Lesniak says ExxonMobil settlement smells bad

The senator is not the only one criticizing proposed deal

UNION COUNTY, NJ — On Tuesday as Gov. Chris Christie defended the $225 million settlement of the ExxonMobil lawsuit saying the deal was “really good,” elected officials and environmentalists cried foul.

Democratic state lawmakers, elected officials and environmentalists reacted with anger since the announcement last week that the energy giant would only be paying three-cents on the dollar for wetlands damage in Linden and Bayonne that began in the 1870s. The New Jersey Attorney General’s Office announced late last week that it reached a settlement with ExxonMobil that would pay $225 million in damages as a result of pollution from refinery facilities. However, officials said that was a far cry from the $8.9 billion they wanted and should have received.

Although the $250 million settlement proposal was the largest in state history, Christie spokesman Kevin Roberts said last week that number was on top of the millions the energy giant would have to pay to clean up and remediate the environmental damage.

ExxonMobil will have to remediate the Arthur Kill and Newark Bay while also dealing with 16 other sites that had damage claims with the company.

Lawmakers reacted angrily to the settlement, while the New Jersey Legislative committee approved a resolution Monday calling for the entire deal to be rejected.

The lawsuit goes back to 2004 when New Jersey claimed the Texas-based company’s refineries in Linden and Bayonne polluted waters adjacent to these plants. Since then a judge ruled the energy company was liable for causing a public nuisance while still another judge was expected to rule soon on how much ExxonMobil would have to pay the state.
However, at the 11th hour lawyers for both sides asked that the decision be set aside because they had reached an amicable settlement.

Democrat Sen. Ray Lesniak took one look at acting Attorney General John Hoffman’s summary of the settlement last week and promptly announced it was “worse than reported.”

Lesniak quickly began pursuing a challenge to the settlement, filing an Open Public Records Act request for all correspondence, including emails and faxes, as well as any reports by environmental experts that show the damage done by ExxonMobil’s Bayway and Bayonne refineries to more than 1,500 acres of wetlands, meadows and waterways that were destroyed or contaminated over the course of decades.

“We have to and we will get to the bottom of this case to determine how $8.9 billion shrunk down to $250 million,” said Lesniak, adding “we are going to dig deep and then we will dig deeper to find the truth.”

Lesniak, who grew up in the Bayway section of Elizabeth said “I can tell you that the smell was bad then but this proposed settlement smells worse.”

The state senator said ExxonMobil’s responsibility had already been established and the next step was allowing a Superior Court judge to rule on the damages and compensation.

“Getting three-cents on the dollar is a giveaway to the oil company that sells short the environment and public’s health,” he added, noting he had many avenues open in order to challenge the proposed settlement, including filing a public comment in opposition to the settlement with the state Department of Environmental Protection and, if necessary, an appeal to the Appellate Court.

Lesniak said the agreement can be overturned if it is “fraudulent, arbitrary or capricious,” adding he felt this settlement “certainly appears to be arbitrary and capricious, to say the least.”

Meanwhile, last week Republican Assembly Minority Leader Jon Bramnick called on Lesniak to back down from his statement calling for the acting attorney general to resign.

“Lesniak’s call for resignation is unfair,” he said, noting that the state senator is “well aware of how complicated litigation is. He actually has a firm that does litigation.” He also said Hoffman was one of the lawyers in the state whose integrity no one questions.

“For a lawyer to call for resignation is simply unfair,” Bramnick added.
Lesniak hit back, saying Bramnick needed to read his statement before responding, noting that he said if former DEP Commissioner Bradley Campbell’s statement that the settlement was engineered by the governor’s chief counsel is accurate, Hoffman should resign. That still needs to be determined.”

Linden Mayor Derek Armstead reacted to the settlement strongly, pointing out that the city of Linden “vigorously opposes the state’s settlement with ExxonMobil,” especially when the state’s own previous projections put that amount closer to $9 billion.
“The amount of the settlement shocks the conscience,” the mayor said, vowing to “make known to both the New Jersey Environmental Protection Agency and court that settling at such an amount does not account for the loss of use for years and years and what residents have gone through.”

“Adding insult to injury, if completed, the settlement may not ensure those funds are used to remediate the Linden site since an appropriations law allows New Jersey to use the money beyond the first $50 million dollars collected to balance the budget in current year,” said Armstead.

Linden Council President George Alvarez echoed the mayor’s concerns.
“How can the Christie administration place corporate interests above residents who have endured the loss of protected property for so long?” the council president said.

In response to the settlement, Armstead directed city attorney Daniel Antonelli to look into the proposed settlement to see what options the city has available to oppose the measure.

Union County Freeholder Chris Hudak, who lives in Linden and is the Democratic Municipal Chairman for this community, immediately shot off a letter to the governor, respectfully objecting to the decision to settle the protracted litigation with ExxonMobil.

“I respectfully question the impetus to settle this matter before a decision is rendered by Superior Court Judge Michael J. Hogan, especially considering that liability has been established against ExxonMobil and the only issue pending before the court was the extent and cost of the damages,” said the freeholder, adding discharge of hazardous substances by ExxonMobil resulted in contamination of groundwater, surface water, and wetlands adjoining these refineries while petroleum production at the refinery created spills, leakages and “sludge lagoons.”

“The residents of this state rely upon such resources for their daily water supply,” Hudak said, adding that it was “imperative the state does not settle this matter for an amount less than what it costs to fully remediate the contaminated properties.”
The freeholder went on to say that permitting a decade’s worth of litigation to settle for such a minimal amount “upon the eve of a presumably positive court decision would have an extremely adverse effect upon the state.”

“As I am sure you are aware, this matter stems from Exxon’s ownership of a refinery in Linden from 1909 to 1993,” he said, adding that in 1999 Exxon and Mobil merged to create ExxonMobil “the company that has a history of dragging out similar litigation in order to force a settlement favorable to them.”

Finally, one of New Jersey’s largest environmental advocacy organizations slammed Hoffman for settling the case, calling it a “bigger scandal than Bridgegate.”

“Attorney General Hoffman should be ashamed of himself. This is more spin and misinformation than we’ve ever seen. He’s trying to justify the unjustifiable. This case not only hurts the environment but it rips off the taxpayers of New Jersey,” said Jeff Tittel, head of the New Jersey Sierra Club in a statement, adding “it’s the biggest giveaway of taxpayer money in state history.”
“The attorney general’s statement is a snow job in the middle of a blizzard,” Tittel added, noting further that the move was “an outrageous abuse of power by the Christie administration that sold out the environment and taxpayers of the state.”

“Critics say the settlement is especially fishy in the context of Christie’s presidential ambitions,” he said, explaining that according to multiple reports, ExxonMobil contributed $500,000 last year to the Republican Governors Association that Christie chaired in 2014, a post which many believe helped him lay the beginnings of a potential 2016 presidential campaign.

Tittel questioned whether all the money would even find its way to the environmental cleanup. He pointed out that there is a provision in Christie’s latest budget that requires the state to use a minimum of $50 million from each settlement to clean up contaminated sites, while anything else can be diverted into general funds and used to the administration’s liking.

“When you sell out the public and let the polluters off the hook, it sends a message that you can get away with anything in the Christie administration. There needs to be an investigation because it looks like the attorney general is involved in a cover up, not a clean up,” said Tittel.