Gulf oil spill: BP's record $4 billion criminal plea deal gets judge's OK

Under the plea agreement between BP and the US, the oil giant admits to 11 counts of felony manslaughter for the alleged negligence of its officials in 2010 Gulf oil spill.

A federal judge in New Orleans on Tuesday accepted a plea agreement between the US government and BP that calls for the oil giant to admit responsibility for 11 dead oil workers and to pay a record $4 billion in criminal penalties for its role in the massive 2010 oil spill in the Gulf of Mexico.

The company admitted 11 counts of felony manslaughter for the alleged negligence of its officials on the Deepwater Horizon offshore oil rig.

BP also admitted violating the Clean Water Act and the Migratory Bird Treaty Act, and that it lied to Congress about the amount of oil flowing into the Gulf.

The $4 billion payment is the largest criminal penalty in US history. It comes in addition to $24.2 billion BP has already provided for cleanup and other claims in the Gulf region, according to court documents.

Resolution of the criminal case does not end BP’s obligation to the Gulf coast. The company still faces additional liability of billions of dollars in other pending civil lawsuits, lawyers say.

The April 2010 oil spill continued for three months as the company attempted to find a way to stop the underwater gusher. Beaches from Texas to Florida were soiled and shut down. Particularly hard hit were the wetlands of Louisiana.

US District Judge Sarah Vance accepted the plea deal after hearing testimony from those who lost family members in the explosion and blow out.

Many opposed the deal.

“The plain and simple fact here is BP killed my son in their efforts to speed up operations, to save time, and money,” Billy Fred Anderson wrote to the judge on behalf of his son, Jason, who died on the offshore rig.

Chris Jones wrote on behalf of his brother, Gordon, whose wife was eight months pregnant with their second son at the time of the disaster. He wants an apology.

“Never once has BP … ever told any member of our family that they are sorry for our loss,” Chris Jones said in his letter. He said top BP executives and members of its board of directors should come personally to the Jones home in Baton Rouge to meet his brother’s widow and two sons.

“I would expect each of them to look each of them in the eye and tell them they are sorry,” he wrote.

Judge Vance told the relatives in court that she had read their “gut-wrenching” submissions and considered their statements before making her decision. She added that she agreed that BP should have issued a personal apology to the families, according to the Associated Press.

“I think BP should have done that out of basic humanity,” the AP quoted the judge as saying.

Federal prosecutors and lawyers for BP submitted a 59-page memorandum to Judge Vance urging her to accept the deal.

The company agreed to plead guilty to the 14 federal charges in November. But the agreement was contingent on the judge accepting the agreement and the proposed punishment.

“The proposed Plea Agreement is a fair, just, reasonable, and appropriately punitive resolution of BP’s criminal liability,” they wrote.

Lawyers said that under one scenario, had the case gone to trial, criminal fines against BP could have been capped at $8.19 million under a federal law.

The $4 billion payment dwarfs the government’s next largest criminal fine of $1.3 billion assessed against the pharmaceutical company Pfizer in 2009.  

In pleading guilty, the company acknowledged that BP managers on the oil rig were negligent in failing to properly oversee safety tests to determine oil well pressure. “That negligence was a proximate cause of the deaths of the men,” the joint memo says in part.

Two BP supervisors are facing trial on manslaughter charges for their actions on the offshore oil rig prior to the disaster.

Earlier this month, Transocean Deepwater, Inc., which ran the drilling rig, agreed to plead guilty to violating the Clean Water Act. The company agreed to pay $1.4 billion in criminal and civil fines. 

The BP plea agreement calls for the company to pay nearly $2.4 billion to the National Fish and Wildlife Foundation to fund environmental restoration projects.

The foundation is required under the agreement to spend roughly half of the $2.4 billion in Louisiana to create and restore barrier islands and coastal habitats hard hit by the spill. The other half of the $2.4 billion must be spent equally in Alabama, Florida, Mississippi, and Texas on coastal restoration and protection projects.

“Today’s guilty plea and sentencing represent a significant step forward in the Justice Department’s ongoing efforts to seek justice on behalf of those affected by one of the worst environmental disasters in American history,” Attorney General Eric Holder said in a statement.

“I’m pleased to note that more than half of this landmark resolution – which totals $4 billion in penalties and fines and represents the single largest criminal resolution ever – will help to provide direct support to Gulf Coast residents as communities throughout the region continue to recover and rebuild.”