Wall Street Journal Editors Put Brakes on BP Story

Corporate Crime Reporter
November 15, 2008

The editors of the Wall Street Journal last week slammed the brakes on a story detailing how the Justice Department shut down a major environmental crimes investigation of BP Alaska.

That's according to Scott West, the now retired lead criminal investigator on the case.

West was leading an 15-month investigation into the March 2006 oil spill on the North Slope when in August 2007 he was told that BP would be allowed to plead to a misdemeanor.

In October 2007, BP did in fact plead guilty to a misdemeanor and was fined $20 million.

West was with the Environmental Protection Agency's Criminal Investigation Division (CID) until he resigned on October 29, 2008.

West says that on October 30, he had a detailed interview with the Journal's Jim Carlton about how the BP investigation was abruptly shut down.

"The agreement I had with Jim Carlton was that the Wall Street Journal was going to publish an article about this case on Monday, November 3, the day before the election," West told Corporate Crime Reporter last week. "I had also spoken with KING5 News, the NBC affiliate here in Seattle. They had me on camera. But I had them under embargo until Monday morning. Then late on Sunday, I was told that the Wall Street Journal editors decided not to go with the story, that they were going to push it off. The Wall Street Journal reneged its promise to me. But KING5 ran it."

Why did Wall Street Journal not run the story?

"I don't know," West said. "I have my suspicions. I understand that the Justice Department was putting a lot of pressure on the Journal. And the Wall Street Journal attorneys were concerned."

During a phone interview with Corporate Crime Reporter last week, West again reiterated that he was told by Karen Loeffler, the lead criminal prosecutor at the U.S. Attorney's office in Alaska, that the prosecutors in Alaska were "just following orders" from Washington to shut down the investigation into BP and to accept the plea to a misdemeanor.

"I hate dragging Karen Loeffler into this," West said. "She is a career prosecutor. A very decent person. Nevertheless, this occurred. Karen took me aside. We were in the hallway at the U.S. Attorney's office. And she directed me into an office off the hallway and she shut the door. And she said look, I'm sympathetic to how you are feeling. And she said you need to know, the decision was made by Ron Tenpas back at Main Justice. And we here are just following orders. I think she said this to try to calm me down. I had no reason to disbelieve Karen. When she told me it was Ron Tenpas, I didn't ask how she knew it was Ron Tenpas. But that's what the woman told me."

Tenpas is the Acting Assistant Attorney General for the Environment and Natural Resources Division at Main Justice.

When West was told last year that his case was being settled for a mere misdemeanor and a $20 million fine, he asked the prosecutors why the rush to settlement?

"Why are we doing this?" he asked. "Look at all of the investment we have in this case. I kept getting back from the senior prosecutors at the Justice Department well, BP wants to wrap this up. We don't want to waste our resources any more. They are willing to plead now. That could save us the expense of a lengthy trial."

"I was screaming bloody murder," West said. "I said I have at least a year to go give me one more year. No, Scott, we are done. Give me six more months. No we are done. Give me three more months, to at least chip away at some of the stuff. No, Scott, BP wants to wrap up this case, Texas City, and the propane trading investigation out of Chicago by October."

West says that BP's lead outside lawyer Vinson & Elkins partner Carol Dinkins tried to get the case dropped altogether, but she was rebuffed early in the negotiations.

When he learned that prosecutors would settle for a misdemeanor plea, West said he called for "an astronomical fine."

He then had a CID lawyer draw up a sentencing memo with three alternative fines topping out at $300 million. But prosecutors opened negotiations with the basement fine $20 million. BP accepted.

[For a complete transcript of the Interview with Scott West, see 22
Corporate Crime Reporter 44(10-16), print edition only
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