October 26, 2007

Justice, BP Settle Criminal Charges

By Greg Farrell

The Justice Department entered into a broad agreement Thursday with British Petroleum to settle criminal charges stemming from a deadly explosion in Texas, an oil spill in Alaska and allegations of price-fixing in the nation's propane markets.

BP will pay $373 million in fines and restitution.

In a related development, a federal grand jury in Chicago returned an indictment against four former employees of BP America, accusing them of trying to manipulate and corner the propane market in 2004.

"The BP cases demonstrate our commitment to enforcing the laws that protect our environment, the safety of Americans and the integrity of the marketplace," said acting Attorney General Peter Keisler in a prepared statement. "Businesses that ignore those laws and endanger their workers and communities or corrupt our markets must be held accountable."

BP America Chairman and President Bob Malone said, "These agreements are an admission that, in these instances, our operations failed to meet our own standards and the requirements of the law. For that, we apologize."

The charges stem from incidents that took place at BP's American operations in recent years:

*In March 2005, an explosion at BP's refinery in Texas City, Texas, killed 15 contract employees and injured 170. As part of Thursday's settlement, BP pleaded guilty to a one-count felony violation of the Clean Air Act in the case and agreed to pay $50 million in criminal fines.

*In March and August 2006, oil from BP's Alaskan exploration subsidiary leaked from pipelines into the tundra and a frozen lake. The company pleaded guilty to a misdemeanor violation of the Clean Water Act and will pay $20 million in criminal fines and restitution to the National Fish and Wildlife Foundation and Alaska.

*In April 2003 and February 2004, the company attempted to manipulate the price of propane on the Chicago Mercantile Exchange, the government said.

Under the agreement between BP and the Justice Department, the government promised not to prosecute the company if BP cooperated with an overseer who would monitor its trading operations.

BP also agreed to pay a criminal penalty of $100 million, a fine of $25 million to the U.S. Postal Inspection Consumer Fraud Unit, restitution of $53 million to parties that overpaid for propane, and a civil penalty of $125 million to the Commodity Futures Trading Commission.

The four former BP employees are not the first to face charges in the propane case. In 2006, Dennis Abbott, a former BP trader, pleaded guilty to conspiring to manipulate the propane market. (c) Copyright 2005 USA TODAY, a division of Gannett Co. Inc. <>