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Defense lawyers say BP rig workers are scapegoats

Associated Press Modified: November 16, 2012 at 4:45 am •  Published: November 16, 2012

The settlement surpasses the $1 billion paid by Exxon for the 1989 Exxon Valdez oil spill off Alaska's coast. No Exxon executives were charged in that case, although ship captain Joseph Hazelwood was ultimately convicted of negligent discharge of oil and fined $50,000. He was cleared of earlier charges of being drunk when the ship ran aground.

BP has previously paid $63 million to settle federal charges of safety violations in the 2005 explosion at its Texas City oil refinery, which killed 15 workers. No individuals were charged in that case.

More recently, Alpha Natural Resources reached a $210 million settlement that spared the company criminal charges over the 2010 West Virginia coal mine explosion that killed 29 workers. The worst U.S. coal mining disaster in 40 years led to criminal charges against a former superintendent and security chief at the Upper Big Branch Mine.

David Uhlmann, director of the University of Michigan's Environmental Law and Policy Program, said even though the BP penalties are records they are at the low end of what the Justice Department could have sought. Uhlmann, a former top Justice Department environmental crimes prosecutor, said BP could have faced upwards of $40 billion in penalties.

"No one expected BP would pay anything close to that amount, given all of the other liabilities it has," he said. "But a $4.5 billion penalty, even though it is a record amount, is modest under the circumstances."

The settlement and the indictments came 2½ years after the fiery drilling-rig explosion set off the biggest offshore oil spill in U.S. history.

The deal, which is subject to approval by a federal judge, includes payments of nearly $2.4 billion to the National Fish and Wildlife Foundation, $350 million to the National Academy of Sciences and about $500 million to the Securities and Exchange Commission. The SEC accused BP of misleading investors by lowballing the amount of crude that was spilling.

"We believe this resolution is in the best interest of BP and its shareholders," said Carl-Henric Svanberg, BP chairman. "It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims."

The settlement appears to be well within BP's means, considering the oil giant made a record $25.8 billion in profits last year. And it will be given five years to pay. But the company still faces huge additional claims.

For one thing, the settlement does not cover the billions in civil penalties the U.S. government and the Gulf states are seeking from BP over the environmental damage.

Also, a federal judge in New Orleans is deciding whether to approve an estimated $7.8 billion settlement between BP and more than 100,000 businesses and individuals who say they were harmed by the spill. They include fishermen, charter boat captains, restaurants, hotels and property owners.

Under the settlement with the U.S. government, BP will plead guilty to 11 felony counts of misconduct or neglect of a vessel's officers, one felony count of obstruction of Congress and one misdemeanor count each under the Migratory Bird Treaty Act and the Clean Water Act. The workers' deaths were prosecuted under a federal law that protects seamen.


Associated Press writers Pete Yost in Washington, Kevin McGill in New Orleans, Holbrook Mohr in Jackson, Miss., and Curt Anderson in Miami contributed to this story.