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It’s been five months since the Justice Department announced a $50 million settlement with oil giant BP over a 2005 refinery blast in Texas that killed 15 workers and injured 173 others. Rather than fade from view, as the world’s second-largest oil company would have preferred, the case has bled into a federal appeals court and raised hackles in Congress, which is inquiring into whether Justice low-balled the deal. Sounding in the background are the victims’ families and their lawyers, who say federal prosecutors kept them in the dark about plea negotiations with BP. They’ve asked the U.S. Court of Appeals for the 5th Circuit to review whether prosecutors stepped on victims’ rights in negotiating the agreement. The settlement is weighted down in federal court in the Southern District of Texas until the appeals court rules. Congress is pushing the Justice Department to explain why it only went after a fourth-tier subsidiary, BP Products North America Inc., rather than the parent company, BP Plc., and its senior executives in London. In a letter to Attorney General Michael Mukasey earlier this month, House Energy and Commerce Committee Chairman John Dingell (D-Mich.) said the plea agreement “does not appear to either protect the safety of workers and residents near this refinery or ensure that the proper signal is sent to BP’s senior management.” But federal prosecutors in Houston defend their work, saying they used all the tools available to them and repeatedly rejected BP lawyers’ pleas to reduce the crime from a felony to a misdemeanor offense. “We looked at the criminal conduct to see if there were violations of criminal law, and all we were able to find was the [Clean Air Act] violation that we brought,” Assistant U.S. Attorney Abe Martinez says. “There is no federal murder statute violation for a company acting in a way that gets people killed. If we could show that there was a criminal enterprise and that people intended to kill people, we would have.” Officials at the Justice Department’s Environment and Natural Resources Division last week declined to comment, citing an “ongoing criminal matter.” Brent Coon, one of the plaintiffs’ attorneys who initiated civil injury and damage claims stemming from the explosion, says, “We are pleased to see that there is interest on the Hill to look into this matter — because it smells.” Victims’ attorneys specifically point to the involvement of Vinson & Elkins partner Carol Dinkins — an experienced environmental law specialist and Washington insider who has served as BP’s lead counsel in the case. They are suspicious of her ties to former high-ranking Bush administration officials, including former Attorney General Alberto Gonzales. A YEAR OF NEGOTIATIONS Three years ago this week, an octane-boosting unit overflowed as workers were restarting it at BP’s Texas City refinery. Gasoline seeped into a ventilation system, which in turn spewed flammable vapor into the surrounding area. Investigators believe a pickup truck left running nearby ignited the cloud, like a stove pilot touching off a gas leak. The blast broke windows five miles away. BP paid a $21.3 million fine in a settlement with the U.S. Occupational Safety and Health Administration, and the company also hired an expert panel, led by former Secretary of State James Baker III, to study its U.S. refineries. The 374-page report, released in January 2007, concluded that BP leadership had failed to make safety a “core value” of the company. In Texas, the report noted, BP asked the refinery to cut costs by 25 percent after acquiring it as part of its purchase of Amoco in 2000. BP says it already has spent $1.6 billion to address about 4,000 injury and property claims in state courts arising out of the explosion. The blast victims are seeking more than $3 billion in fines, twice BP’s current settlement costs, and also seek court supervision of safety improvements to the refinery. Earlier this month, BP set aside an additional $500 million for the remaining 1,250 claims unrelated to the deaths, the company reported. A BP spokesman last week said the company would not comment beyond what it has said in court filings. The Justice Department filed a one-count criminal information against BP on Oct. 22 in Houston’s federal court. Martinez, the lead prosecutor, says negotiations with BP lawyers went on for more than a year before that. Three days later, Justice announced the $50 million fine as part of a three-way $373 million deal with BP that also settled a commodities fraud case in Illinois and oil spill violations in Alaska. The victims’ lawyers opposed the agreement under the Crime Victims Right Act of 2004, which allows them to confer and comment on plea and sentencing matters. They also moved to disqualify Judge Gray Miller, who until his 2006 appointment was a partner at Houston-based Fulbright & Jaworski, the firm representing BP in the civil cases stemming from the explosion. The day the motion was filed to have him removed, Miller recused himself voluntarily. Next in line was Judge David Hittner, who also removed himself, for undisclosed reasons. Judge Lee Rosenthal — the third judge assigned to the case — approved the plea agreement Feb. 21. Days later, the victims filed for mandamus relief in the 5th Circuit, alleging prosecutors had cut them out of the plea agreement. WASHINGTON TIES Plaintiffs’ lawyers also have taken aim at BP’s lead lawyer, Dinkins, who brokered the deal. Dinkins, who chairs Vinson & Elkins’ administrative and environmental law practice, served as assistant attorney general of the Environment and Natural Resources Division from 1981 to 1983 and as deputy attorney general under President Ronald Reagan in 1984 and 1985. Dinkins returned to the firm after her Main Justice stint. She had no comment on the BP matter or to questions about her ties to President George W. Bush’s administration. Former attorney general Gonzales served at Vinson & Elkins in Houston from 1982 to 1994. When Bush ran for governor of Texas, Dinkins served as his treasurer and Gonzales was his general counsel. She would later serve as co-chair of the Lawyers for Bush-Cheney in the 2004 presidential campaign. More recently, the president tapped her in 2005 to be co-chair of the Privacy and Civil Liberties Oversight Board, which was borne out of the 9/11 Commission recommendations to ensure that federal agencies address civil liberties concerns. However, the panel was criticized as too deferential to the White House — where it was based. At least one member, former Clinton White House lawyer Lanny Davis, a partner at Orrick, Herrington & Sutcliffe, quit in protest. While on that board, letters and documents show Dinkins had frequent access to Gonzales and other high-ranking members of the executive branch. “That is one of the things that gives the whole situation a little bit of an air of impropriety,” says David Perry, one of the leading plaintiffs’ lawyers in Texas. “You have this situation where BP’s counsel is close to the administration, has served in the administration and received a number of administration appointments.” No one suggests Dinkins crossed an ethical line, but the plaintiffs’ lawyers surmise she made the best use of her connections. BP’s defense team also included George Wilkinson, also of Vinson & Elkins’ Houston office, D.C.-based Kevin Gaynor of Vinson & Elkins, and Kirkland & Ellis partner Mark Holscher in Los Angeles. Wilkinson declined comment. Gaynor and Holscher did not return phone calls seeking comment. A former Justice Department official with knowledge of the BP plea negotiations says Dinkins’ relationship with administration officials was of no consequence. “It is my understanding that the agreement was negotiated with the line prosecutors and that higher ups, such as the deputy attorney general and attorney general, were not involved,” he says. Mukasey on Friday said he recused himself from answering the congressional inquiry because he interviewed for a corporate monitor position in a BP fraud case while he was at Patterson Belknap Webb & Tyler in New York last year. A response to Dingell’s letter from the Justice Department’s Office of Legislative Affairs is forthcoming, officials said.
Pedro Ruz Gutierrez can be contacted at [email protected]. Joe Palazzolo can be contacted at [email protected].

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