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US Accuses BP of Gross Negligence in Gulf

Ed Crooks in New York
Tuesday, 4 Sep 2012 | 11:27 PM ET

The US Department of Justice intends to prove at trial that gross negligence or willful misconduct by BP caused the 2010 Deepwater Horizon disaster in the Gulf of Mexico, government lawyers have said, in the clearest statement yet that they are seeking the maximum possible penalties from the British oil group.

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Ben Stansall | AFP | Getty Images
BP sign

In a ferociously worded memo, filed with the New Orleans court that is hearing the civil case over the spill, DoJ lawyers accused BP of a “culture of corporate recklessness,” as revealed by email exchanges among BP staff before the explosion on the rig.

“The behavior, words and actions of these BP executives would not be tolerated in a middling size company manufacturing dry goods for sale in a suburban mall,” the government lawyers wrote.

“Yet they were condoned in a corporation engaged in an activity [deepwater drilling] that no less a witness than Tony Hayward [former BP chief executive] himself described as comparable to exploring outer space.”

If the DoJ can establish gross negligence, the penalties under the Clean Water Act would be up to $21 billion, depending on how much oil was spilled. Compensatory and punitive damages would come on top of that sum.

BP has always denied gross negligence and said in a statement on Tuesday that it “looks forward to presenting evidence on this issue at trial in January.”

A trial of the civil case over penalties and damages has been set for January 14 next year. No criminal charges relating to the causes of the spill have been filed.

The DoJ memo came in response to BP’s motion last month for the court to approve its settlement with gulf fishermen and other private sector victims of the spill, which the company has estimated will cost it $7.8 billion.

The government is not seeking to block that settlement, but said it did not want the deal to lead to court decisions that restricted BP’s future liability.

The strong language from the DoJ could be an attempt to increase the pressure on BP in negotiations over a possible settlement of all the civil and criminal claims against it. In June, the Financial Times reported that the company was seeking a resolution for a total of about $15 billion.

The DoJ argues that it is too soon to know the full extent of the damage done to the gulf by the spill, saying “BP’s cherry-picked assertions of robust recovery are at best premature judgments on the health of the overall gulf ecosystem”.

It said the impact was being studied by a “multiyear, multimillion dollar Natural Resource Damage Assessment (NRDA) that is already showing indications of harm to natural resources”.

The memo also accuses Transocean, owner and operator of the Deepwater Horizon rig, of gross negligence, highlighting the role of its staff alongside BP’s in having “stunningly, blindingly botched” a vital test of whether the well had been properly sealed.

The attorney-general of Alabama, which has been leading the cases brought by US coastal states over the spill, made a similar filing, accusing BP of gross negligence or willful misconduct before the disaster, and also alleging that the company’s attempt to “top kill” the leaking well by pumping heavy drilling fluid down it was “predestined to fail” and “amounted to willful misconduct that delayed the capping of the well by several weeks”.

David Uhlmann, a former chief prosecutor of environmental crimes at the DoJ now at the University of Michigan, said the increased pressure from the US authorities suggested frustration over the progress of the case.

He wrote in an email: “The tone of the pleading suggests that the justice department attorneys may be frustrated about the continued delays in the civil trial and their inability to reach a settlement with BP and Transocean .”

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