BP To Pay Largest Criminal Settlement In US History
by: Laurie Johnson, November 15, 2012 9:11:00 am
BP pleaded guilty to 14 criminal counts, including felony manslaughter charges for the deaths of eleven workers who died on the Deepwater Horizon rig in the Gulf of Mexico.
J. Wayne Ballew is an energy attorney with Looper Reed & McGraw. He's also a petroleum engineer and formerly a so-called roughneck. Ballew says as big as BP is, the $4.5 billion settlement is still significant.
"Paying it out over five years, I think reduces some of the significance. Not knowing what the energy market is going to do over the next five years, presuming they're going to be paying that out of cash flow, it certainly could be more significant if we see a downturn."
The company will also have to pay an additional $525 million to the SEC and there are billions more pending in civil suits.
Ballew says one of the questions still unanswered is how the Justice Department will use the settlement money.
"What does $4 billion mean? Does it mean that's going to be spent to increase safety regulations or change the way permitting is done in the Gulf, do additional remediation? What's the $4 billion for?"
Ballew says the settlement is unlikely to have any direct effect on BP's U.S. headquarters here in Houston as far as layoffs go. BP has already spent billions on clean-up and recovery assistance in Gulf Coast states. A nearly $8 billion civil lawsuit is nearing settlement in a New Orleans federal court.