While Gov. Chris Christie was busy discussing giving up the New York Times for lent at the CPAC conference and visiting California, the New York Times reported that his state will settle an environmental dispute with ExxonMobil for $250 million out of the proposed $9 billion. For those of you keeping count, that amounts to almost four percent of what the state wanted. The people of New Jersey got more screwed than the owners of the ill-fated Revel Casino.
The Christie administration joined a decade-long battle with the checkered oil mega-conglomerate upon assuming office.
The lawsuits, filed by the State Department of Environmental Protection in 2004, had been litigated by the administrations of four New Jersey governors, finally advancing last year to trial. By then, Exxon’s liability was no longer in dispute; the only issue was how much it would pay in damages.
The stakes were high, given the enormous cost the state’s experts had placed on restoring and replacing the resources damaged by decades of oil refining and other petrochemical operations, as well as of the public’s loss of use of the land.
As the judge prepared to release a verdict as to how much Exxon would owe, the Christie administration, out of nowhere, petitioned the court twice to wait, and the state told the judge a week ago that the state settled with Exxon. While no records show Exxon contributing to Christie financially, Exxon did contribute $500,000 last May to the Republican Governors Association that Christie chaired last year. The story doesn’t add up, but here’s where the dots start connecting.
Christie’s administration slipped a provision into the budget that requires the state to use a minimum of $50 million from each settlement for purposes of cleaning up the respective contaminated sites. Anything else can legally be diverted by the administration into general funds, which can then be used for anything. The short-term nature of the provision provides an incentive to settle as many environmental cases as quickly as possible.
With New Jersey lagging in recovery and its credit ratings downgrading, a governor could use those funds to create short-term budget stopgaps. Then, he can give his State of the State address or run a campaign advertisement in which he boasts his balanced budget, something that’s his job as it’s New Jersey law to have a balanced budget. A balanced budget doesn’t necessarily mean an improving state and state economy.
After a judge ruled in 2011 that Occidental Chemical Corporation was liable for cleanup costs in the lower Passaic River, the judge needed to decide what the fines should be. As the judge prepared to release his decision last October, in which the state sought $1-4 billion, the administration told the judge to wait. One day, the administration announced a settlement for $355 million. Christie called the original guilty verdict an important victory for taxpayers.
Environmentalists see red right now. Jeffrey Tittel of the New Jersey Sierra Club said, “It’s a two-fer: reduced settlements help the oil companies before Christie’s presidential campaign, and Christie can quickly get more money for the record amounts of corporate subsidies he is handing out.” To dig even further, law firm Arch & Greiner represented both Exxon and Occidental. The firm has major ties to the administration, like representing the attorney general’s office in other matters and accepting $1.1 million in payments from New Jersey agencies. As International Business Times reports: