Justice Department

Corporate And Political Corruption: The Lessons Not Learned From The Deepwater Horizon Disaster

As we approach the six-year anniversary of the Deepwater Horizon oil rig explosion that killed 11 people and devastated much of the Gulf of Mexico ecosystem, recent news stories paint a very clear picture that no one has learned anything from this disaster.
 
On Monday of this week, the U.S. Department of Justice announced that BP will pay $20 billion in civil and federal penalties and fines resulting from its role in the oil spill. This total amount was approved by Judge Carl Barbier who has overseen much of the litigation from the Deepwater Horizon disaster. Judge Barbier ordered that the $20 billion, which includes a $5.5 billion Clean Water Act violation fine, be paid out over 16 years at a rate of $1.3 billion per year.
 
In response to the deal, Attorney General Loretta Lynch made the following statement: “Today’s action holds BP accountable with the largest environmental penalty of all time while launching one of the most extensive environmental restoration efforts ever undertaken.”
 
But here’s the story that the Justice Department didn’t want the public to know: 75% of this fine is tax deductible for BP, meaning that U.S. taxpayers will foot most of the bill for the largest oil spill in history.

BP Settlement Deal Could Put Taxpayers On The Hook For Spill Costs

A proposed settlement deal between the federal government and BP over their involvement in the 2010 Deepwater Horizon oil rig explosion and subsequent oil leak could shift the burden of cleanup costs away from the oil giant and onto U.S. taxpayers.

The current settlement option is just one of several being negotiated between the federal government and BP.  But this settlement option would route fine and settlement money through the Natural Resource Damage Assessment (NRDA), rather than fining the company directly via the Clean Water Act.

Not only could this reduce the total amount of money that the company pays in fines, but it would shift the burden of cost onto U.S. taxpayers.  While the company would still be paying out of pocket, the NRDA allows the company to write off their fines and deduct that from their yearly taxes.  Paying through the Clean Water Act would not allow the costs to be tax deductible. 

But the cost shift is just one of the problems with the proposed deal.  The provision that has residents of the Gulf Coast up in arms is the fact that the NRDA would route the money through the U.S. Treasury, instead of directly sending it to local and state governments.  This means that the Treasury, not the affected areas, would be in charge of determining how the money is spent.

Justice Department Files First Criminal Charges In BP Oil Disaster Probe

The U.S. Department of Justice has filed its first criminal charges into their investigation into the cover up of BP’s oil geyser in the Gulf of Mexico. The charges have been filed against Kurt Mix, a former engineer for BP, for allegedly destroying evidence related to the oil flow estimates from BP following the Deepwater Horizon oil rig explosion.

The investigation has been ongoing since August 2011, when the Justice Department announced that they would be looking into the series of abnormalities related to BP’s estimates of exactly how much oil was flowing from their broken well head on the bottom of the Gulf floor. Official estimates say that close to 5 million gallons of oil were released as a result of the Deepwater Horizon explosion.

Mix is accused of deleting messages that federal officials had requested during their investigation. Mix was a member of the team working on the official flow estimates at BP, meaning he had access to all of the information regarding the spill as it was occurring. BP officials claim that they told Mix to retain all his messages, but he deleted them anyway in October 2010. From CNN.com:

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