SPILLIONAIRES
PAYOUT COMES AT HIGH PRICE

By NATALIE PHILLIPS
Daily News reporter

ANCHORAGE- In early 1989, Mike McLenaghan signed $1 million in loans for a new boat and permits to fish for Prince William Sound herring and Chignik salmon.

''We were on a serious big-time roll,'' said McLenaghan of Edmonds, Wash. Chignik salmon fishermen -- Alaska's richest -- had been netting an average $200,000 a year. ''I remember talking to my attorney. I said, 'What could go wrong, Larry?' ''

Two months later, Prince William Sound was blackened with 11 million gallons of Exxon Valdez oil.

''I was totally screwed,'' McLenaghan said. Since then, he said, he's almost lost it all.

''My net worth today is about half of what it was before the spill,'' McLenaghan said. A bankruptcy form is filled out on his computer ready to be printed.

Now that may be behind McLenaghan. He is set to become an Exxon oil ''spillionaire.''

McLenaghan is one of the 100 or so permit holders from the Chignik area who will split

$186.8 million if the $5 billion award in the Exxon oil spill lawsuit survives the appeals process. State records show that around 75 of those fishermen live in Alaska while another 17 live in Washington. The split works out to about $1.9 million apiece, which means all 100 of the Chignik fishermen could end up millionaires.

''That's exactly right,'' McLenaghan said. ''We prevailed within the system, so however we end up being compensated is just and fair.

''If I could have gotten this settled years ago, I would have been happy with less, but at this point I don't think it is enough,'' he added. ''I have weathered the storm, but I am still battered and bruised.''

The reason the Chignik fishermen make out so well is that their fishery has been the state's richest per capita fishery for years. The matrix for distributing the $5 billion recognizes historic performances and tilts mostly toward compensating red salmon fishermen for getting reduced prices for their fish in the years after the spill, according to David Oesting, one of the lead attorneys who represented fishermen in the case against Exxon.

They must share the money with their crews, typically about three to four members.

From the early 1980s until the spill, Chignik fishermen earned between $80,000 and $240,000 during a summer of fishing for red salmon, mainly in the open water. While their earnings were big, they also paid the most to get in, McLenaghan said.

''We took the risks,'' he said. Back in the late 1980s, Chignik fishermen paid $400,000 for their permits while a Kodiak fishing permit went for $50,000.

The spill didn't stop the Chignik red salmon fishermen, though their average earnings were down slightly at $130,000. But McLenaghan cautions that the numbers are deceiving.

The fishermen used to making the most money didn't fair well at all. The spill forced them off the high seas and into a crowded lagoon. The fishermen who were used to fishing the lagoon did well. They earned three to four times their average, McLenaghan said, while the ''guys who were forced to fish in there who didn't have a clue were basically screwed.''

''The lagoon is a treacherous place to fish,'' McLenaghan said. ''We are rigged up for bigger, deeper nets. Some had to get different nets and had to figure out what they were doing. The distribution of the resource was totally skewed.''

McLenaghan, an outspoken Exxon critic during the spill who became known as the ''Mouth of the South,'' said he made little money that summer because his boat was too deep to fish in the lagoon.

A handful of the Chignik fishermen snagged oil-spill cleanup contracts. At one point McLenaghan was offered a contract, but he said he feared it was hush money, so he turned it down.

In 1992, McLenaghan sold his salmon permit and got the $400,000 he paid for it three years earlier.

''I just got butt lucky,'' McLenaghan said. ''It was probably the largest mistake of that guy's life.'' He is now using his boat year-round fishing for herring in Alaska and dungeness crab in Washington. He figures he will see his million-plus about the time his 9-year-old daughter is ready to start college.

Exxon ''could have settled this damn thing for pennies on the dollar for what they are going to have to pay in the long run,'' McLenaghan said. ''I don't subscribe to punitive damages as a way of doing business, but it is the only thing we got to come anywhere near to compensating for all the heartache.''

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