Federal prosecutors are considering whether to pursue manslaughter charges against BP Plc managers for decisions made before the Gulf of Mexico oil well explosion last year that killed 11 workers and caused the biggest offshore spill in U.S. history, according to three people familiar with the matter.
U.S. investigators also are examining statements made by leaders of the companies involved in the spill – including former BP Chief Executive Officer Tony Hayward – during congressional hearings last year to determine whether their testimony was at odds with what they knew, one of the people said. All three spoke on condition they not be named because they weren’t authorized to discuss the case publicly.
Charging individuals would be significant to environmental-safety cases because it might change behavior, said Jane Barrett, a law professor at the University of Maryland.
“They typically don’t prosecute employees of large corporations,” said Barrett, who spent 20 years prosecuting environmental crimes at the federal and state levels. “You’ve got to prosecute the individuals in order to maximize, and not lose, the deterrent effect.”
The Justice Department in June said it opened criminal and civil investigations into the spill, which began after an April 20 explosion aboard the Deepwater Horizon rig that London-based BP leased from Transocean Ltd. (RIG), of Vernier, Switzerland. The department filed a civil suit against BP in December and hasn’t filed criminal charges. It’s continuing to investigate.
BP fell as much as 10.9 pence, or 2.3 percent, to 466.2 pence in London, and traded at 467.6 pence as of 10:50 a.m. local time.
Authorities are examining actions by BP managers who worked both on the rig and onshore to determine whether they should be charged in connection with the workers’ deaths, according to the people. Prosecutors have been looking at charges of involuntary manslaughter or seaman’s manslaughter, which carries a more serious penalty of up to 10 years.
Scott Dean, a spokesman for BP in Houston, declined to comment. Laura Sweeney, a Justice Department spokeswoman, wouldn’t discuss the details of the investigation.
BP has committed $20 billion to settle claims by businesses and individuals who were hurt by the oil spill. The company has already paid out more than $4 billion to settle such claims and to pay state, local and federal governments for cleanup costs, response and losses, the company said on its website.
The manslaughter investigation is focusing on decisions by BP managers leading up to the explosion that may have sacrificed safety in favor of speed and cost savings, one of the people said.
David Uhlmann, a former chief of the Justice Department’s environmental crimes section, said he expected that companies involved in the spill would be charged with seaman’s manslaughter. Making a case against individual managers would be more difficult, he said.
“You have relatively low-level people in these companies responsible for making bad decisions,” said Uhlmann, who now teaches at the University of Michigan Law School in Ann Arbor. “It’s not clear they had adequate training. It’s not clear they all knew what everyone else involved knew.”
Attorney General Eric Holder in June listed a number of potential environmental violations under review in the criminal and civil investigations, including of the Clean Water Act. Holder, in his statement, didn’t specifically mention the possibility of manslaughter charges.
Investigators are scrutinizing e-mails and other documents to determine what BP officials and the company’s drilling partners knew when they testified before Congress in June and whether they withheld information, one of the people said.
When Hayward, who lost his job after the spill, testified before a House panel, one lawmaker said he wasn’t being forthcoming.
“I expect you to cooperate with us,” Representative Henry Waxman, a California Democrat, told Hayward at the hearing. “Are you failing to cooperate with other investigations as well? Because they’re going to have a hard time reaching conclusions if you stonewall them.”
Hayward denied he was stonewalling and said he wasn’t involved in decisions about the well’s operation.
The investigation is being conducted by a task force within the Justice Department’s criminal division following a move this month to consolidate management of the probe. It’s being run by John Buretta, a senior counsel in the criminal division. Until then, the environment and natural resources division was running the bulk of the criminal case.
Environmental lawyers and lawyers from the U.S. attorney’s office are reporting to Buretta in the probe.
James Cole, the deputy attorney general, said he decided to consolidate the case to ensure “we used all the resources we had the most effective way we could.”
“I felt that the most effective way to proceed with this case was to combine the efforts into one group,” Cole said in an interview. “The focus of the case is the same. It’s just under different organization.”
Before the change, the criminal division had been focusing on whether BP made misleading statements after the spill and company executives traded stock based on insider information, two people familiar with the matter said. The environment division’s criminal lawyers had been examining violations of environmental laws, along with manslaughter, the people said.
Cole declined to discuss specifics of the probe.
“There is a lot of investigation yet to be done,” he said. “It’s going to head wherever the law and the facts take it.”
BP’s shares fell 55 percent in London intraday trading from a high of 658.20 pence on April 21 to a low of 296 pence on June 25. The shares closed in London yesterday at 477.10 pence.
Sealing the Well
Authorities are focusing on events leading up to the explosion of the well as BP and Transocean workers were trying to seal it. The companies wanted to move the Deepwater Horizon drilling rig and replace it with a production rig that would pump oil and gas from the ground.
The companies had struggled with the well for months because the rock formation surrounding the oil and gas repeatedly cracked and collapsed on the hole they were drilling. In the week before the disaster, BP officials made repeated changes to the well plan, according to testimony in Coast Guard hearings, internal documents and investigation reports.
A commission appointed by President Barack Obama to investigate the disaster identified 11 choices made in the completion of the well that both saved time and increased risks. Seven were made by BP managers on shore, the panel said.
The decisions included moving ahead with operations without the recommended equipment, failing to run a test to ensure the well’s stability, and misreading the results of other tests.
In the days leading up to the disaster, BP officials were warned by Halliburton Co. (HAL), the Houston-based company it hired to seal the well with cement, that their design might allow the oil and natural gas to leak to the surface.
Halliburton recommended BP use 21 centralizers that help ensure cement is evenly distributed in the well and seals it. BP had only six centralizers on Deepwater Horizon, according to internal e-mails released by investigators. BP officials decided to go ahead rather than wait for the additional 15.
They also decided to skip a test that would determine if the cement was stable, according to testimony at Coast Guard hearings. Then, on April 20, BP and Transocean managers on the rig misread the results of another test to determine whether the well’s cement seal was strong enough to hold the oil and natural gas beneath the ocean floor, according to the president’s commission.
In the end, the companies went ahead and removed the drilling mud from the well, which took 2,600 pounds of weight from atop the oil and gas reservoir. Within hours, natural gas reached the Deepwater Horizon and touched off the catastrophic explosion.