The NewsFuror

Saturday, October 27, 2007

BP fined $373m by US government

Oil giant BP has been fined a total of $373m (£182m) by the US Department of Justice for environmental crimes and committing fraud.

The fines include $50m relating to a Texas refinery explosion in 2005 that killed 15 people and injured 170 more.

That sum is the highest fine of its kind levied under the Clean Air Act.

The largest fine - $303m - relates to a price manipulation scam between April 2003 and February 2004, over which four ex-BP workers have been indicted.

"The tragic explosion at the Texas city refinery, and the pipeline leaks in Alaska, were sad reminders that our environmental laws exist both to protect the lives and safety of the public, and also to preserve our natural resources," said Acting Attorney General Peter Keisler.

"Businesses that ignore those laws and endanger their workers and communities must be held accountable. Today's announcement shows that they will be," he added.

Manipulation schemes

The $303m relates to price-fixing charges for manipulating the propane market in 2004. It marks a record fine imposed by the Commodity Futures Trading Commission (CFTC) for market manipulation.

"BP engaged in massive manipulation - the magnitude of this settlement reflects that the Commission will not tolerate trading abuses in our open and competitive markets," said CFTC acting chairman Walt Lukken.

The four former BP workers accused of "conspiring to manipulate and corner" the US propane markets were named as Mark David Radley, James Warren Summers, Cody Dean Claborn and Carrie Kienenberger.

They had been employed by a subsidiary of BP America.

BP has committed serious environmental crimes in our two largest states, with terrible consequences for people and the environment
Environment Protection Agency

BP America chairman 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".

Mr Malone said the firm would look at ways of limiting further problems such as the "tragedy" of the Texas City disaster and the leakage of oil pipes in Prudhoe Bay, Alaska.

$50m criminal fine for breaking the Clean Air Act
$12m criminal fines, $4m to the National Fish and Wildlife Foundation, $4m in criminal restitution to Alaska for pipeline leaks
$100m criminal penalty and $25m to the US Postal Inspection Consumer Fraud Fund
$125m civil penalty to the Commodity Futures Trading Commission
Restitution of $53m for victims of market manipulation

BP polluted a lake and land in Alaska after two oil leaks from the pipeline in March and August 2006.

'Terrible consequences'

The government said that BP would be monitored by an independent body for three years to ensure that it complied with the terms of Thursday's agreement.

In opting to pay the fines, the US Government had ended the probes regarding price manipulation. In addition the firm will not face additional criminal charges for the fatal Texas accident.

However, BP could still pay further compensation under unresolved civil lawsuits.

Prior to Thursday's announcement, BP had already spent $1.6b in compensation to victims of the Texas disaster, and has settled more than 1,600 personal injury claims.

"BP has committed serious environmental crimes in our two largest states, with terrible consequences for people and the environment," the Environment Protection Agency said.


Earlier in the week the oil giant announced that quarterly profits slumped by 45% after problems at its production and refinery businesses. Profits at BP fell to $3.88bn (£1.89bn) for the three months to the end of September from $6.98bn a year earlier.

Oil and gas production for the period was 4% lower after temporary shutdowns at its Whiting and Texas City refineries.

News of the fine comes after BP, under chief executive Tony Hayward, announced restructuring plans to overhaul the firm earlier this month in a bid to improve the firm's standing.

Mr Hayward assumed the leadership of the firm in May after former boss Lord John Browne resigned following a personal scandal.

US dollar touches a new euro low

The US dollar tumbled to yet another new low against the euro, as speculation mounted that US interest rates would be cut again next week.

The euro hit $1.4394 by late trade in New York, breaking the record set last Friday, when one euro bought $1.4319.

And the pound hit a three-month high against the dollar at 2.0574.

A slew of weak data - including a drop-off in durable goods sales and plummeting demand for new homes - has underlined woes in the US economy.

Rate cut risks

The Federal Reserve is due to meet next week, having last month reduced interest rates from 5.25% to 4.75% in a bid to rejuvenate the economy.

And many observers expect a further rate cut to at least 4.25% as policymakers try to lift the economy, which is showing increasing signs of suffering from a slump in house prices and higher credit costs.

"The run of downbeat economic data out of the US is underlining the fact that the Fed's last rate cut of 50 basis points clearly hasn't been sufficient to kick-start demand," said CMC Markets analyst James Hughes.

However, there are risks associated with further rate cuts, economists say.

While they can jump-start the economy, they can also weaken a currency as they encourage investors to transfer funds to currencies where they can get higher returns.

And there is a risk of inflation becoming a greater problem if money is made cheaper to borrow, encouraging more consumer spending and takeover activity.

US mortgage firm sees $1.2bn loss

US mortgage giant Countrywide Financial has reported $1.2bn (£584m) in losses during the third quarter.

The loss, the first for the firm in 25 years, comes after profits of $647.6m a year earlier. The latest quarter included $2.9bn in credit losses.

But the firm said it was through the worst of the slowdown that has dogged the US housing sector and expected to make a profit in the fourth quarter.

The improved outlook sent shares surging nearly 25% higher.

"We view the third quarter as an earnings trough, and anticipate that the company will be profitable in the fourth quarter and in 2008," said David Sambol. Countrywide's chief operating officer.


Rising interest rates in the US have made it harder for many borrowers to meet payments.

Earlier this week, Countrywide promised to set new terms or refinance $16bn worth of mortgages, in a bid to help those struggling to make payments.

News of the turnaround comes after the firm announced 12,000 job losses in September as part of wider restructuring plans.

The Californian firm has been one of the worst hit following contraction in the housing market that has triggered wider fears about the US economy.

During the summer, analysts had voiced fears that the firm could go bust.

Bono honoured at Aids fundraiser

U2 frontman Bono has been honoured with an award for his humanitarian work at an Aids charity fundraiser in New York.

Singer Alicia Keys, who co-founded the Keep A Child Alive charity, described Bono as "an amazing man" at the event.

"He is an inspiration and single-handedly made it cool to have something to speak about," she told the Associated Press news agency.

Bono said he was "proud" but would rather be giving an award than receiving one.

"Rock stars always want to do two things. They want to have fun and change the world. If they can do both at the same time, you're okay," he added.

Keys said Bono "works tirelessly at really having a cause and fighting for it".

The Black Ball fundraiser was also attended by stars including Gwen Stefani and Sheryl Crow.

The annual event generates all the charity's operational costs for a year.

The Keep A Child Alive charity provides anti-retro viral medication to children and families in Africa with Aids.

Bono was also awarded with the Liberty Medal for his humanitarian work in Africa last month.

Bono and Keys recorded a version of Peter Gabriel and Kate Bush's Don't Give Up for the charity in 2005.

Suspended jail term for Doherty

Singer Pete Doherty has been handed a suspended prison term for drugs and motoring offences.

Doherty had previously admitted driving while uninsured and with no MoT while in possession of crack cocaine, heroin, ketamine and cannabis.

He was sentenced to four-months in jail - suspended for two years - at West London Magistrates' Court on Friday.

The 28-year-old was also given an 18-month supervision order and a 12-month drug rehabilitation order.

Order revoked

District judge Davinder Lachhar ordered that Doherty pay a £475 fine for driving without insurance or an MOT.

Leaving court to cheers from fans who had earlier packed the public gallery, Doherty said he was pleased with the outcome.

During the hearing the court heard he was arrested while driving a Jaguar in High Street, Kensington, west London in May.

You have made strides and I hope you will continue in doing so
District judge Davinder Lachhar

Officers found a number of substances on him and in the car and Doherty later pleaded guilty to various driving and drug charges.

The judge was also told that Doherty had tested negative for drugs throughout a six-week residential drug treatment and wanted to "give himself a chance" to recover.

Passing sentence, Judge Lachhar said: "You have made strides and I hope you will continue in doing so. I would hate to see you going backwards."

Earlier this week a judge revoked the remaining six months Doherty had left to serve on a drug treatment order after advice from experts.

At that hearing Judge McIvor said Doherty had already been supervised over 18 months, adding that had been convinced the plan in place for the musician to remain drug-free was going to be followed.

US threat over Iraq embassy staff

The US state department has said it may have to force some diplomats to work in Iraq to fill vacancies at the embassy in Baghdad.

About 250 foreign service staff are to be told they are "prime candidates" for nearly 50 jobs, state department human resources director Harry Thomas said.

If too few people volunteer, some will be ordered to go and risk dismissal if they refuse, Mr Thomas said.

Iraq postings have previously been filled on a voluntary basis.

Vietnam precedent

Mr Thomas said he hoped enough diplomats would volunteer to fill the one-year postings but that "we have many options, including dismissal from the foreign service".

The "prime candidates" will be informed by post on Monday and have 10 days to reply.

To sweeten the deal, an attractive financial package is being offered as well as a generous leave allowance.

The Baghdad embassy is considered a hardship posting by US diplomats because of the security risks and because spouses and children must be left at home.

American diplomats have been forced to work in undesirable postings before.

Some were given no choice but to take postings in some African countries in the 1970s and 1980s and in 1969 an entire class of new foreign service officers was sent to Vietnam.

Bhutto visits ancestral village

Former Pakistani Prime Minister Benazir Bhutto has arrived under heavy security at her ancestral village in Larkana in southern Sindh province.

It is her first public trip outside Karachi since nearly 140 people were killed in an assassination attempt.

The attack came within hours of her arrival in Pakistan last week after eight years of self-imposed exile.

At her home village, Ms Bhutto is to pray at the tomb of her executed father, former PM Zulfiqar Ali Bhutto.

She was greeted by crowds of supporters as she arrived at the heavily-guarded airport in Sukkur, near her home village of Garhi Khuda Baksh.

Her convoy to Karachi airport had a strong police escort and side roads along her route were sealed off.

Seat of power

Dozens of activists from her Pakistan People's Party, armed with AK-47s, are guarding her father's tomb.

Larkana, where the Bhutto family are large landowners, is Ms Bhutto's seat of power, says the BBC's Barbara Plett in Islamabad.

She will want to hold some kind of public rally, but after her homecoming parade was torn apart by bombs on 18 October it is not certain she will be able to, says our correspondent.

Ms Bhutto has vowed to stay in Pakistan despite the attack and campaign in the parliamentary election scheduled to be held by January.

"People are just being butchered and it has to stop, somebody has to find a solution and my solution is let's restore democracy," she told a news conference before leaving Karachi.

"Let's give the people education, let's give the people empowerment, let's give the people employment."

Pakistani President Pervez Musharraf granted Ms Bhutto an amnesty from corruption charges that allowed her to return to Pakistan.

She has been negotiating with Gen Musharraf over a possible power-sharing deal.

Rebel snub threatens Darfur talks

UN-African Union talks aimed at ending the four-year war in Sudan's Darfur region are due to open in Libya later on Saturday.

But two of Darfur's main rebel groups have decided to boycott the talks in a row over invited factions, despite UN Security Council sanction threats.

The absence of key rebel groups could mean the talks may have to be delayed, says the BBC's Amber Henshaw in Darfur.

Some 200,000 people have died and about 2m have been displaced in the conflict.

The mediation has fallen in the trap prepared by the government by making the negotiations an arena for every Jack, Tom and Harry
Mohammed Bahr Hamdeen

A 2006 Darfur peace deal faltered because it was signed by the Sudanese government and only one rebel group.

SLA-Unity and the Justice and Equality Movement (Jem) decided not to attend after the UN and the AU - who are mediating the talks - invited other rebel groups they claim have little support, said Mohammed Bahr Hamdeen, a senior Jem leader.

"The mediation has fallen in the trap prepared by the government by making the negotiations an arena for every Jack, Tom and Harry," Mr Hamdeen said.

Camp protest

The talks will be hosted by Libyan leader Muammar Gaddafi in the city of Sirte, but correspondents say the official mediator is likely to be Finnish politician Pekka Haavisto, the EU's special representative to Sudan in 2005.

When the conflict broke out in 2003, SLA and Jem were the only two rebel movements. Now, there are at least 12.

Demonstrators protested against the talks in Abu Shouk, one of many refugee camps in Darfur, on Friday.

Many people in the camps are strongly opposed to the talks and doubt that the negotiations will lead to any concrete improvements on the ground, our correspondent says.