Thursday, November 15, 2012

$4.5 Billion Criminal Settlement Agreement With BP Announced

Nov 15: Attorney General Eric Holder at a press conference in New Orleans indicated that, "Today, in U.S. District Court here in the Eastern District of Louisiana, the Department filed a 14-count information charging BP with 11 counts of felony manslaughter, one count of felony obstruction of Congress, and violations of the Clean Water and Migratory Bird Treaty Acts in connection with the Deepwater Horizon oil spill that began in April 2010. BP has agreed to plead guilty to all 14 criminal charges -- admitting responsibility for the deaths of 11 people and the events that led to an unprecedented environmental catastrophe. The company also has agreed to pay $4 billion in fines and penalties."
    He said, "This marks both the single largest criminal fine – more than $1.25 billion – and the single largest total criminal resolution – $4 billion – in the history of the United States." Further he stated, ". . .in addition to the charges filed against BP, a federal grand jury returned an indictment charging the two highest-ranking BP supervisors who were on board the Deepwater Horizon on the day of the explosion with 23 criminal counts -- including 11 counts of seaman's manslaughter, 11 counts of involuntary manslaughter, and alleged violations of the Clean Water Act. The grand jury also charged a former BP executive -- who served as a deputy incident commander and BP's second-highest ranking representative at Unified Command during the spill response -- with hiding information from Congress and allegedly lying to law enforcement officials.

    "These and other matters remain open, including a separate civil action that's pending in federal court here in New Orleans.   We're looking forward to the trial -- which is scheduled to begin in February of next year -- in which we intend to prove that BP was grossly negligent in causing the oil spill. In that lawsuit, we are seeking civil penalties and a judgment that BP and others are liable for removal costs and natural resource damages -- exposure that could amount to billions of dollars. Though we have been unable to date to resolve the civil case, we remain as determined as ever to hold those responsible accountable. In addition, my colleagues and I are firmly committed to combating oil-spill fraud by investigating and prosecuting those who attempt to reap criminal profits from such a terrible tragedy. . ."

    BP also announced that it had reached agreement with the United States government, subject to court approval, to resolve all Federal criminal charges and all claims by the Securities and Exchange Commission (SEC) against the company stemming from the Deepwater Horizon accident, oil spill, and response. BP summarized the key items in the agreement as follows:
  • Resolution of all criminal claims with Department of Justice includes $4 billion paid in installments over a period of five years
  • Resolution of all securities claims with Securities and Exchange Commission includes $525 million paid in installments over a period of three years
  • Existing $38.1 billion charge against income to increase by approximately $3.85 billion
  • BP is prepared to vigorously defend itself against remaining civil claims
    Bob Dudley, BP's Group Chief Executive said, "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. 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."

    In eliminating the possibility of any further Federal criminal charges against the company based on the accident, BP has taken another significant step forward in removing legal uncertainty and can now focus more fully on defending itself against all remaining civil claims. Carl-Henric Svanberg, BP's Chairman said, "We believe this resolution is in the best interest of BP and its shareholders. It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims."
    Further information released by BP indicates that as part of the resolution, BP has agreed to plead guilty to 11 felony counts of Misconduct or Neglect of Ships Officers relating to the loss of 11 lives; one misdemeanor count under the Clean Water Act; one misdemeanor count under the Migratory Bird Treaty Act; and one felony count of obstruction of Congress. This resolution is subject to U.S. federal court approval.

    Thirteen of the 14 criminal charges pertain to the accident itself and are based on the negligent misinterpretation of the negative pressure test conducted on board the Deepwater Horizon. BP acknowledged this misinterpretation more than two years ago when it released its internal investigation report. Today's agreement is consistent with BP's position in the ongoing civil litigation that this was an accident resulting from multiple causes, involving multiple parties, as found by other official investigations. The remaining criminal count pertains to two BP communications made to a member of Congress during the spill response about flow rate estimates. As part of its resolution of criminal claims with the U.S. government, BP will pay $4 billion, including $1.256 billion in criminal fines, in installments over a period of five years. BP has also agreed to a term of five years' probation.

    Under the resolution with the Department of Justice (DOJ), a total of $2.394 billion will be paid to the National Fish & Wildlife Foundation (NFWF) over a period of five years. In addition, $350 million will be paid to the National Academy of Sciences (NAS) over a period of five years.
    Access a release from the Attorney General (click here). Access a lengthy summary of the agreement released by BP (click here). Access additional information from BP on the agreement and related matters (click here). [#Energy/OilSpill]
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