BP Settles Court Case
October 26th 2007 03:38
The giant British energy company, British Petroleum (BP), agreed to pay $373 million on October 24, 2007 to settle charges of overcharging U.S. propane customers millions, and ignoring environmental warnings which resulted in a deadly explosion in Texas and an Alaskan oil spill.
The charges against BP involve three separate cases which federal investigators have pursued for years. The first case involves a 2004 scheme by BP America, BP’s American subsidiary, to buy big quantities of propane in order to inflate the price charged to U.S. customers. Other propane buyers were forced to pay very high premiums, and had to pass the cost on to their customers. The prices in areas such as New York, Pennsylvania, and Illinois rose to 94 cents a gallon.
BP reached an agreement with the Justice Department to avoid criminal prosecution by paying $100 million, plus fines adding up to $25 million to the U.S. Postal Service, $125 million to the Commodity Futures Trading Commission (CFTC), and $53 million in restitution.
Four former traders were charged by the Justice Department of 20 counts of mail and wire fraud, plus commodities violations. Some of the four traders were caught on tape while they discussed how BP could “control the market at will.”
The CFTC’s Chairman Walt Lukken voiced his “outrage that these people were taking advantage of innocent consumers.”
The second case involved an explosion at a Texas City, Texas BP refinery which killed fifteen employees and injured over 170 others. BP pled guilty to a felony in Texas and will pay $50 million. The explosion violated the Clean Air Act which was enacted in 1990 after an explosion at the Union Carbide plant in Bhopal, India. The explosion killed and injured thousands.
The third case involved an oil spill of 201,000 gallons into Alaska’s Prudhoe Bay. BP pled guilty to violating the Clean Water Act and will pay $20 million. BP will also pay a $12 million fine plus $4 million to the state of Alaska, and another $4 million to the National Fish and Wildlife Foundation.
The Clean Water Act first took shape in 1972 as the Federal Water Pollution Control Act Amendments. It was amended several times, the last time in 2002.
BP issued a press release on October 24, 2007 which admitted that they company “failed to meet our own standards and the requirements of the law.” The statement included an apology by BP America Chairman and President Bob Malone.
“They represent an absolute commitment to work with the government as we continue our efforts to prevent another tragedy like Texas City, to make our Prudhoe Bay pipeline corrosion program more responsive to changing operating conditions and to ensure that our participation in the nation's energy markets is always appropriate,” Malone said.
“Obviously, the actions that we're responding to today reflect that there were some very serious problems within the company,” said acting Attorney General Peter Keisler.
The Acting Chairman of the CFTC Walt Lukken said, “BP engaged in massive manipulation, the magnitude of this settlement reflects that the Commission will not tolerate trading abuses in our open and competitive markets.”
“This case demonstrates that criminals aren't just found on unsafe streets ... they could be in corporate board rooms or on trading desks as well,” said deputy chief postal inspector Kenneth Jones.
“BP committed serious environmental crimes in our two largest states…Today's agreement sends a message that these types of crimes will be prosecuted,” said Environmental Protection Agency (EPA) official Granta Nakayama.
The EPA issued a press release which stated the fines against BP are the “largest criminal fine ever assessed against a corporation for Clear Air Act Violations and the first criminal prosecution of the requirement that refineries and chemical plants take steps to prevent accidental releases.”
BP’s Shady History in Iran
BP began in 1909 as the Anglo-Persian Oil Company (APOC). In 1901 the Shah of Iran allowed William D’Arcy to search for oil. Explorer George Reynolds discovered oil in 1908.
In 1951 the Iranian Prime Minister Mohammed Mossadeq nationalized the oil industry. The British government successfully government convinced U.S. President Dwight Eisenhower to authorize the C.I.A. to overthrow Mossadeq through a conspiracy with the Shah and Iranian military in what became known as Operation Ajax. At first reluctant, the British government convinced the U.S. by playing on their fears of communism spreading, and produced false “evidence” that Mossadeq was cozy with the Soviet Union.
Overthrown in 1953 by a military coup, Mossadeq was replaced by the Shah. The Shah did away with the constitution, and consolidated power.
BP operated in Iran until the 1979 Islamic Revolution in Iran when all of its Iranian assets were confiscated by the Ayatollah Khomeini without compensation to BP.
The charges against BP involve three separate cases which federal investigators have pursued for years. The first case involves a 2004 scheme by BP America, BP’s American subsidiary, to buy big quantities of propane in order to inflate the price charged to U.S. customers. Other propane buyers were forced to pay very high premiums, and had to pass the cost on to their customers. The prices in areas such as New York, Pennsylvania, and Illinois rose to 94 cents a gallon.
BP reached an agreement with the Justice Department to avoid criminal prosecution by paying $100 million, plus fines adding up to $25 million to the U.S. Postal Service, $125 million to the Commodity Futures Trading Commission (CFTC), and $53 million in restitution.
Four former traders were charged by the Justice Department of 20 counts of mail and wire fraud, plus commodities violations. Some of the four traders were caught on tape while they discussed how BP could “control the market at will.”
The CFTC’s Chairman Walt Lukken voiced his “outrage that these people were taking advantage of innocent consumers.”
The second case involved an explosion at a Texas City, Texas BP refinery which killed fifteen employees and injured over 170 others. BP pled guilty to a felony in Texas and will pay $50 million. The explosion violated the Clean Air Act which was enacted in 1990 after an explosion at the Union Carbide plant in Bhopal, India. The explosion killed and injured thousands.
The third case involved an oil spill of 201,000 gallons into Alaska’s Prudhoe Bay. BP pled guilty to violating the Clean Water Act and will pay $20 million. BP will also pay a $12 million fine plus $4 million to the state of Alaska, and another $4 million to the National Fish and Wildlife Foundation.
The Clean Water Act first took shape in 1972 as the Federal Water Pollution Control Act Amendments. It was amended several times, the last time in 2002.
BP issued a press release on October 24, 2007 which admitted that they company “failed to meet our own standards and the requirements of the law.” The statement included an apology by BP America Chairman and President Bob Malone.
“They represent an absolute commitment to work with the government as we continue our efforts to prevent another tragedy like Texas City, to make our Prudhoe Bay pipeline corrosion program more responsive to changing operating conditions and to ensure that our participation in the nation's energy markets is always appropriate,” Malone said.
“Obviously, the actions that we're responding to today reflect that there were some very serious problems within the company,” said acting Attorney General Peter Keisler.
The Acting Chairman of the CFTC Walt Lukken said, “BP engaged in massive manipulation, the magnitude of this settlement reflects that the Commission will not tolerate trading abuses in our open and competitive markets.”
“This case demonstrates that criminals aren't just found on unsafe streets ... they could be in corporate board rooms or on trading desks as well,” said deputy chief postal inspector Kenneth Jones.
“BP committed serious environmental crimes in our two largest states…Today's agreement sends a message that these types of crimes will be prosecuted,” said Environmental Protection Agency (EPA) official Granta Nakayama.
The EPA issued a press release which stated the fines against BP are the “largest criminal fine ever assessed against a corporation for Clear Air Act Violations and the first criminal prosecution of the requirement that refineries and chemical plants take steps to prevent accidental releases.”
BP’s Shady History in Iran
BP began in 1909 as the Anglo-Persian Oil Company (APOC). In 1901 the Shah of Iran allowed William D’Arcy to search for oil. Explorer George Reynolds discovered oil in 1908.
In 1951 the Iranian Prime Minister Mohammed Mossadeq nationalized the oil industry. The British government successfully government convinced U.S. President Dwight Eisenhower to authorize the C.I.A. to overthrow Mossadeq through a conspiracy with the Shah and Iranian military in what became known as Operation Ajax. At first reluctant, the British government convinced the U.S. by playing on their fears of communism spreading, and produced false “evidence” that Mossadeq was cozy with the Soviet Union.
Overthrown in 1953 by a military coup, Mossadeq was replaced by the Shah. The Shah did away with the constitution, and consolidated power.
BP operated in Iran until the 1979 Islamic Revolution in Iran when all of its Iranian assets were confiscated by the Ayatollah Khomeini without compensation to BP.
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