Christie’s oily Exxon Deal: “The smell was terrible, but the stench this deal gives off is worse”

Decades of oil spills and toxic dumping landed Exxon in big trouble in NJ -- until Christie worked his sleazy magic

Published March 5, 2015 5:20PM (EST)

Chris Christie                                    (AP/Matt Rourke)
Chris Christie (AP/Matt Rourke)

Both Exxon and the Christie Administration refuse to comment on their reported deal to settle $9 billion in environmental claims for decades of oil spills and toxic dumping by the oil giant for just $250 million dollars, or 3 cents on the dollar. The suit covers 1,500 acres on the waterfront in Hudson and Union counties where the oil giant operated its Bayonne and Bayway complexes for decades.

The settlement was first leaked to the New York Times yet still has not been made public. Word of a deal came after the conclusion of an eight month long trial after both sides wrote the presiding judge asking him to hold off on issuing a ruling because the two sides had reached an agreement.

Environmentalists and local elected officials, who had been tracking the litigation closely, expressed outrage over the deal which was widely expected to yield the state billions of dollars. “I grew up in the Bayway section of Elizabeth. The smell there was terrible but the stench this deal gives off is worse,” said State Senator Ray Lesniak during an interview. “$250 million dollars is just two weeks of profit for Exxon.”

For over a decade the state's attorneys general under four governors, including Christie, aggressively pursued Exxon Mobil. Back in 2008 a state court judge ruled in the state's favor holding Exxon-Mobil liable for the massive contamination of 1,500 acres in Hudson and Union counties. All that remained was to determine how much the state would be compensated.

The language of the 2008 ruling was powerful and set a strong legal foundation for what promised to be a substantial damages award. “It was estimated in 1977 that at least some seven million gallons of oil ranging in thickness from 7 to 17 feet, are contained in the soil and groundwater underlying a portion of the former Bayonne site alone,” wrote former Judge Ross R. Anzaldi. The level of hydrocarbon contamination was so high one creek was covered with “a gelatinous, oily emulsion overlying grey silt.”

Under New Jersey's state constitution the Attorney General, though nominated by the Governor and confirmed by the state senate, is required to be independent.

Lesniak says New York Times reports that Governor Christie's Chief Counsel Christopher Porrino directly intervened in the settlement, big footing Acting Attorney General John Hoffman, raises serious questions. "How do you turn a $8.9 billion damage claim, with liability already admitted, 11 years of litigation and $100 million of expert fees into a $250 million settlement?," Lesniak asked in a statement.

Lesniak and New Jersey Senate President Stephen Sweeney say they are headed to court to try and de-rail the deal they say is an unconscionable give away to Exxon.

For Jeff Tittel with the New Jersey Sierra Club Exxon’s track record of donating to the Republican Governors Association, which Governor Christie chaired, raises serious ethical concerns that should be brought to the court’s attention. According to the Center For Responsive Politicsin 2014 Exxon donated $750,000 to the Republican Governor’s Association. Other major energy sector donors included the Koch brothers Koch Industries which gave Christie’s RGA $4.25 million dollars.

But Tittlel concedes Governor Christie could also be in a hurry to get Exxon’s $250 million because the state is so strapped for cash it needs the money to balance the budget. Last year Governor Christie inserted a measure in his budget which would permit the state to re-direct the $200 million of the Exxon settlement from environmental reclamation and restoration to the general fund.

Back in 1991 Exxon entered into a consent order with the state’s DEP to assume responsibility for cleaning up the sites themselves.

But under state law the public actually owns the tidal lands that were grossly contaminated in and around Exxon-Mobil’s Bayonne and Linden sites. Once the responsible party for causing the pollution is determined, the law requires the public be compensated for the degradation and loss of use of the natural resources the polluting industry poisoned.

Historically natural resource damage awards have been used as ecological game changers to purchase critical open space and to restore wetlands.

Debbie Mans, the NY/NJ Baykeeper says she’s worried about the precedent that would be set by the state giving Exxon such a deep discount on the natural resource damage claims. Mans says Exxon’s past pollution has left a toxic legacy. “Now we need to have the resources to deal with the broader impact of these contaminated sites because they are still effecting the food chain. That’s what the fish consumption advisories are all about.”

“The state holds these resources in trust for us and Exxon damaged and destroyed them,” says Mans. “This is the one chance to make us whole.”

For decades New Jersey has had bans and consumption advisories in place for the fish and crabs that live in the Newark Bay because of concerns about contamination generated over a hundred years by chemical plants and refineries like Exxon’s facilities. The marshy waterfront provided easy access for tankers from all around the world to drop off raw materials and pick up finished products.

But this hive of hugely profitable waterfront activity left a toxic legacy of heavy metals, dioxins and PCBs in the sediment of the wetlands and nearby waterways. “These contaminants can be especially harmful to women considering pregnancy, pregnant women and nursing mothers. Children are also at risk of developmental and neurological problems if exposed to these chemicals,” according to US EPA advisory put out May of last year.

The reported Exxon settlement comes at a critical point in the history of the Newark Bay according to Dr. Angela Cristini, who teaches biology at Ramapo College and has studied the region for decades. Cristini credits billions of dollars invested in municipal sanitary sewers and declines in direct toxic discharges for bringing back oxygen and life back into these once dead waters. “There has been an amazing recovery in the Hackensack and even in Newark Bay,” Cristini says.

“What we need is a comprehensive plan for dealing with these remaining hot spots,” Cristini contends. Cristini notes that at one time Newark Bay was famous for it clams and oysters sold around the country but that sewage and industrial pollution killed them off. Cristini says if the water quality continues to improve, and the toxic hotspots are effectively remediated, oysters could be re-introduced. “It’s already being done in the Raritan and the lower Hudson,” says Cristini.

According to the NY/NJ Baykeeper oysters are considered a “keystone species” that can mark a turning point for the marine ecology where they thrive. Oysters act as a natural filter that can remove nutrients like algae and pollution from the water while the reefs they establish become a habitat for other marine organisms.

Perhaps not since Teapot Dome have oil interests gotten such a sweetheart deal from officials who are ignoring their obligation to act in the broader public interest while saving Exxon billions of dollars. But perhaps most unforgivable is the lost opportunity cost of not funding this once in a generation shot at reclaiming these wetlands in the most densely populated part of the state and living to see oysters restored to Newark Bay.


By Robert Hennelly

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Chris Christie Environment Exxon Governor Health New Jersey Oil Oil Spills Sierra Club Teapot Dome Toxic Dump