BP Agrees to $4.5 Billion Gulf Spill Settlement; Three Former Employees Charged
(WASHINGTON) -- The Justice Department announced manslaughter charges Thursday against two BP officials involved in the 2010 Gulf of Mexico oil spill, in which negligence by well site managers on the Deepwater Horizon drilling ship allegedly led to the country's biggest environmental disaster.
A third BP official has been charged for allegedly making false statements to Congress by providing inaccurate information to investigators about the rate at which oil was flowing from the well.
The criminal charges were announced along with a $4.5 billion settlement, with BP agreeing to plead guilty to 14 criminal charges and admitting responsibility for the deaths of 11 workers aboard Deepwater Horizon. The company has agreed to plead guilty to 11 counts of seaman's manslaughter, Clean Water and Migratory Bird Act violations and obstruction of Congress.
"Perhaps the greatest tragedy is that the deaths of the 11 men onboard the Deepwater Horizon could have been avoided," Assistant Attorney General Lanny Breuer said at a news conference in New Orleans. "The explosion of the rig was a disaster that resulted from BP's culture of privileging profit over prudence; and we allege that BP's most senior decision makers onboard the Deepwater Horizon negligently caused the explosion."
Under the settlement, BP has also agreed to a $525 million fine to resolve charges with the Securities and Exchange Commission for misleading investors about the rate of oil flow from the well.
Robert Kaluza and Donald Vidrine, BP's well site leaders, were charged in the indictment with 11 counts of seaman's manslaughter and Clean Water Act violations. The charges alleged the "company men" on board Transocean's Deepwater Horizon rig failed to heed abnormal pressure readings in the well as final preparations were made for extracting the oil and gas.
"Kaluza and Vidrine were aware of continued, abnormal, high pressure on the drill pipe," the indictment alleged. "Despite these ongoing, glaring indications on the drill pipe that the well was not secure, defendants Kaluza and Vidrine again failed to phone engineers on shore to alert them to the problem, and failed to investigate any further. Instead defendants Kaluza and Vidrine deemed the negative testing a success."
Kaluza's attorneys, Shaun Clarke and David Gerger, decried the charges.
"After nearly three years and tens of millions of dollars in investigation, the government needs a scapegoat," the lawyers said in a prepared 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."
Vidrine's attorney, Robert Habens, said his client was innocent and called the charges, "a miscarriage of justice."
David Rainey, former vice president of exploration at BP, has been charged with obstruction of Congress and making false statements for asserting that BP's spill estimates were about 5,000 barrels of oil per day, while he allegedly knew that other BP estimates showed oil flows of up to 92,000 barrels of oil per day being spilled. The charge concerned briefing and materials and a letter that was sent to Congress.
"The company lied and withheld documents, in order to make it seem as though less damage was being done to the environment than was actually occurring," Breuer said."Rainey allegedly cherry-picked pages from documents, withheld other documents altogether and lied to Congress and others in order to make the spill appear less catastrophic than it was.
Rainey's lawyers, Reid H. Weingarten and Brian M. Heberlig, said he did "absolutely nothing wrong."
"We are profoundly disappointed that the Department of Justice is attempting to turn a tragic accident and its tumultuous aftermath into criminal activity," they said in a prepared statement. "Mr. Rainey did not commit the crimes charged in the indictment, period."
As part of the settlement, BP will pay almost $2.4 billion to the National Fish and Wildlife Foundation and $350 million to the National Academy of Sciences. BP has also agreed to take additional steps to enhance the safety of drilling in the Gulf.
"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," said Bob Dudley, BP's CEO. "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."
Attorney General Eric Holder praised the settlement.
"The $4 billion in penalties and fines is the single largest criminal resolution in the history of the United States," Holder said, "and constitutes a major achievement toward fulfilling a promise that the Justice Department made nearly two years ago to respond to the consequences of this epic environmental disaster and seek justice on behalf of its victims."
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