ANCHORAGE, Alaska -- Exxon pleaded guilty to four environmental crimes Tuesday, and a federal judge accepted a $1 billion settlement of all government criminal and civil cases arising out of the nation's worst oil spill.
This represents the largest payment for environmental crimes and natural resource damages ever obtained, according to Justice Department lawyers who urged the court to accept the deal.
Tuesday's action settles three cases -- the federal criminal charges, federal civil charges and state civil charges. It does not affect the private civil suits that seek more than $50 billion in damage from the oil giant.
Top executives from Exxon Corp., and Exxon Shipping appeared in court to plead guilty. Exxon lawyers said the settlement would bring Exxon's total payments to $3.5 billion, counting its cleanup costs and partial damage payments to fishermen hurt by the spill.
Justice Department lawyers offered the judge letters from several Bush administration cabinet members supporting the negotiated settlement.
The judge's decision to accept the deal came near the end of a three- hour hearing -- in which he received assurances from Exxon that the oil company would not pass on its fines to consumers in higher gasoline costs. The judge also received government assurances that settlement monies would be spent exclusively on environmental rehabilitation.
'I've determined to accept and approve the criminal plea agreement and the civil settlement,' said U.S. District Court Judge H. Russel Holland, who rejected a similar deal 5 months ago, but said this one was better and that Exxon has since shown itself to be a 'good corporate citizen.'
'The Exxon Valdez oil spill was a complete and utter disaster which I have previously characterized as being off the charts,' Holland said, adding that he now believed the increased criminal fine, most of which will go to restoring the damaged environmentent, was sufficient punishment and deterrent.
The civil settlement calls for Exxon to pay $900 million in damage payments to restore and rehabilitate Prince William Sound, where the tanker Exxon Valdez hit a charted and lighted reef, broke open and spewed 11 million gallons of crude oil into pristine waters in March 1989. Exxon will make payments on a 10-year installment plan and can be assessed another $100 million if long-term damage turns up later.
For its criminal convictions, Exxon must pay $125 million, $25 million more than the previous plea bargain sentence rejected by Holland.
Holland said he decided to accept the new deal because the 25 percent increase in the criminal fine was significant, and because $100 million of the fine must be paid within 30 days and be used for restoring the environment. The $100 million restitution in the criminal fine is double the restitution of the earlier rejected plea bargain.
The on-paper fine assessed against Exxon is $150 million, but $25 million is forgiven, leaving $125 million to be paid. Alaska Attorney General Charles Cole said the $150 million is 'a number that the state can hold up to other polluters and say this is the fine you face.'
Holland called it 'a very heavy fine, the likes of which have never been seen in this country.'
Before court, environmentalists objected to the settlement as being too lenient on the oil giant, saying it was only 'a drop in Exxon's bucket.'
After the judge's decision the Sierra Club blasted it as a '... clumsy attempt by the Bush administration and the oil industry to bury this catastrophe so that they can drill in the Arctic National Wildlife Refuge,' where environmentalists and oil companies are currently waging a battle over drilling rights.NEWLN: 2ndtake stand
No new damage assessments were offered in court and there was no reference to a published report in Tuesday's Los Angeles Times citing secret government studies estimating spill damages at up to $15 billion. After court, state and federal lawyers dismissed the article and said they were unaware of such estimates.
A last-minute plea from a U.S. House of Representatives committee to delay a decision on the new settlement until Congress could analyze it was rejected by the judge, who said it was time for a decision that would start the flow of cash into environmental restoration projects.
Justice Department lawyers gave Holland letters supporting the settlement from the Bush Cabinet, from secretaries of the interior, transportation and agriculture and the heads of the Envirionmental Protection Agency and the National Oceanic and Atmospheric Administration.
Exxon Corp. Chief Executive Officer and Chairman Lawrence Rawl and Exxon Shipping Co. President Augustus Elmer appeared in court and personally pleaded guilty on behalf of their companies. Exxon Corp. President Lee Raymond also was in court.
Rawl, his voice barely audible, pleaded guilty to violating the federal Migratory Bird Act. So did Elmer. Federal officials said Exxon's oil killed hundreds of thousands of birds, as well as thousands of marine mammals. Elmer also pleaded guilty to violations of the federal Clean Water Act and the Refuse Act for spilling the oil. The charges are misdemeanors.
As part of the settlement, four other charges against Exxon Corp. were dismissed, two of them felonies, and two felonies against Exxon Shipping were dropped.
Holland gave Rawl and Elmer a chance to speak before he ruled on the proposed settlement. Elmer declined the opportunity but Rawl said, 'There's no question to anyone that we regret this spill very much. We've done all we could do to get this cleaned up,' and he said, 'We understand what the guilty pleas mean in this case.'
Exxon executives rushed away after court and refused to say anything more.
Exxon Corp. lawyer Patrick Lynch reassured the judge that Exxon accepted its fine and civil damage payment as a penalty against Exxon shareholders and equity owners and that settlement costs would not be passed on to consumers, which he said was impossible if Exxon was to be competitive at the gas pump.
Exxon Shipping lawyer James Neal told the judge that Exxon's total payments of $3.5 billion for the settlement, cleanup and partial damage payouts to fishermen roughly amounted to the oil giant's earnings in 1989 when the spill occurred.
'The spill was a catastrophe and also was an environmental crime,' chief federal prosecutor Charles De Monaco said, but adding, 'There is no question Exxon has paid dearly.'
Before court, environmentalists objected to the settlement as being too lenient on the oil giant.
