Exxon, U.S. Discuss Oil Spill Settlement : Environment: A deal with the Justice Dept. could prevent a criminal trial over damage to Alaska. Possible terms of a pact are not disclosed.

The Justice Department is discussing a settlement with Exxon Corp. that could result in a substantial fine but spare the energy giant a possible criminal trial over its role in last spring’s disastrous Prince William Sound oil spill, government officials confirmed Wednesday.

No criminal charges naming Exxon have been announced, but a federal grand jury in Alaska has been investigating the firm since the Justice Department opened an environmental crimes office in Anchorage in the aftermath of the March 24 Exxon Valdez grounding.

Terms of a possible settlement were not disclosed Wednesday, but Exxon officials have made it known that they are seeking assurances that most or all money collected would be used to fund cleanup and environmental restoration programs.

Word of behind-the-scenes negotiations between U.S. lawyers and Exxon officials, first reported in the Wall Street Journal on Wednesday, was revealed by University of Alaska marine biologist Rick Steiner of Cordova.

In a telephone interview Wednesday, Steiner said he learned about the talks Jan. 23 when he met privately with Exxon Shipping Co. President Frank Iarossi in Washington to discuss a proposal that Exxon invest about $100 million to protect timberlands in the Prince William Sound area.

“He told me that Exxon had agreed to the total amount of (settlement) money it would pay and that they expected to reach an agreement . . . any day,” Steiner said. “He wouldn’t tell me how much that was, but I got the impression that $500 million is in the ballpark.”

Justice Department spokeswoman Deborah Burstion-Wade acknowledged that discussions are under way with Exxon attorneys. She declined to say whether those talks involve possible criminal charges. However, the Associated Press reported that federal prosecutors were involved in the discussions.

Exxon spokesman Bill Smith said the company would have no immediate comment on the report.

Still at issue, according to Steiner, is whether anticipated financial penalties would be assessed as criminal fines or put into some sort of fund to benefit the damaged Prince William Sound environment.

“It is probably in the best interests of the state of Alaska and the whole country” if the settlement is heavily weighted to underwriting restoration efforts, said Steiner, an associate professor with the university’s marine advisory program in Cordova.

“We don’t need to generate more funds for the federal Treasury,” Steiner said.

Alaska Atty. Gen. Douglas Baily offered at least partial support for that view saying: “Obviously, a fine doesn’t do any direct good to the state of Alaska.”

He said the state is aware of talks between Exxon and the Justice Department, but he said Alaska has taken no position on what sort of terms should be worked out. Baily said the state has not been invited to participate in the negotiations. And he said he doubts that a federal plea agreement would affect the state’s pending civil litigation against Exxon.

Exxon has already spent $2 billion in cleanup efforts in Alaska, but critics claim much more work needs to be done. Reducing the amount of criminal penalties in favor of increasing the amount of cleanup funds could be a boost for the company’s public relations, and might mitigate civil damage assessments.

“It’s a win-win situation for everyone--the environmental community, commercial fishermen, everyone” said Steiner, who also is a commercial fisherman in Prince William Sound. “Ideally, we’d like to see an agreement that ends up with a $1 fine and a restoration fund of $499,999,999.”