When oil services firm Halliburton Co. (NYSE: HAL) pleaded guilty to destroying evidence in an investigation of the causes of the explosion of the Deepwater Horizon that killed 11 workers and spilled 5 million barrels of oil into the Gulf of Mexico, the company also agreed to pay the maximum fine of $200,000. If that seems like a slap on the wrist, well, it is.
As long as a company that lies and destroys evidence in order to preserve its profits can get away with the lying and destruction, as long as the firm is willing to pay a pitiably small fine, companies will continue to lie and cheat and happily pay the insignificant fines. Send the liars and cheaters up the river.
In this case Halliburton also agreed to contribute $55 million to the National Fish and Wildlife Foundation whether or not the court upholds the settlement with the U.S. Department of Justice.
And who should go to jail? In this case the DoJ has a prime suspect:
Halliburton, through its Cementing Technology Director, directed a Senior Program Manager for the Cement Product Line (Program Manager) to run two computer simulations of the Macondo well final cementing job using Halliburton’s Displace 3D simulation program to compare the impact of using six versus 21 centralizers. … Program Manager was directed to, and did, destroy these results.
At the very least the Cementing Technology Director should spend a few months in the slammer. One might also reasonably argue that Halliburton’s CEO should also get to spend some time looking at concrete-block walls. He, after all, sets the tone for the company, and as long as he and Halliburton don’t get hit with anything but a chump change fine nothing will change at Halliburton — or at any other company. Halliburton’s revenues in 2012 totaled $28.5 billion and profits were $4.43 billion; $200,000 is a rounding error.
Halliburton’s shares are up more than 3% in premarket trading this morning, at $45.80 in a 52-week range of $29.83 to $46.66. Investors know a good deal when they see one.