U.S. prosecutors are preparing what would be the first
criminal charges against BP
PLC (BP)
employees stemming from the 2010 Deepwater Horizon accident, which killed 11
workers and caused the worst offshore spill in U.S. history, said people
familiar with the matter.
Prosecutors are focused on several Houston-based engineers and at least one of
their supervisors at the British oil company, though the breadth of the
investigation isn't known. The prosecutors assert the employees may have
provided false information to regulators about the risks associated with the
Gulf of Mexico well while its drilling was in progress, these people said.
The felony charges-which might be disclosed early in 2012, if they are
brought-could involve providing false information in federal documents, these
people said. A conviction on such a charge carries a penalty of up to five
years in prison as well as a fine.
The Department of Justice still could decide not to bring charges against the
individuals, people familiar with the situation said. It's not unusual for
prosecutors to use the threat of charges to pressure people to cooperate in
investigations.
Legal experts say BP
itself is expected to face broader criminal charges, including violations of
the federal Clean Water Act; the company already is appealing what could amount
to $36.6 million in administrative fines levied by U.S. regulators for safety
violations. The size of the fines hasn't been finalized.
BP
spokesman Daren Beaudo declined to comment on the potential for charges against
employees or the company. The company has said it believed the accident was
caused by a combination of events that involved multiple parties, not just BP.
A Justice Department spokeswoman declined to comment.
A federal task force based in New Orleans has spent the past 18 months
investigating the April 2010 accident. Prosecutors have reviewed thousands of
documents and conducted dozens of interviews, including bringing some
individuals before a grand jury, according to people close to the
investigation.
Prosecutors recently looked into a key safety measure in deep-water drilling:
The difference between the minimum amount of pressure that must be exerted in a
well's bore by drillers to keep the well from blowing out, and how much
pressure would break apart the rock formation containing oil and gas. The
narrower the margin between those two points, the more difficult a well is to
control.
Federal regulations don't define what margin qualifies as safe, but companies
are supposed to identify the margin in their applications for permits to drill.
When a company cannot maintain that safety margin, it is supposed to suspend
drilling and remedy the problem.
Among questions prosecutors are asking is whether information gathered during
drilling that helped determine the safety margin in the Deepwater Horizon
situation was properly reflected in amended drilling permit applications that
had to be approved by federal regulators, said the people familiar with the
investigation.
The prosecutors' questions appear to mirror concerns raised earlier this year
in public filings by the Bureau of Safety and Environmental Enforcement, the
new U.S. enforcement division spun out of the former Minerals Management
Service in a reorganization after the accident.
The agency in publicly disclosed citations has accused BP,
rig owner Transocean Ltd. (RIG) and Halliburton Co. (HAL), the company
responsible for cementing the well after it was drilled, of violating several
offshore drilling rules. BP
faces four violations of a rule that requires a company to stop drilling when
the safe drilling margin is violated. BP
is contesting the civil charges.
Criminal charges have been brought in previous oil spills, most notably the
1989 Exxon Valdez accident, in which an Exxon oil tanker hit a reef off the
Alaskan coast and spilled 11 million barrels of crude. Exxon, now Exxon Mobil
Corp., faced five criminal charges, including two felonies for placing an
incompetent crew on the ship and three misdemeanor charges of violating the
Migratory Bird Treaty Act and the Clean Water Act.
The company later reached a settlement under which it pleaded guilty to four
misdemeanors and paid $100 million in restitution. The company also paid $900
million to Alaska and the federal government for damaging natural resources.
The only individual charged in the Valdez case was captain Joseph Hazelwood,
who was accused of three felonies-criminal mischief, operating the ship while
intoxicated and reckless endangerment-and a misdemeanor charge of negligently
discharging oil. A jury found him guilty only of the misdemeanor, and he was
sentenced to 1,000 hours of community service and $50,000 in restitution.
The Deepwater Horizon criminal investigation is separate from a group of civil
cases under way in U.S. District Court in New Orleans. The first trial, to
determine the level of liability BP
and other companies will face over the spill, is scheduled to begin Feb. 27,
barring a settlement among the companies and the plaintiffs. BP
has said it wasn't negligent and plans to mount a vigorous defense.
The judge in that case, Carl Barbier, also is set to conduct another trial to
determine how much oil actually escaped from the well before it was sealed and
to what degree the companies controlled the release. The third phase will cover
how the companies did in containing and cleaning up the spill.