The $1 billion Exxon Valdez settlement looked dead Thursday night after the state House of Representatives rejected twice the deal negotiated by Gov. Wally Hickel.
"This settlement would have pitted the state against all the people affected by the spill; the cities, the villages, the fishermen," said Rep. Gene Kubina, D-Valdez. "How could we have deserted those people."
The only thing that could save the deal is if Hickel goes back on his pledge to pull out of the deal if it is not approved by the legislature. And there were indications he was thinking about just that.
Today is the deadline for the state and federal governments to reject the deal. If the governments stay in, Exxon has until Saturday to decide to kill it.
The settlement called for Exxon to pay $900 million over the next decade into a trust fund that would be used to restore Prince William Sound, oiled by the 1989 wreck of the Exxon Valdez. The deal also included a $100 million criminal plea bargain that was rejected as too low last week by a federal judge in Anchorage.
House Democrats, joined by just three Republicans, said the Exxon deal pushed by Hickel was unfair to those hurt by the spill, put Exxon on the easy- payment plan and cut the legislature out of its constitutionally required authority to appropriate the settlement money.
Republicans trying to save the settlement said the money from the settlement was needed now to restore Prince William Sound and a rejection would put the state in endless litigation with Exxon. They said Hickel and Attorney General Charlie Cole negotiated the best possible deal and questioned why the Democrats didn't like it.
"This entire thing is a publicity show for these people to air their complaints about the administration," said House Minority Leader Robin Taylor, R-Wrangell.
In nearly eight hours of debate the longest session of the year the House rejected a resolution that would have called for approving the deal and passed a resolution rejecting the settlement that also laid out the terms the House wants in any new deal.
"It's a flat-out rejection. Period," said Rep. Bill Hudson, R-Juneau.
In the end, the vote was split along political lines. The entire 27-member Democratically controlled Majority Coalition, which has often found itself at odds with Hickel, voted to reject the settlement. The 13-member Republican Minority, which has supported many Hickel proposals, said the settlement should be approved.
Hickel and Cole have said repeatedly that if the legislature did not approve the settlement, the state would pull out under a clause in the agreement signed by the state, the federal government and Exxon. But Thursday night Hickel refused to believe the deal was dead and appeared to be hedging on his promise to the legislature.
Press Secretary Eric Rehmann said Hickel didn't necessarily agree that an overwhelming House vote against the settlement equalled legislative rejection. He said Hickel would not talk to reporters directly because "he has nothing much to say."
Rehmann also said Hickel wouldn't admit defeat because the House might change its mind. He said if the Senate passes a resolution approving the deal, the House could be brought around during a House-Senate negotiating session.
That brought laughs and derision from forces on both sides of the settlement fight.
Taylor chuckled at the suggestion that the administration could change enough minds in the House to save the deal.
"I wish them luck," he said. "They're a little late to the party. I've been trying to get them to change their minds all day long. I think the outcome is predetermined."
Rep. Dave Donley, D-Anchorage, a key opponent of the settlement, laughed even harder.
"Sure it's possible. We could also be visited by little green men from Mars," he said.
Even Cole was talking as if the House had run the settlement onto the rocks.
"If the legislature in its wisdom elects not to approve it, then the governor will abide by its decision," Cole said in Anchorage.
Taylor and his Republican troops, though, said the House action Thursday doesn't really mean the settlement was rejected. Taylor said the legislature must act together, both the House and Senate, to reject the settlement.
"This legislature hasn't done anything until the Senate acts too," he said.
Senate President Dick Eliason could not be reached for comment Thursday night. Eliason has said that unless Exxon says before the end of today that it will stay in the deal, the Senate would probably take no action and let the settlement die.
The administration hasn't said the legislature needs to act together for the settlement to be rejected. On March 28, Cole told the special Senate committee that was reviewing the settlement that if the legislature took no action, Hickel would cancel the deal.
On April 24, Hickel said in a press conference that if one house approved it and one rejected it, he would consider that a rejection.
On April 25, Cole wrote a letter to the House spill settlement committee that said, "Hickel's position continues to be that the State will terminate the Agreement . . . if the Alaska Legislature does not approve the Agreement as written."
Thursday night, Rehmann said the governor had not yet decided what his current position is. He said the governor was hoping for an extension from Exxon and the federal government that would leave time to twist arms in the House.
Cole, though, hinted that the federal government might move to kill the settlement.
"It's possible the United States may terminate the agreement tomorrow (Friday) as it has a right to do," Cole said. "If either the state or the United States elects to terminate the agreement, Exxon will not be required to make a decision."
Cole had said he had hoped to get an extension granted Wednesday. When that didn't happen he said he was confident it would come Thursday. It didn't.
Cole spent an hour in U.S. District Judge H. Russel Holland's chambers Thursday morning meeting with federal prosecutors, lawyers for Exxon and Native villagers who are suing Exxon. Holland must approve the final settlement.
Lloyd Miller, who represents a group of Native plaintiffs, said they talked about extending the settlement deadlines and agreed that "it was best to have another meeting in a few days."
Exxon Shipping attorney James Neal and Exxon Corp. spokesman Lance Lamberton had no comment.
Riki Ott, an environmentalist who has been fighting the settlement, called the House action terrific and said, "I can hardly wait to see what the governor does now."