$4B BP Criminal Settlement for Gulf Oil Spill

Story first appeared on USA Today -

The settlement includes payments of nearly $2.4 billion to the National Fish and Wildlife Foundation and $350 million to the National Academy of Sciences.

A federal judge on Tuesday approved a plea deal between energy giant BP and the U.S. Justice Department for the company's role in the 2010 Gulf of Mexico oil spill, finalizing BP's criminal liability for the spill's aftermath.

As part of the agreement, BP agreed to pay $4 billion in fines — the largest criminal resolution in U.S. history — and pleaded guilty to 14 counts of criminal acts ranging from obstruction of Congress to felony manslaughter.

BP agreed to the deal in November, and it was finalized Tuesday by U.S. District Judge Sarah Vance. BP was leasing the Deepwater Horizon rig in April 2010 when it exploded and sank off the coast of Louisiana, killing 11 crewmen and releasing about 200 million gallons of crude into the Gulf.

Before ruling, Vance heard testimony from relatives of the workers who died in the incident. She told the relatives who were in court that she read their "truly gut-wrenching" written statements and factored their words into her decision, adding that BP executives should have personally apologized to family members.

"I think BP should have done that out of basic humanity," Vance said.

According to a BP statement, Luke Keller, a vice president of BP America, addressed the victims' families during the hearing and reiterated the company's regret for its involvement in the incident.

"Our guilty plea makes clear, BP understands and acknowledges its role in that tragedy, and we apologize — BP apologizes — to all those injured and especially to the families of the lost loved ones," he said.

Under the criminal settlement, BP agreed to pay nearly $1.3 billion in fines. The largest previous corporate criminal penalty assessed by the Justice Department was a $1.2 billion fine against drug maker Pfizer in 2009.

The settlement also includes payments of nearly $2.4 billion to the National Fish and Wildlife Foundation and $350 million to the National Academy of Sciences.

The deal brings BP's criminal liability for the spill to a close. But the company still faces the federal government's civil claims, claims by Gulf Coast residents and businesses and federal environmental penalties that could total into the tens of billions of dollars, said Blaine LeCesne, an associate professor at Loyola University New Orleans' College of Law, who has been following the proceedings.

BP separately agreed to a settlement with lawyers for residents and businesses who claim the spill cost them money. BP estimates the deal with private attorneys will cost the company roughly $7.8 billion but that figure could climb significantly as more plaintiffs sign on, LeCesne said.

The big-money penalties could come under the Clean Water Act and the Natural Resource Damage Assessment process, which could skyrocket BP's fines, especially if the company is found to be "grossly negligent," LeCesne said. Company attorneys and government officials are currently negotiating what those fines could be, he said.

"There's a significant amount of legal liability left," he said. "They have potentially another $30 billion to $40 billion to go before they're out of the woods."