Viewpoint: Exxon still hasn't paid for Valdez spill

StoryImage( ‘/Images/Story//Auto-img-112429879821033.jpg’, ‘Image courtesy of Exxon Valdez Oil Spill Trustee Council’, ‘Oiled duck after the Exxon Valdez spill in 1989. According to a 2001 survey, oil remains on about 20 acres of rocky shore, sheltered from wind and wave. Originally, 92 miles (149 kilometers) of shoreline were heavily spilled with oil. The punitive award damages to residents of the Sound remains unsettled.’);

One of the worst ecological disasters in North America happened 15 years ago on March 24, 1989. That was the day the Exxon Valdez tanker ran aground in Prince William Sound, dumping 11 million gallons of crude oil into the pristine waters of the sound.

Ten years ago, a federal jury awarded the fishers and Native Americans on the Sound punitive damages amounting to $5.2 billion. Today, 10 years later, Exxon has paid not a dime of that award, and the civil case against Exxon drags on.

It is a crystal clear example of how much Big Oil cares about the little guy—the consumer. At the time of the spill, Exxon sent its top man in Alaska to the little fishing port of Cordova.

“You have my word,” he told the fisher folk. “I said it, Don Cornett. We will do whatever it takes to keep you whole. We do business straight.” His comments are reported in a story on

Brian O’Neill, a Minneapolis lawyer, heads the legal team representing the residents of Cordova and others in the civil case. O’Neill says the big corporations are “nation-states unto themselves.” He understands that they know how to use the legal system and the apparent disinterest of the federal government to conquer an entire town through limitless litigation financed by very deep pockets.

Cordova is a town of about 2,600 residents. Once it was a settlement of highly successful fishermen, or high-liners, as they’re called in Alaska. People in Cordova today would tell you there isn’t a single fisher in town who would be viewed as a high-liner by pre-spill criteria.

Cordova today is a depressed little town where formerly successful fishers now mend nets to make ends meet. Where once many of them brought in a couple of hundred thousand dollars or more per year, now they barely survive.

In the 10 years since the federal award, not a single check has been drawn. The civil suit is trying to establish corporate responsibility for the spill as well as how the U.S. legal system can be manipulated by big companies to avoid that responsibility.

At one town meeting to brief Cordova residents on the status of the civil case, a man asked O’Neill: “Where in the hell is my money?” Phil Lian had been one of the biggest high-liners in Cordova. He not only fished the sound, but sold supplies to Cordova’s fleet. His business was growing fast and grossing $2 million a year. Today, his fishing supply superstore sits empty and forlorn.

“If any of us knew we’d be having this meeting 14 years later,” Lian said, “we’d have liquidated and moved out. Maybe we should have.”

The Alaska Daily News reported that Exxon’s delaying tactics in court have handsomely rewarded the big oil company. Exxon has earned enough in interest alone to pay the $5 billion damage award. In 1999, the National Association of Attorneys General wrote Exxon CEO Lee Raymond: “Each year Exxon delays payment of its obligation, it earns an estimated $400 million from the difference between the statutory interest rate on judgments of 6 percent and the company’s internal rate of return of about 14 percent.”

A fisherman named Mike Maxwell snapped: “I would just love to collect the Exxon oil that is on our beaches and dump those gallons of oil on the front yard of its corporate headquarters. It’s been in my front yard for 14 years.”

One of the most devastating results of the oil spill has been the effect on commercial fishing permits. In 1988, some fisher’s permits in Cordova were valued at nearly $1 million. Today, those permits have dropped in value by 90 percent.

In March 1991, the state of Alaska, the U.S. Justice Department, and Exxon cut a deal that would allow Exxon to plead guilty to four misdemeanor environmental crimes, post $100 million for criminal penalties, and pay $900 million in civil damages. Exxon, by then, had spent $2 billion cleaning up its mess in Prince William Sound.

According to an report, environmentalists and legislative critics turned thumbs down on the deal, saying the Department of Justice had pulled back from its earlier strong censure of Exxon. Then Attorney General Dick Thornburgh, who promised to throw the environmental book at Exxon, initially promised to seek more than six times what he finally proposed.

Federal Judge Russel Holland, on April 24, 1991, rejected the proposal. “These fines,” said the judge, “send the wrong message, and suggest that spills are a cost of business that can be absorbed.”

After a long and lethargic performance by the Ninth Circuit Court of Appeals in San Francisco, the court, in November 2001, finally overturned the $5.2 billion award against Exxon, saying it was excessive. By this point, almost 3,000 claimants in the case had died and the mayor of Cordova committed suicide.

Because of 15 years of negative press, Exxon doesn’t want to talk about the Valdez spill any more. Much of the company’s PR efforts today are aimed at trying to disprove claims made by government scientists like Jeff Short. Short, who lives and works in Juneau, reported in 2002 that he found more than 200 times more oil than Exxon said was in and around the Sound. He said the chances of finding oil on the most affected beaches was better than one in three—12 years later. Exxon claims some of the oil was left over from an earthquake in 1964.

The fishy smell of Northwest Bay has been replaced by the toxic odor of oil. Short, who was examining the substrata of the beaches, said: “It’s really an insidious poison. That fact that we can find this much oil 14 years later—and oil in this toxic condition—means the oil did a lot more damage than we think.”

From the August 17-23, 2005, issue

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