Feds Open Criminal Probe of Gulf Oil Spill
Updated at 7:17 p.m. EDT
Attorney General Eric Holder said Tuesday that federal authorities have opened criminal and civil investigations into the nation's worst oil spill, and BP lost billions in market value when shares dropped in the first trading day since the company failed yet again to plug the gusher.
Investors presumably realized the best chance to stop the leak was months away and there was no end in sight to the cleanup. As BP settled in for the long-term, Holder announced the criminal probe, though he would not specify the companies or individuals that might be targeted.
"We will closely examine the actions of those involved in the spill. If we find evidence of illegal behavior, we will be extremely forceful in our response," Holder said in New Orleans.
Special Section: Disaster in the Gulf
Obama Vows "Justice" For Oil Spill Crimes
CBS News chief legal correspondent Jan Crawford notes that as Holder outlined, a criminal investigation could ultimately expose BP and the two other companies - Halliburton and Transocean - to a multitude of criminal charges. As a result, the companies could be looking at penalties and fines that could well exceed the $100 million Exxon paid to settle criminal charges after the 1989 Valdez oil spill.
Holder said prosecutors would look at whether the companies should face prosecution for various environmental violations under the Clean Water Act, the Oil Pollution Act, the Migratory Bird Treaty Act and Endangered Species Act. He also said there could be charges under other "traditional criminal statutes."
Exxon pleaded guilty in 1991 to violating several federal statutes, including the Clean Water Act, the Refuse Act and the Migratory Bird Treaty Act, and it agreed to pay $100 million to settle those criminal charges. It was the largest single environmental criminal recovery ever at the time. (Exxon ultimately paid nearly $2 billion in criminal penalties, civil fines and interest.)
"Our environmental laws are very clear, and we have a responsibility to enforce them," said Holder. "At the same time, we are mindful of the government's first priority, which is to stop the spill and clean up the oil. We are taking the steps necessary to enforce our laws while guaranteeing that we do nothing to jeopardize the response effort."
With the ambitious "top kill" abandoned over the weekend, BP's hope to stanch the leak lies with two relief wells that won't be finished until at least August. The company is, however, trying another risky temporary fix to contain the oil and siphon it to the surface by sawing through the leaking pipe and putting a cap over the spill.
Administration officials are also accusing BP of downplaying the potential damage of its latest effort to cap the well, CBS News Correspondent Chip Reid reports.
That was exemplified on CBS' "Early Show" Tuesday morning.
"Well, there will be a little bit more oil, somewhere between zero and 20 percent more," Bob Dudley, BP's managing director, told Co-Anchor Harry Smith.
The barrage of attacks on BP may be motivated largely by politics.
CBS News Political Analyst John Dickerson notes that the administration is doing what every administration does under fire, which is to defend themselves and then also deflect the blame to a ready villain, which in this case is BP.
Coast Guard Adm. Thad Allen, the national incident commander, said Tuesday that BP was making its first major cut with super shears that weigh 46,000 pounds and resemble a giant garden tool. The company will also use a powerful diamond-edged cutter the resembles a deli slicer to try to make a clean cut above the blowout preventer, then will lower a cap over it with a rubber seal.
After several failed attempts to divert or block the well, BP's latest attempt involves cutting the broken riser pipe, making it spew as much as 20 percent more oil into the water for days while engineers try to position a cap over the opening.
Eric Smith, an associate director of the Tulane Energy Institute, said the strategy had about a 50 to 70 percent chance to succeed. He likened it to trying to place a tiny cap on a fire hydrant.
"Will they have enough weight to overcome the force of the flow?" he said. "It could create a lot of turbulence, but I do think they'll have enough weight."
BP Chief Operating Officer Doug Suttles said there was no guarantee the cut-and-cap effort would work. He did say the company has learned from past efforts to contain the leak, which gives them a better shot at success.
"I'm very hopeful," Suttles said. "I think we'll find out over the next couple of days."
The cleanup, relief wells and temporary fixes were being watched closely by President Barack Obama's administration.
The president gave the leaders of an independent commission investigating the spill orders to thoroughly examine the disaster and its causes, and to follow the facts wherever they lead, without fear or favor.
The president said that if laws are insufficient, they'll be changed. He said that if government oversight wasn't tough enough, that will change, too.
Meanwhile, BP spokesman Graham MacEwen said the company was awaiting analysis of water samples taken in the Gulf before making a final determination on whether huge plumes of oil are suspended underwater. CEO Tony Hayward said Sunday there was "no evidence" of the plumes even though several scientists have made the claims.
Billy Nungesser, president of Plaquemines Parish, fired back at Hayward.
"We ought to take him offshore and dunk him 10 feet underwater and pull him up and ask him 'What's that all over your face?"' said Nungesser.
On the business side of things, the company's share price, which has fallen steadily since the start of the disaster, took a turn for the worse Tuesday, losing 15 percent to $6.13 in early afternoon trading on the London Stock Exchange.
That was the lowest level in more than a year. The shares have now lost more than a third of their value, wiping some $63 billion off BP's value, since the explosion at the Deepwater Horizon oil rig six weeks ago.
BP said early Tuesday it had spent $990 million so far on fighting and cleaning the spill, with multiple lawsuits for damages yet to be tallied.
The Coast Guard also announced that it was replacing the admiral who has been the federal on-scene coordinator since the oil rig exploded, though the agency said the change was previously planned. Rear Adm. Mary Landry will now return to duties as commandant of the 8th Coast Guard District in New Orleans to focus on hurricane season preparations.
BP failed to plug the leak Saturday after several attempts with its top kill, which shot mud and pieces of rubber into the well but couldn't beat back the pressure of the oil.
The spill has already leaked between 20 million and 44 million gallons, according to government estimates.
The National Oceanographic and Atmospheric Administration also announced that almost one-third of federal waters - or nearly 76,000 square miles - in the Gulf were closing to commercial and recreational fishing because of the spill.
The relief well is the best chance to stop the leak. A bore hole must precisely intersect the damaged well, which experts have compared to hitting a target the size of a dinner plate more than two miles into the earth. If it misses, BP will have to back up its drill, plug the hole it just created, and try again.
"The probability of them hitting it on the very first shot is virtually nil," said David Rensink, incoming president of the American Association of Petroleum Geologists, who spent most of his 39 years in the oil industry in offshore exploration. "If they get it on the first three or four shots they'd be very lucky."
The trial-and-error process could take weeks, but it will eventually work, scientists and BP said. Then engineers will then pump mud and cement through pipes to ultimately seal the well.
On the slim chance the relief well doesn't work, scientists weren't sure exactly how much - or how long - the oil would flow. The gusher would continue until the well bore hole collapsed or pressure in the reservoir dropped to a point where oil was no longer pushed to the surface, said Tad Patzek, chair of the Petroleum and Geosystems Engineering Department at the University of Texas-Austin.
Following are Holder's opening remarks at a press conference in New Orleans regarding oil spill:
This morning, I surveyed just one small portion of the damage caused by what is now the largest oil spill in American history. I was briefed by Coast Guard officers involved in the massive response effort and also surveyed the famed Louisiana Delta, where the early signs of oil intruding into the ecosystem are all too evident.
This afternoon, our team from Washington met with Attorneys General and U.S. Attorneys for the states and districts whose coast lines and citizens have been impacted by this disaster to discuss how we can work together to respond to this tragic spill.
As you all know, the President on Friday reiterated that the first and foremost goal of the entire government is stopping the leak, containing and cleaning up the oil, and helping the people in this region get back on their feet and return to their normal lives.
But as we have said all along, we must also ensure that anyone found responsible for this spill is held accountable. That means enforcing the appropriate civil - and if warranted, criminal - authorities to the full extent of the law.
What we saw this morning was oil for miles and miles. Oil that we know has already affected plant and animal life along the coast, and has impacted the lives and livelihoods of all too many in this region. This disaster is nothing less than a tragedy.
There is one thing I will not let be forgotten in this incident: In addition to the extensive costs being borne by our environment and by communities along the Gulf Coast, the initial explosion and fire also took the lives of 11 rig workers. Eleven innocent lives lost. As we examine the causes of the explosion and subsequent spill, I want to assure the American people that we will not forget the price those workers paid.
During the early stages of the response efforts, I sent a team of attorneys including the head of the Environment and Natural Resources Division, Ignacia Moreno, and the head of our Civil Division, Tony West, to New Orleans to lead our efforts to protect not only the people who work and reside near the Gulf, but also the American taxpayers, the environment and the abundant wildlife in the region. They have been working diligently ever since to gather facts and coordinate the government's legal response.
As we move forward, we will be guided by simple principles: We will ensure that every cent of taxpayer money will be repaid and damages to the environment and wildlife will be reimbursed. We will make certain that those responsible clean up the mess they have made and restore or replace the natural resources lost or injured in this tragedy. And we will prosecute to the full extent any violations of the law.
Among the many statutes Department attorneys are reviewing are:
• The Clean Water Act, which carries civil penalties and fines as well as criminal penalties;
• The Oil Pollution Act of 1990, which can be used to hold parties liable for cleanup costs and reimbursement for government efforts;
• The Migratory Bird Treaty Act and Endangered Species Acts, which provide penalties for injury and death to wildlife and bird species; and,
• Other traditional criminal statutes.
There are a wide range of possible violations under these statutes, and we will closely examine the actions of those involved in this spill. If we find evidence of illegal behavior, we will be forceful in our response. We have already instructed all relevant parties to preserve any documents that may shed light on the facts surrounding this disaster. As our review expands in the days ahead, we will be meticulous, we will be comprehensive, and we will be aggressive. We will not rest until justice is done.
While the federal government continues to focus on stopping the leak and responding to the environmental disaster, the Department of Justice will ensure the American people do not foot the bill for this disaster and that our laws are enforced to the full extent. That is our responsibility, and we will do nothing less.
I'd now be happy to take any questions.
More on the Gulf oil spill:
BP Exec: These New Containment Domes Will Work
BP Shares Plunge Following "Top Kill" Failure
Wash. Post: As Gulf Spill Worsens, Charges May Loom for BP
