Vessels monitor a oil burn in the area of the Deepwater Horizon disaster on the Gulf of Mexico, Tuesday, July 13, 2010. BP officials have placed a containment cap over the leak in hopes that the flow of oil will be diminished. (AP Photo/Dave Martin)
President Barack Obama makes a statement after being briefed on the BP oil spill relief efforts in the Gulf Coast region, Friday, June 4, 2010, at Louis Armstrong International New Orleans Airport in Kenner, La. (AP Photo/Charles Dharapak)
Protesters gather outside of the BP offices in San Francisco on Wednesday, May 12, 2010 to demonstrate against the Gulf oil rig disaster. (AP Photo/Marcio Jose Sanchez)
This image from video provided by BP PLC early Sunday morning, June 13, 2010 shows oil continuing to pour out at the site of the Deepwater Horizon oil well in the Gulf of Mexico. The Coast Guard has demanded that BP step up its efforts to contain the oil gushing into the Gulf of Mexico by the end of the weekend, telling the British oil giant that its slow pace in stopping the spill is becoming increasingly alarming as the disaster fouled the coastline in ugly new ways Saturday. (AP Photo/BP PLC) NO SALES
This image from video provided by BP PLC early Sunday morning, June 20, 2010 shows oil continuing to gush millions of gallons a day, from the broken wellhead, at the site of the Deepwater Horizon oil well in the Gulf of Mexico. (AP Photo/BP PLC) NO SALES
GULF SHORES, AL - JUNE 08: Workers pick up oil patches and tar that washed up on the beach at Bon Secour National Wildlife Refuge from the Deepwater Horizon oil spill in the Gulf of Mexico on June 8, 2010 in Gulf Shores, Alabama. Early reports indicate that BP's latest plan to stem the flow of oil from the site of the Deepwater Horizon incident may be having some success. (Photo by Joe Raedle/Getty Images)
Oil floats in the Gulf of Mexico near Orange Beach, Alabama, U.S., on Friday, June 18, 2010. The BP Plc oil spill, which began when the leased Transocean Deepwater Horizon oil rig exploded on April 20, is gushing as much as 60,000 barrels of oil a day into the Gulf of Mexico, the government said. Photographer: Kari Goodnough/Bloomberg
Oil cleanup workers hired by BP pick up oil on the beach in Gulf Shores, Ala., Friday, July 2, 2010. Oil from the Deepwater Horizon incident is expected to come ashore over the July 4th weekend. (AP Photo/Dave Martin)
In this image taken from video provided by BP PLC at 18:17 CDT, a new containment cap, top, is lowered over the broken wellhead at the site of the Deepwater Horizon oil spill in the Gulf of Mexico, Monday, July 12, 2010. Deep-sea robots swarmed around BP's ruptured oil well Monday in a delicately choreographed effort to attach the tighter-fitting cap that could finally stop crude from gushing into the Gulf of Mexico nearly three months into the crisis. (AP Photo/BP PLC) NO SALES
This combo made from images taken from video provided by BP PLC shows oil flowing from two of three valves on the new 75-ton cap atop the site of the Deepwater Horizon oil spill in the Gulf of Mexico at 17:04 CDT Wednesday, July 14, 2010, left, and the top of the cap at 17:56 CDT on Thursday, July 15, minutes after the flow of oil was choked off. BP vice president Kent Wells said the oil stopped flowing into the water at 14:25 CDT after engineers gradually dialed back the amount of crude escaping through the last of three vents in the cap, an 18-foot-high metal stack of pipes and valves.(AP Photo/BP PLC) NO SALES
The view from an approaching helicopter shows the armada of drillships and other vessels surrounding the site of the blown out BP well in the Gulf of Mexico about 40 miles off the coast of Louisiana. Credit Brett Clanton / Chronicle
Oil gushes from a valve atop the failed blowout preventer (BOP) at the BP Deepwater Horizon oil spill site in the Gulf of Mexico off the coast of Louisiana, U.S., in an image captured by the Skandi remotely operated underwater vehicle (ROV) camera at 7:35 a.m. Central Standard Time (CST) on Tuesday, July 13, 2010. BP Plc installed a new cap on its leaking Gulf of Mexico oil well and will start testing today whether this will stop the gusher while work continues on a permanent plug. Source: BP Plc via Bloomberg
EDITOR'S NOTE: EDITORIAL USE ONLY. NO SALES.
GULF OF MEXICO, LA - JULY 27: (EDITORS NOTE: Distortion caused by heat.) Ships assist in clean up and containment near the source of the BP Deepwater Horizon oil spill July 27, 2010 in the Gulf of Mexico off the coast of Louisiana. Work continues to put a permanent plug on the well which has leaked an estimated three to five million barrels of oil. (Photo by Chris Graythen/Getty Images)
Hairdresser Karen Jackson wears a t-shirt that reads "We've been BPeed on!" on the front of the shirt and "Gulf Oil Disaster 2010-??" on the back Saturday, July 3, 2010, in Orange Beach, Ala. Jackson says she is worried about the effect the spill is having on her community and what will happen if local business continues to falter. "I would hate to have to leave this place. We love it here." She said her business is way off what it should be for the season, "down here we make all of our money in the summer," she says. Her husband's work as an electrician has dried up she says, so he has signed on to work cleanup for BP. ( Smiley N. Pool / Houston Chronicle )
A driver rolls down the highway with messages such as "$ave the Gulf Coa$t" and "Tony Hayward C.E. O of B.P. Give us out Live Back" while driving Sunday, June 27, 2010, in Pensacola, Florida. ( Smiley N. Pool / Houston Chronicle )
This still image from a live BP video feed shows a view from a submersible while checking the integrity of the well head on August 3, 2010 in the Gulf of Mexico. BP prepared Tuesday to plug the worst oil leak in history, although the Gulf of Mexico region will be counting the environmental and economic costs for years, perhaps decades, to come. Already delayed by a week due to Tropical Storm Bonnie, the long-awaited "static kill" was put off again at the last-minute when a leak was discovered on Monday in the cap that has been sealing the runaway well since July 15. US spill chief Thad Allen said the leak had been stopped overnight and that the operation to ram in heavy drilling fluids, known as mud, would commence as soon as "injectivity tests" had given the procedure the all-clear. AFP PHOTO / BP == RESTRICTED TO EDITORIAL USE / NO SALES / NO MARKETING / NO ADVERTISING CAMPAIGN == (Photo credit should read HO/AFP/Getty Images)(Photo Credit should Read /AFP/Getty Images)
In this image taken from video provided by BP PLC at 12:23 a.m. EDT, Saturday Sept. 4, 2010 Aug. 3, 2010 shows the blowout preventer that failed to stop oil from spewing into the Gulf of Mexico being raised to the surface. The blowout preventer wasn't expected to reach the surface until Saturday, at which point government investigators will take possession of it. (AP Photo/BP PLC) NO SALES
DAUPHIN ISLAND, AL. | JULY 4, 2010 : A cleanup worker, wearing a protective coverall and carrying a small scoop, punctuates an otherwise typical holiday beach scene as patrols the beach looking for tar balls on Independence Day. While exact numbers are elusive, tourist business along the Gulf Coast all reported feeling the sting of lost income from a noticeable dip in tourism this summer following the Deepwater Horizon spill.
GULF OF MEXICO | JUNE 26, 2010 : Streaks of oil are seen on the surface of the water near the site of the Deepwater Horizon spill in the Gulf of Mexico. The amount of oil spilled, and what happened to the oil remains in debate, but in August, the Department of Energy and United States Geological Survey announced, that it estimated a total of 4.9 million barrels of oil had been released from the BP Deepwater Horizon well.
GRAND ISLE, LA. | JULY 15, 2010 : Oil containment boom floats just off the pier as fishermen cast lines near the bridge leading to the island after sun sets on the first full day of fishing after a ban on sport fishing was lifted. Commercial fishing remained closed, but happy recreational fishermen flocked to the water on a beautiful evening. Most were BP contractors working on the cleanup. One was Bobby Walker of Houma, La., who said he had been coming to the island to fish for over 30 years and praised the great fishing and natural beauty of the island. "But who would have ever thought I would be here all summer working on the oil spill."
Related stories: BP’s $4.5 billion plea includes manslaughter; After BP spill, information trickled as oil gushed; In BP settlement, felonies matter more than fines; Read the SEC filing against BP
After a year of talks, the threat of indictment finally may have been what brought BP to a felony plea deal in the 2010 Gulf of Mexico oil spill, and behind-the-scene tactics could play out again with the oil giant’s partners in the doomed Macondo well project.
Records show that three current or former BP employees were charged in an indictment that was filed under seal on Wednesday, but not disclosed publicly until Thursday. The separate charges to which BP will plead guilty weren’t filed until Thursday.
In the intervening hours, talks between BP and the U.S. governmentapparently picked up – around 1 a.m. Thursday BP reported discussions were at an “advanced” stage but not completed – and eventually a settlement was reached under which BP will pay $4.5 billion to resolve manslaughter, obstruction and securities charges stemming from the rig explosion and oil spill off Louisiana.
BP declined to comment on the discussions that took place prior to the deal.
Legal experts say the government likely would have used the threat of indictment as leverage against the company, which warned just a few weeks ago of “significant uncertainty” about the prospect of any deal.
The same scenario could play out down the road for Transocean, which owned the Deepwater Horizon drilling rig destroyed when BP’s Macondo well blew out, and Halliburton, the cement contractor on the well.
“The federal criminal indictment has an amazing way of sharpening one’s mind and focus, and that’s true for a company as well as for an individual,” said Jeff Meyer, a Quinnipiac University law professor and former federal prosecutor specializing in environmental crimes.
It is not uncommon for federal prosecutors to go to a company or individual they plan to indict in advance of doing so and give them an opportunity to reach a plea agreement, said University of Michigan law professor David Uhlmann, a former federal prosecutor who is following the spill litigation closely but isn’t directly involved.
If the parties reach a deal, the government files a document called a “criminal information” detailing the allegations, and that’s what happened in BP’s case. Such a result gives a company certainty and allows it to control the message that comes out more than if it were indicted first and forced to go through the protracted litigation that often precedes a trial.
It’s not clear to what extent such discussions may have occurred in advance with the three individuals charged this week – BP well-site leaders Donald Vidrine and Robert Kaluza and former executive David Rainey.
But they did not reach plea deals, and were named in formal indictments rather than criminal informations.
Lawyers for Vidrine and Kaluza expressed shock at their indictments on manslaughter charges and maintained their clients’ innocence.
Rainey was charged with obstruction of Congress and making false statements to law enforcement officials after the disaster. His lawyer could not be reached.
A curious notation in the court record suggests the criminal cases against Vidrine and Kaluza were filed on Oct. 3, and the indictment unsealed Thursday is described as a “superseding indictment.” But court records show no related public paper trail prior to Thursday.
A Justice Department spokeswoman declined to comment,but Kaluza’s lawyer vowed to pursue the matter.
“It’s something we’re going to be on top of,” attorney Shaun Clarke said.
Now attention turns to Transocean and Halliburton.
In recent regulatory filings, both companies have acknowledged the government’s criminal investigation could ensnare them.
Transocean said in a regulatory filing on Sept. 11 that it has had discussions with the Justice Department seeking to resolve civil and criminal claims related to the disaster for $1.5 billion. But an agreement so far has been elusive.
The company said it would have to resolve several issues, including the time period for payment and the factual basis for a plea, before it can agree to any criminal settlement.
A person familiar with the situation said Friday there have been talks between Transocean and the Justice Department in recent weeks. A Transocean spokesman declined to comment.
Halliburton, meanwhile, said in an Oct. 23 filing that the Justice Department is examining the company’s record-keeping, testing and modeling after the accident, securities filings and public statements by the company and its employees.
“We have had and expect to continue to have discussions with the DOJ regarding the Macondo well incident and associated pre-incident and post-incident conduct,” Halliburton said in the filing. A Halliburton lawyer did not respond to a request for comment.
Uhlmann, the professor and former prosecutor, said charges are certainly possible against Transocean and Halliburton.
“The biggest question right now about Transocean and Halliburton is why they have not been charged already,” Uhlmann said. “It is unusual to bring charges against the lead defendant first and wait until later to bring charges against the less culpable defendants. But that’s what the Justice Department has done here.”