BP admits several crimes, is fined millions

October 26, 2007|By David Greising

CHICAGO -- Oil giant BP PLC agreed to pay $373 million in fines and admit to criminal wrongdoing in a sweeping settlement of charges linked to a fatal Texas explosion, an oil spill in Alaska and illegal propane trading engineered from Chicago.

In addition, a Chicago grand jury indicted four former BP employees on 20 counts of mail and wire fraud connected to the alleged fixing of prices in the propane market in February 2004. The scheme, allegedly involving huge purchases of propane and delayed deliveries through a pipeline serving the East Coast, pushed propane prices as high as 94 cents a gallon.

The settlement was made public yesterday at Justice Department news conferences in Washington and Houston.

Despite the settlement, the department continues to investigate alleged wrongdoing, and it secured BP's commitment to cooperate in the investigations.

"We will continue to look at everything there is to look at and we're not foreclosing anything in these investigations," said Peter D. Keisler, acting attorney general.

Even so, the Justice Department agreed not to bring additional criminal charges against BP arising from the Texas City explosion, in which 15 employees were killed and more than 170 injured. However, individuals still could be charged with crimes in the matter.

The $50 million fine to settle the charges stemming from the explosion in March 2005 marks the first criminal prosecution and highest-ever fine arising from enforcement of the Clean Air Act.

"If our approach to process safety and risk management had been more disciplined and comprehensive, this tragedy could have been prevented," BP North America President Robert A. Malone said in a statement.

"We did not provide our people with systems and processes that would have enabled them to appreciate the risk of a catastrophic release" of explosive gases at the Texas City refinery.

BP also agreed to pay a $12 million criminal fine and $8 million in restitution and environmental research payments as part of the settlement of charges arising from the March 2006 oil spill in Prudhoe Bay, Alaska.

In the propane trading case, BP agreed to pay $303 million in fines, including a $100 million criminal penalty and the creation of a $53 million fund to reimburse victims of the scheme to corner the propane market.

David Greising writes for the Chicago Tribune. The Associated Press contributed to this article.

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