(The headline as published has been corrected in this text.)
Oil giant BP PLC agreed to pay $373 million in fines and admit to criminal wrongdoing in a sweeping settlement of charges stemming from 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 U.S. Justice Department is continuing to investigate alleged wrongdoing and has 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 2005. However, individuals still could be charged with crimes in the matter.
The $50 million fine paid to settle the charges arising from a March 2005 explosion in Texas City 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 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.
The settlement of the trading case is called a deferred prosecution, meaning the Justice Department will dismiss charges against the company after three years if BP complies with all terms of the agreement.
An indictment issued by a federal grand jury in Chicago charged Mark David Radley, James Warren Summers, Cody Dean Claborn and Carrie Kienenberger, former employees of a subsidiary of BP America Inc., with conspiring to manipulate and corner the propane market from Feb. 5 to March 15, 2004. The indictment also claims the traders violated the Commodity Exchange Act and accuses the traders of wire fraud.
Previously, a Houston-based BP trader named Dennis N. Abbott had pleaded guilty to conspiring to manipulate and corner the propane market in 2004.
Radley, Summers, Claborn and Kienenberger could not be reached.
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dgreising@tribune.com
