San Francisco News

Prosecutors want $40M fine for Cosco Busan

Tuesday, June 09, 2009

Federal prosecutors have asked a U.S. judge in San Francisco to rule that a Hong Kong shipping company could be eligible for fines of up to $40 million if it pleads guilty to two charges in a 2007 oil spill into the San Francisco Bay.

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The actual fine, if Fleet Management Ltd. is allowed to plead guilty to two misdemeanors, would be determined by U.S. District Judge Susan Illston.

But in a court filing on Monday, prosecutors asked Illston to keep open the possibility of a multimillion-dollar fine by permitting prosecutors to use a revised indictment providing for such a fine.

Illston will hold a hearing on the case on June 19.

Fleet Management was the operator of the Cosco Busan at the time the container ship hit a fender of the Bay Bridge in heavy fog on Nov. 7, 2007 and spilled 53,000 gallons of oil into the Bay.

The company has told the judge it is prepared to plead guilty to two misdemeanor criminal charges: killing migratory birds and violating the U.S. Clean Water Act by polluting the bay.

It contends the maximum fine it could face under an indictment filed last year would be $400,000.

But in late May, prosecutors obtained a revised indictment that specifies that the loss caused by the pollution was $20 million. Under the Clean Water Act, a fine could be double that amount, or $40 million.

Fleet Management argued in a brief filed last week that it was unfair of prosecutors to obtain a revised indictment at the last minute. The company said a huge fine would "potentially cripple Fleet financially."

Prosecutors said in Monday's response that "there is nothing improper" with their obtaining a revised indictment.

Justice Department lawyers wrote, "Charging decisions rest entirely with the prosecutor."

The prosecutors said the $20 million figure is based on the fact that Fleet Management has said in court papers that it has paid more than $21 million to fisherman, local businesses and local government agencies for damage caused by the spill.

Total costs of the spill, including environmental cleanup costs, are estimated at more than $70 million.

Pilot John Cota pleaded guilty to the same two misdemeanor charges in March and is awaiting sentencing.

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