BP recently reached an agreement with the Justice Department to plead guilty to criminal charges stemming from the 2010 Deepwater Horizon explosion and oil spill in the Gulf of Mexico. The oil giant also has also agreed to pay out $4.5 billion in government penalties.
The funds will be dispersed as follows:
$4 billion to settle criminal charges
$525 million to settle allegations brought by the Securities Exchange Commission (SEC) that contend the company lied to investors by minimizing the amount of oil spilled into the Gulf after the explosion.
A federal grand jury indicted two of BP’s well-site supervisors onboard the Deepwater Horizon on the day of the explosion with 23 criminal counts, including 11 felony manslaughter charges. The indictment accuses them of disregarding abnormal high-pressure readings that should have been significant indications of trouble just before the explosion occurred. They were also charged with criminally violating the Clean Water Act.
In addition, David Rainey, a former executive, was charged with withholding information from Congress and allegedly lying to officials. Further, the company will also plead guilty to a felony count of obstruction of Congress, a misdemeanor charge under the Clean Water Act and a misdemeanor count under the Migratory Bird Treaty.
The financial penalties and the criminal charges against the individuals and the company are unprecedented. The settlement is subject to judicial review which is currently scheduled for December 11.
The fines come in addition to the $20 billion BP has agreed to pay into a trust fund for damage claims from the millions of gallons of oil spilled into the Gulf. The company is expected to make a final payment of $860 into the fund this quarter.
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