Exxon Mobil Should Pay Up and Soon
Last year, Exxon Mobil reportedly paid its Chief Executive Officer $147 million in compensation and benefits. That amount is $55 million more than what the State of Alaska and three federal agencies announced today that they are seeking from the company in new damages from the 1989 wreck of the Exxon Valdez oil tanker in Prince William Sound.
After posting a record $36.1 billion in profits last year-- that's right, billion with a "b"-- and with Congress making noise about windfall-profit legislation, there is no legitimate reason for the company not to quickly and happily pay the damages. It is, pardon the pun, a drop in the ocean compared with the money that routinely passes through the company's coffers. And the demand comes at a particular pregnant moment-- with company shareholders in meetings about the company's future.
The government was able to make the new request for damages under the terms of the original settlement with the company. In the law, such a provision is called a "re-opener," a clause contained in an initial agreement that provides for the possibility of later-developing damages. Alaska and the feds say that there is still an oil problem in the Sound, and it has emerged relatively recently and thus is within the spirit and letter of the re-opener. Exxon already has paid about $900 million in restitution for the spill.
Exxon Mobil can delay the process, perhaps even for years, but at the risk of antagonizing the very folks in Congress and in the executive branch who already are jittery about their ties to Big Oil during an age of $3/gallon gas prices. And clearly smart corporate lawyers can gin up arguments that the damages sought by the federal and state governments are not justified by science-- all you need to do that is a couple of cheesy expert witnesses in the pocket of the oil giant to create a disputed issue of material fact. But that doesn't mean the company ultimately would prevail or even avoid having to pay further damages. The smart move here for the company would be to pay the money and run.
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