BP criminal settlement announced

BY JOHN MULLEN jmullen@gulfcoastnewspapers.com
Posted 11/15/12

ORANGE BEACH, Ala. – 

ORANGE BEACH, Ala. – The government and BP announced it has reached a settlement on some of the criminal charges stemming from the Deepwater Horizon explosion and spill, but state officials say it will not affect the …

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BP criminal settlement announced

Posted

ORANGE BEACH, Ala. – 

ORANGE BEACH, Ala. – The government and BP announced it has reached a settlement on some of the criminal charges stemming from the Deepwater Horizon explosion and spill, but state officials say it will not affect the suit Alabama has filed against the oil giant.

Alabama Attorney General Luther Strange issued a statement via email addressing today’s announcement.

“BP's criminal acts levied economic and environmental damages of historic proportions upon Alabama, and these damages are not covered under today's agreement,” Strange’s statement said. “Accordingly, in my role as the States' Coordinating Counsel, I will continue devoting my time to holding BP and the other responsible parties accountable for their acts, and I look forward to presenting Alabama's case that BP was grossly negligent when we have our day in court.”

What it does mean is still muddled. This proposed settlement of this phase is more than $4.5 billion and part of the resolution mentions BP pleading guilty of a misdemeanor count under the Clean Water Act. The entire announced resolution is pending the approval of a U.S. federal court.

But is it related to the criminal trial in New Orleans or the current negotiations leading up to a civil trial by the Justice Department against BP?

“BP must not mistake the Justice Department’s agreement to these criminal penalties from the 2010 spill as a signal that pending civil penalties under the Clean Water Act will be any less severe,” U.S. Rep. Jo Bonner, R-Mobile, said.

U.S. Sen. Jeff Sessions, R-Mobile, issued an email statement after U.S. Attorney General Eric Holder's afternoon press conference in New Orleans, but still wasn't sure what the settlement meant.

"While we have not yet seen all of the settlement terms, today's agreement on criminal liability appears to be a strong step forward," Sessions' statement said.

Lewis said Holder's conference may shed some light on the settlement.

“The congressman has withheld any comment until we have the chance to study the information that we’re still waiting on from Justice Department,” Lewis said.

Orange Beach Mayor Tony Kennon and member of Alabama’s RESTORE Act panel, is still hoping for answers as well.

“Where does the money go, what does it mean that they didn’t get charged with gross negligence and who’s going to take the fall?” Kennon said. “Is it going to be working stiffs or are they going to go after some of the hotshots who made some of the decisions with these manslaughter charges?

“Nobody was consulted so how can we trust anything coming out of the Justice Department and BP from behind closed doors. I just don’t know what to make of it right now.”

For BP, Kennon asked, is $4.5 million really a punitive amount?

“On the top of it $4.5 billion for a company that makes $4.5 billion a quarter or better, I don’t know if that’s a big enough disincentive not to do it again,” Kennon said.

Under the RESTORE Act passed in July, 80 percent of all Clean Water Act fines would be distributed to the five Gulf Coast states.

Local officials believe this is just for the criminal phase of the trial, but Thursday morning none were really sure what the resolution means or where the money would go.

Will it affect the civil litigation and negotiations currently still ongoing that caused such consternation locally last month? Details of a deal to lessen Clean Water Act fines, thus trimming RESTORE Act eligible money, were rumored to be in the works.

That settlement proposal would have BP pay less in Clean Water Act fines and more to the Natural Resource Damage Assessment program and also give BP a tax break.

The cold numbers as reported by BP today “are resolution of all criminal claims with Department of Justice includes $4 billion paid in installments during a period of five years; resolution of all securities claims with Securities and Exchange Commission includes $525 million paid in installments during a period of three years; and existing $38.1 billion charge against income to increase by approximately $3.85 billion.

The company also said it is prepared to vigorously defend itself against remaining civil claims.

As part of the resolution, “BP has agreed to plead guilty to 11 felony counts of Misconduct or Neglect of Ships Officers relating to the loss of 11 lives; one misdemeanor count under the Clean Water Act; one misdemeanor count under the Migratory Bird Treaty Act; and one felony count of obstruction of Congress.”

“This has all to do with the punitive damages for the claimants,” Kennon said. “It’s hard to know exactly unless you are an attorney in the middle of all of it, but from what I understand it has nothing to do with the Restore Act, Clean Water or NRDA.

“It’s hard to decipher.”