Criminal probe of Gulf spill could be key to civil resolution

A protracted criminal investigation of the deadly 2010 Gulf of Mexico rig explosion and oil spill may be holding up civil settlements that could result in multibillion-dollar fines against BP and other companies linked to the disaster.

Well owner BP and rig owner Transocean both face criminal and civil liability and would not be inclined to settle civil claims unless they knew their fate with prosecutors, legal experts say.

But the status of the criminal investigation is unclear.

“We do need clarity of the criminal prosecution before there will be any civil settlement,” said University of Michigan law professor David Uhlmann, a former federal prosecutor who is following the spill litigation closely but isn’t directly involved.

Lawyers for several possible individual defendants say they’ve had no recent contact from government investigators. BP continues to have discussions with the Justice Department about settling expected fines and penalties, but its lawyers are also preparing for a drawn-out court fight over how much oil spilled, according to people familiar with the matter who asked not to be identified because of the sensitivity of the talks.

BP owned the Macondo well that blew out on April 20, 2010, destroying the Deepwater Horizon drilling rig, killing 11 men and discharging by government estimates 5 million barrels of oil. BP disputes the amount spilled, which will be key to setting fines under pollution laws.

No recent talks

Transocean, which owned the Deepwater Horizon, and Halliburton, the cement contractor on the Macondo well, have had no recent discussions with the government about criminal or civil issues, sources said.

The Washington-based official who has been leading the criminal probe, John Buretta, set up shop in New Orleans after the accident, but Justice Department spokeswoman Rebekah Carmichael declined to say if he’s still there. Spokesman Wyn Hornbuckle did say Buretta is still in charge.

Attorneys involved in the case don’t expect the government to wrap up the probe without taking further action. To date, only a low-level former engineer for BP has been charged, and that charge involves actions after the disaster.

“I’ve told them in the past to just call me when it’s time to go to court,” said Pat Fanning, an attorney for James Harrell, a Transocean employee who was the offshore installation manager on the Deepwater Horizon. “I was told in the first of June by the prosecutors that an indictment would be presented to a grand jury in a matter of two or three weeks. So, while the rumor mill is interesting, it also is very unreliable.”

Fifth Amendment

William Taylor, who represents BP engineer Brian Morel, also said he’s had no contact with the Justice Department in a long while. An attorney for BP well site leader Don Vidrine wouldn’t say.

Morel asserted his Fifth Amendment right against self-incrimination and refused to testify before a federal panel investigating the spill. Citing health reasons, Vidrine declined three times to testify at joint hearings of the U.S. Coast Guard and the Bureau of Ocean Energy Management, Regulation and Enforcement panel.

Harrell did testify before the panel, but invoked his Fifth Amendment rights and refused to testify in a civil case deposition.

The government has paid particular attention in its probe to statements made by officials for BP and its partners about the amount of oil that was flowing into the Gulf. And investigators have reviewed testimony executives gave Congress and briefings they gave to congressional staff, people familiar with the probe have said.

Even as the investigations continue, BP already has spent or committed tens of billions of dollars on cleanup costs and compensating victims.

It expects to pay $7.8 billion under a proposed settlement with Gulf Coast private individuals and businesses making spill-related economic or health claims. BP and lawyers leading a steering committee for plaintiffs urged a federal judge Thursday to approve the deal.

Other disputes

Getting the non-government settlement behind it would be a major step forward for BP in resolving remaining legal liability over the worst offshore oil spill in U.S. history. But the settlement doesn’t cover government claims, or disputes involving other companies on the Macondo project.

Being methodical

Legal experts believe the Justice Department is being methodical, and that’s why it has taken as long as it has to make charging decisions.

“The department appears to be focusing more on ancillary questions such as whether BP and the other companies involved were dealing honestly with regulators both before the spill and during efforts to contain the spill,” Uhlmann said. “To be fair, it does take longer to build a case that’s focused on obstruction of justice, false statements and concealments.”

Among the possibilities: the Justice Department could push for a global settlement of civil and criminal penalties, try to reach separate agreements with the various companies or, on the criminal side, charge first and resolve later.

“They are going for the brass ring, trying to make this a more difficult case about lying,” Uhlmann said.

harry.weber@chron.com