Posted by Sheila Shayon on November 16, 2012 02:12 PM
It's understandable that the record-breaking sum that BP will be paying out — $4.5 billion in fines and other payments — as a result of the Department of Justice settlement over the 2012 Deepwater Horizon accident, oil spill and response raised eyebrows. While two employees are being charged wth manslaughter, the company also pled guilty to 14 criminal charges in connection with the cataclysmic oil spill in the Gulf of Mexico two years ago, and admitted to criminal conduct and deliberately misreporting the impact of the spill.
It's a record-breaking sum, but as a reader noted on our story, it's "a drop in the barrel" for the oil and gas giant. Even the fact that the DOJ investigation is ongoing, and BP will be subject to additional including federal civil claims and claims for damages to natural resources and fines under the Clean Water Act, with potential fines of up to $21 billion, the brand is more than prepared to absorb the financial hit.
The bigger question is how much, if at all, things have changed in the corporate culture that led to the accident, and led to harsh criticism over its handling of the accident. As Tom Zara, Interbrand's global Corporate Citizenship practice leader, comments, the DOJ penalty is directed at the "ethical bone structure" that led to the disaster, and the loss of 11 lives. "Notoriety of criminality isn’t the death knell of a brand, but corruption of culture will kill the brand."
The Justice Department press release detailing BP's guilty plea doesn't mince words on that front:Continue reading...
Posted by Shirley Brady on November 15, 2012 10:07 AM
The Associated Press is reporting that "BP has agreed to pay the largest criminal penalty in U.S. history, totaling billions of dollars, for the April 2010 oil spill in the Gulf of Mexico" that killed 11 workers in 2010. Bloomberg also reports: "The company will plead guilty to obstruction of justice for lying to Congress. Two of the company’s employees face manslaughter charges over deaths in the explosion of the oil well, said the person, who requested anonymity to discuss the deal which has not been made public. The amount wasn’t disclosed." The BBC is putting the figure at between $3 billion and $5 billion, and hears that up to four BP staff may be arrested.
Update: The settlement for the DOJ's Deepwater Horizon oil spill fraud case levies $4.5 billion in penalties against the company, including $1.26 billion for 14 criminal charges, and eliminates any further criminal and Securities and Exchange Commission (but not civil) charges against the company. As part of the deal, BP "has agreed to plead guilty to 11 felony counts of Misconduct or Neglect of Ships Officers relating to the loss of 11 lives; one misdemeanor count under the Clean Water Act; one misdemeanor count under the Migratory Bird Treaty Act; and one felony count of obstruction of Congress." It's also agreeing to pay $525 million in civil penalties through 2015 to settle claims by the SEC over the company's reporting on the oil flow rate into the Gulf of Mexico in the days following the accident. The deal is still subject to US federal court approval.
The Justice Department press release confirms that BP's two highest-ranking supervisors are being charged with manslaughter while a former senior executive is being charged with obstruction of Congress:Continue reading...
Posted by Shirley Brady on September 1, 2011 10:06 AM
AT&T is not used to not getting its way, as Politico observes today. Having spent millions and employing an army of lobbyists and publicists to make its case for acquiring T-Mobile's US operations, the telecom giant was stunned when the US Department of Justice went to court yesterday to block the deal.
Still, it stands a fighting chance to salvage its proposed merger with T-Mobile USA and convince the DOJ that the merger is not anticompetitive, but in fact offers real merits for consumers.
Whiile the company's chairman and CEO Randall Stephenson is (according to Bloomberg News) gearing up for a court fight and ready to make concessions to save the T-Mobile deal, Hal Singer, managing director of Navigant Economics, told Bloomberg TV that AT&T has a "standing chance" to convince the Department of Justice that the merger will benefit mobile customers.Continue reading...
Posted by Shirley Brady on August 31, 2011 11:17 AM
AT&T's offer to bring home some 5,000 jobs to the US as part of its proposed $39 billion purchase of T-Mobile USA has failed to win over the Obama administration.
Reuters, the Associated Press, the Wall Street Journal and Bloomberg are reporting that the Justice Department has filed suit to block the merger, which was announced in March, between the second biggest wireless carrier in the U.S. (AT&T) and the fourth-biggest carrier.
While AT&T will likely definitely contest the DOJ suit, there's one delighted party at the news: Sprint CEO Dan Hesse, who is vigorously opposed to his rivals' merger, which would dwarf his company. (Read Sprint's official response here.)
The Justice Department just confirmed the move, stating in a press release that it's rejecting the deal on antitrust concerns that it would reduce competition and raise prices for mobile customers in the US — or as the DOJ puts it, “Unless this merger is blocked, competition and innovation will be reduced, and consumers will suffer.”
Fortune reports that AT&T shares fell nearly 4% on the news, while Sprint shares jumped more than 8%, to $3.83 a piece. The FCC review of the deal will continue, although Bloomberg notes that the agency has never approved a proposed merger that the DOJ opposed.