1. Archive

Deal could free Exxon from criminal charges in Valdez spill

Published Oct. 16, 2005

Exxon Corp. may be allowed to avoid criminal prosecution for the Exxon Valdez oil spill, Alaskan officials said Thursday. The officials said the company has drafted a plea bargain with the Justice Department that, if approved by the court, would require Exxon to pay penalties of up to $500-million into an environmental restoration fund.

Political leaders in Alaska, who said they had been put under pressure by the federal government to go along with the plea bargain, condemned the terms of the pact as outlined to them as inadequate and hastily drawn.

A crucial part of the proposed settlement, Alaska officials said, would ban civil lawsuits by the federal government against Exxon for four years.

Such a settlement, the officials said, could hurt the state's effort to get Exxon to pay for damages from the 11-million-gallon spill last March and could have broad implications in the 150 lawsuits filed in state and federal courts against the company since the spill.

Alaska's attorney general, Doug Baily, said he was concerned that the actual amount paid by Exxon would be far less than the $500-million because the plea arrangement would give Exxon discretion over where and how to spend the money.

One state source said that under the draft agreement Exxon would have to pay only $170-million initially with the rest of the $500-million spread over seven years, and with each payment subject to challenge by Exxon.

"If you read the fine print it could be substantially less" in actual payments overall, said the source, who spoke on the condition that he not be identified.

The federal government had previously announced a plan to bill Exxon for the total environmental damage in Prince William Sound, a legal claim that could have been the biggest against the oil company. Federal environmental officials had estimated that the claim could have cost Exxon several billion dollars.

And under two criminal statutes used by federal prosecutors in oil spill cases, fines of up to double the cost of the cleanup could be levied.

Justice Department officials have not explained why they are pursuing a plea bargain agreement with Exxon. Privately, some officials have said that an agreement would avoid the delays and uncertainty of a long trial and would provide immediate compensation to the state of Alaska and some plaintiffs.

"If the latest draft of this agreement is imposed, Alaska would find itself on the short end of the stick," Baily said.

"We are being asked to accept a pig in a poke under unreasonably short time constraints, and that pig smells awfully bad."

Alaskan officials now feel "abandoned by the federal government" in their legal fight with Exxon, Baily said. The state has yet to decide how it will fight the proposal other than to voice its opposition.

Justice Department officials have refused to comment on the case other than to acknowledge that negotiations over a possible plea bargain have been under way for several weeks.

Exxon has also declined to comment. Richard B. Stewart, the assistant attorney general who has been negotiating with Exxon, has not answered numerous messages left for him or returned telephone calls seeking comment.

Environmental groups have tried, without success, to have some details of the talks made available to them.

A federal judge Thursday denied a motion to force the Justice Department to make the arrangement public.