With the federal trial set to begin in February to determine fault in the worst oil spill in U.S. history, legal maneuverings have reached fever pitch on the Gulf Coast. Federal prosecutors are reportedly preparing criminal charges that could put a handful of mid-level BP employees behind bars for their role in last year’s 200-million-gallon oil spill. Based on the enormous scope of the disaster and the egregious nature of the safety lapses involved (according to a series of highly critical government investigations), many legal experts anticipated criminal charges against BP, the company, but far fewer expected that even the threat of criminal charges against specific employees would emerge.
From a Dec. 29 Wall Street Journal report:
Prosecutors are focused on several Houston-based engineers and at least one of their supervisors at the British oil company, though the breadth of the investigation isn’t known. The prosecutors assert the employees may have provided false information to regulators about the risks associated with the Gulf of Mexico well while its drilling was in progress…
The felony charges – which according to the Journal “might be disclosed in early 2012, if they are brought” – carry a penalty of up to five years in federal prison in addition to a substantial fine. Although I believe the severity of the safety violations and the enormity of the resulting damage warrant criminal charges against both the company and the responsible employees, it is likely that prosecutors are primarily focused on buttoning up their case against the oil giant itself rather than specific BP employees. More from the WSJ report:
The Department of Justice still could decide not to bring charges against the individuals, people familiar with the situation said. It’s not unusual for prosecutors to use the threat of charges to pressure people to cooperate in investigations.
Believe me, there’s nothing like the prospect of jail time and a significant monetary fine to persuade people to break their silence and cooperate more fully with an ongoing investigation. The threat of criminal charges is not only “not unusual” but in fact fairly common when building a case against a defendant, particularly one with the immense power and wealth of BP. While charges against the “several Houston-based engineers” remain uncertain, charges against their employer seem to be a foregone conclusion. More from the Journal:
Legal experts say BP itself is expected to face broader criminal charges, including violations of the federal Clean Water Act; the company already is appealing what could amount to $36.6 million in administrative fines levied by U.S. regulators for safety violations. The size of the fines hasn’t been finalized.
It appears federal prosecutors, who have “reviewed thousands of documents and conducted dozens of interviews” over the last 18 months, are focusing on a new aspect of the case tied to the stability of BP’s Macondo Well and its ability to be controlled. More from the WSJ article:
Prosecutors recently looked into a key safety measure in deep-water drilling: The difference between the minimum amount of pressure that must be exerted in a well’s bore by drillers to keep the well from blowing out, and how much pressure would break apart the rock formation containing oil and gas. The narrower the margin between those two points, the more difficult a well is to control.
. …Among questions prosecutors are asking is whether information gathered during drilling that helped determine the safety margin in the Deepwater Horizon situation was properly reflected in amended drilling permit applications that had to be approved by federal regulators, said the people familiar with the investigation.
With the federal trial date less than two months away, we’ll soon know whether this was merely a threat to cajole additional information out of BP employees or if the criminal charges against those employees will be formally brought. One thing is certain: Either scenario amounts to very bad news for BP’s legal defense.
Read the full Wall Street Journal report here: http://online.wsj.com/article/SB10001424052970203899504577126871591624572.html
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Fining a corporation does little to change corporate behavior. People in the highest places have to do jail time or there’s no effect. Go get ’em Feds!
Thanks for all your work keeping us up to date with the events that most Media have consigned to oblivion.
Stuart, I had read somewhere that BP made some kind of deal and settled with the US Government using the $20 Billion fund to give them immunity to further fines… i.e. $20 billion covers all eventualities.
Do they have some kind of immunity to further damage claims outside of the 20 billion?