Execs Don't Take Personal Reponsibly for Transocean's Part in Gulf Oil Disaster
Section: Business & the Economy
Conservatives frequently argue that liberals don’t take personal responsibility. For example, on Mitt Romney’s 47% tape, he argues Americans who paid into Medicare and Social Security are lacking personal responsibility when they receive benefits for their payments. He also argues that people without jobs are simply refusing to work. As Romney notes on the tape, he has an idea of how he would like to see people in this country work. He argues we need to bring slave labor back to this country. He doesn’t seem to mind that people in his Chinese factories sleep twelve to a room, only earn $1.99 or less per hour and work 84 hours per week.
In addition, conservative corporate executives such as Mitt Romney have engineered a legal system where they do not have to take responsibility for the problems they create. Romney like many other corporate executives refuse to take responsibility for treating others in a humane way. They’d rather roll back safety and human rights regulations so they can make even more money exploiting workers. That’s why Romney has worked hard moving factories from the U.S. to China in order to make drive down wages and human rights in the U.S.
At the same time Republicans were creating a legal system where U.S. corporate organization could profit from foreign slave labor, they created a legal system in this country where they could not be held personally responsible for crimes committed by their companies even if they made decisions which contributed to the crimes.
While Citizen’s United gave corporations the ability to influence elections, corporate law allows corporations to pay fines for corporate criminal behavior. Company officials do not go to jail, lose their jobs and their pay is not even reduced when their companies are found guilty of criminal behavior. For example, this system has allowed Transocean execs off the hook in two separate incidents over the past two years. The fines they pay are passed off as the costs of doing business which means the fines are passed off on the consumer.
For example, Transocean, a global provider of offshore oil drilling services and equipment based in Vernier, Switzerland, agreed to plead guilty to violating the Clean Water Act (CWA) and entered a civil settlement to resolve claims from the Gulf Oil Deepwater Horizon Disaster that include paying a record $1 billion in civil penalties and $400 million in criminal fines but no one at the company was held personally responsible. The pattern occurred after Transocean corporate convictions in a foreign bribery scandal.
Yesterday, Transocean Deepwater Inc. admitted criminal conduct but no one at the company was convicted of even a minor offense. As part of the plea agreement, Transocean Deepwater Inc. agreed, subject to the court’s approval, to pay $400 million in criminal fines and penalties and to continue its on-going cooperation in the government’s criminal investigation. In addition, pursuant to the terms of a proposed partial civil consent decree also lodged with the court today, Transocean Ocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., Transocean Deepwater Inc. and Triton Asset Leasing GMBH have agreed to pay an additional $1 billion to resolve federal Clean Water Act civil penalty claims for the massive, three-month-long oil spill at the Macondo Well and the Transocean drilling rig Deepwater Horizon. Under the civil settlement, the Transocean defendants also must implement court-enforceable measures to improve the operational safety and emergency response capabilities at all their drilling rigs working in waters of the United States.
Attorney General Eric Holder said
“This resolution of criminal allegations and civil claims against Transocean brings us one significant step closer to justice for the human, environmental and economic devastation wrought by the Deepwater Horizon disaster. This agreement holds Transocean criminally accountable for its conduct and provides nearly a billion dollars in criminal and civil penalties for the benefit of the Gulf states.”
Lanny A. Breuer, Assistant Attorney General for the Justice Department’s Criminal Division echoed
“Transocean’s rig crew accepted the direction of BP well site leaders to proceed in the face of clear danger signs — at a tragic cost to many of them. Transocean’s agreement to plead guilty to a federal crime, and to pay a total of $1.4 billion in criminal and civil penalties, appropriately reflects its role in the Deepwater Horizon disaster.”
Similarly, Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division said
“This unprecedented settlement under the Clean Water Act demonstrates that companies will be held fully accountable for their conduct and share responsibility for compliance with the laws that protect the public and the environment from harm. This settlement will provide immediate relief and benefits to the people of the five Gulf states, and requires Transocean to implement significant safety measures, as well as stringent auditing and monitoring to reduce the risk of any future disasters.”
Although criminal penalties were assigned to the company, no individuals at the company were held personally responsible. The company stock moved up over seven percent on the news. After the disaster, execs received bonuses for the increased level of work they were required to do in response to the Gulf Oil Disaster.
According to court documents, on April 20, 2010, while stationed at the Macondo well site in the Gulf of Mexico, the Deepwater Horizon rig experienced an uncontrolled blowout and related explosions and fire, which resulted in the deaths of 11 rig workers and the largest oil spill in U.S. history. In agreeing to plead guilty, Transocean Deepwater Inc. admitted that members of its crew onboard the Deepwater Horizon, acting at the direction of BP’s “Well Site Leaders” or “company men,” were negligent in failing fully to investigate clear indications that the Macondo well was not secure and that oil and gas were flowing into the well.
Similarly the corporation pled guilty in 2010 to conspiring to violate the Foreign Corrupt Practices Act (FCPA) including violating the anti-bribery provision of the FCPA; and aiding and abetting the violation of the books and records provisions of the FCPA. The charges related to approximately $90,000 in bribes paid by Transocean Inc.’s freight forwarding agents in Nigeria to Nigerian customs officials to circumvent Nigerian customs regulations regarding the import of goods and materials and the import of Transocean’s deep-water oil rigs into Nigerian waters. Transocean agreed to enter into a deferred prosecution agreement that required, among other things, paying a $13.44 million criminal penalty. In that case, no one at the company was held responsible for the bribes.
Transocean’s most recent criminal resolution will financially benefit the Gulf region. Under the order presented to the court, $150 million of the $400 million criminal recovery is dedicated to acquiring, restoring, preserving and conserving – in consultation with appropriate state and other resource managers – the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill. This portion of the criminal recovery will also be directed to significant barrier island restoration and/or river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the oil spill. An additional $150 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.
In addition, the civil settlement secures $1 billion in civil penalties for violations of the CWA, a record amount that significantly exceeds last year’s $70 million civil penalty paid by MOEX Offshore 2007 LLC, a 10 percent partner with BP in the Macondo well venture. The unprecedented $1 billion civil penalty is subject to the Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States Act of 2012 (Restore Act), which provides that 80 percent of the penalty will be to be used to fund projects in and for the Gulf states for the environmental and economic benefit of the region. This civil resolution reserves claims for natural resource damages and clean-up costs.
Under the civil settlement, the Transocean defendants must also observe various court-enforceable strictures in its drilling operations, aimed at reducing the chances of another blowout and discharge of oil and at improving emergency response capabilities. Examples of these requirements include certifications of maintenance and repair of blowout preventers before each new drilling job, consideration of process safety risks, and personnel training related to oil spills and responses to other emergencies. These measures apply to all rigs operated or owned by the Transocean defendants in all U.S. waters and will be in place for at least five years.
The guilty plea agreement and criminal charge announced today are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill. The civil resolution is part of the ongoing litigation against defendants BP Exploration and Production Inc., the Transocean defendants, and Anadarko Petroleum Corporation (among others) for civil penalties, injunctive relief, and a declaration of unlimited liability for removal costs and damages under the Oil Pollution Act.
The proposed civil settlement is subject to a public comment period (see below) and final court approval.
Partial Consent Decree (pdf)
by Todd Miller
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