Monday, June 14, 2010

BP Redux

Guest Blogger - Benson Weintraub

The daily images of oil soaked wildlife and soiled beaches—not to mention the loss of human life from British Petroleum’s Deepwater Horizon explosion on April 20, 2010—is a reminder that corporate crime can only be reduced by a change in corporate culture. However, BP failed to heed this organizational imperative.

In United States v. BP Products of North America, Inc., 610 F.Supp.2d 655, 660 (S.D. TX. 2009),"BP Products North America, Inc. entered a plea of guilty to an information charging a felony violation of the federal Clean Air Act. The charge arises from the March 23, 2005 explosion at the Texas City, Texas plant that killed 15 and injured scores. The plea agreement stipulates the sentence: a $50 million fine and three years of probation with the conditions that BP Products comply with a Settlement Agreement reached with the Occupational Safety and Health Administration ("OSHA") and an Agreed Order imposed by the Texas Commission on Environmental Quality ("TCEQ")."). BP also paid more than $1 billion in restitution. 

The 74 page decision addresses restitution, corporate fines, Apprendi, and claims under the CVRA.

DOJ has now commenced a criminal investigation of BP’s handling of the 2010 explosion and events leading up to it.

Be assured that one focus of BP’s counsel is on application of the Corporate Sentencing Guidelines and the firm’s prior criminal history. One point would be assessed under USSG §8C2.5(c)(1) because the instant offense was committed by "the organization (or separately managed line of businesses)" after a "criminal adjudication based on similar misconduct" within the past 10 years. Id.

Before the threat of receivership takes hold, BP’s lawyers would be well-advised to get ahead of this problem by enforcing their compliance programs and making voluntary disclosures rather than obstructive comments.


Environment, Investigations | Permalink

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