Halliburton pleads guilty to criminal charge in Gulf oil spill case

NEW ORLEANS _ Halliburton, the oil field services firm that supplied the cement for the undersea well that blew out in the Gulf of Mexico in 2010, pleaded guilty Thursday to destroying evidence and was ordered to service three years’ probation and pay a $200,000 fine.

“Does the company wish to plead guilty because it is in fact guilty?” U.S. District Judge Jane Triche Milazzo asked.

“Yes,” responded Halliburton attorney Marc Mukasey, who was authorized by the company’s board to enter the plea on the company’s behalf.

With its plea agreement accepted by Milazzo, Halliburton escaped criminal prosecution for any conduct leading up to the worst offshore oil spill in U.S. history, despite its cement job being faulted in independent investigations.

Provided Halliburton complies with the terms of the deal, prosecutors agreed to end their criminal probe of the company, which is based in Houston and Dubai.

Also Thursday, a former Halliburton manager from Katy was charged with destroying evidence in the case.

The charge to which Halliburton pleaded guilty to in federal court in New Orleans during a hearing was a misdemeanor, and Halliburton was ordered to pay the maximum fine it could have faced. It could have faced five years of probation if it was convicted of the charge at trial. Milazzo said.

Milazzo said the deal was fair and reasonable and she approved it. She said that under the law in making her decision she could not consider whether additional charges should have been pursued.

The plea culminated a series of carefully scripted criminal prosecutions involving the three main companies that were involved in the deadly disaster.

The companies negotiated wording in their admissions of guilt that were designed to accept some responsibility for what happened while also seeking to limit the impact of those admissions on the ongoing civil litigation in the case.

Time will tell whether they succeeded.

The companies face the possibility of having to pay billions of dollars in civil damages, if U.S. District Judge Carl Barbier declares they were grossly negligent.

The first phase of a civil trial over the disaster, which dealt with assigning responsibility, wrapped up in April. The second phase, to determine how much oil spilled, starts Sept. 30, in a courtroom across the hall from Milazzo’s.

Only BP, which owned the well that blew out a mile beneath the sea some 50 miles off the coast of Louisiana, was convicted of a felony.

The British oil giant previously pleaded guilty to manslaughter and other charges and was ordered to pay a $4 billion criminal fine. It also agreed to pay $525 million to settle related securities violations.

Transocean, the Swiss drilling contractor that owned the rig that exploded and sank, pleaded guilty to a misdemeanor charge of violating the Clean Water Act through negligent discharge of oil into the Gulf. Eleven rig workers, nine of whom were employed by Transocean, were killed in the explosion.

Now that Halliburton’s guilty plea is out of the way, the government could suspend the company from securing new federal contracts, though prosecutors have agreed to advise agencies that the company provided significant cooperation in the criminal inquiry and accepted its responsibility.

Four current or former BP employees face criminal charges in the case and are awaiting trial. The charge against the former Halliburton employee brings to five the number of people charged in the case. The government has indicated its investigation is continuing.

At the time of the disaster, BP was in the process of temporarily abandoning its deep-water Macondo well. Halliburton supplied the cement used to plug the well. The seal failed to keep oil and gas from entering the well, triggering the blowout and the explosion on the rig.

Federal prosecutors say that after the well blew out, Halliburton looked at whether the number of centralizers used on the final production casing — pipe cemented into the well bore — could have contributed to the blowout. Centralizers can be significant to the quality of cementing around the bottom of the casing.

Halliburton had recommended BP use 21 centralizers. BP used six.

Prosecutors say that the month after the blowout April 20, 2010, a Halliburton official told a senior program manager to run two computer simulations. They indicated that there was little difference between using six and 21 centralizers. The manager was directed to, and did, destroy those results, the Justice Department said.

In June 2010, similar evidence also was destroyed when Halliburton’s cementing technology director asked an employee to run simulations again comparing six versus 21 centralizers. The employee reached the same conclusion and, like the program manager before him, then was directed to “get rid of” the simulations, federal prosecutors say.

Halliburton has faced heavy criticism for its cement job. Among other things, a presidentially appointed oil spill commission concluded that Halliburton should have considered redesigning the foam slurry used in the Macondo well before pumping it. Independent tests as part of the commission’s probe found that the cement mix was unstable.