At first glance the record fine of $4.5 billion and three criminal indictments of BP employees seems to mete out justice to a company whose Deepwater Horizon oil rig exploded in the Gulf Of Mexico more than two years ago.
The explosion killed 11 workers on the oil rig and the runaway well pumped an estimated 170 million gallons of crude oil into the Gulf, fouling marshes and beaches, killing fish and shrimp and destroying a tourist season that affected small businesses from Louisiana to Mississippi to Alabama to Florida.
BP has since funded a multibillion program to reimburse those who have shown that the oil spill cost them money. It has also invested large amounts of money buying ads on TV and in newspapers, touting its efforts to make good on the tragic explosion and spill. (Full Disclosure: This newspaper has run such ads for BP.)
But all that pales when you read that last year BP made more than $25 billion in profits and it has five years to pay the fines which are allocated to government agencies charged with protecting and repairing the environment.
BP CEO at the time Tony Hayward stepped down after his callous remark that “I’d like my life back” didn’t sit well with investors, employees and the public who were reminded by his comments that 11 men working on the rig were gone and they and their families would never get their life back.
Current chairman of BP Carl-Henric Svanberg was quoted as saying the negotiated settlement was in the “best interest of BP and its shareholders. It removes two significant risks and allows us to vigorously defend the company against the remaining civil claims.”
Perhaps the chairman also expressed regret for the loss of life and immense environmental damage that resulted from his company’s actions. If so, it was not reported.
Assistant Attorney General Lanny Breuer announced the deal that he said resulted from the company’s “culture of privileging profits over prudence.” That statement makes sense to us, given all that has been learned since the disaster took place.
Shares of BP rose 14 cents Thursday, the day of the announced deal. Apparently investors agreed with one stock analyst who termed the settlement “an expensive positive.”
This record-breaking criminal settlement generated headlines around the world. But despite its size, it does not mark the end of BP’s time in court. Federal and state governments are seeking billions more in civil fines. A U.S Federal Court judge is weighing a settlement of almost $8 billion between BP and individuals and businesses who claim to have been harmed by the spill.
Perhaps some of those will produce more than “expensive positives” to a company that can produce $25 billion in profits in a single year and still appears to value its stock price above all else.