More than two years after its Deepwater Horizon rig created the largest oil spill in U.S. history, British Petroleum (BP) this week admitted criminal wrongdoing and settled for $4.5 billion with the U.S. Department of Justice (DOJ). The amount is the largest corporate fine in U.S. history.
According to the (DOJ), $4 billion will be paid to the federal government over five years, with $525 million paid separately to the Securities and Exchange Commission (SEC) over three years. The SEC settlement is because after the April 20, 2010 rig explosion BP lied about how much oil was coming from the well.
BP pled guilty to 12 felony charges stemming from 11 deaths on the rig and another count of obstruction of Congress, and was hit with one misdemeanor count under the Clean Water Act and one misdemeanor count under the Migratory Bird Treaty Act. The settlement must still be approved by a U.S. district court judge.
About $2.4 billion of the settlement will go to the National Fish and Wildlife Foundation (NFWF), an independent non-profit conservation group chartered by Congress in 1984. NFWF will directly oversee the use of those funds" to maximize benefits for fish and wildlife habitats in the Gulf Coast region," Ducks Unlimited (DU) reported.
"Ducks Unlimited applauds the decision to direct a significant portion of the settlement funds to the National Fish and Wildlife Foundation," DU CEO Dale Hall said. "NFWF is the appropriate organization to manage these funds and determine how they can best be used to benefit Gulf Coast fish and wildlife, and the people who depend on these resources for their livelihood and recreation."
DU said up to 14 million waterfowl winter along the Gulf Coast, and the area is one of DU's highest conservation priorities.
Louisiana Gov. Bobby Jindal said the settlement is "an important first step," but "the majority of BP's liability remains outstanding and we will hold them fully accountable." He added, "In Louisiana, our fishermen are experiencing extraordinary impacts. Shrimp, crabs, oysters and other seafood are in decline."
John Young, president of Jefferson Parish, La., told PBS, "The fact that it's the largest criminal fine in U.S. history I think is appropriate, in light of the fact that the BP oil disaster was the largest environmental disaster in U.S. history.
"But ... it's just a first step. Civil awards and damages need to be assessed against BP, so that we're made whole down here in Louisiana and in the entire Gulf Coast."
In other words, this settlement is just the first step in legal wrangling that could result in BP paying out tens of billions. (If that sounds like a lot, BP's 2011 profit was $25.7 billion, and it profited $5.5 billion in its most recently reported quarter.)
Time.com noted that BP could in the future "face a massive, multi-billion dollar penalty over a provision of the Oil Pollution Act, which would allow the Justice Department to charge the company more than $30 billion to fix damages from the spill. A settlement of some sort seems more likely, but ... Gulf Coast states insist that BP should pay the full fine, and that the bulk of those funds should go to the Gulf states. A settlement, however, might allow the federal government to control where that money ends up."
Last year Congress voted to steer 80 percent of civil penalties related to the spill to Gulf states.
Young said, "It's far from over in terms of not only cleanup, but in terms of assessing what the long-term effects are going to be as a result of this oil disaster and how it's going to affect our Gulf Coast.
"We had a U.S. Senate hearing down here about a month and a half ago, and the Coast Guard admitted they can't account for a lot of oil. That oil has been submerged in the Gulf because of the dispersants that were used, and then when Hurricane Isaac came around, it churned up that.
"Now we're having oil on our beaches, and before Hurricane Isaac BP was wanting to sign out and say everything was fine. So, certainly, we continue to fight again with BP. BP wants to say that their responsibility is over; they want to walk away from this."
According to the Associated Press (AP), BP acquired 40 new leases in the Gulf this year and even though it will soon be a convicted criminal has no plans to stop drilling in the Gulf. "No federal agencies have indicated an intention to suspend or disbar the company, something that's permitted following a criminal conviction," AP noted.
Also, BP's stock price actually went up on news of the settlement – in other words, the company is now worth more. That's because the "settlement with the U.S. Justice Department was less harsh than many had feared, and finally establishes the extent of criminal wrongdoing BP faces from the catastrophe," stated MarketWatch.com.