Exxon’s Oil Spill Penalty Squandered

Exxon’s $1-billion penalty settlement for the 1989 oil spill in Alaska’s Prince William Sound has--at least until recently--been squandered, with little lasting benefit to the public, a government study to be released today concludes.

Nearly 15% of the money has been spent to reimburse government agencies and Exxon itself for expenses, the General Accounting Office reported.

“The report documents that the past (George Bush) Administration failed to assure that the Exxon Valdez funds were used wisely to protect natural resources that were affected by the oil spill. Instead, the bureaucrats gave top priority to feathering their own nests with reimbursements and gold-plated studies of questionable merit,” Rep. George Miller (D-Martinez), chairman of the House Natural Resources Committee, said.

Over the objections of environmentalists, native groups and fishermen, the governments of Alaska and the United States agreed in October, 1991, to settle damages with Exxon for $900 million in civil penalties and $125 million in criminal fines. The money, which will be paid out over 11 years, is administered by government trustees supposedly to restore the coastal waters of south-central Alaska.

As of December, 1992, the GAO reported, $107 million had been paid out to government agencies as reimbursement for spill-related activities. Another $40 million was offset against Exxon’s fines to cover cleanup costs incurred by the oil company in 1991, as provided in the terms of the controversial settlement. Another $19 million was spent for sundry government administrative costs and damage assessments.

These expenditures have been reported previously. But the GAO report and Miller’s harsh critique will no doubt add to the already noisy clamor over how to spend the remaining money.

In a written statement prepared to accompany release of the report, Miller acknowledged that the trustees themselves, including Alaska Atty. Gen. Charles Cole and representatives of the Clinton Administration, recently have taken steps to “improve management” of the funds.

In particular, Cole has joined with coastal residents and environmentalists and pushed to spend more of the money to acquire lands in Prince William Sound to prevent further degradation due to logging or development.

So far this year, $39 million has been appropriated for land acquisition in an area known as Seal Bay on Afognak Island, and another $7 million for land near Homer that was threatened by logging. Other acquisitions are being negotiated.

Interior Secretary Bruce Babbitt and top deputies are now in Alaska and are scheduled to attend a meeting today of the trustee council. Environmentalists said that they expect a strong expression of support for land acquisition.

Miller encouraged this. He called for the trustees to rein in scientists, who are seeking vast sums of money to study the after effects of the spill.

“The best use of the remaining money is to protect key fish and wildlife habitat from development threats,” the congressman said.

Complicating the picture is a recent harsh decline of salmon runs in Prince William Sound. After record salmon levels in 1990 and 1991--so many, in fact, that fish processing plants were overwhelmed--the 1993 harvest has plummeted. Nearly 45 million pink salmon returned to the sound in 1990, but fewer than 5 million are expected this year.

Angry salmon fishermen blame the oil spill and want compensation. “It doesn’t take a Ph.D. to see that something is very wrong in PWS (Prince William Sound),” said Bob Widmann, who was among fishermen who called for boats to mass together in shipping lanes used by Exxon tankers to protest the recovery efforts.

About 60 fishing boats clogged the Valdez Narrows on Saturday. By Sunday, about 100 boats had joined the protest, moving to a small bay just beyond the narrows but poised to move quickly back into the tankers’ shipping lanes.

Fishermen agreed Sunday to lift the blockade after Babbitt promised to look into their concerns.

“The fishermen correctly say we need a fair portion of that money here in Prince William Sound,” Babbitt said. “Their complaint, with which I concur, is that the trustee council really hasn’t worked hard enough to try and wrap their arms around that issue.”

Meanwhile, cash-pressed Alaska natives continue to insist that the government buy their timberlands in the region. Otherwise, the natives say, they will expand clear-cut logging. A recent surge in lumber prices had added incentive to cut quickly.

Apart from these claims, both fishermen and native organizations continue to press millions of dollars of private lawsuits against Exxon. These are not included in the Exxon-government settlement.