Haliburton Pleads Guilty to Destroying Evidence after Bp Oil Spill

When a company gets to be as big as Halliburton, it tends to think of millions the way that most folks think of tens. Dollars, that is. The oilfield services giant, which recorded revenues of more than $28 billion in 2012, and which routinely offers its executives multi-million dollar compensation packages, is currently fighting allegations of culpability in the disastrous 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

Potential liabilities could run to several hundred million dollars. Halliburton’s partners in the project, BP and Transocean Ltd, have already been slapped with fines of $1.26 billion and $400 million respectively.

However, in a bid to divert responsibility for the Macondo oil well rupture – and the United States’ worst ever ecological accident – Halliburton destroyed critical evidence relating to its cementing activities. Halliburton had recommended the use of 21 metal collars, or ‘ centralizers’, to stabilize the construction casing, but BP rig operators opted to use only six to save time and money. According to the U.S. Department of Justice, computer simulations were destroyed by Halliburton after test results showed that the number of centralizers used on the well had made little difference to the outcome.

As a result of this destruction of evidence, to which Halliburton has pleaded guilty, the company has received a $200,000 fine, the maximum allowable for this misdemeanor under statutory law. By the time you have finished reading this paragraph, Halliburton will have earned more than that. By the end of this week, its CEO, David Lesar, will have earned about twice the amount.

Halliburton has also “donated” $55 million to the National Fish and Wildlife Foundation.

Carl Tobias, a law professor at the University of Richmond, believes that this punishment doesn’t fit the crime. “It seems paltry for an act that undermines the justice system,” he says. Other legal experts say that the admission of guilt is ultimately more important than the fine, and that it will strengthen the government’s case against Halliburton in a multi-billion dollar civil case currently underway in New Orleans.

It could also make a big difference to BP, whose stock price has suffered as a result of government claims of “gross negligence”, due in part to its refusal to use more centralizers on the well. BP is likely to make full use of Halliburton’s confession in its defense against these accusations.

The Deepwater Horizon rupture occurred on April 20, 2010, when natural gas rushing up the well led to a massive explosion. The rig caught fire and sank, killing 11 workers and spewing about five million barrels of oil into the Gulf.

While possibly not on the scale of oil spill environmental damage suffered by people in Nigeria, the impact on coastlines, wildlife, tourism and health has been immense. For instance, a study conducted in January by Columbia University’s National Center for Disaster Preparedness revealed that parents in Louisiana and Florida have witnessed “unexplained symptoms among their children, including bleeding ears, nose bleeds, and the early start of menstruation among girls.”

Whatever may ultimately be decided by the New Orleans court, the true cost of the Deepwater Horizon disaster is certain to be much greater than any fines imposed on those responsible.