BP to pay $4.5 billion in oil spill settlement (+video)
Charles Dharapak, File, Associated Press
NEW ORLEANS — BP said Thursday that it will pay $4.5 billion in a settlement with the U.S. government over the disastrous 2010 oil spill in the Gulf of Mexico and plead guilty to criminal charges related to the deaths of 11 workers and lying to Congress.
The day of reckoning comes more than two years after the nation's worst offshore oil spill. The figure includes nearly $1.3 billion in criminal fines — the biggest criminal penalty in U.S. history — along with payments to certain government entities.
A person familiar with the settlement said two BP employees will also face manslaughter charges over the 11 deaths in the oil-rig explosion that triggered the spill. The person was not authorized to discuss the matter on the record and spoke on condition of anonymity.
Up to now, the only person charged in the disaster was a former BP engineer who was arrested in April on obstruction of justice charges. He was accused of deleting text messages about the company's response to the spill.
"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, 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 spewing from the ruptured well.
London-based BP said in a statement that the settlement would not cover any civil penalties the U.S. government might seek under the Clean Water Act and other laws. Nor does it cover billions of dollars in claims brought by states, businesses and individuals, including fishermen, restaurants and property owners.
A federal judge in New Orleans is weighing a separate, proposed $7.8 billion settlement between BP and more than 100,000 businesses and individuals who say they were harmed by the spill.
BP will plead guilty to 11 felony counts of misconduct or neglect of a ship'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 provision of the Seaman's Manslaughter Act. The obstruction charge is for lying to Congress about how much oil was spilling.
Attorney General Eric Holder was scheduled to discuss the settlement at an afternoon news conference in New Orleans.
The penalty will be paid over five years. BP made a profit of $5.5 billion in the most recent quarter. The largest previous corporate criminal penalty assessed by the U.S. Justice Department was a $1.2 billion fine imposed on drug maker Pfizer in 2009.
Greenpeace blasted the settlement as a slap on the wrist.
"This fine amounts to a rounding error for a corporation the size of BP," the environmental group said.
Nick McGregor, oil analyst at Redmayne-Bentley Stockbrokers, said the settlement would be seen as "an expensive positive."
"This scale of bill is unpleasant, but I think it will be seen over time as being positive. The worst-case scenario for BP would be an Exxon Valdez-style decade of litigation," he said. "I think that is the outcome they are trying to avoid."
The Deepwater Horizon rig, 50 miles off the Louisiana coast, sank after an April 20, 2010, explosion that was later blamed by investigators on time-saving, cost-cutting decisions by BP and its drilling partners in cementing the well shaft.
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