pelicans see habitat shrinking 2 years after Gulf spill
Archival video: The people of the Gulf Coast have survived hurricanes, but 128 days after the BP oil spill disaster, they're struggling to see a way forward. NBC's Anne Thompson reports.
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Can you imagine if Romney or the Bush administration were in charge?? Republicans would be asking tax payers to give a 5 billion dollar subsidy to help BP recover from their economic woes; I mean they are the JOB CREATORS!! ( please turn on the echo machine when you say job creators, LOL)
Michael--so interesting that you STILL can't get over blaming BUSH for everything. It was the OBAMA admin. who was 'in charge' when this disaster happened, and HIS administration was NO different from Shrub on failing (for two years!) to conduct the required inspections of that rig. (and remember, Obama PROMISED to be "not like Bush''.)
My DEM Senator also, a couple of years ago, said that during a recession it NOT the time to raise taxes on or cut subsidies to Oil companies. Is she (Claire McCaskill, D-MO) a closet Pub?
It was the OBAMA admin that negotiated this 'slap on the wrist' to BP, so if you don't like it, complain to HIM.
Meanwhile, I was in FL for a week on the gulf side, in AUGUST, and the white sand beaches were WHITE and pristine. My cousin says it was the same in Mississippi last year (2011) when he and his wife were there in Biloxi visiting her family.
Now, I'm sure there was damage. Probably still is. But whole chunks of the Caribbean is virtually DEAD, not from oil spills, but from the 'run off' of fertilizer in the bread basket (midwestern farming states) which add fertilizer and insecticides to their land in gross amounts in an effort to 'feed the world' which would not be depleting their topsoil to help US out if the cases were reversed.
And BTW--I'm a little old 49%-er--you know, income less than $50 K but STILL pay income tax--and I OWN Stock in BP. I never bought it, a mutual fund I own did. But remember when you preach hurting big companies, it is NOT just the 'rich folks' who get hurt--it is also the little guys that have their pension or 401K invested in the market.
This may have happened under a liberal democrat's administration, but I'm not letting Republicans off the hook for groveling and apologizing to BP over what they called a "Chicago-style shakedown."
Momaid, this goes back alot farther than Obama! This goes to tort reforms that REPUBLICANS put in place to limit the damage that a company could have to pay out!! It is NOT HOLDER or Obama's fault, it is the stupid people who were convinced to vote AGAINST their best interests!! It is the stupid people who heard on part of a settlement about a woman getting burned from coffee at McDonalds. Republicans seized an opportunity to limit the liablity companies have to pay out WHEN they are at fault for causing harm to a person!
You don't like it, VOTE OUT REPUBLICANS who only vote to PROTECT corporations and their owners!!
Yeah $4,000,000,000 isn't enough, along with the othe 4 bil or so they previously paid...
Since Corporations are people I want somebody in Jail!!!!!!!!!!!!!
Therein lies the problem: if corporations are people, and corporations can plead guilty to crimes, then how do you jail a corporation?
Corps can't go to jail but their CEOs can!!
There is no problem. The CEO or Chairman of the Board, take your pick!!!!
How about the entire board....
Bubbs, exactly.
Angry, how about all of the stockholders? They could put tremendous pressures on a corporation
Seriously.....thats a months profit....someone got paid off..
It should have been a Trillion plus and a new jail facility to house them all. But then again, I see Holder in the picture...
wow
The settlement total, to be paid out over five years, includes more than $1.25 billion in criminal fines -- the largest such penalty ever.
bp pulls in 60 billion in profits every 3 months lol
and they cant pay such a measly fine? and for murder?
who is going to jail?
and who gets the legal bribary money anyway
sounds to me our government is fuc king us big time like usual
sadsadsad see u in hell fuc ks
i say close all the bp drill sites and their gas station boot them out completely
they are going to do it again hopefully it happens when our reps are on the rig so they can taste death instead of blood money
damm what a crappy deal for us
eh to rough am i
think about the innocent workers that died, the us always sides with murderers why is this, guilty of murder you should be put 6 feet under the dirt
Do you even know what 200,000,000 gallons of oil looks like? If you have ever seen the reservoir in Central Park, it holds 1,000,000,000 gallons... So this would fill the Central Park reservoir eight feet deep, one and a half miles in diameter. Just to keep this in perspective.
How about the people who died in Bengazi? If Obama is involved, should they kill him?
Yes... and the Gulf of Mexico has 643 quadrillion gallons of water... so... the Gulf of Mexico would hold 643,000,000 Central Park reservoirs... just to put it in perspective. ;)
Thank you, not that any of these dimwits can understand this...
Wilman, POV is very narrow. Does not take into account all of the damage done to the interconnectedness of the ecosystem.
just about 1/3 from the Price they extracted out of consumers pocket, not to mention the future, ecological reprecaution's buried deep on the ocean floor.
I live in a Gulf Coast town that was effected by the oil spill. I can unequivocally say that the oil spill was a huge boost to our economy. Some industries were hurt, no doubt, but money poured in from the clean up crews and work generated by the clean up efforts. BP paid outrageous amounts of money to people to help with their efforts and, once it was done, the pay outs started coming in funding programs, infrastructure, and some frivolous stuff simply because there was SO much money.
I don't give BP a pass and still find myself not giving them my business. It was an environmental disaster and I worry about the long term effects. Still, I must say that I was on a project in the Gulf in August of 2010 that involved scientific diving and some coring of the sea floor. We came within 60 miles of ground zero and ranged well past Texas and the only oil we saw was leaking (VERY slowly) out of a WWII tanker. Likewise, the cores revealed little or no oil in the upper layers of the sea floor.
I find the post rambling as I train of thought this thing so I will sum up by saying those of you who are hating terribly may consider that, despite what should be considered a terrible tragedy, it may not be as bad as it has been made out to be and certainly has helped the economy in a lot of really poor areas. Still won't buy from BP, though... :P
nawtark -
One of the very few honest, thoughtful posts here.....
Does Rainbow Stew include a Silver Spoon.
Since Corporations are people can we put BP in the slammer? The whole Corp? LOL!
Not to worry the middle class will be paying the cost of this settlement at the pump. I also notice we have a bunch of crybabies on this issue. I wonder if the crybabies are going to give up their SUV's and Van's and reduce the flow of oil consumption. Heaven forbid you should tell the crybabies to get an electric car. No sir the crybabies want it all and the entitlement to whine.
Not enough, it will be generations before the Gulf and the beaches recover. Exxon Valdez spill effects still being felt. I would love to see some jail time for those indicted on manslaughter charges, disgusting.
skyparrot -
Simply not true. It is already very difficult to find any trace of the Big Spill along the Gulf Coast. Check your facts.
This is an atrocity. I didn't read anywhere where the families were going to be given some sort of payment some of those workers I'm sure had families. And it appears nobody is going to jail for this?
And 4 billion? Poor BP... they make that in like what? A month?
This is pathetic. We live in a world where money literally DOES buy you anything.
Go @!$%# yourselves BP.
Everybody needs more money... They get Worker's Compensation, they get social security, they get life insurance... For starters...
And to add insult to injury, that money is just a drop in the proverbial bucket to them, considering the billions and billions of dollars that we citizens have given to them for way overinflated gas prices at the pump. No consciences at their workplace. AND--it will happen again. Greed takes and takes until finally it implodes.
Let's see now, if the government didn't make these oil companies drill down 2 miles for oil, maybe there would not have been a spill. Liberal (tree huggers) won't let mainland drilling take place. We have it all right beneath us, and there is safety measures available to do it by the regulations.
So lets drill in your backyard
If the oil companies aren't following safety measures for their deep-water drilling operations like the ill-fated Horizon, then what makes you so sure that they'll follow the rules when they're drilling on land?
The US government did not make BP, a foreign interest, do anything. NOT ONE THING. What they did do was allow BP to do business in our country and didn't hold them to extraction standards they should have. That was Congress' doings. We could kick them out anytime we want to. We don't want to.
B/P made 25 Billion last year alone, this is a slap on the wrist.
You gotta really make it hurt so all involved learn their lesson. A little Preventive maintenance that would cost only pennies cost them a good chunk of change.
I hope it was worth the lack of oversight.
"...a federal indictment unsealed Thursday charges David Rainey, who was BP's vice president of exploration for the Gulf of Mexico, with obstruction of Congress and making false statements. He is accused of lying to federal investigators when they asked him how he calculated a flow rate estimate for BP's blown-out well in the days after the disaster." --How novel, criminal charges against a corporate human.
The headline should read:
American Consumers to pay $4.5 billion, Innocent BP employees to plead guilty to manslaughter in Gulf of Mexico oil spill
I'm sure Fox News has some spin like that. Funny though.
Did i hear someone say fuel prices are about to quadruple? They will just pass the cost to us.
So we should just let them extort us so they don't get criminal charges or else we get @!$%#ed at the pump.
When the BP exec testified he should've been killed in front of god and everybody.I bet that would've changed things
MANslaughter? That's it? How about the slaughter of all the other Citizens of the Earth?
OH! The Arrogance of mankind. It is disgusting.
WE kill off everything around us and the only thing that matters is when a human dies. Disgusting.
Oh---how I would love to see a world void of people---the peace----vitality---the harmony that would return.
Can they deposit that 5.4 Billion into the social security account to help save that..or will it go the general fund and congress use it for another spending spree for unnecessary pork barrel projects ? Just what does government do with the fines it assesses (and collects) to business like this ?
Nah, it will pay for a few more billion dollar bombers.
I wonder where they'll get the money.
Us. We'll pay when we buy their products.
This is exactly why so many Americans are fed up with our gov't. The biggest crime of the century committed by a corporation and no one goes to jail. Money talks - once again.
Biggest crime of the century? Do you even know what jail is for?
Only in the near-total business ignorance of Obama could these very wrongful penalties have been made! 'We the People' will pay them and 'We the People' are broke!
Obama caused nearly all the damages of the Deepwater Horizon accident himself - through his refusal to accept foreign help initially (he was clueless) and through his drilling and fishing moratoriums which should have never been issued.
Obama has neither business sense nor technical knowledge.
Wow. This is breathaking. Obama is responsible for this disaster? Mind numbing.
Its about time the company be forced to pay financially speaking, but how the hell can some of its employees get murdered over nothing other than greed, and no one goes to prison?
Well no one is going to prison this politicos will need them in coming 3 years. If they go to prison where the campaign money is going to come from.