Thursday's announcement that oil giant BP has agreed to pay a record criminal fine for the 2010 oil spill in the Gulf of Mexico sends the right signal on corporate accountability to an industry whose mistakes can impact millions of Americans. The financial penalties will help restore the gulf and strengthen federal, state and private claims against BP for civil damages. And the same-day indictments of two BP rig workers on manslaughter charges will go even further in capturing the attention of industry players who have long dodged responsibility for cowboy operating tactics.
BP will pay $4.5 billion to settle 14 criminal charges stemming from the April 2010 blowout of the Deepwater Horizon. Eleven workers were killed when the offshore drilling rig exploded and sank, spewing 206 millions gallons of oil into the gulf, killing wildlife, soiling hundreds of miles of shoreline and closing tens of thousands of miles of federal waters to fishing. It makes sense that the worst environmental disaster in this nation's history would draw the largest criminal fine. And it is fitting that most of the money, $2.7 billion, will go to environmental restoration and conservation efforts.
Thursday's settlement resolves only federal criminal charges against the company. It does not affect the Justice Department's ongoing criminal investigation of any individuals involved. Nor does it resolve any claims under the federal Clean Water Act, state and private claims for economic damages, environmental losses or cleanup costs. But the sheer size of Thursday's deal and BP's agreement to plead to criminal charges - including a felony complaint of obstructing Congress - should strengthen the hand of the federal government, states and businesses in forcing BP to make full reparations. The Clean Water Act penalties alone could reach $20 billion. Clearly, Thursday's move was but a step, but it was a step in the right direction.
The criminal charges should send a message to industry that the government will hold even powerful companies to account for negligent operating practices. The fines against BP don't even equal the $5.4 billion in profits the company made in the last quarter. But the stigma of the criminal charges and the ongoing regulatory oversight required by the settlement have far-reaching implications for any player in this competitive global industry. And the terms of the plea underscore the expectations the government has for industry to be candid and cooperative in responding to future crises.
Attorney General Eric Holder and his department deserve credit for wringing an admission from BP that begins to address the pain the company caused. The federal government and the states need to continue looking after the victims and pursuing the range of criminal and civil penalties that will serve justice and be a model for better corporate behavior.