BP has pleaded guilty to 14 criminal charges related to the Deepwater Horizon explosion and oil spill of April 2010 and will pay a record penalty of $4.5 billion, which includes $1.26 billion for criminal felonies, according to CBS News. In total, the company faced 12 felony counts and two misdemeanors. The government has also unsealed 23 other charges, including two BP officials who will face charges of manslaughter for the 11 deaths on the rig, reports The Wall Street Journal's Tom Fowler. But the financial penalties announced today are already very large. To put it in perspective, the company made a $5.5 billion profit last quarter—so $4.5 billion is a lot of money even for a giant company like BP. Below we've compiled a breakdown of the money, where it is going, why and, if known, for what it will be used.
$1.26 Billion: Criminal Charges
- Eleven felony counts of 'Misconduct or Neglect of Ships Officers' relating to the deaths aboard the drilling rig that exploded and sank.
- 1 felony of obstruction of Congress because of false information it gave about the rate that oil was leaking from the well. The final government estimate put the rate at between 53,000 and 62,000 barrels of oil a day, for a total of about 4.9 million barrels spilled, reported Fowler last March. BP said it was 20 to 50 percent less than that.
- A misdemeanor count under the Clean Water Act because BP had misinterpreted a safety test and continued to operate despite knowing that there might be unexpected results, which ended up leading to the accident, explains Law Blog's Joe Palazzolo.
- A misdemeanor count under the Migratory Bird Treaty Act, which prohibits the killing of certain migratory birds. The BP oil spill did just that.
The government said it would use the money to rebuild and continue environmental clean-up and some of it will go to the Coast Guard, Attorney General Eric Holder said in a press conference this afternoon.
$2.394 Billion (Over 5 Years): National Fish & Wildlife Foundation
BP has been working with the Foundation on the Recovered Oil Fund for Wildlife.
$350 Million (Over 5 Years): National Academy of Sciences
Again, the charges don't explain exactly where this money will go. But this organization has done a number of reports and research on the state of the area. Presumably this will help fund those and more to come.
$525 Million (Over 3 Years): Security and Exchange Commission
This again is related to the way the company reported the oil flow rate of the spill. The government says that the company misled investors, as well as the government, on how bad the spill really was. It said that the flow rate was only 5,000 barrels per day, when it had other reports with estimates multiple times that. The actual amount was nearly 50,000 barrels per day.