The Case Against BP: What Makes an Oil Spill a Felony

(June 1) -- As public anger over the Gulf of Mexico oil spill mounts, demands that BP pay out millions in damages are giving way to a growing clamor that oil industry executives also go to jail.

Attorney General Eric Holder's highly visible visit to the gulf today to meet with state and federal prosecutors signals the Obama administration's recognition of the souring public mood. The Justice Department normally doesn't announce criminal investigations, but Holder announced that civil and criminal investigations are proceeding.

"If we find evidence of illegal behavior, we will be forceful in our response," Holder said.

The criminal investigation, which has been under way for about three weeks, will almost certainly lead to criminal negligence charges, legal experts say, which could involve multimillion-dollar fines and a year in jail.

But did any of the activity that led to the explosion at the Deepwater Horizon oil rig involve behavior that could bring felony charges, with more serious prison sentences?

The answer most likely can be found in the thousands of pages of contacts, e-mails, repair logs, communications with contractors and other documents that prosecutors already have begun to explore. They are looking for evidence that BP knowingly violated federal safety regulations, misled the government about the risks involved or failed to notify the government when dangerous conditions existed.

"When there is an environmental catastrophe of these proportions, the threshold is not very high for making it a criminal case," said David Uhlmann, who headed the Justice Department's environmental crimes section for seven years in during the Clinton and George W. Bush administrations. "But crossing the line into felony behavior means knowing behavior. Was there enough intentional conduct for it to rise to the level of a felony?"

Prison terms are not unheard of in environmental pollution cases. The president of one of the largest hazardous waste handling companies in California was sentenced to 37 months and ordered to pay a $1 million fine, according to Steven Solow, a D.C. attorney who also served as chief of the Justice Department's environmental crimes section. Likewise, Solow noted, the vice president of a South Carolina chemical company received 18 months in prison for illegal waste discharge.

In the case of oil spills, the closest similar case involves the 1989 spill by the Exxon Valdez in Alaska's Prince William Sound. Unlike the gulf oil disaster, the cause of the Exxon spill wasn't much of a mystery -- the ship ran aground. Exxon was charged with felony violations of the Migratory Bird Act and the Clean Water Act, but pleaded guilty to misdemeanors and paid $125 million in criminal fines.

"Exxon is a blueprint for what's likely to happen here," Uhlmann said. "Misdemeanors are a big deal. Exxon paid $125 million and that was 20 years ago. The fines here could be hundreds of millions of dollars."

The gulf inquiry promises to be one of the most complex of its kind ever undertaken, with the "crime scene" and much of the physical evidence lying 5,000 feet beneath the surface of the water. And because the spill also involves Transocean Ltd., which operated the oil rig; Halliburton Energy Services, which performed the cementing work for the well; and Cameron International, which provided the blowout preventer that was supposed to have stopped the gushing oil, investigators could end up interviewing dozens if not hundreds of witnesses.

In congressional hearings, executives from the four companies have blamed one another for the disaster -- a public relations strategy that could pay dividends to criminal investigators eager to question them.

President Barack Obama already has asked Congress for $10 million to finance the investigation. At a news conference in New Orleans today, Holder announced that prosecutors will focus on the following federal laws:

• The Clean Water Act, which carries civil and criminal penalties as well as fines
• The Oil Pollution Act of 1990, used to hold responsible parties liable for cleanup costs
• The Migratory Bird Treaty and the Endangered Species Act, which carry penalties for injury and death to birds and wildlife

To bring felony charges under the Clean Water Act, prosecutors do not have to prove BP knew it was violating the law -- only that it knew it was doing something it shouldn't, and continued to operate the well anyway.

"If you see a hole in the ground with crushed and rusted drums, a prosecutor does not have to prove that the defendant knew a barrel contained a solvent that is regulated as hazardous waste," said Tom Kiehnhoff, a former federal prosecutor now in private practice in Beaumont, Texas.

"It's enough that the prosecutor show the defendant knew there was something in the barrel that wasn't innocuous," he said.

In the case of the spill, prosecutors will begin by determining what caused the well to explode.

"The first question the government is looking at now is, why did that well blow out and who were the people involved?" Kiehnhoff said.

At a Coast Guard hearing last week in Louisiana, Robert Kaluza, a top BP official who was on the rig on the day of the explosion, refused to testify and instead invoked his Fifth Amendment right against self-incrimination.

Prosecutors will want to know how information flowed among the four companies. For example, were the workers pouring the concrete acting at the direction of BP or Halliburton? Then there's the old Watergate question: Who knew what when?

The decision to prosecute may turn on how BP behaved after the well blew up.

"If it turns out to have been misleading conduct, false statements, concealment or withholding of information, then there's a whole laundry list of other charges that could materialize," Uhlmann said.

Sen. Barbara Boxer, D-Calif., who chairs the Senate Environmental and Public Works Committee, asked the Justice Department to investigate whether BP made false statements to the federal government about the company's ability to respond to an oil spill.

From New Orleans, Holder declined to talk specifics. But he added: "As our review expands, we will be meticulous, we will be comprehensive and we will be aggressive. We will not rest until justice is done."