Secrets and Settlements

After the Exxon Valdez spilled over half its cargo into Prince William Sound, the United States government and the State of Alaska filed criminal charges against Exxon and civil claims for damages to and recovery of wildlife and public lands harmed by the oil spill.
It took over two years for the federal and state governments and Exxon to reach a settlement that resolved all the issues. During this time (1989-1991) the governments gathered evidence, such as the investigation into spill volume, to support their case. The governments and Exxon conducted their investigations and scientific studies on extent of damages to wildlife and public lands (habitat) in secret as both sides tilted towards litigation. Government scientists were under a U.S. Department of Justice-imposed gag order not to share their work with anyone (Cummings 1992). The public did not know the extent of injury--except for what information Exxon shared with the media or produced for the public in numerous glossy brochures, which proclaimed rapid recovery (Baker, Clark, and Kingston 1990, 1991; Exxon 1991a 1991b; Neff 1990, 1991; Owens 1991).

On 9 October 1991, the U.S. District Court approved the settlement among the federal and state governments and Exxon (U.S.A. v. Exxon [1991a]; State of Alaska v. Exxon [1991]). Under the Criminal Plea Agreement (U.S.A. v. Exxon [1991b]), Exxon was fined $150 million and forgiven $125 million in recognition of Exxon's good corporate behavior in cleaning up the spill. The remaining $25 million was paid to the North American Wetlands Conservation Fund ($12 million) and the national Victims of Crime Fund ($13 million). For criminal restitution, Exxon paid $100 million, which was divided evenly between the state and federal governments. Under the civil settlement, Exxon agreed to pay $900 million in annual payments over a ten-year period. (This was three times lower than the minimum estimate for damages calculated from public surveys and it amounted to about $500 after accounting for inflation, tax-breaks, and the ten-year payment period [Lancaster 1991; Schneider 1991].)

The 1991 civil settlement created a council of state and federal trustees--the Exxon Valdez oil spill (EVOS) Trustee Council--to oversee restoration of injured wildlife and habitat through the use of the $900 million. The Memorandum of Agreement and Consent Decree (U.S.A. v. Alaska [1991]) guides the use of this money. In this book, I refer to scientists funded with public money through the EVOS Trustee Council or the various government agencies as "public-trust scientists." The stories of their work and findings--and of Exxon's spill science--are told in Part 2.

Section 17 of the 1991 civil settlement contains a "Reopener for Unknown Injury" (U.S.A. v. Exxon [1991a], 18-19; State of Alaska v. Exxon [1991], 18-19). This requires Exxon to pay the governments up to an additional $100 million to restore wildlife or habitat for harm that "could not reasonably have been known nor… anticipated" based on the scientific understanding of oil effects at the time. The settlement may be reopened by any of the three parties to the settlement for additional claims from 1 September 2002 to 1 September 2006. The "$100 million reopener clause," as it is commonly known, is discussed in Part 3.