HARD AGROUND - Wreck of the Exxon Valdez - March 24, 1989

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SPILLS: A MATTER OF LIABILITY
HISTORY SHOWS THAT MANY VARIABLES AFFECT TREATMENT WHICH DAMAGED PARTIES RECEIVE AFTER OIL DISASTERS

By SHEILA TOOMEY
Daily News reporter

Anchorage Daily News
Date: 05/07/89
Day: Sunday
Edition: Final
Section: Nation
Page: A1

ANCHORAGE- In Portsall, a fishing village of 1,200 located on a knob of France that juts into the North Atlantic, people awoke on March 17, 1978, to find one of the biggest ships in the world wrecked and broken on the rocks off their beach, and a black tide rolling in.

During the next two weeks, as it slowly sank, the Amoco Cadiz spilled 65 million gallons of Arabian and Iranian crude oil into the sea off the French coast. Eventually it spread, thinning to a slick that moved 200 miles east, blackening the white sands and rocky shores of 100 coastal communities. But on that first day, so much oil was dumped so quickly and so close to shore that when the tide came in at Portsall, petroleum, not water, filled the harbor.

Eleven years after the worst tanker grounding in history, the owners of the Amoco Cadiz have paid not one penny in damages to anyone. The case is still in litigation in Chicago and seems doomed to remain in federal court for several more years.

Shortly after noon on July 30, 1984, the British tanker Alvenus hit the soft bottom of a channel 11 miles off the Louisiana coast and buckled hard enough to crack open its main deck, spilling 2.8 million gallons of Venezuelan crude oil into the Gulf of Mexico. The giant petroleum puddle streamed westward with the Gulf current, across an invisible border into Texas, where it came ashore on the Galveston beach four days later and 70 miles from its mothership.

Oil washed ashore in Galveston for two weeks.

The Alvenus owners, Lloyd's Leasing Ltd. of London, immediately accepted responsibility for the cleanup and performed well, according to Galveston city officials. But tourists tend to be turned off by tarry beaches, so a group of beachfront condo owners sued to recover

lost rent and other revenue they would have gotten from visitors who didn't show up that year.

Four years later, a federal judge, who has since been upheld by the 5th U.S. Circuit Court of Appeals, threw out the suits. According to law governing unintentional maritime disasters, a person has to own something physical that gets damaged directly by the oil in order to make a claim. Even then, collecting for lost potential income is iffy.

The Galveston beach is public property. No individual can claim ownership, the judge said.

In an effort to get around the lack of beach ownership, the condo owners pointed out that people tracked oil from the beach into their apartments and damaged their rugs. The judge said such thirdparty damage was not something the ship owners could have foreseen. Case dismissed.

On the afternoon of Dec. 21, 1985, the Arco Anchorage, en route from Valdez to a refinery just outside Puget Sound with 34 million gallons of North Slope crude oil, pulled into Port Angeles harbor to wait its turn at the refinery dock. The weather was overcast with light winds, the sea flat. As required, a local pilot, Ray Leson, had come aboard at 3:19 p.m. to guide the ship through the inland waters.

At 4:02 p.m., Leson turned the ship sharply to the right, at too high speed into too shallow water, according to a review by the Washington Department of Ecology. At 4:25 p.m., the Arco Anchorage struck hard bottom, probably a rock, and split open two of its tanks. About 239,000 gallons of oil spilled.

It was later revealed that Leson, 65, had been involved in nine reportable incidents since 1981 while piloting ships, including three groundings. The Coast Guard punished him for this fourth grounding by suspending his license for two months.

Six weeks after the Exxon Valdez spilled more than 10 million gallons of North Slope crude oil into Prince William Sound, the shock of disaster is giving way to consideration of the future. What's it like to live with a major spill? How long will the cleanup take, how much of the destruction is permanent, whose claims of damage will be paid, how long will the litigation take, who was at fault, what will their punishment be and, of course, can anything be done to keep it from happening again?

Some of these questions won't be answered for years, but studying prior spills may help prepare us for the history we are about to repeat.

The first lesson is that oil spills, even big ones, happen wherever oil is pumped or moved in tankers. Although it is the largest in U.S. history, the Exxon Valdez spill doesn't rank high enough among world oil disasters to make even the list of the dirtiest dozen.

As compiled by Golob's Oil Pollution Bulletin, the world's worst spills offer these nightmare numbers: Ixtoc I, 1979, Mexico, offshore well blowout, 140 million gallons, burned for nine months; Atlantic Empress, 1979, Tobago, tanker collision, explosion and fire, 43 million gallons spilled and burned; Torrey Canyon, 1967, England, tanker grounding, 36 million gallons spilled; Othello, 1970, Sweden, tanker collision, 30 million gallons spilled; Nova, 1985, Arabian Gulf, tanker collision, 21 million gallons spilled.

The best safety systems are only as good as the people who run them. Machines fail, and so do men. From a victim's point of view, the 1978 wreck of the Amoco Cadiz, still the largest grounding disaster in history, is an example.

The Cadiz was one of four VLCCs (very large crude carriers) built for Amoco in the early 1970s by Astilleros Espanoles ancient and respected shipwrights who 500 years earlier built the Nina, the Pinta and the Santa Maria. At 1,095 feet, the Cadiz was 108 feet longer the Exxon Valdez.

In March 1978, two of the giant tankers were being used by Amoco to ferry its own oil around the world and two were leased out to other oil companies. The Cadiz was on longterm lease to Shell Oil.

For Capt. Pasquale Bardari and his crew of 40, March 16 was the last day of a sixweek voyage with a full load of crude oil from the Persian Gulf. Their trip took them down the west coast of Africa, around the Horn and up the Atlantic coast en route to the Netherlands, with a stop first in England.

Bardari, 35, had served on Amoco vessels since 1970, overcoming a series of unsatisfactory evaluations to eventually become a captain in 1975. This was his first trip in charge of the Cadiz.

Galeforce winds and seas rough enough to bounce around 233,000 tons of steel pounded the tanker as it reached the northwestern tip of France and made a right turn into the English Channel, one of the busiest shipping routes in the world. In his book "Superwreck," author Rudi Chelminski estimated that "something like a billion tons of merchandise a year, or a quarter of the world's circulation of goods," pass through the English Channel, including 300 million gallons of crude oil a day.

To promote safety, the Channel has a lane system similar to the one in Valdez: an "in" lane, an "out" lane and a noman's lane between. For reasons that have never been fully explained, the Amoco Cadiz was outside the inlane boundary that morning, far to the right, toward France. Bardari said later he moved right to avoid a small tanker coming out of the Channel in the wrong lane, an incident no one else on board remembered, according to Chelminski. Bardari also said one of the crew made a navigation error.

Whatever the reasons, it was a bad time to be in the wrong place. At 9:45 a.m., as enormous waves pounded the ship, washing over the decks, and winds gusted at 40 miles per hour, the hydraulic steering system failed. Suddenly, the Amoco Cadiz was adrift out of control and headed toward shore 10 miles away.

It took nearly 12 hours for the giant ship to float onto the Portsall Rocks, a shoal so treacherous even small boats avoid it. Why no one figured out how to stop the tanker's helpless drift toward disaster is a question that has been examined for more than 10 years. Every action that Bardari took or didn't take has been criticized by someone. Every move made or not made by a German tugboat, Pacific, which hurried to the scene and tried to tow the tanker to safety was reviewed by experts and challenged in court.

Among the questions: Why did Bardari fail to issue a general SOS until he was actually aground? Why did he haggle over the cost of the tug and did the squabbling between him and the tugboat captain slow down rescue efforts? And what kind of instructions did Bardari receive from his Amoco bosses during the many radiophone calls placed that day between the ship and corporate headquarters in Chicago?

What seems certain is that it took Bardari too long to understand that his ship was in mortal danger. He didn't realize the pitching tanker was too heavy to be towed by one tug. No one realized it because no one had ever tried to tow a tanker that heavy.

During the long March day, the tide came and went, the current changed and plan after plan was debated, but nothing stopped the drift toward shore. By the time the inevitable became obvious, no other boats were close enough to get there before time ran out. At 9:04 p.m., with the Pacific's line still attached, the Amoco Cadiz floated on a high spring tide onto the killer rocks and split in two.

The oil spilled first in floods, then in lessening amounts for nearly two weeks. On the 12th day, the French Navy blew up what remained of the broken hull with depth charges to release any trapped residue that might become a problem in the future.

The cleanup began quickly, and ran into problems now familiar to Alaskans. Booms were used to protect estuaries and mariculture facilities, "but a combination of improper deployment, strong currents and rising tides made the booms ineffective," according to a synopsis by oilspill historian Richard Golob.

"Bureaucratic confusion reigned," wrote Chelminski. "Later investigation showed that (the French oilspill plan) involved no less than eight ministries, each one having its own priorities and jealously guarded prerogatives, and was capable of dealing with a slick of no more than 181|2 kilometers (11 miles)."

Skimmers provided by the government were ineffective; pig manure pumps, offered by local farmers, worked, as did shovels, rakes and elbow grease. "The less sophisticated the equipment, the greater was the success," Chelminski concluded.

The French government and local communities conducted and paid for most of the clean up.

Fisheries along the Brittany coast took about three years to recover, according to Golob's report. Some species never came back and tar balls still wash up on the beach now and then.

According to a 1983 study by the U.S. National Oceanic and Atmospheric Administration, the tourism industry along the Brittany coast lost between $28 million and $60 million. NOAA valued the lost tanker at from $15 million to $24 million and the lost cargo at another $24 million. And the list goes on.

The French government paid $12 million to fishermen and others to offset their losses. The government has yet to be reimbursed by anyone.

Amoco's position is straightforward: The company is not responsible for the failure of the steering system, and therefore has no obligation to pay for the damage caused by the spill.

What can Alaskans learn from the wreck of the Amoco Cadiz? According to Joseph Pizzurro of Curtis, MalletProvost, the New York law firm representing the affected French towns, Alaska can start by being grateful that the Exxon Valdez was an Americanowned ship.

"Exxon is a United States oil company that spilled oil in the United States and has got a real problem from a public relations standpoint that Amoco never had," Pizzurro said. "It made a tremendous difference in the way the two companies have reacted. It will continue to make a difference."

Consider what the people of Portsall faced when they woke up on March 17 to find oil at their door: The Amoco Cadiz was owned on paper by Amoco Transport Co., a Liberian corporation with its principal place of business in Bermuda. Amoco Transport's owner was Standard Oil, an American corporation. The crew was Italian. The builders were Spanish. The cargo belonged to the Royal Dutch| Shell group. The victim, France, got oiled because the tanker just happened to be passing that country when its steering failed. So, who was responsible?

"Amoco took a very early strong, adverse, sort of a "screw you guys' attitude toward the whole thing and has maintained that till today," Pizzurro said.

In the lawsuits that followed, France, the fishermen and the coastal communities sued Amoco and the Spanish shipbuilders, Astilleros Espanoles, which designed the hydraulic steering mechanism that failed; Amoco sued the German tugboat, France and Astilleros. Amoco accused the French of failing to prevent the spill, although Bardari never asked for help, then of botching the cleanup.

Alaskans can also learn not to assume a tanker is well designed or well maintained just because its owners have $23 million invested in it.

In 1984, Judge Frank McGarr of the U.S. District court in Chicago found Amoco and the Spanish shipbuilders responsible for the wreck of the Cadiz. The steering system was not designed to be strong enough for such a heavy tanker in such heavy seas, the judge said. And even if the design was good, Astilleros Espanoles did not build to specifications.

For instance, the hydraulic steering mechanism blew apart when five of six halfinch thick studs holding a flange failed. The studs should have been threequarters of an inch thick.

Amoco was found liable largely because of its dismal maintenance record, and because it knew from the first voyage of the Cadiz that the steering mechanism was flawed and failed to repair it, according to McGarr. Descriptions of the steering gear room, most taken from reports by Amoco's own inspectors, called it damp and dirty, with dripping oil and leaking steam pipes. McGarr found that Amoco failed to change the oil, remove sludge and clean the filters. Hydraulic fluid leaked out, air leaked in and there wasn't enough pressure to hold the rudder against the storming sea.

Amoco originally scheduled the ship for dry docking and maintenance once a year. Before the Cadiz was launched, Amoco changed the maintenance period, first to once every 18 months, then once every two years and, in 1976, once every 21|2 years. The number of days in dry dock was reduced from 14 to eight. In fact, the Cadiz was drydocked for repairs only once in four years, the judge found.

The lack of maintenance was a deliberate decision, made "in order to realize a cost savings of $1.25 million in shipyard costs and $200,000 per year in offhire losses," McGarr concluded. The two VLCCs used by Amoco to move its own oil were given regular maintenance, he noted. But, by mid1977, Amoco's goal was to operate the Cadiz, on longterm lease to Shell, "throughout the remainder of her charter with no down time."

Amoco plans to appeal the judgment once it is made final, said Mike Thompson, the company's media director in Chicago. "These are not final decisions," he said.

In preliminary findings issued in 1988 and earlier this year, McGarr awarded the spill victims damages totaling $117.5 million, in most cases awarding specific victims only a fraction of what they claimed. He noted a tendency toward exaggeration and a lack of evidence supporting claimed costs. In at least one case, the judge noted there was double billing the same expense was submitted to Amoco that was presented to the owners of another tanker that spilled oil in the same area two years later.

He also penalized the government of France for limiting the use of dispersants to water deeper than 50 meters (165 feet). McGarr said there was no scientific basis for the decision, which "seems to have been solely the result of pressure from ecology and nature groups."

No damages were awarded to anyone for general damage to the environment. "Basically the court took the position that it was impossible to determine who had a property interest, a right in the ecology," said Pizzurro, the lawyer for the damaged French communities. "There was no one who had a right that could be remedied, so it's just too bad."

McGarr based his decisions on French law, but according to Pizzurro, it's not that different in effect from American law.

Astilleros Espanoles, the shipbuilder, refused to accept U.S. jurisdiction and did not defend itself at trial. The company reportedly has no assets in the U.S., which leaves Amoco holding the bag for all the damages eventually awarded. They presumably will go after Astilleros in Spain.

"Amoco intends to pursue their rights against the Spanish shipbuilders," said Thompson, the company spokesman.

Bardari also skipped the trial. With the exception of an early hearing in London by the Liberian government, he refused to answer any questions on the grounds that he faced possible criminal prosecution in France in connection with the wreck. In general, a person charged with a criminal offense cannot be required to testify in any inquiry until the charges have been tried and appealed.

No one prosecuted Bardari and, despite his absence, McGarr absolved him of responsibility for the wreck of the Amoco Cadiz.

Machines fail, and so do men. In most shipwrecks, a variety of circumstances come together to produce disaster, making it impossible to fix blame clearly. Investigators in the 1985 grounding of the 853foot Arco Anchorage in Port Angeles, Wash., had no such problem. They were able to lay that spill at the feet of one man.

Capt. Raymond Laurence Leson had sailed as a merchant officer for 35 years before becoming a pilot in 1977, but had little experience with large vessels, "particularly ones anywhere close to the size of the Arco Anchorage," wrote Capt. Kirk Greiner, a retired Coast Guard captain, formerly captain of the Port of Portland, who was hired by the Washington state Department of Ecology to determine the cause of the accident.

Harbor pilots are specially licensed captains who, for safety reasons, take over command of ships moving from ocean to inland water on the theory that they know the local waters and what lies hidden beneath better than mariners who are just passing through.

On Dec. 21, 1985, the Arco Anchorage was finishing a run from Valdez to a refinery at Cherry Point, at the entrance to Puget Sound. As the ship moved through the Strait of Juan de Fuca, Leson came aboard and took command. His plan was to park the huge tanker, nearly as long as three football fields, off Ediz Hook, a witch's finger of land that juts out from the mainland and hooks around, forming a protected cove.

At 4:23 p.m., after checking navigation charts, Capt. Robert Sutherland, the master of the Arco Anchorage, checked the ship's position and asked Leson if he was satisfied with where they were. Leson said yes.

The draft of the Anchorage the distance its hull extended down into the water was 50 feet, 9.6 inches. The depth of the water where Leson chose to park her was "slightly over 50 feet," but not over enough. At 4:45 p.m. the Arco Anchorage struck bottom, "undoubtedly a rock," Greiner concluded. The blow ruptured two tanks and she began spilling what eventually amounted to 239,000 gallons of oil.

Bad luck seemed to dog ships piloted by Ray Leson, as investigators later discovered. In 1981 a freighter he was piloting grounded when it missed the channel by 40 feet. In 1982 a ship piloted by him approached a dock at excessive speed and hit it. In 1983 a ship ran aground "apparently because he did not allow sufficiently for leeway for the current."

A month later, he grounded a ship in the Shohomish River entrance. He got a letter of reprimand from the Pilot Commission for that one. In 1984, he struck some pilings in Blair Waterway, in Tacoma, Wash., while backing to turn the vessel. A second reprimand was issued.

"In the opinion of the writer, the cause of the grounding of the Arco Anchorage was the failure of the Federal pilot, Captain Leson, to safely navigate the vessel," Greiner concluded.

The Coast Guard reached the same conclusion and charged Leson with negligence. "You're not supposed to park your ship (in shallow water)," said Coast Guard Capt. J.E. De Carteret at a press conference. "That's what they make charts for. That's why pilots are there." Leson got news of the charge while he was on the job, the Seattle PostIntelligencer reported, "as he prepared to pilot the tanker Mobile Meridian out to sea."

Washington officials seconded everyone else's conclusion about who was to blame for the spill by fining Leson $60,000 for polluting the environment, making him the first individual in state history to be so fined. A similar fine was levied against Arco. The fines were later reduced to $30,000.

Leson was set to go to trial before an administrative judge with the maximum punishment loss of his pilot's license, when the Coast Guard prosecutor announced a plea bargain. The deal was Leson would plead no contest to negligence and his accident record would not be introduced at his sentencing.

In April 1986, the judge suspended Leson's license for two months, noting that the grounding "was a onetime event," rather than a pattern of negligence.

"It was a momentary lapse on the part of Leson," the judge said. "I am entering this order to make this man aware he has to be on his toes at all times."

After the sentencing, Leson told reporters, "I regret the ecological damage, but the fish and the birds will come back. . . . Being a pilot is a lonely job. You're the only one on the ship. . ."

Seattle got lucky. Unpredictable wind and current drove oil from the Arco Anchorage, the worst tanker spill in Washington history, west toward the Pacific Ocean instead of east, toward Puget Sound. Much of the glop got trapped in Ediz Hook, where it fouled beaches and killed clams and birds, but where it sat still long enough for skimmers to pick up more than they usually are able to recover, according to Ron Holcomb of the Washington Department of Ecology.

Washington law requires that spillers pay for the wildlife they kill. The state billed Arco for $32,930, which included 229 dead whitewinged scoters at $5.53 each, four mallards at $9.45 each and a canvasback duck at $11.03. Arco also bought 12,468 pounds of clams ranging from $1.39 to $2.21 a pound. Prices were determined by estimating how much it would cost to dig one up to eat, even if the species was not normally taken for food.

"In retrospect, it was not appropriate," said Lew Kittle, the onscene coordinator for the Ecology Department. Kittle said Washington is working on a new table of values, one that will include nonconsumption worth as well.

Cleanup of the Anchorage spill began almost immediately and took about four months. It was run by Arco with Coast Guard and state oversight. "I was very happy with how Arco handled themselves," Kittle said. "They took full responsibility for their action. We mustered an oil spill cleanup plan . . . they worked with us."

One thing that proved valuable, Kittle said, was a joint spill response exercise a year earlier that had included Arco, the state and the Coast Guard. The responsible people

got to know each other during the exercise so, when the real thing happened, they were able to work smoothly together.

It all cost Arco $13.1 million, said Robert Levine, the company's onscene coordinator: $9.1 million for the actual cleanup and $4 million to settle damage claims, including the $30,000 fine, $32,930 for the dead wildlife, and $285,000 reimbursement for state investigations, damage assessment studies, monitoring and cleanup.

Kittle said Ediz Hook is now, 31|2 years later, clean. How clean? One hundred parts of oil per million is the standard. "You can't see it."

You can't see the oil on Galveston Beach any more either, according to Galveston Mayor Janice Coggeshall. And, considering how much oil has spilled around Galveston through the years, it's probably hard to tell one ship's spill from another.

Before the Exxon Valdez spill became the largest in U.S. history, Galveston Bay had three entries on the list of top 10 U.S. spills, including the country's worst, the Burma Agate, which spilled and burned 10 million gallons in 1979.

The Olympic Glory dumped 1 million gallons into the bay in 1981. And, as if Texas didn't have enough oil problems of its own, 1 million gallons from a 2.8 million gallon spill by the Alvenus off Louisiana in July 1984 drifted along the Gulf of Mexico and came aground on the Galveston beach in early August.

Alvenus owners Lloyd's Leasing Ltd. of London responded quickly and paid for the cleanup, estimated to have cost $5 million by Pat Cooney, an attorney for Lloyds in Houston. But the company has every intention of getting reimbursed once the case goes to trial later this year and a judge decides who the real culprit is.

Cleanup responsibility and ultimate liability are not the same thing. In the Exxon Valdez spill, Exxon publicly accepted responsibility, not liability, especially not liability for damage cause by the oil due to ineffective cleanup. Recent public criticism of the state of Alaska by Exxon officials may be a clue to how Exxon hopes to split the bill.

In the Alvenus spill, the state and city agree that Lloyds did an enthusiastic and effective job of removing oiled sand from beaches and scrubbing clean Galveston's famous 10mile, 17foot high sea wall. They also washed thousands of rocks piled along the wall, which acted as a breaker and kept the oil out of nearby estuaries and fishing grounds, said former city attorney Bob Shattuck, now in private practice in Galveston.

"They did about everything they could do. . . . They paid all the bills," Shattuck said. "They just didn't seem to care what it cost. They just did it."

Of course, tar balls still wash up occasionally, but who knows which spill they belong to. And people who go to the beach occasionally tell Shattuck, "Oh, I got my feet black today."

Until liability is determined, Lloyds is not paying any damages claims and is using well established principles of admiralty law to fend off wouldbe claimants, like the condo owners with the dirty rugs and empty apartments.

In this regard, some Alaskans damaged by the spill in Valdez are ahead of the game. Exxon has already begun paying damages, in some cases to people who perhaps would not have been able to collect through the courts, based on the law applied in past cases.

Exxon spokesman Jack Holleran said the amount paid out so far is "proprietary information."

Claims are being paid to "those persons, including individuals or businesses, who suffer losses or damage to property as a direct result of the discharge of the oil," according to Holleran. "This includes net income (lost) because of their reduced ability to use the natural resources of the Sound area as a direct result of the discharge of oil into the Sound," he said. For instance, according to Holleran, the claim of a charter fishing boat operator who lost business because the oil kept the sport fishermen away would be covered. This is a class of people who would be out of luck, based on the rulings so far in the Alvenus case.

Alaskans probably owe this easier money atmosphere, at least in part, to the existence of the transAlaska Pipeline Liability Fund.

Created by Congress at the time the pipeline was approved, the TAP fund provides $100 million a spill to compensate damage victims. The fund is not public and is not run by the government, although the Department of the Interior writes its operating regulations. The fund is owned by the pipeline companies the board of directors is made up of one member from each, plus three members appointed by the secretary of the interior, one of whom is chosen by the governor of Alaska.

Quinn O'Connell, a Washington, D. C. lawyer for the fund, is also a lawyer for Alyeska Pipeline, which is also owned by the oil companies. Alaska's man on the fund board is Richard Hall, a senior vice president for National Bank of Alaska.

According to O'Connell, the fund is an investment account now totaling $249 million. In compliance with the law, the oil companies anted up the first $100 million to establish the fund by paying 5 cents per barrel of oil transported through the pipeline for about four years, O'Connell said. The rest is accrued interest.

The standard for damages as spelled out by the fund law is much broader than the standard used by federal courts in the Amoco Cadiz and Alvenus. The statute speaks of "any economic loss, arising out of or directly resulting from an incident," including "loss of use of natural resourses . . . loss of profits or impairment of earning capacity . . . including loss of subsistence hunting, fishing and gathering opportunities."

But these definitions have never been tested in court, so no one knows what they really mean.

In an eligible spill, the spiller must pay the first $14 million in damages, regardless of fault. If the spiller is determined to be liable for the spill, then it is supposed to pay the full $100 million. The fund pays if the liable party refuses.

None of the North Slope oil spills prior to the Exxon Valdez has cost more than $14 million. That's why the fund has never been used.

If approved claims against the fund for a single spill total more than $100 million (or $86 million, assuming the oil company involved pays its share), then all the claims are prorated to bring the total paid out down to $100 million. Because of this provision, fund directors have decided that no claims from the Exxon Valdez will be paid for two years, the deadline by which all claims must be filed, O'Connell said.

"It looks like the $100 million is not enough to cover all the claims. That's our assessment at the present time. . . . The fund is taking the position now that they will take claims but we won't process any until we know how many claims are going to be filed."

What's happening, according to Cliff Groh, an Anchorage attorney hired by the fund after the Valdez spill, is that claims are being referred to Exxon, which is paying those that unquestionably meet fund criteria.

But how far from the water is Exxon going to throw its cash? The company's attorney in Anchorage, former Superior Court Judge Douglas Serdahely, did not return a series of phone calls placed over a week. However, the Small Business Administration says Exxon has established three classes of claimants and is only paying one right now:

Class 1 is commercial fishermen, processors and cannery workers. These claims are being processed and paid.

Class 2 is businesses directly dependent on the affected waters, but not engaged in commercial fishing, such as Prince William Sound tour boats, local marina operators, boat sellers and fuel suppliers. These claims are being considered but not paid.

Class 3 is everyone else local retailers, restaurants and other businesses not directly related to the Sound. These are not being paid, said SBA official John Brenner.

Given the experience of victims in other cases, why should Exxon pay these claims? Suppose Exxon can prove that others caused the cleanup to cost more than it should have.

And how liable are the six oil companies other than Exxon for the sins of their collective agent, Alyeska Pipeline? Commissioner Dennis Kelso of the state Department of Environmental Conservation has already pointed a finger at Alyeska. In a letter dated April 19, Kelso told Alyeska President George Nelson:

"Alyeska has the obligation under the Prince William Sound Contingency Plan to respond to, contain and clean up the spill. Alyeska's presence in responding to the spill and in the cleanup effort has been fleeting at best. Indeed, Alyeska seems to have assumed that its response obligation has somehow been satisfied by Exxon's presence."

Twentyeight federal lawsuits and a halfdozen or more state suits have been filed so far, seeking damages from Exxon, Alyeska and others. More than 20 law firms, in Alaska and across the country, have positioned themselves for battle. The big money wars have barely begun.


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