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.”