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BP Settlement: ‘Record US Criminal Fine,’ But ‘Worth a Fraction of Last Year’s Profits’

The BBC reported the announced agreement or settlement, or probably “deal” is the best word,” with this:

BP gets record US criminal fine over Deepwater disaster

BP has received the biggest criminal fine in US history as part of a $4.5bn (£2.8bn) settlement related to the fatal 2010 Deepwater Horizon disaster.

Two BP workers have been indicted on manslaughter charges and an ex-manager charged with misleading Congress.

The Department of Justice (DoJ) said BP must hand over $4bn. The sum includes a $1.26bn fine as well as payments to wildlife and science organisations.

As part of the agreement, BP will also plead guilty to 14 criminal charges.

The company apologised for its role and said it regretted the loss of life.

BP will also pay an $525m to the Securities and Exchange Commission over a period of three years, the firm said.

The resolution with the DoJ includes a record criminal fine of $1.26bn, as well as $2.4bn to be paid to the National Fish and Wildlife Foundation and $350m to be paid to the National Academy of Sciences, over a period of five years.

DoJ Attorney General Eric Holder said its resolution ‘stands as a testament to the hard work of countless investigators, attorneys, support staff members, and other personnel’.

To BBC’s credit, in the second half of the report, they provided differing perspectives, including from Dean Blanchard, shrimp distributor in Louisiana.

‘I believe the settlements a joke. BP have got to be held accountable for what they’re doing over here. …

‘It’s nothing like the BP commercial you see. BPs doing an effective job of fooling the American public.

Along those lines, from Public Citizen:

Stunning: BP Settlement Is Worth a Fraction of Last Year’s Profits
We’re stunned. This settlement is pathetic. The $4 billion penalty is equivalent to just a fifth of the company’s 2011 profits.

The point of the criminal justice system is twofold: to punish and to deter. This does neither. It is a weak-tea punishment that provides zero deterrence to BP or other companies. Consider that after the 2005 Texas refinery explosion that killed 15 people, BP pleaded guilty to a criminal charge and paid a fine. Now, after a 2010 event that killed 11 people, BP is again pleading guilty and paying a fine. Zero deterrence.

Although the government is right to pursue manslaughter charges against two individuals BP employees, the settlement is inadequate to address BP’s repeated criminal conduct.

The government must impose more meaningful sanctions. Nothing in this settlement stops BP from continuing to get federal contracts and leases. BP will earn more in annual federal contracts than it will pay in penalties as a result of this. That’s appalling.

You can read BP’s statement about the agreement here.

(BP Logo via BP)

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5 Responses to BP Settlement: ‘Record US Criminal Fine,’ But ‘Worth a Fraction of Last Year’s Profits’

  1. mjsmith November 16, 2012 at 4:03 pm #

    I listened to someone from the Justice Dept. drone on and on yesterday. The whole dollar amount to human life ratio scares me.

    From the beggining the story focused on the dollar amount.

    If a doctor kills someone, it is settled by money. This oil spill settled by money.

    We need oil. We need oil companies to be responsible.

    Criminal prosecution will go much farther than just monetary punishment alone.

  2. Jane Austen November 16, 2012 at 6:36 pm #

    You can bet that if they didn’t settle, and had gone to trial the consequences would have been huge. They have gotten away with murder.

  3. TPAZ November 17, 2012 at 3:26 am #

    Total bullshit.

  4. Cujo359 November 17, 2012 at 5:48 am #

    Awhile back someone here asked why I kept mentioning that the Obama Administration had prosecuted no one for the massive fraud that caused the 2008 crash. It was as if they thought I was obsessing about nothing. This is why. An Dept. of Justice that would countenance that fraud will be willing to overlook anything if it’s done by the people who matter. Now, once again, we see that they will do nowhere near what is needed when the rich and powerful break the law. A few mid-level employees may end up in jail, but no one at the top is going to.

  5. TPAZ November 19, 2012 at 11:11 am #

    This just in:

    http://www.reuters.com/article/2012/11/18/us-bp-buyback-idUSBRE8AH01620121118

    “BP Plc (BP.L) plans to spend up to 3.7 billion pounds ($5.9 billion) buying back its shares after agreeing last week to pay record criminal penalties over the Deepwater Horizon disaster, Britain’s Sunday Times said in an unsourced report.”

    Not only is BP telling their shareholders not to worry about the settlement but that they have more money than the penalty sum to spend on buying back shares of stock in the open market. A decrease in outstanding shares causes an increase per share on dividend payments (a pay raise).

    Crime does pay; and very well.

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