Will Legislators Learn From Disastrous Christie Exxon NRD Deal And Open Space Diversion of Parks Funding?
Restore State Parks Maintenance Cuts Made By Open Space Ballot Approval
Don’t Starve DEP Natural Resource and Enforcement Programs
Assure that communities are compensated for pollution damages
[Update and corrections below]
A very important Senate Concurrent Resolution (SCR 39) will be heard by the Senate Environment Committee on Thursday.
SCR 39 would
Amend [the] Constitution to dedicate all State moneys received from settlements and awards in cases of environmental contamination for certain environmental purposes.
The SCR is a response to the Christie Administration’s sweetheart settlement with Exxon for Natural Resource Damages (NRD).
The Christie DEP settled for pennies on the dollar ($225 million) of an $8 billion NRD claim. Adding insult to injury, Governor Christie then diverted the majority of the funds to close budget revenue shortfalls created by his $5 billion in corporate tax cuts.
Few people are aware of the fact that DEP settling NRD claims for pennies on the dollar was the rule BEFORE Exxon. Exxon was no exception.
The DEP’s NRD program is weak because it lacks policy direction, is captured and controlled by the privatized site remediation program, lacks technical expertise, lacks adequate staff, and lacks enforceable regulations.
Passage and voter approval of SCR 39 would prevent the diversion of NRD settlement funds to the General Fund – but it would not address and in fact exacerbates serious underlying flaws that led to the Exxon disaster.
It would actually make them worse and let even more large corporate polluters off the hook, as an underfunded and downsized DEP were forced to settle for pennies on the dollar.
Additionally, the SCR 39 provides opportunities to:
1) restore huge cuts to State Parks maintenance, water resources and toxic site cleanup made by voters’ approval of the Open Space ballot question; and
2) assure that locally impacted communities are compensated.
Here is my letter to the sponsors asking for amendments – we should make a full court press to assure that prior cuts, particularly to State Parks, are fully restored and that DEP’s NRD and enforcement programs are not further starved by an arbitrary 5% cap on administrative costs. No private law firm would accept such a cap on compensation for settlement work.
[Update: could the 5% cap on DEP be a Trojan Horse, designed to starve the beast? Retaliation for this? Smith was prime sponsor for privatization of toxic site cleanup (Site Remediation Reform Act), so I would not be surprised if he’s again using the enviro’s as useful idiots:
From: “Bill” <bill_wolfe@comcast.net>
To: “senbsmith” <senbsmith@njleg.org>, “sengreenstein” <sengreenstein@njleg.org>
Cc: senlesniak@njleg.org
Sent: Tuesday, November 1, 2016 11:47:02 AM
Subject: SCR 39 – clarifications and amendments
“Amends Constitution to dedicate all State moneys received from settlements and awards in cases of environmental contamination for certain environmental purposes. ”
I write to suggest amendments to improve the bill and clarify certain issues to prevent unintended consequences.
1. Administrative costs
The SCR would limit the appropriations to State agencies to 5% for administrative costs.
One of the many issues to emerge from the recent Christie DEP Exxon NRD Settlement is that enforcement of these cases is not cheap.
Current DEP staffing levels for the NRD program are not adequate to manage the large backlog of NRD cases. In addition, DEP lacks in house scientific and technical expertise to effectively prosecute many complex contested cases. As a result, DEP often must hire contract consultant experts – or settle for paltry pennies on the dollar settlements.
DEP also lacks promulgated NRD regulations to bolster the legal enforceability of the NRD program (NJ Courts have rejected DEP NRD enforcement efforts due to lack of adopted regulations).
The Kanner law firm that managed the Exxon case – and their expert consultants – were compensated at far more than 5% of the settlement proceeds.
No private law firm in NJ would accept 5% of a civil settlement agreement as adequate compensation.
Finally, DEP and the Department of Law seek “cost recovery” actions to compensate the State for costs incurred as a result of the discharge of hazardous substance and/or natural resource injury. Those efforts must not be limited by the 5% administrative cost cap.
To address these kinds of issues, I suggest the following amendments:
a) define “administrative costs” to exclude DEP professionals and technical and legal consultants.
b) specifically exclude DEP and DoL “cost recovery” efforts from the SCR – or dedicate them to State agencies.
Passage of the SCR in its current form with the 5% cap would starve already under-resourced DEP programs and virtually guarantee that there would never again be anything like a large scale complex Exxon case, that the current limited DEP NRD and enforcement programs would persist, and perhaps they would be further scaled back due to lack of adequate resources.
2. Use of the funds
The first priority of the SCR should be to restore fully the previously CBT dedicated funds diverted by the Open Space Ballot approval, specifically for State parks maintenance, water resources, and hazards site remediation. This money should come off the top.
The public never supported and has been outraged to learn that these funds were diverted by the Open Space Question.
The second priority should be to allocate 50% of remaining revenues (after the above restoration) to the nearby communities that suffered the harms to natural resources and/or public health. This could b done via a requirement for a geographic regional nexus.
Finally, the remaining 50% would be allocated according to the current version, i.e.
“for any of the purposes enumerated in Article VIII, Section II, paragraph 6 of the State Constitution, “
3. Expand the scope to include all enforcement revenues
The SCR is not precise regarding the settlements and revenues covered. For example, would a Water Pollution Control Act or Freshwater Wetlands Act settlement be included within the scope of the SCR? Cost recovery? It appears not.
To promote the policy objectives of the SCR, all DEP enforcement revenues could be dedicated.
In conclusion, please keep in mind that the dedication of NRD settlement revenues was included in the introduced version of the Open Space SCR. Mysteriously, that provision was deleted instead of being expanded to include all enforcement and settlement revenues.
I appreciate your consideration of these amendments and would be glad to respond to your questions.
Respectfully,
Bill Wolfe
[Update – readers corrected a typo (wrong SCR #)and two errors – My poor writing created the mistaken impression that the Exxon $225 million settlement proceeds had been diverted into the budget already. Actually, the money has not been conveyed to the State and incorporated in the budget due to litigation. What Christie did was cap the use of settlement money for environmental purposes at $50 million and divert the rest to the General Fund. The Passaic settlement was involved as well, which I failed to mention.