US House panel probes adequacy of BP refinery fine

By Tom Doggett

WASHINGTON, March 14 (Reuters) - A U.S. congressional panel is investigating whether the Justice Department's $50 million fine against BP (BP.L: Quote, Profile, Research) was adequate punishment for an explosion at the company's Texas oil refinery that killed 15 people and injured 170.

Rep. John Dingell, who heads the House Energy and Commerce Committee, noted that the $50 million fine for criminal conduct BP admitted to in a plea agreement amounted to less than a single day of BP's profits in 2006 and 2007.

The amount also is just 4 percent of the maximum fine for violations leading to the March 2005 explosion, he said.

That amount "does not appear to either protect the safety of workers and residents near this refinery or ensure that a proper signal is sent to BP's senior management whose budgeting decisions led to this tragedy," Dingell wrote this week to U.S. Attorney General Michael Mukasey.

Dingell asked Mukasey for more information about the settlement. He noted that the plea agreement stated BP had violated the Clean Air Act from the day the company bought the refinery in January 1999 to the day it exploded in March 2005, amounting to 2,639 consecutive days of noncompliance.

"If the maximum penalty per violation is $500,000, and DOJ charged BP for 2,639 days of violation, this would produce a potential maximum fine of $1.31 billion," Dingell said.

Dingell said he also wants to know whether decisions made by executives of the parent company, BP Plc, aided and abetted noncompliance at the Texas refinery, and if so, do they have culpability and should they have been held accountable.

A 341-page investigation report from the U.S. Chemical Safety Board noted that "cost cutting, failure to invest and production pressures from BP Group executive managers impaired process safety performance at Texas City."