BP‘s settlement for the Deepwater Horizon spill was great headline-grabbing news recently.
Five Gulf coast governors as well as the US Attorney General took the opportunity to claim glory for the largest settlement with a single entity in American history. But who’s in deep water for the Deepwater? Beneath the headlines, it looks as if we are. In case you missed it, under terms announced July 2, British Petroleum agreed to a record-breaking $18.7 billions to resolve claims related to the massive oil spill in the Gulf of Mexico in 2010. Five states stand to gain from payouts over the next 18 years: Louisiana will receive approximately $6.8 billion according to Governor and GOP presidential candidate Bobby Jindal. In her announcement, A.G. Loretta Lynch declared that ever since the spill the Justice Department has been “fully committed to holding BP accountable” and to restoring the environment and the economy of the region “at the expense of those responsible and not the American taxpayer." But if that’s what the DOJ’s committed to, it’s not exactly what they got. As we’ve mentioned before, when corporations agree to pay out compensation, they can claim a tax deduction. Restitution, unlike a criminal penalty or fine, can be written off as just another “cost of doing business”. Of that $18.7 billion, the Justice Department seems only to have tied $5.5 billion to criminal Clean Water Act violations. The rest will likely be tax-deductible, even though a New Orleans judge ruled BP guilty of gross negligence. $18.7 billion is a hefty sum, but it's one that the public will largely be on the hook for. It seems to suggest that bad behavior can lead to just another windfall. No wonder that five years after the Gulf of Mexico disaster, a Southern California coast was coated in crude oil. If the DOJ had seized BP’s assets and taken over control, now that might have sent a real message.