'BP squad' assembled for criminal investigation

A team of federal investigators known as the "BP squad" is assembling in New Orleans to conduct a wide-ranging criminal probe that will focus on at least three companies and examine whether their cozy relations with federal regulators contributed to the oil disaster in the Gulf of Mexico, according to law-enforcement and other sources.

The squad at the FBI offices includes investigators from the Environmental Protection Agency, the U.S. Coast Guard and other federal agencies, the sources said. In addition to BP, the firms at the center of the inquiry are Transocean, which leased the Deepwater Horizon rig to BP, and engineering giant Halliburton, which had finished cementing the well only 20 hours before the rig exploded April 20, sources said.

While it had been known that investigators are examining potential violations of environmental laws, it is now clear that they also are looking into whether company officials made false statements to regulators, obstructed justice or falsified test results for devices such as the rig's failed blowout preventer. It is unclear whether any such evidence has surfaced.

One emerging line of inquiry, sources said, is whether inspectors for the Minerals Management Service (MMS), the federal agency charged with regulating the oil industry — which is itself investigating the disaster — went easy on the companies in exchange for money or other inducements.

"The net is wide," said one federal official who spoke on the condition of anonymity because he was not authorized to speak publicly.

The Justice Department investigation — announced in June by Attorney General Eric Holder and accompanied by parallel state criminal probes in Louisiana, Mississippi and Alabama — is one of at least nine investigations into the worst oil spill in U.S. history. Unlike the public hearings held last week in Kenner, La., by a federal investigatory panel, the criminal probe has operated in the shadows. But it could lead to large fines for the companies and jail time for executives if the government files charges and proves its case.

In an additional avenue of inquiry, BP disclosed in a regulatory filing Tuesday that the Justice Department and the Securities and Exchange Commission are looking into "securities matters" relating to the spill.

Brian Kennedy, a spokesman for Transocean, a former U.S. firm now based in Switzerland, declined to comment, as did Teresa Wong, a spokeswoman for Houston-based Halliburton.

Dems unveil bills

in response to spill

WASHINGTON — House and Senate Democratic leaders introduced bills Tuesday responding to the Gulf of Mexico oil spill, with provisions to overhaul regulation of offshore drilling, lift liability limits on companies responsible for spills and funnel more money to spill-related research and restoration projects.

The bill comes as the oil slick in the Gulf of Mexico appears to be dissolving far more rapidly than expected.

The Senate bill introduced Tuesday falls far short of the comprehensive legislation on energy and climate change Senate Democrats and the White House have been pursuing for more than a year. Senate leaders abandoned that goal last week, conceding they did not have the support or time to pass any bill to begin to control greenhouse gases that contribute to global warming.

The House passed a comprehensive climate bill in June 2009.

Both new measures call for a reorganization of the Minerals Management Service. They also call for tougher oversight of offshore operations, more assertive environmental monitoring and new fees on oil companies to help pay for compliance.

The 238-page House bill combines provisions from three bills passed since the April 20 blowout and fire on the Deepwater Horizon.

It includes a so-called bad-actor provision that would deny drilling rights to any company that has had more than 10 deaths offshore or at land-based oil operations over the previous seven years. That rule would now apply to only BP.

The Senate bill, sponsored by Sen. Harry Reid of Nevada, the Democratic leader, includes subsidies for projects that improve energy efficiency in homes, incentives linked to vehicles powered by electricity and natural gas, and spending on federal land and water projects.

Reid said the bill was intended to create jobs, lower energy costs, reduce dependence on foreign oil and tighten regulation of offshore drilling. But he acknowledged it was not the broad bill he wanted.

"This bill does not address every issue of importance to our nation's energy challenges," Reid said, "and we have to continue to work to find bipartisan agreement on a comprehensive bill."

The New York Times