Feds File First Criminal Charges Related to BP Gulf Spill
by Abrahm Lustgarten ProPublica
Two years after oil from a BP well began gushing into the Gulf of Mexico, the U.S. Department of Justice has filed criminal charges alleging that a former BP employee destroyed critical evidence in the early days of the unfolding disaster.
The charges are the first to be filed in what the Obama administration has called the worst environmental disaster in American history, and they are significant because they target an individual employee for his actions.
According to an affidavit and complaint filed today in a Louisiana court, Kurt Mix, a former drilling and completions engineer, deleted email and text messages he had sent to senior BP managers estimating that the amount of oil spewing into the Gulf was many times greater than the amount stated publicly. Mix was specifically instructed by attorneys contracted by BP to retain his records before he deleted them, the affidavit states.
In a statement released to reporters, U.S. Attorney General Eric Holder indicated that more charges are likely, describing the indictment as “initial charges” in an ongoing investigation, and saying that the Department of Justice “will hold accountable those who violated the law.”
More than 200 million gallons of crude oil flowed into the Gulf of Mexico after a blowout caused the explosion of the Deepwater Horizon oil rig and the death of 11 workers on April 20, 2010. The spill continued, unabated, for nearly three months. Analysts have long expected criminal charges against BP or its employees.
A spokeswoman for the agency declined to say when more charges might be expected, or to explain why the case against Mix was the first to be made public.
Mix could not be reached for comment, and we were unable to leave him a message because his voicemail was full.
BP issued a statement saying that the company was cooperating with federal investigators and that “BP had clear policies requiring preservation of evidence in this case and has undertaken substantial and ongoing efforts to preserve evidence.”
According to an FBI affidavit submitted to the court along with the indictment, Mix, who worked for BP until January 2012, was directly involved in BP’s efforts to understand how much oil was flowing out of the broken Macondo well. On April 21, 2010, Mix estimated that between 68,000 and 138,000 barrels of oil were leaking each day 2014 far more than the 5,000 barrels that were estimated publicly at the time.
On April 22, Mix received the first of six legal notices instructing him to retain his electronic records.
Yet, according to the affidavit, in early October, Mix allegedly deleted a string of more than 200 text messages on his iPhone that he had sent to a supervisor. The deleted texts, which the Department of Justice said were recovered forensically, included sensitive 2014 and pessimistic 2014 internal BP information sent while the company was attempting what it called a “Top Kill” effort to stop the gushing oil on May 26, 2010.
Mix wrote that the effort 2014 which he was directly involved in 2014 was unlikely to succeed. “Too much flowrate 2014 over 15,000 and too large an orifice. Pumped over 12,800 bbl of mud today plus 5 separate bridging pills. Tired. Going home and getting ready for round three tomorrow.”
At the time, BP said publicly that the measure had a 70 percent chance of success.
Mix, 50, was arrested in Katy, Texas today. If convicted, he faces a maximum penalty of 20 years in prison and a fine of up to $250,000 on each of the two counts he is charged with.
Abrahm Lustgarten, a reporter for Pro Publica, is the author of “Run to Failure: BP and the Making of the Deepwater Horizon Disaster.”
Advice From Walmart Exec at Center of Scandal: ‘Personal Integrity’ is Key
by Justin Elliott, ProPublica
In a 7,000-word blockbuster Sunday, The New York Times reported that Walmart allegedly engaged in a vast campaign of bribery to expand the company’s Mexico business in the early 2000s, potentially violating U.S. law. The scheme was allegedly overseen by a Walmart executive, Eduardo Castro-Wright, described by The Times as “the driving force behind years of bribery” totaling millions of dollars.
Castro-Wright sat for an interview in 2009 as part of The Times’ “Corner Office” series in which top executives talk “about leadership and management.” The Times asked Castro-Wright: “What message would you convey in a commencement speech?” Heresponded:
“Here in the United States, and any of the developed countries, I would tend to provide a speech along the lines of what I said before about what makes great leaders 2014 the fact that there’s no leader who can be called one if they don’t have personal integrity, or if they don’t deliver results, or if they don’t care about the people they lead, or if they don’t have a passion for winning.”
Asked about the “most important leadership lesson” he’d learned in his career, Castro-Wright emphasized trust:
“There’s nothing that destroys credibility more than not being able to look someone in the eye and have them know that they can trust you. Leadership is about trust. It’s about being able to get people to go to places they never thought they could go. They can’t do that if they don’t trust you.”
The Times interview ran under the headline “In a Word, He Wants Simplicity” about five years after the period in which Castro-Wright had allegedly overseen systematic bribery.
In its front-page story yesterday, The Times quoted former Wal-Mart de Mexico executive Sergio Cicero Zapata alleging how and why Castro-Wright had authorized bribery:
In an interview with The Times, Mr. Cicero said Mr. Castro-Wright had encouraged the payments for a specific strategic purpose. The idea, he said, was to build hundreds of new stores so fast that competitors would not have time to react. Bribes, he explained, accelerated growth. They got zoning maps changed. They made environmental objections vanish. Permits that typically took months to process magically materialized in days. “What we were buying was time,” he said.
The meteoric growth of the company’s Mexican business translated into promotions for Castro-Wright. In 2005, he was appointed head of Walmart U.S., and in 2008 to his current position as vice chairman of Walmart and CEO of its global ecommerce business.
Walmart announced in September 2011 that Castro-Wright would retire this July. The company’s bio page that shows up as the second hit for Castro-Wright’s name on a Google search is now blank. Company spokeswoman Ashley Hardie told ProPublica that the page had been taken down after the announcement last September. Castro-Wright is also on the boards of insurer MetLife and the charity CARE.
Walmart has posted a statement on the Times piece, saying that it is “working aggressively to determine what happened” and that “if these allegations are true, it is not a reflection of who we are or what we stand for.” The company informed the Justice Department of an internal investigation in December after it learned of The Times’ reporting, according to the paper.
Photo: Walmart via Flickr