Justice Dept. Defends Exxon Plea Dealing

The U.S. Justice Department defended its plea bargain negotiations with Exxon Corp. Friday, in the aftermath of the state of Alaska’s stinging rejection of the criminal settlement terms. Public and political criticism mounted.

“No actions taken by the federal government in the enforcement of federal criminal laws will compromise the state of Alaska’s ability to pursue violations of its criminal laws or appropriate civil remedies,” said David Runkel, a Justice Department spokesman in Washington.

“Nor will the rights of private parties, including environmental groups and Alaska residents . . . be adversely affected by any actions of the federal government in the criminal law area.”

But in Alaska, the state attorney general called the deal “smoke and mirrors.” In the negotiations, “Exxon’s coming on bended knee as a criminal defendant but being treated as an equal business partner,” said Alaska Atty. Gen. Douglas Baily in a telephone interview. “We’re not for sale that cheap.”

(Exxon could be liable for criminal penalties as a result of the Exxon Valdez oil spill last March that dumped 11 million gallons of crude in Prince William Sound.)

The deal rejected by the state would require Exxon to put $150 million into an environmental restoration fund. An additional $350 million might be added over the next seven years in interest-free installments. Exxon would retain veto control over how the funds are spent, however. Also, much or all of the company’s payments could be used to offset future damage claims.

A federal grand jury is meeting in Alaska in connection with the investigation by the Justice Department’s environmental crimes section. The grand jury could conceivably return an indictment as early as Tuesday if the department and Exxon do not reach a settlement.

Environmentalists complained that an agreement with such implications for restoration of the oil-smeared Alaskan shoreline should not be negotiated in secret.

“No one represents the environment in those negotiations,” Macon Cowles, one of the supervising attorneys for 150 victims seeking civil damages from Exxon, said in a prepared statement.

Baily also disputed the Justice Department’s assertion that the settlement would not hurt Alaska’s civil case against Exxon. Another key element of the proposal would require the federal government to drop its participation with the state in joint civil action against Exxon.

The state attorney general said this would mean Alaska must bear the cost and burden of gathering scientific data alone.

“They’ve pulled the slats out from under us,” Baily said. He said that even if Alaska “is abandoned” by the federal government, it will not drop its civil suit against Exxon.

Alaska’s criticism was echoed in Congress Friday. Sen. Joseph I. Lieberman (D-Conn.), a member of the Environment Committee, complained at a Capitol press conference that the Justice Department “seems all too willing to settle . . . too softly.”

“Civil and criminal penalties are meant to be levied on top of costs associated with environmental cleanup or restoration. The nature of this plea bargain appears to stand that concept on its head,” he said.

Runkel replied that “there are a number of complicated legal and factual issues involved in this matter and we are puzzled by comments . . . by persons who appear to have little grasp of what is actually involved in this case.”

Times Staff Writer Ronald J. Ostrow in Washington contributed to this story.