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BP Guilty Plea in Rig Crew Deaths Set for January Hearing

BP Plc (BP/)’s guilty plea in the 2010 deaths of 11 crew members of the Deepwater Horizon drilling rig in the Gulf of Mexico will be considered by a federal judge in New Orleans on Jan. 29.

BP announced Nov. 15 that it reached a deal with the U.S. Justice Department to plead guilty to 14 counts, including 11 for felony seaman’s manslaughter, and pay $4 billion to end all criminal charges related to the largest offshore oil spill in U.S. history.

U.S. District Judge Sarah S. Vance said yesterday she will determine at the Jan. 29 hearing whether to “accept the plea agreement and impose the agreed sentence or reject the agreement and allow BP to withdraw its agreement to plead guilty.”

The court can only accept or reject the plea agreement, Vance said in yesterday’s three-page order. “The court may not become involved in plea negotiations,” she said.

BP’s settlement with the U.S. includes a record $1.26 billion criminal fine, which would be paid over five years. BP agreed to five years’ probation and extensive monitoring of its drilling operations, according to court papers.

Along with the criminal fine, the resolution with the Justice Department includes a total of $2.4 billion that will be paid to the National Fish & Wildlife Foundation over five years. Another $350 million will be paid to the National Academy of Sciences during that same period.

SEC Claims

Beyond the $4 billion criminal settlement, BP will pay an additional $525 million to resolve claims by the Securities and Exchange Commission that the London-based company underestimated the size of the spill to bolster stock prices.

Scott Dean, a spokesman for London-based BP, declined to comment on yesterday’s order. Michael Passman, a Justice Department spokesman, also declined to comment.

BP agreed to plead guilty to 14 criminal counts, including 11 for felony manslaughter for the people who died when the Deepwater Horizon drilling rig exploded and sank, Vance said in her order.

The company also pleaded guilty to one misdemeanor count under the Clean Water Act, one misdemeanor count under the Migratory Bird Treaty Act and one felony count of obstruction of Congress, she said.

Joint Memo

Vance ordered the U.S. and BP to file a joint memo on “why they contend that the plea agreement adequately reflects the seriousness of the offenses.” She also ordered the U.S. Probation Office for the Eastern District of Louisiana to conduct a presentence investigation to be presented to the court two weeks before the hearing.

The U.S. government must inform victims of the hearing, Vance said. She gave victims a Jan. 16 deadline to file written submissions about the plea.

The U.S. last month also charged two BP well-site managers with involuntary manslaughter and a former executive with obstruction and false statements. The three men each pleaded not guilty Nov. 28 in federal court in New Orleans.

The site managers, Robert Kaluza and Donald Vidrine, who supervised testing on the Macondo oil well were charged Nov. 15 with involuntary manslaughter, seaman’s manslaughter and Clean Water Act violations. The U.S. alleges that Kaluza and Vidrine ignored multiple indications that the well wasn’t secure before the explosion.

Trial Date

A trial has been set for Feb. 4. Shaun Clarke, the Houston- based defense attorney for Kaluza, filed a joint motion yesterday with his co-defendant, asking the court to delay the trial until late 2013. The defendants filed the motion “with the consent of the prosecution,” Clarke said.

David Rainey, BP’s former vice president of exploration for the Gulf of Mexico, was charged with obstruction of Congress and making false statements related to the size of the oil spill. The U.S. claims Rainey cherry-picked information from flow-rate reports to make the spill seem less catastrophic than it was.

U.S. District Judge Kurt Engelhardt granted Rainey’s motion on Dec. 10 to delay his trial, initially set for Jan. 28. The judge said he agreed to the delay based on “the complexity of this matter” and the need for Rainey to review “voluminous” documents.

The criminal case is U.S. v. BP Exploration and Production Inc., 12-00292, U.S. District Court, Eastern District of Louisiana (New Orleans). The criminal cases against the individuals are U.S. v. Kaluza, 12-cr-00265; and U.S. v. Rainey, 12-cr-00291, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporters on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net; Allen Johnson Jr. in New Orleans, allenmct@gmail.com

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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