Only three months before New Jersey agreed to accept $250 million in cash from ExxonMobil to settle claims the oil giant sullied public land, Gov. Chris Christie was still signaling a hard line. The governor called the ecological damage from the firm’s refining operations “staggering and unprecedented,” and his administration continued to pursue a state lawsuit seeking nearly $9 billion in damages.
Yet as the Christie administration this week agreed to shut down its case for a fraction of its original demands, a little-noticed provision tucked into the governor's 2014 state budget appears to shed light on why he was willing to strike a settlement that quickly drew accusations of reckless lenience from environmentalists.
The language in question -- the handiwork of Christie's own administration -- empowers the governor to divert money obtained from environmental litigation away from pollution cleanup programs and into the state’s general fund, where it can be used to fill budget gaps or finance corporate subsidies. The provision explicitly takes precedence over other state laws designed to direct proceeds from environmental lawsuits into New Jersey’s environmental protection programs.
And because the provision is temporary, remaining in force only until a new budget is enacted, critics say that it effectively encourages Christie’s administration to settle cases as quickly as possible to free up cash that the governor can then tap however he sees fit. The most expedient way to accelerate a settlement is to lessen the fines sought from the company facing the lawsuit.
“This is money that rightfully belongs to the people of New Jersey to make up for the injury to the environment,” said Jeffrey Tittel, executive director of the New Jersey Sierra Club. “Instead, the governor is diverting it for other purposes. It’s a two-fer: reduced settlements help the oil companies before Christie’s presidential campaign, and Christie can quickly get more money for the record amounts of corporate subsidies he is handing out.”
Christie’s office did not respond to International Business Times’ request for comment.
The budget language in question stipulates that while the first $50 million of any environmental settlement is designated for the state’s cleanup fund, additional cash from natural resource litigation can “be deposited in the General Fund as general State revenue.” Earlier this year, with that budget language in force, the Christie administration engineered a series of settlements in a longstanding case against Occidental Petroleum. While a judge in 2011 ruled that the company was liable for between $1 billion and $4 billion, the Christie administration’s settlements totaled just $355 million.
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The proposed ExxonMobil settlement and the Occidental agreement share one key element: In both cases, the defendants were represented by the law firm Archer & Greiner, which has extensive ties to the Christie administration. This same law firm represents the office of New Jersey's attorney general in other matters.
In short, as the Christie administration's lawyers squared off with their adversaries at Exxon Mobil and Occidental -- presumably seeking to maximize the settlement for the people of New Jersey -- they were conferring with the same firm that represents their interests in other litigation.
According to state records, New Jersey agencies have paid Archer & Greiner $1.1 million since Christie took office in 2010. That includes more than $336,000 from the state attorney general’s office. Government records show the firm has done state and local business in New Jersey since 2006 under both Republican and Democratic administrations.
According to the firm’s website, an Archer & Greiner partner was a member of Christie’s transition team and was appointed to serve on the board of the New Jersey Economic Development Agency, which hands out state subsidies to business. The firm is also designated as a bond counsel for the agency. Another executive at the firm’s public affairs affiliate, Richard Mroz, was appointed by Christie to head the state’s Board of Public Utilities. Mroz, who headed Archer & Greiner’s lobbying subsidiary, is a longtime friend of Christie’s and was appointed to Christie’s ethics panel. He has also made substantial campaign donations to state Republicans.
Christie’s commissioner of the Department of Community Affairs, Lori Grifa, was hired by Greiner’s government relations unit weeks before the ExxonMobil settlement was made public. According to Archer Public Affairs' website, she also served in the New Jersey Attorney General’s office from 2002 to 2003 under David Samson, who was appointed by Christie to chair the Port Authority of New York and New Jersey and whose former law partner served as attorney general under Christie.
Archer and Greiner made $30,000 worth of contributions to the Christie-led Republican Governors Association since 2013, according to data from PoliticalMoneyLine.com. Its clients ExxonMobil and Occidental donated $2 million to the RGA since 2009.
Morgan Winsor and Matthew Cunningham-Cook contributed research to this report