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BP to Settle in Gulf Spill, Face Manslaughter Charges

BP announced today that it will pay approximately $4.5 billion in criminal charges after pleading guilty in a settlement with the US government over t...

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|Nov 15|magazine6 min read

 

BP announced today that it will pay approximately $4.5 billion in criminal charges after pleading guilty in a settlement with the US government over the 2010 Deepwater Horizon rig explosion and massive oil spill. Two BP employees also face manslaughter charges for the death of 11 workers as a result of the explosion. 

The oil giant will plead guilty to 11 felony counts of misconduct or neglect relating to the death of those workers, a misdemeanor count under the Clean Water Act, a misdemeanor count under the Migrator Bird Treaty Act and a felony count of obstruction of Congress.

Since 2010, BP has paid a record $1.3 billion in criminal fines in addition to payments to several government entities. The settlement is separate from BP's agreement to pay affected parties $7.8 billion in damages. 

Although it sounds like a lot of money, BP has five years to pay off the fine in addition to another $525 million in payments to the Securities and Exchange Commission to settle securities charges. In 2011 alone, the company recorded a revenue of $234.25 billion, with a net income of $16 billion, according to data tracker FactSet. Essentially, the penalty fee could be completely paid off within the course of a single quarter's profits. Needless to say, the company will not need to be borrowing any money to pay the costs. 

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The charges far surpass those of the Exxon Valdez spill in 1989, in which Exxon settled with the US government for $1 billion (about $1.8 billion today). Transocean Ltd., the rig's owner, and cement contractor Halliburton also face criminal charges from the government and plaintiffs' attorneys.

In a court filing, the Justice Department said it will argue that BP's actions leading up to the explosion were grossly negligence.

"We do not use words like `gross negligence' and `willful misconduct' lightly," a Justice Department attorney wrote. "But the fact remains that people died, many suffered injuries to their livelihood, and the Gulf's complex ecosystem was harmed as a result of BP and Transocean's bad acts or omissions."

Attorney General Eric Holder will discuss the settlement further this afternoon at a news conference in New Orleans.

 

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