Why $4.5 Billion Doesn't Get BP Off the Hook

The details of BP’s historic settlement with the U.S. Department of Justice on Nov. 15 seem basic enough: The energy giant will pay $4.5 billion, including a record $1.26 billion criminal fine, to end all criminal charges and settle U.S. securities claims stemming from the April 2010 blowout that killed 11 men and spewed an estimated 4.9 million barrels of crude into the Gulf of Mexico. Disbursing that much cash isn’t so easy, though—and it still isn’t enough to put the matter to rest.

Where exactly does the money go?
The settlement will be paid out over five years. The $1.26 billion in criminal fines will go to a fund overseen by the Justice Department, which has a lot of discretion about how to spend it. Another $2.39 billion will go to the National Fish and Wildlife Foundation for cleanup. And $350 million will go to the National Academy of Sciences for research on environmental damage to the Gulf. BP will make payments totaling $525 million over three years to the U.S. Securities and Exchange Commission; some of that money could flow back to investors who were misled by the company’s false statements about the rate of spillage.