Alexander Cockburn | BP Faces Fines of Up to $10 Billion, Plus Jail Time for Guilty Officials
Friday 18 February 2011
For its huge oil spill last summer in the Gulf of Mexico, BP is facing "the largest criminal fine ever paid in the
These days, David Uhlmann is a professor at the
In the article, Uhlmann says it's a sure thing that the Justice Department will bring criminal charges against BP, Transocean and in all likelihood, Halliburton.
The charges will include criminal violations of the Clean Water Act and the Migratory Bird Act -- two of the environmental crimes charged in the Exxon Valdez oil spill case.
But what is probably prompting sweaty palms and atrial fib in the relevant corporate suites is that in an interview with the Washington, D.C.-based Corporate Crime Reporter, released Feb. 16, Uhlmann predicts there'll be federal manslaughter charges for the deaths of the 11 workers who died when the Deepwater Horizon well exploded in April 2010.
Last month, BP gave a muted sigh of relief after the Obama-appointed national commission to investigate the oil spill in the
But a criminal prosecution requires only that the violation was negligent. Grossness is not mandatory. A criminal prosecution would be separate from the civil action, but the Justice Department can launch it while a civil action is under way. With criminal sanctions, the penalties facing BP would be far harsher, including possible jail time for individuals.
"The President has described the Gulf oil spill as the worst environmental disaster in U.S. history," Uhlmann points out, and "the precedent for bringing criminal charges was set more than 20 years ago when the Justice Department prosecuted Exxon for the Valdez oil spill in Prince William Sound."
"What about the Seaman's Manslaughter Statute -- the law under which you say the manslaughter charges will be brought?" Corporate Crime Reporter asks.
"It's a very old statute, which predates the environmental laws that were violated in this case," Uhlmann answers. "Under the Seaman's Manslaughter Statute, it is a crime if a worker dies aboard a vessel because of negligence or inattention to duties by the master of the vessel or the owner of the vessel."
"It's a felony violation that could result in up to ten years in prison and significant fines. The worker deaths are an important part of the Gulf oil spill case that should not be forgotten. As terrible as the ecological harm was to the Gulf, this tragedy began with eleven people losing their lives."
"I expect the Justice Department to include criminal charges under the Seaman's Manslaughter Statute in any indictment. Prosecutors will want to address the misconduct that caused those workers to die, and the Seaman's Manslaughter Statute allows them to do so. I would be very surprised if charges are not brought based on the worker deaths."
BP has been clinging to the hope of a deferred or non-prosecution agreement. A deferred prosecution is an agreement not to seek criminal charges in exchange for the functional equivalent of civil penalties. Ironically, Corporate Crime Reporter runs a story in the same current newsletter on the rise of these agreements in recent years.
But Uhlmann tries to slam that door shut. "Deferred prosecution would be completely inappropriate after a tragedy like the Gulf oil spill. ... Eleven people died. A fragile ecosystem was irreparably damaged. Communities along the Gulf suffered billions in economic losses."
"If the companies that caused such terrible damage do not deserve criminal prosecution, it is hard to imagine ... If the outcome of the Gulf oil spill case is a deferred prosecution, the Justice Department will have a lot of explaining to do."
What about the fines?
To date, the largest criminal fine paid by a corporation was the $1.3 billion paid by Pfizer in fall 2009 for illegal marketing of Bextra, a drug used for the relief of pain, fever, swelling and tenderness caused by osteoarthritis.
The fine paid by BP will dwarf the fine paid by Pfizer, according to Uhlmann, who explains that under the Alternative Fines Act, the government can seek up to twice the losses associated with the Gulf oil spill, which puts the maximum fine well into the tens of billions of dollars.
The bottom line? "I don't think we will see a $30 billion or a $40 billion fine, but a criminal sentence of $10 billion would be appropriate, along with an equal amount in civil penalties. At a minimum, we will see a multi-billion criminal fine for BP."
What about individual culpability? According to Uhlmann, "There is no question that the Department will want to prosecute individuals. ... The government is going to struggle to identify individuals high enough up in the chain of command at BP, Transocean and Halliburton to warrant criminal prosecution."
Executives at BP, Transocean and Halliburton are no doubt hopefully rereading Obama's recent speeches pledging a more corporate-friendly posture on the part of his administration across the next two years.
Alexander Cockburn is co-editor with Jeffrey St. Clair of the muckraking newsletter CounterPunch. He is also co-author of the new book "Dime's Worth of Difference
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