NEW ORLEANS — More than 2 1/2 years after its deep-water Macondo well blew out in the Gulf of Mexico, triggering a deadly rig explosion and catastrophic oil spill, British oil giant BP faced a U.S. judge Tuesday as it answered to manslaughter and other criminal charges.
At a brief arraignment hearing before a federal judge in New Orleans, BP lawyer Mark Filip said the company’s board had authorized him to enter a not guilty plea as a procedural matter, but the firm still intends to plead guilty at a later date.
U.S. District Judge Ivan Lemelle set a trial date for Feb. 4, another procedural matter that would be relevant only if the court doesn’t accept the plea deal and the case goes to trial.
BP has agreed to pay $4.5 billion to settle the criminal charges and related Securities and Exchange Commission charges.
And that settlement figure could pale in comparison to what BP still has yet to resolve — civil fines over the amount of oil that spilled. BP either will reach a deal with the Justice Department, or go to trial over civil citations. In either case, BP could be on the hook for up to $21 billion in Clean Water Act fines alone.
A status conference in which BP officials planned to meet with U.S. District Judge Sarah S. Vance to discuss its plans to plead guilty was postponed from Thursday to Dec. 11.
A corporate officer likely will have to appear to enter BP’s formal guilty plea. The company hasn’t said who that might be.
Generally when a person or company enters a guilty plea, the judge orders a pre-sentence report in which court officials recommend the appropriate punishment. The judge then decides whether to accept the terms of the plea deal, impose a lighter sentence or impose a harsher one. If the judge doesn’t accept the terms, the defendant typically is allowed to withdraw the guilty plea and go to trial.
BP’s plea deal requires it to pay $4 billion as a criminal penalty and $525 million to resolve Securities and Exchange Commission violations stemming from the disaster. The SEC has charged that BP understated the range of possible rates at which oil was flowing into the Gulf, which could have misled BP investors.
In Tuesday trading, BP shares fell 25 cents to close at $41.35. The shares are down almost 25 percent since the day before the rig explosion on April 20, 2010.
Deputy Assistant Attorney General John D. Buretta said at the hearing that if BP were to go to trial, it would face penalties as high as twice the gross financial gain or loss from its conduct for each of the 11 counts of manslaughter with which the company is charged. A Clean Water Act violation also would carry a penalty up to twice the resulting gross gain or loss. In addition, BP is charged with obstruction of Congress and violation of a migratory bird statute.
Buretta did not say how the government might calculate the financial consequences of the loss of life or from the oil spilled, which the government estimates totaled 4.9 million barrels. University of Michigan law professor and former federal prosecutor David Uhlmann said that it could total tens of billions of dollars, largely because of the Clean Water Act count.
On a related legal matter, trial dates probably will be set Wednesday at a hearing for BP well-site leaders Donald Vidrine and Robert Kaluza and former executive David Rainey. Criminal charges against them were announced at the same time as the plea deal with BP.
A judge also may set bond conditions and other restrictions on the defendants, but the workers don’t face arrest ahead of time, their lawyers said.
Lemelle reminded lawyers that he may have a conflict of interest because his wife owns stock in Halliburton — the cement contractor on the Macondo well. He has asked any parties that want him to recuse himself to state that request by Dec. 7.
Federal rules require a trial be set within 70 days from the date an indictment is filed or a defendant first appears in court, whichever is later. And while the judge on Wednesday may set a near-term trial date, defense lawyers are likely to argue the case is complex, which would mean the trial could be postponed for months or even years.
Kaluza and Vidrine are charged with manslaughter, accused of failing to alert on-shore managers at the time they observed clear signs that the Macondo well was not secure and that oil and gas were flowing into the well. The well blew out, causing an explosion on the Deepwater Horizon drilling rig that killed 11 workers. The resulting oil spill was the worst in U.S. history.
Rainey, a former BP vice president in charge of exploration in the Gulf of Mexico, is charged with obstruction of Congress and making false statements to law enforcement officials about the amount of oil flowing from the well.
Lawyers for all three have said their clients will plead not guilty and fight the charges.
A fourth employee, former BP engineer Kurt Mix, was charged previously with obstruction for allegedly deleting text messages about the rate at which oil was flowing to the sea.