Proposed Christie-Exxon Mobil contamination deal criticized

AP News
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Posted: Mar 04, 2015 6:50 PM

ELIZABETH, N.J. (AP) — Democratic lawmakers and environmentalists have assailed a proposed court settlement of about $250 million between Republican Gov. Chris Christie's administration and Exxon Mobil in an oil and chemical contamination case in which the state originally sought nearly $9 billion.

The settlement figure, they argued this week, amounts to the state getting just 3 cents on the dollar even though Exxon's liability had already been established.

"The public health of our residents and our environment are priorities, especially in areas long subject to pollution and misuse," said Assembly Speaker Vincent Prieto, who's planning a public hearing this month to question the deal.

Criticism of the proposed settlement, which would have to be approved by a judge, comes as Christie weighs a bid for the White House and as state lawmakers begin to hold hearings on his 2016 budget proposals.

The contamination case stretches back to 2004, when the state Department of Environmental Protection and the state attorney general brought a suit against Irving, Texas-based Exxon Mobil Corp. The suit charged that Exxon's petroleum refining plants in Linden and Bayonne fouled the land and water. The state sought to recoup losses stemming from the lack of use of the land and the contamination of groundwater.

A trial was held last year, but the judge hadn't ruled on a damage amount. In late January, attorneys sent a letter to the judge asking him to refrain from ruling because the two sides had "agreed on the general parameters of a settlement," and they notified him on Feb. 20 that they had reached a settlement. No financial details were mentioned in the letter.

The settlement is for about $250 million, said a person familiar with the matter who wasn't authorized to speak before details were released publicly and spoke to The Associated Press on Wednesday on the condition of anonymity.

Court documents show the state initially sought about $8.9 billion in damages, a figure Exxon vigorously contested, referring to it in a November court filing as "jaw-dropping." Exxon accused the DEP of using faulty methodology and unsubstantiated claims to arrive at the number and urged the judge to award no more than $3 million in damages.

A spokesman for the attorney general's office declined to comment on Wednesday, citing the pending litigation. A Christie spokesman did not immediately return a message seeking comment.

Three months ago the government announced it settled with Occidental Chemical Corp. for $190 million for contamination of the Passaic River. Acting Attorney General John Hoffman praised that settlement at the time as a "victory" for the state's residents.

The settlements come after the governor signed into law to a budget provision for fiscal year 2015 permitting proceeds from such deals beyond the first $50 million to be used in the state's general fund, rather than for cleanup costs.

New Jersey Sierra Club director Jeff Tittel questioned whether that was in the best interests of the state and said it sends a message to companies that if they pollute or have problems or accidents it's cheaper not to fix them.

"The governor is more concerned about taking care of big oil and polluters than he is about taking care of New Jersey's environment," said Tittel, whose organization says its mission is partly to "protect the wild places of the earth."

Exxon and its employees gave $500,000 to the Republican Governors Association last year, while Christie served as its leader, campaign finance records show. It gave $125,000 to the Democratic Governors Association.

Senate President Steve Sweeney and state Sen. Ray Lesniak threatened to file a lawsuit objecting to the settlement.

"Settling for 3 cents on the dollar in a case where liability has been admitted is just totally arbitrary and capricious," Lesniak said.

The proposed settlement is expected to be made open for comments from the public.

Bob Benkovich, who has lived in Linden for the past 40 years, said he was disappointed by the settlement.

"Exxon has gotten away every year with the pollution," he said.

The settlement was first reported by The New York Times.

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Associated Press writer Jonathan Fahey, in New York, and Jill Colvin, in Linden, contributed to this story.