Christie's Involvement in Lower-Than-Expected Exxon Settlement Questioned

by | March 6, 2015

By James M. O'Neill

New Jersey announced Thursday that it has settled an environmental damage claim against Exxon Mobil Corp. for $225 million, $25 million less than originally reported last week and far less than the $8.9 billion it had originally sought.

State officials called the $225 million figure the single largest environmental settlement with a corporate defendant in state history.

The settlement follows a lawsuit the state filed 11 years ago against Exxon Mobil for damage to the environment and natural resources caused by contamination of more than 1,500 acres of wetlands from the company's refinery operations, as well as from company service stations and other facilities throughout the state.

The settlement was announced today by Acting State Attorney General John J. Hoffman and Bob Martin, commissioner of the state Department of Environmental Protection.

When the New York Times originally reported last week that the settlement was $250 million, it drew withering criticism from many legislators and environmentalists because the state had sought $8.9 billion and the settlement came just before a state Superior Court judge was set to rule on the amount Exxon would be penalized.

The vast gap between what the state originally sought and what it settled for raised questions about the involvement of the administration of Gov. Chris Christie in the case, since the governor, eyeing a presidential bid, has drawn heavily from the fossil fuel industry for money to boost his national stature.

Bradley M. Campbell, who launched the Exxon case in 2004 as former head of the New Jersey DEP, said in an opinion piece published Thursday in the New York Times that former colleagues in state government told him that Christie's chief counsel, Christopher Porrino, "inserted himself into the case, elbowed aside the attorney general and career employees who had developed and prosecuted the litigation, and cut the deal favorable to Exxon."

In his opinion piece, Campbell called the settlement "an embarrassment to law enforcement and good government," and that it is "a disgrace."

Campbell's accusations brought quick response from state legislators. "If former Commissioner Campbell's information is accurate, Acting Attorney General Hoffman has abdicated his responsibility as the chief law enforcement officer of the state by allowing the Governor's Office to interfere in the litigation, resulting in sweetheart deal for Exxon but a bad deal for New Jersey," said state Sen. Ray Lesniak. "If the Acting Attorney General can't act like an Attorney General, he should resign."

"The Attorney General is a constitutional office, independent of the Governor's Office and, unlike other cabinet officials, does not serve at the pleasure of the Governor," Lesniak said in a statement. "The framers of the New Jersey's Constitution planned it that way so the chief law enforcement officer of the state would be independent of any political pressure."

In a statement, Hoffman said that "settling the case rather than continuing to litigate provides a predicable, fair outcome for the people of New Jersey."

The attorney general's office said the litigation and settlement negotiations, "as with all such cases of this magnitude, were conducted by the State Attorney General's Office working in coordination with the New Jersey Department of Environmental Protection and the Governor's Office."

The settlement announced Thursday must undergo a 30-day public comment period and must be approved by a Superior Court judge.

The settlement still preserves the state's claims against Exxon Mobil for natural resource damages to surface waters affected by the company's operations, according to the attorney general's office. It also preserves the state's natural resource damage claims against Exxon Mobil related to the discharge of MTBE at the company's service stations in New Jersey.

The settlement is in addition to Exxon Mobil's costs to clean up the contamination from its operations.

"This important settlement, which came about because this administration aggressively pushed the case to trial, is the result of long fought settlement negotiations that pre-dated and post-dated the trial," said Hoffman. "It ensures the continuation of the ExxonMobil-funded remediation work at these contaminated sites, and it holds the company financially accountable through payment of a historic Natural Resource Damages settlement on top of Exxon's obligation to clean up the sites."

"As the Trustee for Natural Resources for the State of New Jersey, I take very seriously my responsibility to ensure that the people of New Jersey are compensated when there are damages," Martin said. "This settlement is the largest in the history of the state, and is six times greater than the previous largest: natural resource damage settlement.

The state settled MTBE-related claims last year with Hess for $35.5 million. The 2004 Athos spill, which resulted in a major oil discharge into the Delaware River, was settled in 2009 for $19 million. The state sought as much as $5 billion in a decade-old suit against a group of Passaic River polluters and settled in recent years for $355 million.

(c)2015 The Record (Hackensack, N.J.)