In criminal investigation of BP, who'd go to jail? Not the CEO

Reply Mon 7 Jun, 2010 11:16 am
June 5, 2010
In criminal investigation of BP, who'd go to jail? Not the CEO
By Scott Hiassen | McClatchy Newspapers

U.S. Attorney General Eric Holder promises an aggressive criminal investigation of BP and its contractors for their actions leading up to the massive Gulf of Mexico oil spill, already the worst environmental disaster in U.S. history.

If history is any guide, however, don't expect to see the chief executive of BP in handcuffs.

Over the years, the Justice Department has repeatedly pursued criminal charges in major environmental accidents, from the Exxon Valdez oil spill in 1989 to the Three Mile Island nuclear accident a decade earlier. In most high-profile environmental cases, criminal charges are brought mainly against the companies involved, while corporate executives typically escape punishment.

However, if the companies responsible for the Gulf spill are prosecuted and convicted of wrongdoing, they can expect millions of dollars in criminal fines " on top of any civil penalties " or even banishment from government contracts, experts say.

"Federal statutes give (prosecutors) a lot of tools and a lot of flexibility for this kind of catastrophic event," said Ronald Sarachan, who led the Justice Department's environmental crimes section in the 1990s.

The experts also stress that the Gulf oil spill is unlike any other disaster in the past, greater in its scale " threatening the coastlines of at least four states, and possibly gushing for months " and in the extent of the injuries it has caused. Given those factors, the Justice Department may push to hold individuals accountable.

If we find evidence of illegal behavior, we will be forceful in our response," the attorney general said at a news conference in Louisiana last week. "There is really nothing off the table."

One strategy investigators will likely follow will be to determine whether BP or its contractors submitted false information to the government, either in drilling permits or safety documents, Sarachan said.

Federal prosecutors followed a similar path after the accident at the Three Mile Island nuclear power plant in Pennsylvania in 1979. The operator of the plant, Metropolitan Edison Co., was charged with 11 felonies, including counts for allegedly falsifying safety records and destroying other records in the months before the accident.

The company ultimately pleaded guilty to one charge. No individuals were charged.

Since the Gulf oil spill, environmental groups and other critics have accused BP of misleading the Interior Department in an oil-spill response plan filed with offshore drilling permits two years ago. In the plan, BP said it was prepared to manage a spill 10 times greater than the gusher that's fouled the Gulf from Louisiana to the Florida Panhandle for almost seven weeks.

A BP spokesman didn't respond to a request for comment.

Prosecutors will also determine whether the oil companies violated the criminal provisions of environmental laws, such as the Clean Water Act and the Migratory Bird Treaty Act, Holder said in a news conference last week.

Under the Clean Water Act, a company may be charged with a misdemeanor for negligent conduct, or a felony if there is evidence the company knowingly engaged in conduct risking injury, said Robin Greenwald, also a former Justice Department environmental prosecutor.

Such an inquiry would turn on whether employees with BP or its contractors, Transocean and Halliburton, approved risky methods to extract a drill from the undersea well, knowing that such methods could injure those on board the Deepwater Horizon oil rig, Greenwald said. Eleven people died in the April 20 rig blowout that sparked the spill.

These charges could apply against both companies and individuals. In practice, however, prosecutors more often bring these cases against corporations alone, not their executives or employees.

That's because it's often difficult to prove that corporate officers have specific knowledge of misbehavior, and the power to prevent the criminal activity " the two key elements needed to charge company executives not personally involved in the illegal conduct.

"With a large corporation, sometimes the people making those decisions are hard to figure out," Greenwald said.

When the Exxon Valdez tanker ran aground in 1989 and spilled at least 11 million gallons of oil into Alaska's Prince William Sound, it was a rare instance where an individual was held responsible. The captain of the ship, Joseph Hazelwood, was charged with intoxication and reckless endangerment " not by the feds, but by state prosecutors.

Hazelwood, who had been drinking before the crash but was not piloting the ship at the time of the accident, was ultimately cleared of all charges.

Criminal cases involving corporate defendants rarely go to trial, and typically end in negotiated plea bargains for fines and probation. Criminal charges can be useful tools in embarrassing companies or deterring them from breaking the law in the future, Sarachan said.

"Obviously, you can't put the corporate seal in jail," he said. "But corporations really are concerned about their reputations."

BP's reputation was already bruised by criminal charges long before the Gulf spill.

In 1999, BP's exploration company pleaded guilty to a felony charge of illegal dumping of hazardous material on Alaska's North Slope, paying $22 million in criminal and civil fines.

Eight years later, BP pleaded guilty to a felony violation of the Clean Air Act and paid a $50 million fine following a 2005 explosion at a Texas oil refinery that killed 15 people and injured 170 others. That same year, BP also pleaded guilty to a misdemeanor Clean Water Act violation for an oil spill on Alaska's North Slope, paying another $12 million fine.

The fines will likely be much higher this time, experts say.

(Hiassen reports for the Miami Herald.)

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Reply Mon 7 Jun, 2010 02:01 pm
Thanks for posting this.

I can almost hear the right saying but we must never interfere with the unfettered working of the free market.
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