Alaska Blasts Proposed Settlement on Oil Spill : Environment: State officials charge the Justice Department is selling them ‘down the river.’ Exxon’s role in a restoration fund is viewed as inadequate.

Alaskan officials on Thursday bitterly charged that the state is “being sold down the river” by the U.S. Department of Justice, which is negotiating with Exxon Corp. over settlement of criminal allegations stemming from the disastrous Exxon Valdez oil spill in Prince William Sound last spring.

Pressed by federal officials to concur with specific elements of the more than 30-page settlement proposal about 24 hours after receiving a copy, state officials said: “No dice.”

“We . . . reject the invitation for a hasty endorsement of the plea agreement negotiated between Exxon and the United States both on the basis of the manner in which it has been presented and on its unacceptable content,” Alaska Atty. Gen. Douglas Baily informed the Justice Department in a letter, a copy of which was obtained late Thursday.

Sources confirmed that the proposed plea agreement would require Exxon to underwrite an environmental restoration fund, but state officials expressed anger and dismay over the amount of money guaranteed by the deal and the strings attached. For example, Exxon would retain veto control over investments made from that fund, officials complained.

An aide to Alaska Gov. Steve Cowper told The Times that among the key provisions of the proposed settlement are these:

--Exxon would guarantee to pay only $150 million as a sort of down payment to establish the environmental restoration fund.

--An additional $350 million might be paid over time, possibly in installments that would be interest-free.

--The federal government would agree not to pursue civil litigation against Exxon for at least four years, a key sticking point for the state, which would be left to press such litigation alone.

Justice Department officials have refused to disclose details of their negotiations with Exxon.

Exxon attorneys told a federal judge in Anchorage on Thursday that the company had reached no plea agreement. Officials in Washington said they expect no announcement before Tuesday when a federal grand jury in Alaska is scheduled to reconvene on the Exxon investigation. So far, no indictments have been issued.

“There’s a pretty strong sense up here of being sold down the river,” said David Ramseur, spokesman for Cowper. He said the governor was en route to Washington for an unrelated meeting but hoped to confer with U.S. Atty. Gen. Dick Thornburgh on the matter.

“Our bottom line is not necessarily to get blood money out of Exxon but to restore the Sound and all areas affected by the spill,” Ramseur said in a telephone interview.

The 11-million gallon tide of heavy crude oil released by the March 24 grounding of the Exxon Valdez tainted shorelines hundreds of miles from rocky Bligh Reef, killing thousands of birds and marine mammals in its path.

The state’s angry response to the plea agreement apparently was aggravated by pressure to react virtually overnight to the proposal. Baily complained that key elements of the deal were still being withheld from Alaska.

In his letter rejecting the agreement--sent to Asst. U.S. Atty. Gen. Richard B. Stewart--Baily noted that Alaska has “not seen any information concerning the nature of the criminal plea which Exxon would enter, the charge to which it would plead, or the extent of any criminal fine which would be imposed.”

An anonymous source familiar with the agreement said one recent draft included a $25-million punitive fine, but it was not clear whether that provision was included in the final document.

University of Alaska marine biologist Rick Steiner, a Cordova fisherman who first disclosed existence of the secret plea negotiations last week, said a fine would do nothing to help restore the damaged environment. But he expressed some misgivings about Exxon’s potential veto power over restoration fund spending.

“That could be very unsatisfactory,” Steiner said. “But I doubt that Exxon would abuse that veto authority. I truly believe Exxon wants to do the right thing in this case. It’s to their advantage as well as the state’s.”

Other environmentalists were not so sanguine. Jay Hair, president of the National Wildlife Federation, accused the Bush Administration of “giving Exxon a wink and a nod.”

Mike Matz of the Sierra Club and chairman of the Alaska Coalition, a group of environmental and civic organizations, said the Administration is moving too fast.

“Exxon is responsible for the worst environmental tragedy since Three Mile Island and the Justice Department wants to punish them with little more than a slap on the wrist,” he said.