BP has agreed to plead guilty to 14 federal criminal counts related to the 2010 Gulf Oil Disaster — including 11 counts of felony manslaughter for the workers killed in the Deepwater Horizon explosion — U.S. Attorney General Eric Holder announced at a New Orleans press conference today.
"BP has agreed to plead guilty to all 14 criminal charges including responsibility for the deaths of 11 people and the events that led to an environmental catastrophe," Holder said. "The company has also agreed to pay $4 billion in fines and in penalties. This marks both the largest single criminal fine — more than $1.25 billion — and the largest total criminal resolution — $4 billion — in the history of the United States."
The U.S. Department of Justice has also indicted two former supervisors on the Deepwater Horizon — Robert Kaluza and Donald Vidrine — for manslaughter. Kaluza and Vidrine are scheduled to be arraigned on Nov. 28.
"After nearly three years and tens of millions of dollars in investigation, the Government needs a scapegoat. Bob was not an executive or high-level BP official. He was a dedicated rig worker who mourns his fallen co-workers every day.m No one should take any satisfaction in this indictment of an innocent man. This is not justice," reads an emailed statement from Kaluza's attorneys Shaun Clarke and David Gerger.
(More after the jump)
Video of Holder's opening remarks (apologies for the frantic photographers crawling in front of the lens)
BP has agreed to pay $525 million in a civil settlement with the Securities and Exchange Commission for misleading the regulator and its own investors by low-balling oil flow estimates in the months following the April 2010 explosion. BP repeatedly estimated — in public statements and regulatory filings — that oil flow from the spill was about 5,000 barrels per day.
"BP was in possession of numerous analyses showing that 5,000 was at the lower range," said SEC Enforcement Division Director Robert Khuzami. "The actual amount was nearly 10 times the amount BP had estimated."
David Rainey, BP's former vice president of Gulf of Mexico exploration, has been charged with obstruction of Congress for allegedly lying about the company's assessments as to the extent of the spill. The indictment against Rainey alleges that he was personally responsible for the false estimates, which he repeated in May 2010 Congressional testimony.
After learning of initial estimates the indictment says, "defendant Rainey, an executive who had no prior experience in spill estimation, surfed the Internet for information about how to conduct oil-spill-volume estimates based on oil floating on the surface of a water body ... . Defendant Rainey's internet search led him to a website where he found a Wikipedia entry that described some generally accepted mass balance methodologies..."
Rainey is scheduled to be arraigned on Nov. 28.
Holder said that the apportionment of $2.4 billion in penalties was modeled after the RESTORE Act, with the money split among Gulf Coast states for coastal restoration. $1.2 billion will go to Louisiana. The remaining $1.2 billion will be divided between Alabama, Florida, Mississippi and Texas. Of the $1.25 billion in criminal fines, $1.15 is dedicated to the Coast Guard's Liability Trust Fund. $100 million will go to the North American Wetlands Conservation Fund.
Assistant Attorney General Lanny Breuer said that the investigation into the company will continue. Breuer declined to comment on whether criminal charges against Deepwater Horizon owner Transocean Ltd. or contractor Halliburton could be expected.
Meanwhile the federal government has a pending civil liability cases against BP, set to go to trial in February. A statement posted on the company's web site today reads, "BP will continue to vigorously defend itself against all remaining civil claims and to contest allegations of gross negligence in those cases."
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