BP Trial Begins

Witnesses began testifying in the British Petroleum trial this week to determine whether the company acted with gross negligence or willful misconduct that resulted in the largest oil spill in US history, the death of eleven oil platform workers, and destruction of uncounted numbers of protected wildlife. The outcome of the case will determine the size of the company's financial liability for the accident. The admiralty trial is to federal district Judge Carl Barbier sitting without a jury. BP has already admitted it was negligent in the guilty plea made in January to violations of environmental protection statutes, but liability for the contamination under the Clean Water Act are based upon size of the spill and the degree of culpability. BP faces a potential fine of $17 billion or $4,300 per barrel spilled if found grossly negligent or engaging in willful misconduct. Part of BP's defense will be to blame the company's drilling contractor, Transocean for a negative pressure test that was misinterpreted. The test was intended to determine whether the temporary abandonment procedure had successfully sealed the well from seawater outside it. Cameron International, the maker of the blowout preventer which failed, also received a share of the blame for the disaster in opening statements. But Alabama's Attorney General said that BP's "culture of corporate callousness towards the Gulf" was primarily to blame and that "greed devastated the Gulf." Louisiana Attorney General told the judge 212 miles of Louisiana coastline are still being polluted as result of the spill that began April 20,2010.

While the trial is underway, a $16 billion settlement of all liability has been proposed; however only a mere $6 billion of that would be fines for violating the Clean Water Act. Fines for criminal or wanton behavior unlike penalties or other payments are not tax deductible since they are intended to punish. Assuming the judge accepts an estimate of about 4.7 million barrels spilled, a figure BP disputes, the proposed $6 billion in fines represents the low end of possible fines under the Act. A negligence finding would imply a fine of about $4.7 billion or $1,000 per barrel spilled. A second trial will determine how much oil officially leaked into the Gulf of Mexico. The company has already received credit for the oil recovered from the well in a separate decision. It has made a contingency provision of $42 billion for damages arising from the disaster.

BP's internal investigation known as the Bly Report did not extend to possible systemic causes for the disaster. A Berkeley engineering professor said on the witness stand that the omission made the report incomplete from a safety management standpoint.

In a related development, a Louisiana woman defrauded resident Southeast Asian fisherfolk who wanted employment as spill clean-up workers. Large areas of the Gulf were closed to commercial fishing as a result of the Deepwater Horizon disaster. The woman created false identification documents and impersonated a federal hazardous waste official to collect money for "training seminars". Connie M. Knight held fake OSHA seminars and promised work to attendees once they paid for and completed the course. She had no connection to official spill contractors. Price of the course varied between $150 and $400 and lasted a few hours. Actual hazardous waste training takes at least six days of classroom work and three days of on-site training. Knight pleaded guilty to three felony charges and one misdemeanor. She faces a maximum of 15 years in prison and a $250,000 fine.