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BP agrees to pay billions, admit crimes for oil spill

Even so, Greenpeace calls settlement slap on the wrist

– A day of reckoning arrived for BP on Thursday as the oil giant agreed to plead guilty to a raft of criminal charges and pay a record $4.5 billion in a settlement with the government over the deadly 2010 disaster in the Gulf of Mexico.

Three BP employees were also charged, two of them with manslaughter.

The settlement and the indictments came 2 1/2 years after the fiery drilling-rig explosion that killed 11 workers and set off the biggest offshore oil spill in U.S. history.

The settlement includes nearly $1.3 billion in fines, the largest criminal penalty in the nation’s history.

As part of the deal, BP will plead guilty to charges involving the 11 deaths and lying to Congress about how much oil was spewing from the blown-out well.

“We believe this resolution is in the best interest of BP and its shareholders,” said Carl-Henric Svanberg, BP chairman. “It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims.”

Assistant Attorney General Lanny Breuer said the deaths and the oil spill “resulted from BP’s culture of privileging profit over prudence.”

Separately, BP rig workers Robert Kaluza and Donald Vidrine were indicted on federal charges of manslaughter and involuntary manslaughter, accused of repeatedly disregarding abnormal high-pressure readings that should have been glaring indications of trouble just before the blowout.

In addition, David Rainey, BP’s former vice president of exploration for the Gulf of Mexico, was charged with obstruction of Congress and making false statements. Prosecutors said he withheld information that more oil was gushing from the well than he let on.

The settlement, which is subject to approval by a federal judge, includes payments of nearly $2.4 billion to the National Fish and Wildlife Foundation, $350 million to the National Academy of Sciences and about $500 million to the Securities and Exchange Commission. The SEC accused BP of misleading investors by lowballing the amount of crude that was spilling.

“This marks the largest single criminal fine and the largest total criminal resolution in the history of the United States,” Attorney General Eric Holder said at a news conference in New Orleans.

He said much of the money will be used to restore the Gulf.

The settlement appears to be well within BP’s means, considering the oil giant made a record $25.8 billion in profits last year. And it will be given five years to pay. But the company still faces huge additional claims.

For one thing, the U.S. government and the Gulf states are still seeking billions of dollars in civil penalties against BP over the environmental damage.

Also, a federal judge in New Orleans is deciding whether to approve an estimated $7.8 billion settlement between BP and more than 100,000 businesses and individuals who say they were harmed by the spill. They include fishermen, charter boat captains, restaurants, hotels and property owners.

Under the settlement with the U.S. government, BP will plead guilty to 11 felony counts of misconduct or neglect of a vessel’s officers, one felony count of obstruction of Congress and one misdemeanor count each under the Migratory Bird Treaty Act and the Clean Water Act. The workers’ deaths were prosecuted under a federal law that protects seamen.

The largest previous corporate criminal penalty assessed by the Justice Department was a $1.2 billion fine against drug maker Pfizer in 2009.

Greenpeace blasted the settlement as a slap on the wrist.

“This fine amounts to a rounding error for a corporation the size of BP,” the environmental group said.

Nick McGregor, an oil analyst at Redmayne-Bentley Stockbrokers, said the settlement would be seen as “an expensive positive.”

“This scale of bill is unpleasant,” he said. But “the worst-case scenario for BP would be an Exxon Valdez-style decade of litigation. I think that is the outcome they are trying to avoid.”

The Deepwater Horizon rig blew up 50 miles off Louisiana on April 20, 2010, in an explosion that investigators blamed on time-saving, cost-cutting decisions by BP and its drilling partners in cementing the well shaft.

Following several failed attempts that introduced the American public to such industry terms as “top kill” and “junk shot,” BP finally capped the well on the sea floor after more than 85 days.

By then, the well had spewed an estimated 172 million gallons of crude into the Gulf, fouling marshes and beaches, killing wildlife and closing vast areas to fishing.

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