[Corp. Watch] BP violated its probation, and top executives should go to jail

[Corporation Watch]

Punishments that Fit BP's Crimes

by Phil Mattera

(Dirt Diggers Digest, May 21) -- Few things enrage the American public more than hearing about a criminal who is given a light sentence and then commits another offense.

	But this scenario is not limited to murderers and rapists -- corporations can also be recidivists as well, and we're currently contending with such a culprit in the (corporate) person of British Petroleum (BP).

	The oil giant's apparent negligence in connection with the ongoing disaster in the Gulf of Mexico comes on the heels of two previous major accidents in which the company was found culpable: a 2005 explosion at a refinery in Texas that killed 15 workers, and a series of oil spills in 2006 at its operations in the Alaskan tundra.

	Those earlier cases were not just another blot on BP's blemished track record. In both instances, the company was compelled to plead guilty to a criminal charge and not only heavily fined, but also put on probation for three years.

	On a single day in October 2007, the U.S. Department of Justice announced those plea agreements, along with the resolution of another criminal case in which BP was charged with manipulation of the market for propane.

	In the latter case, prosecution of BP was deferred on the condition that the company pay penalties of more than $300 million, and be subjected to an independent monitor for three years.

	In other words, at the time that BP engaged in behavior that contributed to the Gulf catastrophe, it was already under the supervision of federal authorities for three different reasons.

	Although the terms of the probation and independent monitor agreements refer to the parts of BP's business involved in the offenses, federal law (18 USC Section 3563) requires that "a defendant not commit another federal, state, or local crime during the term of probation."

	Given the distinct possibility that BP will face new criminal charges, the question arises: What would be a suitable punishment?

	When an individual violates his or her probation by committing a new offense, the usual result is imprisonment. Federal sentencing guidelines say that when an organizational defendant commits such a violation, the remedy is to extend the period of the probation.

	That hardly seems adequate in the case of an egregious repeat offender such as BP. Just as an individual loses certain rights when imprisoned, so should a corporate probation violator face serious consequences. Here are some possibilities:

 • Ineligibility for federal contracts -- BP is currently among the top 30 federal contractors, and should lose the privilege to bid on federal contracts.

 • Ineligibility for federal drilling leases -- Having shown itself to be reckless when it comes to drilling, BP should no longer be able to obtain leases to drill on public lands or in public waters.

 • Ineligibility for federal tax incentives -- Like other oil companies, BP receives a variety of special tax advantages such as write-offs of intangible drilling costs, and should be denied such benefits.

 • Suspension of the right to lobby -- According to the Open Secrets database, BP spent nearly $16 million last year on federal lobbying. As a probation violator, it should be barred from trying to influence public policy.

 • Moratorium on advertising -- As the Gulf debacle continues, BP is spending heavily on advertising to try to salvage its tarnished image, and convey the message that it is doing everything in its power to stop the spill. Once it is designated a probation violator, it should be barred from marketing during its probation.

 • Public admission of fault -- At the point that BP pleads guilty to another criminal offense, an appropriate penalty might be to force it to take the money now being spent to repair its image and use it to run ads admitting its misbehavior. Nothing would be more satisfying than hearing BP admit that its purported devotion to corporate social responsibility has been a sham.

	No doubt there are legal barriers to such measures, but we need to go beyond the current wrist-slapping approach to the punishment of corporate crime and create deterrents that once and for all get the likes of BP to take safety and environmental regulations seriously.