New scandal for Christie? State confirms $225M Exxon settlement

LINDEN – Reports that New Jersey had settled a pollution lawsuit against ExxonMobil for $250 million — a fraction of the $8.9 billion the state has been fighting for more than a decade — got it wrong.

The state actually settled for less: $225 million.

"It's worse than we thought," said state Sen. Raymond Lesniak, the Union County Democrat who's been leading the charge against the settlement since news of it was reported last week by the New York Times.

On Thursday, in the middle of a snowstorm that closed state and government offices, Gov. Chris Christie's administration confirmed the settlement for the first time.

While state officials called the $225 million amount "historic" and estimated it to be as many as six times greater than previous cases, critics say the settlement shortchanges the state in a case involving decades of industrial contamination to 1,500 acres of wetlands and waterways in Bayonne and Linden, where the Bayway refinery left deep lagoons filled with toxic sludge.

The case may now turn into another scandal for Christie, with Democratic lawmakers announcing a March 19 hearing in the Assembly to get answers from state officials.

State officials on Thursday did not explain why the administration settled for nearly three cents on the dollar.

The proposed settlement must undergo a 30-day public comment period and be approved by a Superior Court judge.

A growing number of Democratic lawmakers, environmental groups and local officials have blasted the Christie administration for the deal.

Lesniak plans to challenge the settlement and on Thursday said that acting Attorney General John J. Hoffman should resign if former state Department of Environmental Protection Commissioner Bradley Campbell's accusation that Christie's chief counsel muscled his way into the settlement negotiation is true.

"Former colleagues of mine in state government, where I served as commissioner of environmental protection from 2002 to 2006, have told me that Mr. Christie's chief counsel inserted himself into the case, elbowed aside the attorney general and career employees who had developed and prosecuted the litigation, and cut the deal favorable to Exxon," Campbell, who ran the state DEP under Gov. Jim McGreevey, a Democrat, said Thursday in a New York Times op-ed.

On Thursday, a spokesman for Christie called Campbell's comments "baseless allegations" coming "from a known partisan," and pointed out that under Campbell's watch the DEP had settled environmental cases for far less.

"Campbell's attacks are even more irresponsible, disingenuous, and baldly political when you consider that as DEP Commissioner, Campbell projected Exxon's liability could run into the 'hundreds of millions of dollars' and said the case would likely have a reasonable basis to be settled, rather than fully litigated," he said.

"The notion that this settlement represents something less than what is fair for New Jerseyans is absurd and baseless when you consider the facts of the settlement and Campbell's prior comments on this case."

In a separate joint statement, Hoffman and DEP Commissioner Bob Martin said the settlement is "on top of ExxonMobil's separate obligation to remediate the contaminated Bayonne and Linden refinery sites at the company's sole expense... The agreement reinforces ExxonMobil's obligations to clean up the sites, which are ongoing pursuant to Administrative Consent Orders (ACOs) previously entered into between ExxonMobil and the state Department of Environmental Protection (DEP).

"Under the ACOs, ExxonMobil must thoroughly investigate and fully remediate contamination at both the Bayway and Bayonne facilities to standards specified in DEP regulations," the statement said.

But Lesniak on Thursday dismissed the state's praise of its own deal, saying that the remediation "was something they always had to do."

"We always knew that they had to remediate the sites. The $8.9 billion was for restoration and for economic value damages," Lesniak said. "They are trying to gild the lilly on a bad deal and now it's worse."

Jeff Tittel, director of the New Jersey Sierra Club, called Hoffman's statement "a snowjob in the middle of a blizzard."

"This is a case that New Jersey was going to win, but the Christie administration decided to sell out the people of New Jersey. They settled this case for pennies on the dollar," Tittel said.

"This is a bigger scandal than Bridgegate. Bridgegate was about retribution. This settlement is costing the taxpayers billions of dollars. When you sell out the public and let the polluters off the hook, it sends a message that you can get away with anything in the Christie administration. There needs to be an investigation because it looks like the attorney general is involved in a cover-up not a cleanup."

Debbie Mans, executive director of NY/NJ Baykeeper, which advocates for the Hudson and Raritan estuary, said part of the settlement could be diverted from cleanup in order to balance the state budget.

The state used much of the $355 million obtained in similar litigation involving the Passaic River as general revenue in the budget. Just $67.4 million went toward river cleanup and restoration.

"Budget holes should not be filled with dollars meant to restore the places where New Jerseyans live, work and raise their children. It's irresponsibility bordering on immorality," Mans said in a statement.

"Once again, Gov. Christie has turned his back on our communities who have suffered years of pollution impacts. Not only will the proposed settlement not address the cleanup, or ultimate restoration, of the site, ExxonMobil has pushed to leave the pollution in place and simply place a cap on the pollution and walk away."

Martin and Hoffman said the ExxonMobil settlement money "would not be received by the state until, at the earliest, fiscal year 2016; the allocation of these funds will depend upon the appropriations act enacted for that respective fiscal year."

Exxon owned the Bayway refinery from 1909 to 1993 and paid millions to settle previous pollution cases. In 2005, Bayway owner ConnocoPhillips agreed to spend $60 million on air-pollution controls as part of a state and federal settlement.

Staff Writer Sergio Bichao: 908-243-6615; sbichao@mycentraljersey.com