INVESTIGATIVE JOURNALISTS: |
Here are six suggested stories that reflect some of the untold investigative stories of the Exxon Valdez spill. From your standpoint, these stories represent more than a 10th-anniversary rehashing of stories already told. They are new stories that will further the telling of the Valdez disaster. For further information, contact Steven Goldstein at Sgoldstein@exxonvaldez.org or call him at (212) 981-5103.
If you read the book or saw the movie A Civil Action -- and know what Woburn, Massachusetts endured -- the cities, villages and towns on Prince William Sound are still suffering similarly and incomprehensibly.
The Valdez spill severely hurt the towns' economies and centuries-old reliance on providing themselves food and clothing from the sea. The result: Increases in clinical depression. Domestic violence. Attempted suicide. Broken families. Researchers have shown that the more exposed an Alaskan area to Valdez oil, the more social and psychological problems have resulted.
Researchers have also done studies measuring the psychological trauma suffered by the affected Alaskans. And the researchers have found the trauma to be comparable to, or worse than, the trauma stemming from rape or the death of an immediate relative. Imagine that trauma as suffered by many people all at the same time.
As Exxon appeals the $5 Billion punitive damages award against it, the company claims it shouldn't have to pay that award because the company has already suffered enough financially. We disagree.
Exxon cites the $1 Billion it paid the Federal and Alaska governments in 1991 to settle their civil and criminal claims. Exxon also says it's spent about $2 Billion on environmental clean-up and land restoration.
But here's what Exxon doesn't say, and what has never been reported in the press: Exxon has been reimbursed in significant part by the insurance industry and by American taxpayers.
One of Exxon's insurance companies has covered hundreds of millions of Exxon's expenses. And Exxon has been eligible for as much as $2 Billion in Valdez spill-related tax deductions.
In essence, ordinary Americans have paid for the Valdez disaster far more than Exxon has.
Just as astounding is the amount of interest Exxon has made on the $5 Billion punitive damages award it refuses to pay: over $3 Billion so far.
As the Anchorage Daily News reported on August 4, 1998: "Apparently, delay pays. Exxon is earning $90,000 an hour, about $2 millon a day or nearly $800 million a year, on the same $5 billion as long as the case drags on and the money stays in its coffers. As it stands now, if the appeals linger a couple of more years, Exxon will have earned enough interest alone to pay the $5 billion plus the accrued interest."
That's not punishment at all. Maybe that's why Exxon is still filing endless appeals of the case it lost in 1994.
And how has Exxon done it? Over the years, it has retained scores upon scores of in-house lawyers and outside lawyers from around the country to work on the Valdez case alone. Exxon is said to have paid them hundreds of millions -- maybe more. Is it that Exxon would rather pay that much money to lawyers than to the victims of the spill? If the company wants to talk about abuse of tort system, it ought to look inside its own house first.
Even without the interest covering a punitive damages payment, $5 Billion is not a lot of money to Exxon. Exxon's revenue rose from an annual $96 Billion in 1989 to $137.2 Billion in 1997; its net profits rose from an annual $3.5 Billion in 1989 to $8.5 Billion in 1997; and it stock value rose from $5 Billion to $20 Billon between the 1989 Valdez spill and the 1994 trial alone.
Exxon admits it considers such vast sums of money to be nothing, yet it refuses to pay the judgment. As then-Exxon CEO Lawrence Rawl told stockholders in 1991 about the $1 Billion settlement Exxon paid to the Federal and Alaskan governments: "The settlement will have no noticeable effect on our financial results."
According to scientists, several species have never recovered. They include harbor seals, harlequin ducks, marbeled murrelets, pacific herring, cormorants, sea otters, pigeon guilllemot and certain whales. This is in stark contrast to Exxon's claims.
The Seattle Times reported on October 5, 1998: "Lingering oil from the 1989 grounding of the Exxon Valdez supertanker in Prince William Sound will kill or stunt Alaskan pink salmon for generations to come, government scientists say.
"Long lasting hydrocarbon components of the crude oil will cause chronic harm to successive generations."
"'Those buried oil pockets are sort of like land mines,' ready and able to release poison, said Jeffrey Short, a scientist with the National Marine Fisheries Service."
Other scientists add that the oil spill seems to have led created permanent genetic damage, passed down from generation to generation, in various species of fish and other sea mammals.
And though Exxon claims Prince William Sound is back at its pre-spill level of cleanliness, the Seattle Times reported that the Sound "is clearly not as clean as it was in 1988."
Many scientists believe that Exxon, in cleaning the shoreline with overly hot water sprayed at overly high pressure, did as much harm as good. The hallmark of Exxon's post-spill cleanup -- 140-degree water applied at high pressure -- was, according to these scientists, poison to the beach and area's many animals.
Apparently, Exxon was more interested in cleaning up its image than in cleaning the oil. On tape, we have Don Cornett, Exxon's chief public relations officer, yelling frantically to Exxon's cleaners: "I want something people can see."
Exxon compounded its 1989 Valdez misconduct in 1991, when it committed one of the worst legal charades of our time. That's when it signed a secret agreement -- which did not come to light until 1996 -- with seven seafood processors based in Seattle who lost business because of the Valdez oil spill. Exxon gave them $70 million in exchange for the seafood processors giving Exxon their share of the punitive damages, should Exxon pay it. That amount would be $745 million -- 15% of the total $5 billion dollars in punitive damages.
What's wrong with that? At trial in 1994, Exxon bragged to the Valdez jurors, hoping to persuade them to keep their damages award low, that it gave the "Seattle Seven" the money out of the goodness of its heart. Exxon made no mention of the quid pro quo.
As Business Week, certainly no anti-business publication, wrote in a scathing anti-Exxon full-page commentary in 1996:
"On June 11 (1996), after learning of the true situation, the judge presiding over the case (U.S. District Judge H. Russel Holland) went ballistic. Exxon's lack of forthrightness, he said, meant that the jury charged with punishing the oil company for one of the worst environmental disasters in history heard corporate officers brag about the company's generosity to the seafood processors -- but not how it extracted valuable concessions in return.
"'Exxon has acted as a Jekyll and Hyde, behaving laudably in public, and deplorably in private. The court is shocked and disappointed that Exxon has entered into such a repugnant agreement,' wrote Judge Holland. He prohibited the seafood processors and Exxon from receiving any portion of the $5 billion."
"Litigation misconduct will only stop when the courts ensure it doesn't pay off. Judge Holland's decision is a good start."
Respected citizens and environmental leaders and organizations question whether Exxon has ever created safe-enough tankers, and instituted sufficient manpower -- in terms of both quantity and training -- to prevent another Valdez spill from happening.
Specifically, Exxon still refuses to protect its ships and Alaska's waters by building double hulls: the best possible safety move that several other oil companies have undertaken since the spill. Exxon, which because of its misconduct should have been a double-hull pioneer, remains a holdout that is acting as if it never learned its lesson.
As you see on our website, Alaskans, environmentalists and public-interest leaders are starting to question the advisability of rewarding Exxon for its Valdez misconduct -- both Exxon's pre- and post-spill misconduct -- by approving Exxon's bid to merge with Mobil. As the anti-merger movement grows and the pressure starts to increase on the players in the Federal government responsible for approving the merger, this may become one of the biggest business stories of 1999.
Towns all across the Prince William Sound region, as well as state and national environmental organizations, are now passing resolutions also opposing the merger. This linkage between the merger and Exxon's misconduct in handling the Valdez oil spill may prove to be Exxon's worst nightmare come true. Exxon has a lot more to lose than the $5 billion in punitive damages if, in fact, the merger is blocked.
Copyright © 1999 Survivors of the Exxon Valdez Oil Spill