McCain: Halliburton faces ‘paltry’ fine for destroying oil spill evidence

Halliburton Energy Services is facing a “paltry” fine in connection with its planned admission to destroying evidence tied to the 2010 Gulf oil spill, Sen. John McCain, R-Ariz., said Thursday.

The company, which is set to plead guilty to destroying evidence during a Sept. 19 hearing, faces a maximum penalty of $200,000 and a three-year probation for the crime.

McCain suggested the punishment isn’t harsh enough to deter corporate crime.

“I worry that such paltry fines fail to discourage defendants from destroying evidence,” McCain said in a letter sent Thursday to Attorney General Eric Holder. “If the fines do not adequately deter companies, they may begin routinely destroying unfavorable evidence as an acceptable cost of doing business.”

McCain also set out to probe the contours of the Justice Department’s plea deal with Halliburton, saying that “maximum transparency” was warranted especially “in matters like the Deepwater Horizon disaster, which tragically killed 11 people, devastated our treasured shores, and dramatically disrupted the economy in the region.”

“It is important for the American people to know how effectively the terms of such plea agreements hold accountable those who affirmatively attempted to undermine the investigation into this massive disaster,” McCain said. “Why did (the Department of Justice) settle this case for such a relatively small fine rather than choose to prosecute Halliburton to the full extent of its culpability in the Deepwater Horizon disaster?”

A judge must sign off on the plea deal before it can take effect. But Halliburton said the agreement would end the federal government’s criminal investigation into its role in the 2010 oil spill.

It is not clear whether the Justice Department may still pursue prosecution of individuals, including Halliburton employees, in connection with destroying evidence or obstructing justice. McCain pressed Holder to detail whether the plea deal precludes the possibility of that individual prosecution.

Halliburton also made a contribution of $55 million to the National Fish and Wildlife Foundation — a donation announced along with the plea deal. The Justice Department said the contribution was not conditioned on the court’s acceptance of its plea agreement.

But McCain seemed skeptical. He bluntly asked whether the contribution was part of Halliburton’s plea agreement.

“To what extent did DOJ influence Halliburton’s decision to contribute $55 million to the NFWF?” he asked Holder. “If so, what facts led DOJ to believe that the impacted areas along the Gulf Coast would most benefit from Halliburton’s voluntary contribution to NFWF rather than from contributions to other civic groups?”

If the Justice Department didn’t influence Halliburton’s decision to donate to the foundation, McCain said, he wanted to know whether the company told federal investigators about the planned contribution before or after the final plea deal was reached.

Federal prosecutors said Halliburton destroyed evidence related to how many centralizers were used to help keep the wellbore away from surrounding walls inside BP’s failed Macondo well.

According to the Justice Department, a Halliburton senior manager complied with orders to destroy the results of a test conducted about a month after the well blew out that showed little difference between using six centralizers (as BP opted to do) and 21 (which Halliburton had recommended).

The underlying test results bucked a key tenet of Halliburton’s argument that BP should bear liability for the disaster because it did not heed the service company’s centralizer recommendation.

08 01 13 John McCain letter to AG Eric Holder re Halliburton destroying evidenceplea