With weathered oil believed to be from BP's Deepwater Horizon disaster washing up across the Gulf in the wake of Hurricane Isaac and leading to the emergency closure of Louisiana beaches and fisheries, the federal government blasted the company for recent legal filings that make misleading claims about its negligence and the environmental damage it caused.
On Aug. 13, BP filed a motion for final approval of the proposed $7.8 billion settlement for economic and property damages resulting from its 2010 Deepwater Horizon disaster in the Gulf of Mexico. The U.S. Department of Justice said it had no intention of responding until it read the filing, which contained claims that the DOJ blasted as "plainly misleading."
"…[I]f the United States were to remain silent," the DOJ stated in a memorandum it filed with the court on Aug. 31, "BP later may urge that its arguments had assumed the status of agreed facts or, alternatively, that the non-settling parties somehow had waived the right to contest BP's false assertions."
David Uhlmann, a University of Michigan law professor and former chief of the DOJ's environmental crimes section, told the Associated Press that the federal government's strong language "is intended to signal its readiness to go to trial." The first phase of that trial is set to begin in January 2013.
Among BP's claims that provoked the DOJ response was that the company's actions did not constitute gross negligence. On the contrary, the DOJ pointed to a well-documented culture of corporate recklessness. It cited an email sent on April 17, 2010 -- three days before the deadly blowout that triggered the catastrophic spill -- from John Guide, a team leader for the ill-fated Macondo well, to his boss, Houston-based BP executive David Sims.
Guide wrote that the site leaders were at "wits end" and were "flying by the seat of [their] pants." He said a "huge level of paranoia from engineering leadership is driving chaos" and reported that an engineer named Brian Morel called him repeatedly "trying to make sense of all the insanity." Guide concluded, "This operation is not going to succeed if we continue in this manner."
Here's how Sims responded:
John, I've got to go to dance practice in a few minutes. Let's talk this afternoon … . We've both [been] in Brian's position before. The same goes for him. We need to remind him that this is a great learning opportunity, it will be over soon, and that the same issues -- or worse -- exist anywhere else … I'll be back soon and we can talk. We're dancing to the Village People.
DOJ noted that BP's internal investigation into the Deepwater Horizon disaster -- "which consisted of 190 pages and another 569 pages of Appendices" -- failed to mention the Guide-Sims emails, which it calls "only the merest tip of the culture of corporate recklessness that pervaded management and operation of the Macondo well." DOJ wrote:
The behavior, words, and actions of these BP executives would not be tolerated in a middling size company manufacturing dry goods for sale in a suburban mall. Yet they were condoned in a corporation engaged in an activity that no less a witness than [former BP CEO] Tony Hayward himself described as comparable to exploring outer space.
The DOJ devoted 20 pages of its 39-page memorandum to detailing BP's negligence and recklessness, saying the U.S. intends to prove gross negligence or willful misconduct. Doing so would subject BP to much higher financial penalties under federal law. In addition, if the U.S. were to bring a criminal complaint for manslaughter, "gross negligence" could be a factor in defining the crime.
The DOJ also vigorously objected to BP's claim that the Gulf is "undergoing a robust recovery, further weakening claims for economic damages." It points to "severe ill health" of dolphins in Louisiana's Barataria Bay, dead and dying deep-sea corals, and heavy marsh oiling. Noting that the U.S. and five Gulf states are conducting a comprehensive Natural Resource Damage Assessment to evaluate the environmental impact of the spill, DOJ accuses the company of seeking to pre-judge the NRDA results "by inviting the Court to make factual findings on environmental injury based on BP's selective and misleading account of environmental conditions."
In a separate filing submitted to the court on Aug. 31, Alabama also blasts what it calls "BP's one-sided commentary on the factual and legal issues" surrounding the case. It asks the court to exclude factual findings regarding BP's liability and says it reserves its right to rebut BP's claims.
Meanwhile, BP is being sued for tens of millions of dollars by institutional investors who say the company misled them over its safety policies and the scale of its spill in the Gulf, The Telegraph newspaper reports. They're suing under Texas law for fraud and negligent misrepresentation.
(Louisiana Department of Wildlife and Fisheries map shows the approximately 13-mile stretch of the state's beaches that are now closed due to concerns about oil washed up by Isaac.)