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BP to pay $4.5 billion in fines for Gulf oil spill. Is legal saga over?

A deal on federal criminal charges helps bring legal action over the Gulf oil spill nearer a conclusion. But many more claims remain – totaling perhaps tens of billions of dollars.

By Staff writer / November 15, 2012

The BP logo is seen at a gas station in Washington. BP agreed to a settlement Thursday with the Justice Department on federal criminal charges relating to the 2012 Gulf oil spill.

Charles Dharapak/AP/File

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British oil giant BP is agreeing to pay $4.5 billion in fines related to its role in the 2010 spill that killed 11 people and released five million barrels of oil into the Gulf of Mexico. The corporate criminal penalty is the largest of its kind in US history. 

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The settlement includes 14 criminal counts that range from misconduct and negligence to obstruction of Congress. It allows the company to put a significant legal battle behind it, though at no small cost. Moreover, other legal claims remain, including federal civil claims for damages under the Clean Water Act and private civil claims.

Though criminal settlements are hard to judge, given that much of the information is not public, the fines appear “appropriate,” says Richard Frank, director of the California Environmental Law & Policy Center at the University of California at Davis

“It would appear the Justice Department was appropriately aggressive in pursuing and negotiating this,” he says. “One can always argue for greater fines, but these are pretty big numbers, and the fact that there’s a felony conviction on record against this corporation is significant.”  

The 14 criminal counts against BP include: 

  • Eleven felony counts of misconduct and negligence related to the deaths.
  • One misdemeanor count under the Clean Water Act.
  • One misdemeanor count under the Migratory Bird Treaty Act.
  • One felony count of obstruction of Congress related to incorrect flow-rate estimates of oil given to members of US Congress in the first 14 days of the disaster.  

A separate indictment charges former senior BP executive David Rainey individually with obstructing a congressional investigation by making false statements regarding the flow rate from the wrecked well. The Justice Department also released a 23-count indictment involving manslaughter and Clean Water Act violation charges against Robert Kaluza and Donald Vidrine, both on-site supervisors at the time of the disaster.

Of the $4.5 billion in fines against the company, $525 million goes to the Security and Exchange Commission for misreporting the flow-rate estimates, $1.3 billion relates to the deaths of the 11 oil-rig workers, and $2.7 billion goes to the National Fish & Wildlife Foundation and National Academy of Sciences for violations of environmental laws.  

The previous highest payout by a US company was in 2009 when pharmaceutical giant Pfizer pleaded guilty to misbranding its anti-inflammatory drug Bextra and was forced to pay $2.4 billion in penalties.  

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