Halliburton Agrees To Plead Guilty To Destruction Of Evidence In 2010 BP Spill, Pay Maximum Fine

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"Halliburton Agrees To Plead Guilty To Destruction Of Evidence In 2010 BP Spill, Pay Maximum Fine"

The Deepwater Horizon spill. (Credit: AP Photo/Gerald Herbert)

On Thursday, the Department of Justice announced that Halliburton had agreed to plead guilty to criminally destroying evidence in the investigation of the BP Gulf oil spill in 2010. The company “signed a cooperation and guilty plea agreement,” will pay the maximum fine of $200,000, and undergo three years of probation. It also had already made a $55 million voluntary contribution to the National Fish and Wildlife Foundation.

Halliburton was the oil services company that oversaw the cement pouring while the Macondo well was drilled. The well malfunctioned on April 20, 2010, causing an uncontrolled blowout on the Deepwater Horizon rig and an explosion that killed 11 people and caused the largest oil spill in U.S. history.

As an oil services company, Halliburton “was responsible for conducting the cement job” according to the final investigation into the disaster. BP and Halliburton had a disagreement over how many centralizers to use on the well, which help keep the wellbore centralized. After the accident, Halliburton tried to find out what happened, according the the Justice Department press release:

On or about May 3, 2010, Halliburton established an internal working group to examine the Macondo well blowout, including whether the number of centralizers used on the final production casing could have contributed to the blowout. A production casing is a long, heavy metal pipe set across the area of the oil and natural gas reservoir. Centralizers are protruding metal collars affixed at various intervals on the outside of the casing. Use of centralizers can help keep the casing centered in the wellbore away from the surrounding walls as it is lowered and placed in the well. Centralization can be significant to the quality of subsequent cementing around the bottom of the casing. Prior to the blowout, Halliburton had recommended to BP the use of 21 centralizers in the Macondo well. BP opted to use six centralizers instead.

That same month, Halliburton did some sophisticated 3D simulations of the final cementing job, using 6 and then 21 centralizers. The simulations, however, showed that there was little difference between the two scenarios, suggesting that Halliburton’s recommendation to BP that the well should have 21 centralizers instead of 6 was irrelevant. The Senior Program Manager who conducted the simulations was directed to destroy the results. The same simulations were run a month later, and again the person who conducted the simulation was directed to “get rid” of the results.

This is relevant because when the 2011 Bureau of Ocean Energy Management, Regulation and Enforcement report on the spill found that BP and Halliburton shared responsibility for the spill, Halliburton denied responsibility. Halliburton spokeswoman Beverly Stafford said the report “incorrectly attributes the operation decisions to Halliburton,” and that “Every contributing cause where Halliburton is named, the operational responsibility lies solely with BP. Halliburton remains confident that all the work we performed with respect to the … well was completed in accordance with BP’s specifications for its well construction plan and instructions.”

In 2011, BP filed court papers that accused Halliburton of having “intentionally destroyed evidence” related to the explosion aboard the rig. When BP made these allegations, the Halliburton spokeswoman responded that “we believe that the conclusions that BP is asking the court to draw is without merit and we look forward to contesting their motion in court.”

A year and a half later, Halliburton agreed to cooperate with the ongoing investigation, pay the maximum fine, plead guilty, and undergo three years of probation. Corporate probation is often used when the prosecution defers prosecution, or tries to get a corporation to change practices. It is unclear why probation was used in this case — it is possible that penalties will be higher for future violations within the three years, in addition to an agreement to cooperate with the investigation. The settlement still requires court approval.

TransOcean, the company that leased the Deepwater Horizon rig to BP, has already admitted criminal and civil violations and settled with the federal government to the tune of $1.4 billion. BP, of course, already pled guilty and agreed to pay $4.5 billion in fines and penalties.

In June, BP decided to stop sending crews to Gulf Coast beaches, even as tar balls continue to wash ashore.

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34 Responses to Halliburton Agrees To Plead Guilty To Destruction Of Evidence In 2010 BP Spill, Pay Maximum Fine

  1. BillD says:

    Criminal penalties for executives are probably what is needed. Indictment of individuals is more effective than even “large fines.” When a company pleads guilty, it seems that the only action is to put the company on probation. Guilty individuals can actually serve time. At least, such admissions open up Halliburton to civil suits.

  2. Steve_I_Am says:

    A $200,000 fine?!! Are you f’ing kidding me? That’s like you, or I, covering up a murder and having to pay a $1 fine!

    It is time for the Justice Department to crack down on these Corporate criminals. Give Halliburton the Corporate DEATH PENALTY! REVOKE its corporate charter . . . put management directly involved in the cover up in JAIL . . . and sell off its corporate assets and use the money to pay to truly clean up the Gulf!

    • Steve_I_Am says:

      THIS is why America needs a constitutional amendment that says both “Corporations are NOT People!” and “Money is NOT Speech!”

      The ONLY proposed constitutional amendment that says BOTH things is Move to Amend’s WE THE PEOPLE AMENDMENT. Check it out at http://www.wethepeopleamendment.org.

      Steve Justino
      Co-Chair, Colorado Move to Amen

      • Sharron Carr says:

        I agree, plus the fine that Haliburton had to pay was a pittance compared to the damage caused. And, now, BP is trying to get out of paying reparations saying that the companies and towns that were damaged by the oil spill are committing fraud and they really didn’t suffer that much monetary damage. FRUSTRATION.

      • Tom Cyr says:

        FYI –
        Typo: Colorado Move to Amen should be Colorado Move to Amend. It only becomes move to amen in the Sprgs…CO joke.

        Otherwise, good comment and I agree.

        Tom who used to be in CO but now resides in CA

    • John Riingen says:

      Count me in.

  3. quiksloth says:

    Since Haliburton is apparently a “person”, shouldn’t it, or at least those with a vested interest in it, all be sent to prison? Why is it that when individuals commit crimes, they go to jail, while the leaders of corporations play a shell game with the truth to avoid any real consequences beyond, maybe, having to pay inconsequential fines.

  4. MarkfromLexington says:

    It does seem a travesty of justice that the penalties associated with their illegal behavior are so low.

  5. Ken says:

    This is not a situation dealing with Haliburton or BP and others but with Big Corps. In virtually every instance the Corp. pays a “Simple Fine” as in $200,000.00 and admits no guilt. I can’t have an accident and claim the auto maker shares liability and my Insurance Company and the Auto Maker’s Insurance company pay a fine, admit no guilt and walk away scott free so why should ig Corps. The CEO’S and Presidents and Vice Presidents shoud e held personally responsible for the actions of the companies they lead. Convict them, put the identical fine on them and sentence them to prison just as they were any other person not of wealth.

  6. Marie says:

    Fines mean little to huge operations like Halliburton. Added to hefty fines should be criminal prosecutions.
    They want to be viewed as “people” when it suits them, but will take corporate exits whenever possible. The best of both worlds thanks to the GOP and the SCOTUS.
    The donation to NF&W is “chump change” to them and is a tax write off.
    After all we have learned about Halliburton in the past decade the fine for the worst man-made disaster in America is ludicrous.
    Heads must roll and responsible persons must be tried.

  7. Matthew Tanner says:

    They need to be axed from all their government contracts as they are, admittedly, a criminal enterprise.

  8. Mike Roddy says:

    $200k? That’s two days worth of coca cola profits from the Halliburton Iraq office.

    Criminal prosecutions are called for. We can start with Dick Cheney.

  9. Ben Adam says:

    They’re still laughing at us all. This was a carefully arranged admission of guilt that harms them not one bit. Those culpable will continue to rake in their fat bonus while this paltry sum is not even missed from the corporation’s petty cash box.

  10. gerald says:

    But if anyone of us had obstructed justice by destroying evidence we would be in prison!!

    • Mulga Mumblebrain says:

      In Australia one of the tobacco Murder Incorporateds and its ‘legal’ sonderkommandoes ran a ‘Document Retention Program’ that, would you believe it, did not much but destroy incriminating documents. Capitalism is quite simply and unambiguously totally inimical to all morality but that of the heartless exploiter.

  11. Rick Drake says:

    Undoubtedly the tip of the iceberg.

  12. james corbett says:

    Oh, No!! Not a fine. How will they ever recover? Boy, a fine; that’ll teach ‘em. I’ll bet they think twice before risking a small fine to make hundreds of billions. “Obstruction of Justice” may sound like a serious felony, but consider the law as it applies to rich people, and this is a very serious penalty. For stealing far less almost anybody who makes less than a half a million a year would go to jail. That is as it should be. How else can we keep the great unwashed churlish masses under control while we plunder their retirement savings, pensions, and health care?

    • Mulga Mumblebrain says:

      No doubt they will also appeal, use the legal fees for tax deduction purposes, then simply not fork out the cash.

  13. Bryan Hester says:

    This is exactly whats wrong with the Department of Justice — A $200,000 dollar fine? Utterly ridiculous. Should be more like $200,000,000 Considering the amount of money they make and the damage that the bad cement mixture caused when it failed.

    It’s cheaper for them to break the law then to spend the money to do it right.

  14. Dr. Craig Coelho says:

    200k??? Are you serious??? Who’s going to jail? The fines that Halliburton is incurring don’t make their actuaries break a sweat, reporting how it’s the cost of doing business and to do it again with all good speed.

  15. Now, if we could just get them to pay for the war we threw for them.

  16. Scott says:

    Most likely, Halliburton wrote the legislation specifying that maximum fine.

  17. Renee says:

    Since corporations are people, shouldn’t it be in jail?

  18. glogrrl says:

    $200,000 fine? Are you kidding me? It should be $200,000,000,000.00—that’s just a drop in the bucket for those scumbags.

  19. AndyA121 says:

    Gee, 200,000 dollars,Think that will cover the livelyhoods of the gulf states and Mexico? That runs to about .00010 of a cent to everyone in not including those effected by tropical storms coming on to the inland.Don’t spend it all in one place.
    (sarcasum)

  20. Mary McGlaughlin says:

    $200,00.00 is a joke. Prosecution and prison time for executives who okayed this debacle , along with a much bigger fine is abetter idea.

  21. Jusef says:

    It is a typical “settlement” that the Justice Dept. Makes with all corporate criminals. No admission of guilt, no jail time for anyone, court records are sealed so that we can’t find out the whole truth, allowing the corporate criminals to define the penalties that they shall be imposed upon them, no exclusion from future sweetheart deals with the government. Ain’t that a bitch . I, on the other hand, was convicted of FELONY possession of some pot in Indiana which will now effectively excludes me from student loans, government sponsored food and housing assistance for life, bars me from owning a weapon, excludes me from most private and all civil service work…and I spent 6 months in jail and spent 5k fighting it. If corporations are people let them experience this legal system from a peoples perspective.

  22. Marian Cruz says:

    Halliburton is a despicable company and in my opinion, should be held accountable and responsible for their actions.

    The ordinary folks are struggling, while the likes of Halliburton make billions/trillions!

  23. sharida abdoel says:

    Haliburton,
    After 911 you fired my brother in law from your company in Huston for being a Muslim. Now 12 years later you have to pay. People who do wrong things or oppress people always pay, they always pay.

  24. Scott says:

    Pardon me, other commenters, but as I read the above article, the evidence, admittedly destroyed, as described in the article was not as prejudicial to Halliburton as I initially thought or is at least unclear. The issue at hand was that Halliburton destroyed some simulation results that showed that their more conservative pre-accident cementing plan recommendation would have been be no more effective than BP’s eventual actual cementing. It is unclear to me whether the simulations showed cement failure with both 6 and 21 centralizers or whether both scenarios indicated successful cementing. If they showed failure in both cases, Halliburton is guilty of a much worse crime than if the simulations showed both scenarios would have succeeded. It would be good to know which was the case. In either case, of course, destroying evidence willfully must be punished.
    As an unknowledgeable observer, I wonder along what length of pipe the 6 and 21 centralizers were meant to be spaced; certainly not the entire 18k? foot depth of the well.