BP fined, charged in oil spill that showed 'profit over prudence'

BP will pay a record U.S. fine to settle criminal claims arising from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, a Department of Justice official said Thursday.

By Michael Muskal and Ronald D. White

November 15, 2012, 1:28 p.m.

Oil giant BP and three of its employees were indicted on criminal charges including manslaughter and obstruction of Congress on top of a record $4-billion fine that the company will pay the government for its role in the oil spill disaster that scarred the Gulf of Mexico, officials announced Thursday.

Led by Atty. Gen. Eric H. Holder Jr., officials announced the indictments in a televised news conference from New Orleans, where the grand jury has been investigating the 2010 explosion of the Deepwater Horizon oil rig off the Louisiana coast. Eleven people died in the explosion.

The announcement of the charges against BP employees came on the same day officials announced that BP had agreed to an unprecedented settlement involving a guilty plea to criminal charges.

';



jQuery(document).ready(function(){
jQuery('#story-body-text').append(muskalsig);
});

Hi-res photos: Gulf oil spill

Drill rigs wind up operations in Arctic Alaska seas

BP guilty of criminal misconduct, negligence in gulf oil spill

“The $4 billion in penalties and fines is the single largest criminal resolution in the history of the United States and constitutes a major achievement toward fulfilling a promise that the Justice Department made nearly two years ago to respond to the consequences of this epic environmental disaster and seek justice on behalf of its victims,” Holder said.

 PHOTOS: Deepwater Horizon disaster in hi-res

In addition, BP agreed to pay more than $525 million in civil penalties to satisfy complaints by the Securities and Exchange Commission. That brings the total settlement cost to more than $4.5 billion – not including the billions the company has already paid to settle civil claims from residents, fishermen and businesses harmed by the spill.

The settlement of the criminal charges by the company still leaves BP open to civil cases, officials said. The federal government is also seeking civil penalties in the billions of dollars against the company, arguing that BP was grossly negligent during the oil spill, which poured about 4 million barrels of oil from the underwater Macondo well into the gulf waters. A trial is scheduled in February and BP, in a statement released Thursday, said it will continue to vigorously defend itself from civil actions.

Federal officials blamed BP’s culture of profit for the spill.

“The explosion of the rig was a disaster that resulted from BP’s culture of privileging profit over prudence,” said Assistant Atty. Gen. Lanny A. Breuer at the news conference. “We hope that BP's acknowledgment of its misconduct – through its agreement to plead guilty to 11 counts of felony manslaughter – brings some measure of justice to the family members of the people who died on board the rig.”

In all, the company said it agreed to enter guilty pleas to 14 charges, including the eleven counts of manslaughter. But the government went further, charging individuals as well.

“Make no mistake,” Breuer said. “While the company is guilty, individuals committed these crimes.”

Two BP employees, Robert Kaluza and Donald Vidrine, who were described by Holder as the two highest-ranking BP supervisors on board the Deepwater Horizon when it exploded, were charged with manslaughter and other counts.

The 23-count indictment “charges these two BP well site leaders with negligence, and gross-negligence, on the evening of April 20, 2010. In the face of glaring red flags indicating that the well was not secure, both men allegedly failed to take appropriate action to prevent the blowout,” Breuer said.

David Rainey, who was BP's vice president of exploration for the Gulf of Mexico, was indicted on charges of obstruction of Congress and false statements, Holder said. Rainey, a former BP executive, served as a deputy incident commander and BP’s second-highest ranking representative at Unified Command during the spill response, Holder said.

Rainey, Breuer said, is charged with “obstructing a congressional investigation and making false statements to law enforcement officials. The indictment alleges that Rainey, on behalf of BP, intentionally underestimated the amount of oil flowing" from the Macondo well, which was spilling oil into the gulf. “Rainey allegedly cherry-picked pages from documents, withheld other documents altogether and lied to Congress and others in order to make the spill appear less catastrophic than it was,” Breuer said.

Rainey's lawyer told the Associated Press that his client did “absolutely nothing wrong.” And attorneys for the two rig workers accused the Justice Department of making scapegoats out of them.

“Bob was not an executive or high-level BP official. He was a dedicated rig worker who mourns his fallen co-workers every day,” Kaluza attorneys Shaun Clarke and David Gerger said in a statement. “No one should take any satisfaction in this indictment of an innocent man. This is not justice.”

Chris Jones, the brother of one of the rig workers killed in the disaster, said the settlement renewed his grief and anger over the loss of his younger sibling, Gordon.

“The fact that BP is finally admitting that it is responsible is not shocking; the amount of money it is paying in fines is not shocking,” said Jones, a litigation attorney in Baton Rouge, La. “What is shocking is that it has been ... years since this happened and not once has a representative of BP said to us, ‘I’m sorry for your loss.’ It’s par for the course.”

“BP is simply going to sign a check for billions of dollars, then continue to do business in U.S. waters and make money for its shareholders,” he said. “But Gordon wasn’t able to live a day after April 2010.”

British oil giant BP is more than prepared for the $4.5 billion in settlement charges it agreed to Thursday, analysts said.

In the third quarter alone, BP raked in sales of more than $93 billion and had a net profit of more than $5.2 billion. That result showed that “BP has made the most remarkable comeback from the most costly industrial accident in history,” said Fadel Gheit, senior energy analyst at Oppenheimer and Co., in a note to investors.

Read More..

DA: Heroin charge dropped vs. Bon Jovi's daughter

CLINTON, N.Y. (AP) — A central New York prosecutor says drug charges against Jon Bon Jovi's 19-year-old daughter have been dropped.

Stephanie Bongiovi was found unresponsive by medics after she apparently overdosed on heroin in a Hamilton College dorm early Wednesday.

Town of Kirkland police charged Bongiovi, of Red Bank, N.J., and another student with possession of a small amount of heroin and marijuana.

Oneida County District Attorney Scott McNamara said Thursday he was dismissing the charges against both students. Under state law, someone having a drug overdose or seeking help for an overdose victim can't be prosecuted for having a small amount of heroin or any amount of marijuana.

Bon Jovi is scheduled to perform a concert to benefit Hamilton on Dec. 5. He has not commented on his daughter.

Read More..

I Was Misinformed: The Time She Tried Viagra

I have noticed, in the bragging-rights department, that “he doesn’t need Viagra” has become the female equivalent of the male “and, I swear, she’s a real blonde.” Personally, I do not care a bit. To me, anything that keeps you happy and in the game is a good thing.

But then, I am proud to say, I was among the early, and from what I gather, rare female users.

It happened when the drug was introduced around 1998. I was 50, but after chemotherapy for breast cancer — and later, advanced ovarian cancer — I was, hormonally speaking, pretty much running on fumes. Whether this had diminished my sex drive I did not yet know. One may have Zorba-esque impulses when a cancer diagnosis first comes in; but a treatment that leaves you bald, moon-faced and exhausted knocks that out of your system pretty fast.

But by 1998, the cancer was gone, my hair was back and I was ready to get back in the game. I was talking to an endocrinologist when I brought up Viagra. This was not to deal with the age-related physical changes I knew it would not address, it was more along the feminist lines of equal pay for equal work: if men have this new sex drug, I want this new sex drug.

“I know it’s supposed to work by increasing blood flow,” I told the doctor, “But if that’s true for men, shouldn’t it be true for women, too?”

“You’re the third woman who asked me that this week,” he said.

He wrote me a prescription. I was not seeing anyone, so I understood that I would have to do both parts myself, but that was fine. I have a low drug threshold and figured it might be best the first time to fly solo. My memory of the directions are hazy: I think there was a warning that one might have a facial flush or headaches or drop dead of a heart attack; that you were to take a pill at least an hour before you planned to get lucky, and, as zero hour approached, you were supposed to help things along by thinking beautiful thoughts, kind of like Peter Pan teaching Wendy and the boys how to fly.

But you know how it is: It’s hard to think beautiful thoughts when you’re wondering, “Is it happening? Do I feel anything? Woof, woof? Hello, sailor? Naaah.”

After about an hour, however, I was aware of a dramatic change. I had developed a red flush on my face; I was a hot tomato, though not the kind I had planned. I had also developed a horrible headache. The sex pill had turned into a bad joke: Not now, honey, I have a headache.

I put a cold cloth on my head and went to sleep. But here’s where it got good: When I slept, I dreamed; one of those extraordinary, sensual, swimming in silk sort of things. I woke up dazed and glowing with just one thought: I gotta get this baby out on the highway and see what it can do.

A few months later I am fixed up with a guy, and after a time he is, under the Seinfeldian definition of human relations (Saturday night date assumed) my official boyfriend. He is middle aged, in good health. How to describe our romantic life with the delicacy a family publication requires? Perhaps a line from “Veronika, der Lenz ist da” (“Veronica, Spring Is Here”), a song popularized by the German group the Comedian Harmonists: “Veronika, der Spargel Wächst” (“Veronica, the asparagus are blooming”). On the other hand, sometimes not. And so, one day, I put it out there in the manner of sport:

“Want to drop some Viagra?” I say.

Here we go again, falling into what I am beginning to think is an inevitable pattern: lying there like a lox, or two loxes, waiting for the train to pull into the station. (Yes, I know it’s a mixed metaphor, but at least I didn’t bring in the asparagus.) So there we are, waiting. And then, suddenly, spring comes to Suffolk County. It’s such a presence. I’m wondering if I should ask it if it hit traffic on the L.I.E. We sit there staring.

My reaction is less impressive. I don’t get a headache this time. And romantically, things are more so, but not so much that I feel compelled to try the little blue pills again.

Onward roll the years. I have a new man in my life, who is 63. He does have health problems, for which his doctor prescribes an E.D. drug. I no longer have any interest in them. My curiosity has been satisfied. Plus I am deeply in love, an aphrodisiac yet to be encapsulated in pharmaceuticals.

We take a vacation in mountain Mexico. We pop into a drugstore to pick up sunscreen and spot the whole gang, Cialis, Viagra, Levitra, on a shelf at the checkout counter. No prescription needed in Mexico, the clerk says. We buy all three drugs and return to the hotel. I try some, he tries some. In retrospect, given the altitude and his health, we are lucky we did not kill him. I came across an old photo the other day. He is on the bed, the drugs in their boxes lined up a in a semi-circle around him. He looks a bit dazed and his nose is red.

Looking at the picture, I wonder if he had a cold.

Then I remember: the flush, the damn flush. If I had kids, I suppose I would have to lie about it.

Read More..

BP's Deepwater settlement considered chump change by critics

British oil giant BP is more than prepared for the $4.5 billion in settlement charges it agreed to Thursday, analysts said.

BP agreed to plead guilty to 11 felony counts of misconduct or neglect of ships officers directly related to the 2010 Deepwater Horizon explosion in the Gulf of Mexico that killed 11 workers.

BP also agreed 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. The deal requires U.S. federal court approval.

In the third quarter alone, BP raked in sales of more than $93 billion and had a net profit of more than $5.2 billion. That was a result that showed that “BP has made the most remarkable comeback from the most costly industrial accident in history,” said Fadel Gheit, senior energy analyst at Oppenheimer and Co., in a note to investors.

BP’s recent business performance has been so strong that some critics say the fine isn’t punishment enough.

“This settlement is pathetic,” said Tyson Slocum, director of the energy program at Public Citizen, a consumer advocacy group. “The point of the criminal justice system is twofold: to punish and to deter. This does neither. It is a weak-tea punishment that provides zero deterrence to BP or other companies.”

What remains unclear is how the settlement will affect BP’s business in the U.S., particularly in the Gulf of Mexico, where BP remains active. The company has seven rigs drilling in the Gulf and has plans to add an eighth and possibly a ninth next year, Gheit said.

BP faces five years of probation and will undergo scrutiny by two appointed monitors.

In a statement, BP appeared to acknowledge the uncertainty: “Under U.S. law, companies convicted of certain criminal acts can be debarred from contracting with the federal government."

BP added that it has "not been advised of the intention of any federal agency to suspend or debar the company in connection with this plea agreement. BP will continue to work cooperatively with the debarment authority.”

ALSO:

Quiz: Why are California gas prices so high?

Quiz: How much do you know about the fiscal cliff?

Google+ Hangout: U.S. to become world's biggest oil producer

Read More..

Obama pressures House Republicans to pass tax breaks

WASHINGTON -- President Obama used his post-election news conference to pressure House Republicans to extend expiring tax rates for middle-class Americans – avoiding massive tax hikes in the New Year that he said could put a damper on the holiday shopping season.

Halting class tax hikes for 98% of Americans would ease the threat of the coming "fiscal cliff" – the year-end confluence of automatic tax hikes and spending cuts that Washington is now desperately trying to stop.

“We could get that done by next week,” Obama said.

Obama warned Republicans not to hold the middle-class tax cuts “hostage” as the debate continues over taxes for upper-income Americans. If both sides resist compromise, he said, “we can all imagine a scenario when we go off the fiscal cliff.”

Congressional Republicans have dismissed the president’s approach as incremental as they press for a comprehensive bill that would keep tax rates low -- or lower -- for all Americans, including those who earn incomes above $200,000, or $250,000 for couples, who Obama has said should pay more.

House Speaker John A. Boehner (R-Ohio) has made an opening offer that would extend all of the expiring tax rates for another year while Congress and the White House work on a broader overhaul of the tax code, with the goal of closing loopholes and using the revenue to lower all tax rates.

The White House has been cool to Boehner’s offer even as the president said Wednesday he remains open to new ideas.

“I don’t expect the Republicans to simply adopt my budget,” the president said. “When it comes to the top 2%, what I’m not going to do is extend further a tax cut for folks who don’t need it.”

Obama has invited congressional leaders to the White House on Friday to begin talks on the looming budget battle.

One idea circulating is to maintain the existing tax rates, as Republicans prefer, but capping deductions for upper-income households as a way to produce more revenue.

As talks begin, the White House appears to have begun a strategy that aims to isolate House Republicans as standing in the way of the tax break for the middle class. The Senate has already passed a bill that would extend the tax rates for the middle class. Without action, tax rates would rise on most Americans on Jan. 1, a tax hike that would ripple through the economy.

At the same time, massive spending cuts are scheduled to begin – the result of a previous deficit-reduction bill that both sides had previously agreed to, but now want to amend. Halting those cuts are also part of the talks.

Economists say the combined fiscal contraction of tax hikes and spending cuts could send the economy into another recession.

Follow Politics Now on Twitter and Facebook

lisa.mascaro@latimes.com

twitter.com/LisaMascaroinDC

Read More..

Judge tosses anti-paparazzi counts in Bieber case

LOS ANGELES (AP) — A law aimed at combating reckless driving by paparazzi is overly broad and should not be used against the first photographer charged under its provisions, a judge ruled Wednesday.

Superior Court Judge Thomas Rubinson dismissed counts filed under the law against Paul Raef, who was charged in July with being involved in a high-speed pursuit of Justin Bieber.

The judge cited numerous problems with the 2010 law, saying it was aimed at First Amendment newsgathering activities, and lawmakers should have simply increased the penalties for reckless driving rather than targeting celebrity photographers.

Attorneys for Raef argued the law was unconstitutional and was meant merely to protect celebrities while punishing people who gather news.

"This discrimination sets a dangerous precedent," attorney Brad Kaiserman said.

Prosecutors argued that the law, which seeks to punish those who drive dangerously in pursuit of photos for commercial gain, didn't merely apply to the media but could apply to people in other professions.

Rubinson cited hypothetical examples in which wedding photographers or even photographers rushing to a portrait shoot with a celebrity could face additional penalties if charged under the new statute.

Raef still faces traditional reckless driving counts.

Prosecutors allege he chased Bieber at more than 80 mph and forced other motorists to avoid collisions while Raef tried to get shots of the teen heartthrob on a Los Angeles freeway in July.

Raef has not yet entered a plea in the case.

___

Anthony McCartney can be reached at http://twitter.com/mccartneyAP

Read More..

Well: How Many Calories Do We Really Eat at Thanksgiving?

A reader writing in to The Times’s Thanksgiving Help Line asked this question: “What is the average number of calories a person consumes at Thanksgiving dinner?”

The commonly cited statistic is that the average American will consume more than 4,500 calories on Thanksgiving Day alone. That’s according to the Calorie Control Council, which represents the people who bring you diet foods. After thinking about how much 4,500 calories really is, I was skeptical of the claim. I decided to create a gluttonous virtual Thanksgiving feast of traditional foods and count the calories along the way (with the help of several online calorie counters).

To read the rest of my answer (which includes sweet potato casserole with marshmallows and buttery rolls), go to the Thanksgiving Help Line.

Read More..

Fed minutes suggest new bond-buying plan is likely

The Federal Reserve will probably announce a new bond-buying program in December to try to spur job growth.

The purchases would be intended to lower long-term borrowing rates to encourage spending and strengthen the economy. The hope is that more hiring would follow.

Minutes of the Fed's Oct. 23-24 policy meeting released Wednesday suggest that it will unveil a Treasury-buying plan to replace a program that expires at year's end. Under the existing program, called Operation Twist, the Fed has been selling $45 billion a month in short-term Treasurys and using the proceeds to buy an equal amount of longer-term securities.

When Operation Twist ends, the Fed will run out of short-term investments to sell. The minutes show support among the Fed's policymakers to replace Twist with another program of long-term bond purchases.

A new bond-buying program would come on top of a program the Fed launched in September. It began buying $40 billion a month in mortgage bonds to try to reduce long-term rates and make home-buying more affordable. It was its third round of bond purchases.

The Fed also said in September that it planned to keep its benchmark short-term rate near zero through mid-2015. And it signaled a readiness to take other stimulative steps if hiring didn't pick up.

The Fed reaffirmed that stance at its October policy meeting but took no new action. Officials decided to wait to see whether the aggressive steps they announced in September would boost the economy.

In a statement after the October meeting, the Fed said that although the economy is improving moderately, job growth remained slow and the unemployment rate elevated. The rate is now 7.9%.

Many analysts say the economy has been growing in the October-to-December quarter at a weak annual rate below 2% — too slow to drive down unemployment. In part, that's why the Fed will probably take further action at its final policy meeting of the year, Dec. 11-12.

Operation Twist hasn't expanded the Fed's portfolio of bond holdings. It has instead revamped the portfolio by shrinking the proportion made up of short-term investments and expanding the proportion made up of longer-term investments.

If the Fed launches a new bond-buying program, it would expand the portfolio.

Critics say the Fed's continued pumping of money into the financial system is heightening the risk of high inflation. But Fed Chairman Ben S. Bernanke and his allies say the bigger risk would come from doing too little to boost a persistently sluggish economy.

Read More..

Obama reassuring liberal allies, prepping for 'fiscal cliff' talks

WASHINGTON -- President Obama is assuring liberal allies that he will fight for the middle class during upcoming fiscal negotiations with Republicans, and he is urging those supporters not to lay down their weapons just because the election is over.

But the White House is also talking about the inevitability of compromise as the administration and congressional Democrats and Republicans prepare to negotiate an end-of-year fiscal deal that will center on the expiration of the George W. Bush-era tax cuts and a spate of automatic spending cuts.

The preparations are bringing progressive allies and business leaders alike to the White House this week, leading up to the president’s summit on Friday with congressional leaders of both parties -- their first session since his reelection.

PHOTOS: Reactions to Obama's victory

In an hourlong meeting with labor and other progressive leaders on Tuesday, the president promised to stand firm on the tax principles he outlined in the campaign, according to several people who were present.

They departed the West Wing under a bright sky, the victory they helped Obama win fresh in their minds. They were heartened that Obama emphasized the need for "balance" between spending cuts and revenue increases, and for the wealthy to bear a fairer share of the tax burden, said Neera Tanden, president of the Center for American Progress.

"He said that this election was about the middle class and fairness," Tanden said. "He’s standing firm on taxes on the wealthiest Americans."

Labor leaders were adamant that the deal protect the middle-class tax cuts, said AFL-CIO chief Rich Trumka. "Do we believe the president is committed to that same thing?" he said after emerging from the West Wing. "Yes, we do."

White House officials are talking about a schedule in which the president would stay on the campaign trail, with the aim of keeping the pressure on House Republicans to renew the expiring tax cuts for the middle class while letting those for the wealthy expire.

PHOTOS: America goes to the polls

As the Tuesday meeting was breaking up, White House Press Secretary Jay Carney was just steps away in the briefing room, talking about the realities of negotiation.

The "whole point of compromise," he said, "is that nobody gets to achieve their maximalist position."

The president in the past has demonstrated a willingness, he said, to "give" in an effort to "meet your negotiating partner somewhere in the middle and reach a deal."

As they stake out their stand, business leaders are signaling resistance to the idea of letting the tax cuts expire for any Americans, including the wealthy.

In a letter to the president, several corporate chief executives warned of the economic perils of cutting spending dramatically while simultaneously raising taxes. If the president and Congress can’t agree on how to head off those automatic changes, they’ll both begin to take effect at the end of the year.

"Experts agree such immediate changes will most likely reduce economic growth and hinder employment in the United States and globally," said the letter by the CEOs, including some who are invited to the White House on Wednesday. "This would be particularly damaging as economies throughout the world struggle and look to us for leadership."

PHOTOS: President Obama’s past

The meeting is expected to be a little tense as the two sides stake out territory. That’s what the progressive leaders hope for.

Quietly, some of them worry about the inevitable "give" that Carney talked about. As they left the White House grounds on Tuesday, they spoke of nothing but optimism -- even as they spoke in terms of supporting particular principles, not particular leaders.

Asked if he would help the president lobby Congress, Trumka said he was “prepared to stand up to make sure that there is shared sacrifice here, so the rich actually start paying their fair share.”

Follow Politics Now on Twitter and Facebook

christi.parsons@latimes.com

twitter.com/@cparsons

Read More..

Petraeus enlisted for cameo in 'Call of Duty' game

LOS ANGELES (AP) — David Petraeus has landed on his feet with a new gig in "Call of Duty: Black Ops II."

The retired Army general who stepped down as CIA director last week amid a scandal surrounding his extramarital affair pops up in the highly anticipated Activision Blizzard Inc. first-person shooter game released Tuesday.

A character with Petraeus' name and likeness voiced by Jim Meskimen briefly appears as the Secretary of Defense in the year 2025.

The cameo was first reported by the gaming site Kotaku.com.

"Call of Duty" games have often employed virtual renditions of political figures.

"Black Ops II" also features an encounter with Manuel Noriega, a female president resembling current Secretary of State Hillary Rodham Clinton, an aircraft carrier named the USS Barack Obama and an appearance by retired Lt. Col. Oliver North.

Read More..