EXXON MUST FACE CHARGES, JUDGE SAYS

By DON HUNTER
Daily News reporter

ANCHORAGE- Rejecting company arguments that a federal pollution indictment against Exxon Corp. is basically "a case of mistaken identity," U.S. District Court Judge Russel Holland on Friday said he will not dismiss criminal charges against Exxon and its shipping subsidiary.

The charges in a five-count indictment against Exxon and Exxon Shipping Co. stem from the wreck of the Exxon Valdez last year. The tanker ran aground on a charted reef in Prince William Sound on March 24, 1989, spilling nearly 11 million gallons of oil that eventually smeared hundreds of miles of shoreline and killed thousands of birds and sea mammals.

The trial is scheduled to begin in April. Exxon Shipping attorney James Neal said later the companies will not try to move the trial from Anchorage.

In motions to dismiss the charges, Exxon attorneys argued the parent corporation can't be held criminally liable for the acts of Exxon Shipping Co. employees. Exxon Shipping, which owns the tanker, claims Congress didn't intend the pollution laws to be used to prosecute shipowners for the acts of a vessel's captain and crew.

During two hours of arguments Friday morning, Exxon attorney Patrick Lynch told Holland the tanker was owned and operated by Exxon Shipping. Naming the parent company in the indictment is a mistake, he said: "It's a case of mistaken identity."

Lynch argued that Exxon Shipping is a separate company controlled by an independent board of directors. Federal prosecutors say Exxon dominates the subsidiary and makes all the important decisions for Exxon Shipping, "a corporate puppet on a carefully calibrated string."

Lynch said drawing the parent company into the criminal case would needlessly complicate things.

"It will turn this trial from a straightforward trial on maritime issues . . . into a business school seminar on how corporations are managed," he said.

Holland denied those motions, however, and also rejected a series of other technical arguments by the companies, including Exxon Shipping's claims that crude oil is not a pollutant under the federal Clean Water Act.

Exxon Shipping attorney Edward Bruce said the Clean Water Act lists only waste products as pollutants. "The crude oil on board the Exxon Valdez was not a waste. . . . It was a commodity," he said.

The tanker slammed into Bligh Reef shortly after midnight on March 24. Capt. Joseph Hazelwood had ordered the vessel into a course change that put it in line with the reef, then left an uncertified third mate in charge while he went below to his cabin.

Hazelwood, an alcoholic with a history of drunken-driving arrests, had spent the afternoon of the preceding day drinking vodka in Valdez bars. A jury in a state court trial acquitted Hazelwood of charges of operating a vessel while under the influence of alcohol and felony criminal mischief, but convicted him of negligent discharge of oil. He is appealing.

The oil companies are charged with criminal violations of the federal Clean Water Act, the Refuse Act, the Migratory Bird Treaty Act, the Ports and Waterways Act and the Dangerous Cargo Act.

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