Company admits to felonies; implications for civil suits unclear
It certainly sounds like a lot. After spewing hundreds of millions of gallons of oil into the Gulf of Mexico, fouling beaches, killing wildlife and ruining livelihoods up and down the Gulf Coast, oil giant BP will pay fines and penalties of more than $5 billion over five years. News accounts are trumpeting the largest criminal penalty in U.S. history.
But that needs to be understood in the context of what it means to be an oil giant. The fine equals about $262 million per quarter for 20 quarters. But in just the most recent quarter, BP amassedprofits of $5.43 billion. That’s more than all the fines and penalties agreed to today. Looked at another way, had BP been required to pay one-quarter’s worth of the fine during the most recent quarter, it would have cut the company’s profits by less than five percent.
This for a company that also is pleading guilty to 11 felonies relating to the deaths of 11 people when its Deepwater Horizon offshore oil rig exploded in 2010. Two BP employees have been charged with involuntary manslaughter.
This may be the best the government could do given that, had the case gone to trial, it would have been heard in what AFJ President Nan Aron has aptly dubbed the “oil soaked Fifth Circuit” – a reference to the ties between some judges in that circuit and the oil industry.
BP may yet have to pay more, including a fine of up to $21 billion for violating the Clean Water Act – something worth remembering whenever conservative lawmakers rail against “excessive government regulation.” But that, too, is subject to negotiation.
AFJ is studying the settlement to determine the impact, if any, on the small businesses and private citizens who sued BP, some of whom were profiled in AFJ’s documentary Crude Justice. Many, but not all, of those cases were settled earlier this year, settlements BP estimates will cost the company about $7.8 billion.
Anticipating that the impact of the disaster would continue to be felt long after the initial damage was done, Alliance for Justice worked hard to advocate for legal solutions that would let Gulf Coast residents retain their right to hold BP accountable for the damage done to their health and businesses, and to be compensated for loss of income due to the long-term environmental impact of the spill.
Through Crude Justice and other efforts, AFJ has played a substantial role in bringing public attention to the critical issues surrounding the Deepwater Horizon accident, its effects, and the search for justice. AFJ was instrumental in helping to secure $2 million to pay for legal aid attorneys to assist victims of the spill. A year after the spill, we published an in-depth report on how the legal process was and wasn’t working to help victims achieve justice.
For more about the Deepwater Horizon explosion, it’s impact on the people of the gulf, and their efforts to find justice, check out these resources on our website.