The Terra News
13Jun/17Off

Settlements for Company Sins Can No Longer Aid Other Projects, Sessions Says


By TATIANA SCHLOSSBERG and HIROKO TABUCHIJUNE 9, 2017

Photo

pastedGraphic.pdf

Water and sediment gush out of a pipe in a project to restore the beaches near Port Fourchon, Louisiana. Much of the funding came from fines paid by BP from the devastating 2010 Deepwater Horizon oil spill.

Credit

William Widmer for The New York Times

When companies settle claims of wrongdoing, they are often compelled to pay for environmental or community development projects as well as pay fines and direct compensation to victims. Sometimes the third-party payments are only marginally related to the damages caused by the company’s actions.

To settle claims from the Gulf oil spill, BP was required to spend billions on coastal restoration projects that were not directly related to spill damage. Volkswagen is financing electric vehicle charging stations under its settlement of the diesel emissions cheating scandal. Duke Energy paid for soil restoration on federal land as part of its compensation for air pollution violations at some of its power plants in North Carolina.

That longstanding practice is now under attack on two fronts, potentially jeopardizing a source of financing for initiatives across the country that supporters say have paid great environmental and social dividends. Critics say the practice effectively creates “slush funds” for favored organizations or causes.

Attorney General Jeff Sessions, in a memo issued this week, directed the Justice Department to no longer include funding for projects managed by outside groups in settlements with corporate wrongdoers. The settlement money will instead go exclusively to the federal Treasury or to victims of the company’s actions, Mr. Sessions said.

“It has come to my attention that certain previous settlement agreements involving the department included payments to various nongovernmental, third-party organizations as a condition of settlement with the United States,” Mr. Sessions said. “These third-party organizations were neither victims nor parties to the lawsuits. The department will no longer engage in this practice.”

The policy applies only to future cases.

A bill with similar intent, sponsored by Robert W. Goodlatte, Republican of Virginia, passed a House committee in February. It would prevent the government from using settlement money from civil cases for purposes other than direct victim compensation or remediation, like cleanups of environmental disasters. A version of the bill passed the House last year, but died in the Senate.

This year, groups including the Competitive Enterprise Institute and Americans for Prosperity, both closely linked to the libertarian billionaire brothers Charles G. and David H. Koch, wrote to President Trump criticizing a recent settlement between the Obama administration’s Justice Department and Volkswagen.

The $14.7 billion settlement, over Volkswagen’s use of “defeat devices” to cheat emissions rules, included almost $2 billion that Volkswagen was required to invest in electric vehicle charging stations and other clean vehicle technology. The settlement also directed Volkswagen to pay $2.7 billion to programs that would reduce pollution from diesel cars and trucks. Volkswagen had been accused of manufacturing cars that spewed harmful nitrogen oxides at up to 40 times the levels allowed under the Clean Air Act.

Some of the money was in effect going to pay for clean air initiatives championed by President Barack Obama, the conservative groups said, initiatives that Congress twice refused to fund.

“Having been twice spurned by lawmakers, the Obama administration leveraged the Volkswagen settlement,” the groups charged. All settlement money, they argued, should “instead be deposited into the U.S. Treasury.”

The groups said that Congress has not authorized or provided money for electric vehicle infrastructure. They said the plan represents “an end-run around Congress’s lawmaking power.”

https://www.nytimes.com/2017/06/09/us/politics/settlements-sessions-attorney-general.html?ref=energy-environment&_r=0

Share This Post
Comments (0) Trackbacks (0)

Sorry, the comment form is closed at this time.

No trackbacks yet.