UNION COUNTY, NJ — Backlash from the state settling the decade-long lawsuit against ExxonMobil for pennies on the dollar continued last week when Democrat State Sen. Ray Lesniak called the deal a sellout. Information supporting that theory is starting to surface and it connects the governor and his staff closely to those involved with the settlement.
Last week Lesniak held a press conference in Linden, launching a grassroots campaign opposing Gov. Chris Christie’s administration accepting a $225 million settlement for dumping oil and chemicals into acres of land surrounding the Bayway and Bayonne refineries since 1909.
The senator blasted Acting Attorney General John Hoffman and DEP Commissioner Robert Martin regarding the proposed legal settlement with the oil giant, making it crystal clear the agreement should be rejected.
“Gov. Chris Christie has stated the $225 million settlement is ‘on top of ExxonMobil’s obligation to clean up the site.’ Acting Attorney General Hoffman claims that it ‘reinforces’ ExxonMobil’s obligation and Commissioner Martin said there is ‘no cap on remediation,’ all in an effort to justify the reduced settlement of three cents on the dollar,” Lesniak said, stressing these statements “are deceiving because they have nothing to do with the litigation.”
The senator, who grew up in Elizabeth and says he can still remember the acrid stench that filled the air from the Bayway refinery, faulted the state for “letting the company off the hook” for damages that left more than 1,500 acres in Linden contaminated with oil and chemical sludge that goes as deep as 17-feet in some places.
Despite the state claiming the deal was “historic,” Lesniak believes it remains a “corporate giveaway that shocks the conscience.”
“The proposed consent judgment is inadequate, improper and inappropriate and all it does is protect ExxonMobil’s corporate profits,” said the senator, who said the measure should be rejected by the DEP.
“If it isn’t, it should be denied by the judge or overturned by the appellate division,” Lesniak said.
The senator is hoping his efforts, which includes an online petition that already has 15,000 signatures supporting rejection of the proposed settlement, will result in the state going back to the table to fight for more money.
However, since there will not be any hearings on the proposed settlement, the only option the public has is to lodge their objections by emailing or writing the state during the 60-day comment period, which began April 6 with the release of the official release of the settlement deal the state made with ExxonMobil.
Lesniak also felt the state let ExxonMobil “off the hook” for undisclosed damages at 16 other facilities and hundreds of gas stations. He took particular exception to how the settlement was drafted.
“The misleading reference to ‘alleged discharges’ shows that the proposed consent judgment is further biased on behalf of ExxonMobil because the oil company already admitted to the discharge of contaminants,” he added, referring to a ruling by Superior Court Anzaldi May 26, 2006, that found ExxonMobil liable for restoration of the natural resources impacted by these discharges occurring over many decades.
The legal battle between the state DEP and ExxonMobil went on for more than a decade, but there was an expectation the oil giant would reimburse New Jersey $8.9 billion based on what experts said during a trial last year targeting the company’s liability.
That number, though, fell by the wayside when the state announced in early March it had come to an agreement with the company for $225 million.
The lawsuit was filed in 2004 against the world’s largest publicly traded energy company and after a trial in 2014 that lasted 66-days, Superior Court Judge Michael Hogan of Mt. Holley was within days of handing down a damages ruling when the governor’s administration requested in late January that he hold off because the two were close to making a deal out of court.
Lesniak is not the only one calling the settlement a “sellout.” In addition to legislators, who are trying to block the state from accepting the settlement, environmental groups have come out against the deal.
Jeff Tittel, executive director of the New Jersey Sierra Club, was livid over the state accepting three-cents on the dollar for such extensive contamination damages.
“This is money that rightfully belongs to the people of New Jersey to make up for the injury to the environment,” he said, adding that the deal was a “two-fer,” which reduced settlements to help oil companies before Christie’s presidential campaign and “the governor can quickly get more money for the record amounts of corporate subsides he is handing out.”
Raising the ire of legislators is that it is possible the settlement monies may not even be applied to what they was intended for, which is the environment. Due to a New Jersey appropriations law, the first $50 million has to be designated to the state cleanup fund, but anything beyond that amount can be diverted to balance the state budget.
Earlier this year, with that budget language now law, the Christie administration finalized a series of settlements against Occidental Petroleum. Although a judge in 2011 ruled the company was liable for between $1 and $4 billion, in the end Christie’s administration settled for $355 million.
However, there are similarities between Occidental Petroleum’s settlement and the ExxonMobil settlement.
According to information obtained by LocalSource, both energy companies were represented by the law firm of Archer and Greiner, which has extensive ties to the Christie administration. For instance, the same law firm represents the state attorney general in other matters.
What this means is the state negotiated with the same firm that represents their interests in other litigation. It is especially noteworthy because according to state records, the state has paid Archer and Greiner $1.1 million since Christie took office in 2010; however, the law firm has done business with the state and locally since 2006 under both Democrat and Republican administrations.
Archer and Greiner was also a member of Christie’s transition team when he took over as governor and was appointed to serve on the board of the New Jersey Economic Development Agency, which offers capital to businesses looking to grow in New Jersey. The firm is also bond counsel for this agency.
Since 2013 the Archer and Greiner law firm made $30,000 in contributions to the Christie-led Republican Governors Association, according to information obtained from PoliticalMoneyLine.com. Its clients ExxonMobil and Occidental donated $2 million to RGA since 2009, with $1.9 million of that from ExxonMobil.
These donations included $279,000 that was given during Christie’s election and reelection races and another half-million when he chaired the organization in 2014.
In addition, one of ExxonMobil’s law firms in the Bayway contamination case also made $30,000 in donations to the RGA since 2013.
Christie’s first attorney general also worked for Exxon for seven years and his deputy chief of staff left the governor’s office in 2014 for a job with one of the oil giant’s lobbying firms in Trenton. Weeks before the settlement was announced, one of his cabinet secretaries took a job with Exxon’s New Jersey law firm.
Adding insult to injury was news that ExxonMobil probably can write off any payment they have to make in damages on the next year’s taxes, lowering the overall amount of the fine.
Democrat State Senate President Steve Sweeney said last weekend that he will be introducing legislation preventing ExxonMobil and other companies from deducting the cost of legal settlements from their state tax bills.
“Taxpayers shouldn’t be subsidizing Exxon or other corporations for bad behavior,” Sweeney said, adding “contaminating the environment should not be considered the cost of doing business.”
Sweeney said his legislation will specifically prohibit corporations from defining legal settlements as a routine business expense that can be deducted from the state corporate business tax, which can significantly reduce a corporation’s total costs and liabilities.
The proposed settlement, in which ExxonMobil does not admit guilt for the contamination, will resolve liability for the natural resource damage by contamination from refinery operations in Linden and Bayonne. A separate agreement requiring the mega oil company to clean up the two sites, which is estimated to cost as much as $4 billion, was previously agreed upon and has been underway.