BP Hit With Record Fine
by Jay Kumar
More than two years after its Deepwater Horizon rig created the largest oil spill in U.S. history, British Petroleum (BP) admitted criminal wrongdoing and settled for $4.5 billion with the U.S. Department of Justice (DOJ). The amount is the largest corporate fine in U.S. history.
According to the (DOJ), $4 billion will be paid to the federal government over five years, with $525 million paid separately to the Securities and Exchange Commission (SEC) over three years. The SEC settlement is because after the April 20, 2010 rig explosion, BP lied about how much oil was coming from the well.
BP pled guilty to 12 felony charges stemming from 11 deaths on the rig and another count of obstruction of Congress, and was hit with one misdemeanor count under the Clean Water Act and one misdemeanor count under the Migratory Bird Treaty Act. The settlement must still be approved by a U.S. district court judge.
About $2.4 billion of the settlement will go to the National Fish and Wildlife Foundation (NFWF), an independent non-profit conservation group chartered by Congress in 1984. NFWF will directly oversee the use of those funds" to maximize benefits for fish and wildlife habitats in the Gulf Coast region," Ducks Unlimited reported.
Louisiana Gov. Bobby Jindal said the settlement is "an important first step," but "the majority of BP's liability remains outstanding and we will hold them fully accountable. In Louisiana, our fishermen are experiencing extraordinary impacts. Shrimp, crabs, oysters and other seafood are in decline."
John Young, president of Jefferson Parish, La., told PBS, "The fact that it's the largest criminal fine in U.S. history I think is appropriate, in light of the fact that the BP oil disaster was the largest environmental disaster in U.S. history.”But ... Civil awards and damages need to be assessed against BP, so that we're made whole down here in Louisiana and in the entire Gulf Coast."In other words, this settlement is just the first step in legal wrangling that could result in BP paying out tens of billions. (If that sounds like a lot, BP's 2011 profit was $25.7 billion, and it profited $5.5 billion in its most recently reported quarter.)