BP Announces More Fines for Illegal Propane Trades

In addition to fines BP Products America will pay for violations of the Clean Water and Clean Air Acts, BP announced on Thursday that it would also pay fines for manipulating propane prices in 2003 and 2004.

BP has agreed to a deferred prosecution agreement (DPA) with the US Justice Department. The DPA carries a term of three years, in which the company will by monitored in its trading policies and practices. The independent monitor will investigate any suspicious behavior and report to the US Commodities Futures Trading Commission, if necessary.

The judgment against BP forces the oil company to pay criminal fines of $100 million, a civil penalty of $125 million, $53.5 million to a victim's restitution fund as well as an additional $25 million to the US Postal Inspection Service Consumer Fraud Fund. The total fines are just over $300 million, and comes on a day in which another ruling against BP requires the company to pay $60 million in fines and more than $400 million in safety measures for an explosion at a Texas refinery and an oil spill in Alaska.

The trading fraud in question occurred in April 2003 and February 2004, when BP admits it tried to manipulate the price of propane for customers. BP has stated in its press release that the company has taken action against the employees involved in the matter.

The deferred prosecution agreement requires that after the three years term, the Justice Department will decide whether or not BP has successfully and entirely complied with the terms of the judgment.

BP conducted its own investigation of the trading fraud and has since determined ways to increase compliance within trading regulations. BP has also worked on better training for traders and improved monitoring of transactions. The internal investigation also concluded that the illegal trades resulted in $10 million in losses for the company.

In the oil company's press release, BP America Chairman and President Bob Malone said, "These agreements are an admission that, in these instances, our operations failed to meet our own standards and the requirements of the law. For that, we apologize." He added, "This settlement acknowledges our failure to adequately oversee our trading operation. The agreement provides compensation for victims and establishes a foundation for working with the government to ensure our participation in the nation's energy markets is always appropriate. We are determined to restore the trust of regulators in our trading operations."

Source: BP America