Patrick CrowEnvironmental groups often have good causes but bizarre methods.
An example of that was their recent claim that Exxon Corp.'s litigation over the Exxon Valdez accident a decade ago is a reason for the federal government to block its pending merger with Mobil Corp. (see story, p. 42).
A coalition of public interest groups is opposing the merger on the general principle that it would make big oil bigger.
The coalition said, "The merger will create an oil giant with enormous political power, with the ability to skew critical policy debates over matters such as labor standards, global warming, opening of the Arctic and other environmentally sensitive areas to oil exploration, government support for renewable energy, and tax code subsidies."
Liberal Sen. Paul Wellstone (D-Minn.) summed up their position. He said the merger of the two large firms "is a direct threat to our representative democracy."
(Go ahead and laugh if you need to.)
Tanker angleEqually silly is some of the environmental groups' argument that the merger should be halted until Exxon agrees to pay $5.3 billion in punitive damages levied in a 1994 jury verdict. Exxon has appealed, vigorously raising a number of issues.
Sen. Slade Gorton (R-Wash.) summed up the "Valdez argument" in a recent floor speech. He credited Exxon for spending $2-3 billion to clean the spill and compensate parties.
But he said Exxon still owes tens of thousands of fishermen and small business owners (including 6,500 who live in Washington state).
"They will be waiting a lot longer if Exxon has its way. Every year of delay is worth about $400 million to Exxon, the difference between the 6% interest rate on the $5 billion judgment and Exxon's own rate of return of about 14% on the same $5 billion.
"If this case drags on long enough, Exxon will be able to pay most of the jury verdict out of money that it made solely because of the delay in paying the judgment," Gorton claimed.
Exxon's replyThe day after Gorton made those remarks, Exxon publicly pointed out that the judgment and the merger are totally unrelated.
"The appeals process has not delayed in any way payments for the damages caused by the spill," Exxon said, noting that it paid more than $300 million immediately after the spill to more than 11,000 persons and businesses.
"The federal court in Anchorage found that virtually all claims for actual damages had already been fully paid."
Exxon said, "We are appealing the $5 billion punitive damage verdict because we believe it is unjust and excessive. Our appeal is intended to have the award overturned, not to delay further payments. Important legal issues of fairness and precedent in this case must be reviewed and decided by appellate courts.
"Exxon is exercising a fundamental right to appeal these punitive damages, a right to which every American individual and company is entitled."
Environmentalists are obviously trying to sway public opinion with their "Valdez argument."
But the only opinions that count are those of the four Federal Trade Commission members considering the merger. And they won't be swayed by such folderol.
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