BP Reported Close to Settlement With U.S. Over Gulf Spill

November 15, 2012

“LONDON — BP, the British oil company, is expected to agree to criminal liability on Thursday in the giant oil spill in the Gulf of Mexico two years ago and agree to a large fine, according to people close to the situation.

“A law enforcement official also said that BP was expected to plead guilty to obstruction, as well as environmental crimes, and two of its employees would be charged with manslaughter in the case. The official also said the fine, reported to be in the billions of dollars, would be part of the largest criminal penalty in United States history.

“The company itself said it was in advanced talks with the United States about settling all criminal claims stemming from the spill. …

“Even if BP and the government settled on the criminal claims, BP would still be subject to other claims, including federal civil claims and claims for damages to natural resources.

“In particular, this settlement, if it is reached, does not include what is potentially the largest penalty: fines under the Clean Water Act. The potential fine for the spill under the Clean Water Act is $1,100 to $4,300 per barrel spilled. That means the fine could be as much as $21 billion, according to Peter Hutton of RBC Capital Markets in London.”

(Emphasis added.)

I’m not clear on the ability of BP to make a settlement which includes criminal charges against individual employees. Does BP have an obligation to defend them, and if so, how aggressively? If not, what kind of defense could individuals afford to mount in such a high profile case?

Update: A law enforcement official familiar with the case also said that two BP employees would be charged with manslaughter in the case. The United States attorney general, Eric H. Holder Jr., was scheduled to hold a news conference in New Orleans later Thursday.

Talk about being thrown under the bus. These guys have just been thrown under the Deepwater Horizon.