Ex-BP Executive Acquitted of Lying About Size of 2010 Spill

(Bloomberg) -- The highest-ranking BP Plc executive charged in the 2010 Gulf of Mexico oil spill was found not guilty of lying to investigators in a blow to prosecutors as the company awaits word on billions of dollars in potential fines for the disaster.

Other BP employees still have trials to face, with two former well-site managers charged with manslaughter scheduled to have their cases heard starting in February. An engineer charged with destroying evidence had his conviction reversed with a judge ordering a new trial for him.

The New Orleans jury sided with David Rainey, BP’s former vice president of Gulf of Mexico exploration, whose lawyer called the case one of “prosecutors’ overreach.”

U.S. District Judge Kurt D. Engelhardt said Friday he thought the jury had reached “the correct verdict, based on the evidence.”

The jury was already deciding a narrower case than the government initially proposed.

Engelhardt threw out an obstruction of Congress charge on Monday, the first day of the trial.

On Wednesday, Engelhardt blasted the government for basing its prosecution on a federal investigator’s notes instead of a recorded interview of Rainey.

Relying on such evidence is “very dangerous territory,” the judge said outside the presence of the jury. The judge already had been considering a request to throw out the case against Rainey regardless of the jury’s verdict.

Evidence Trash

Reid Weingarten, Rainey’s lawyer, took up the judge’s concerns in his closing argument to the jury, urging it to reject the investigator’s notes because, he said, the evidence was “a piece of trash.”

The BP well blowout off the Louisiana coast in April 2010 killed 11 people aboard the drilling rig and set off the largest offshore oil spill in U.S. history.

The London-based company earlier pleaded guilty for its part in underestimating the spill’s size. BP also paid $525 million to the U.S. Securities and Exchange Commission, which alleged it downplayed the size to bolster stock prices.

BP agreed in 2012 to plead guilty to 11 counts of manslaughter for the deaths and two misdemeanor pollution law violations, paying a $4 billion settlement to the U.S.

The company is awaiting a separate court ruling on how much it will have to pay for violating the U.S. Clean Water Act. The government asked U.S. District Judge Carl Barbier to fine BP at least $12 billion.

BP has argued that any fine should be much lower, and that Barbier should consider its efforts to stop the spill. Barbier found in September that BP was grossly negligent in causing the blowout, raising the maximum possible fine.

Compensation Payments

BP has put aside $43.8 billion to pay for the disaster. The company has already paid more than $28 billion in response, cleanup and compensation, BP said in a regulatory filing in April.

Rainey wasn’t trying to mislead anyone and was scurrying to provide estimates of the flow rate of a spill that was beyond anyone’s prior experience, Weingarten said.

Rainey wasn’t involved in the drilling of the BP well and wasn’t accused of any wrongdoing related to the blast. The U.S. claimed Rainey cherry-picked information from flow-rate reports to make the oil spill seem less catastrophic than it was.

“It was a guess submitted as scientific analysis,” Tsao had told the judge earlier.

Two BP well-site managers, Robert Kaluza and Donald Vidrine, were charged in November 2012 with involuntary manslaughter for the 11 deaths and face trial in February.

The case is U.S. v. Rainey, 12-cr-00291, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporter on this story: Katy Reckdahl in New Orleans federal court at katyreckdahl@gmail.com Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Joe Schneider


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