Halliburton agrees to guilty plea

WASHINGTON - Halliburton Co. agreed to plead guilty Thursday to destroying evidence related to the 2010 BP oil disaster, the U.S. Justice Department announced late in the day.

Halliburton agreed to pay $55 million to the National Fish and Wildlife Foundation, although that is not written into the guilty plea agreement, which is subject to federal court approval. The oilfield services company also agreed to pay a maximum statutory fine of $500,000, to accept three years of probation and to cooperate in the government’s ongoing criminal investigation.

Halliburton was contracted to provide the cementing and other services for the Mocando well in the Gulf of Mexico. The 2010 Deepwater Horizon drilling rig explosion killed 11 men, and resulted in a three-month discharge of 4.9 million barrels of oil into the Gulf of Mexico off the coast of Louisiana.

For years, BP has accused Halliburton employees of internally investigating after the blowout and finding and destroying evidence of early test results that showed potential problems. The argument is that some of the destroyed evidence would remove some of BP’s burden of guilt. But Halliburton had initially denied any destruction of evidence.

The law cited in the plea deal is regarding fraudulent activity in connection with computer evidence.

In March, Timothy Probert, who headed Halliburton’s safety program at the time of the BP oil leak, acknowledged in federal court that he had learned some evidence was destroyed. “Obviously, it doesn’t make you feel happy,” he reportedly testified during the first phase of the sprawling civil trial over the deadly Deepwater Horizon catastrophe.

But Probert also testified that he believed Halliburton had “zero responsibility with respect to the accident.”

The plea agreement announced late Thursday states that Halliburton formed an internal investigation group about two weeks after the April 20, 2010 well blowout. The investigation included looking at whether the number of “centralizers” used in the well’s production casing played a role in the disaster. Centralizers are used to keep the drill pipe centered in the well as cement is pumped in.

Prior to the blowout, Halliburton had recommended that BP use 21 centralizers in the well; BP opted to only use six, according to the Justice Department.

The plea deal states that Halliburton conducted three-dimensional simulations to study the matter and found “there was little difference between using six and 21 centralizers,” according to the plea deal.

But the key is that Halliburton cementing technology director then directed a program manager destroy the results despite feeling “uncomfortable” about doing so, according to the criminal bill of information. In June 2010, similar evidence was also destroyed in a later incident of again studying the centralizers, although another employee also felt “uncomfortable” about the orders and initially hesitated before following through.

Investigators with the presidential commission that reviewed the BP oil leak reported that Halliburton had used a cement slurry in the Macondo well that was not in line with best industry practices, and that the mixture had failed multiple tests in the weeks preceeding the disaster. Thursday’s guilty plea makes no mention of the cement’s design.

Efforts to forensically recover the original computer simulations during ensuing civil litigation and the federal criminal investigation were unsuccessful, according to the Justice Department.

But, in agreeing to plead guilty, Halliburton has accepted criminal responsibility for destroying the evidence.

Because the deal was announced after working hours on Thursday, U.S. Justice Department and Halliburton officials were not available for comment.

Members of the Louisiana congressional delegation did not immediately respond to requests for comment because they had not reviewed the plea deal.

In February, a deal was finalized for Transocean, which owned the Deepwater Horizon rig, to plead guilty to misdemeanor charges and pay $400 million in criminal penalties.

A tougher deal with BP was finalized one month prior to pay $4 billion in criminal fines while pleading guilty to manslaughter and other charges. The settlement included payments of nearly $2.4 billion to the National Fish and Wildlife Foundation and $350 million to the National Academy of Sciences.

But the ongoing civil trial in New Orleans, slated to start its second phase in September, is expected to lead to larger sums of money. BP’s Clean Water Act penalties alone in trial could range from $5 billion to nearly $18 billion depending on how “grossly negligent” BP is found.