British Petroleum Corporation agreed to plead guilty to
11 felony counts of misconduct or neglect related to the deaths of 11 workers in the explosion and fire that destroyed the
Deepwater Horizon drilling platform and caused the largest oil spill in US history. Under the agreement BP will pay $4.5 billion in fines, also the largest in US history for a single criminal case. Most of that money will go towards environmental remediation efforts. In addition the company will submit to government oversight of its ethics and safety practices for a period of four years. Two company employees were also charged with manslaughter for each man who died. The government alleges they were negligent in supervising negative pressure tests intended to seal the runaway Macondo well.
Significantly, the deal does not include the potentially largest liability the company faces from the disaster. Under the Clean Water Act the company could face civil fines ranging from $1000 to $4300 a barrel of oil spilled if the company is found to have acted with gross negligence. Since an estimated 4.9 million barrels of oil escaped into the Gulf of Mexico BP could be assessed as much as $21 billion. Potential liability under the Oil Pollution Act is even greater at more than $31 billion. As of now the government intends to go to trial in February on the pollution claims. Also left unresolved is the company's eligibility to perform government contracts now that it pleaded guilty to criminal misconduct. Contract debarment or disqualification from federal contracting is rarely imposed, but appropriate in the case of BP which has demonstrated a corporate tendency to cut costs when regulations or safety rules are involved in operational decisions. BP increased its corporate reserve for costs and claims related to the spill to $42 billion. It's stock price remained relatively unchanged at market close on Thursday.
