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



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Daily News reporter

Anchorage Daily News
Date: 11/14/91
Day: Thursday
Edition: Final
Section: Metro
Page: B1

ANCHORAGE- Alaska and the federal government have banked $125 million in criminal fines and restitution from Exxon Corp., fulfilling the first stage of the record $1 billion settlement of government litigation over the wreck of the Exxon Valdez.

In a plea bargain accepted by a federal judge last month, Exxon and its shipping subsidiary pleaded guilty to four misdemeanor criminal charges for the 1989 spill.

The company agreed to pay $100 million in restitution split between the state and federal governments and $25 million in fines. Exxon also agreed to pay $900 million over 10 years to settle civil claims for damages to natural resources.

The check for the criminal part of the settlement arrived last week, and now the state must figure how to spend its share.

Alaska's $50 million will be held in the state treasury until the legislature and Gov. Wally Hickel decide how it should be spent, said Eric Rehmann, the governor's press secretary.

Hickel wants to use the $50 million to endow a research center specializing in oil spills in northern regions, Rehmann said.

"He'd like to put something up that would be a benefit for the long term, looking at (the spill's) effects 10 or 12 years down the line," he said.

With that accumulated expertise, Alaska could offer scientific aid to Norway, the Soviet Union and other oil producers operating in the frigid, remote seas of the north.

"It sounds like something that might be appropriate," said Rep. Gene Kubina, D-Valdez, who with other lawmakers had insisted the constitution requires that the Exxon money be appropriated through the legislative budget process. "Whatever he (Hickel) does, he has to come through the legislature."

In a concession to Kubina and other lawmakers, Hickel now is willing to dicker over how to spend the money, Rehmann said.

The settlement requires that Exxon's $1 billion in payments be spent on restoring, replacing and "enhancing" natural resources damaged by the spill a term that Hickel has said might include salmon hatcheries, roads, boat harbors and other recreational and commercial development of Prince William Sound and other areas.

Exxon is expected to pay $90 million early next month as the first installment of the $900 million civil deal. A six-member panel of state and federal trustees will decide how to spend the civil settlement money, to be paid over a 10-year period. The trustees have not yet met or established guidelines for spending the money.

Hickel's desire for an oil spill research center was the main reason the state, in its negotiations with Exxon, got the word "enhancement" into both the criminal and civil agreements, Rehmann said.

"That was why he wanted to call it enhancement, to somehow benefit from the tragedy."

The agreement also permits Exxon money to be spent on long-term environmental monitoring and research aimed at preventing, containing and cleaning up oil spills, said Attorney General Charlie Cole.

But an estimated $100 million in government studies already finished won't be available to Hickel's proposed oil spill research center, at least not right away.

Cole said the research remains locked away through a deal with private plaintiffs suing Exxon, who agreed not to sue the state in exchange for exclusive use of the state's scientific research and damage assessments.

"It would be a breach of faith if we were to conclude our agreements with these Alaska fishermen and all, and receive dismissal of their lawsuits and then turn around and give all that data to Exxon." Cole said. "They'd say, "Hey, you sandbagged us.' "

An April 19, 1993 trial date has been set in state court for the hundreds of private civil lawsuits against Exxon.

Charles DeMonaco, assistant chief of the U.S. Justice Department's environmental crimes section in Washington, said the $25 million criminal fine will be split into two funds. A total of $12 million will go into a fund for wetlands conservation, and $13 million will go into a crime victims' fund.

The Associated Press contributed to this story.

Story Index:
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