Almost Two-Thirds of the Payments Made to Date Have Been Used for Damage Assessment and Cleanup or Habitat Acquisition

As of September 30, 1997, $198 million, or 32 percent, of the amount paid by Exxon had been used to reimburse federal and state agencies for oil spill cleanup or damage assessment or to credit Exxon for similar work the company had done itself. About $99 million of Exxon’s payments through September 30, 1997, had not been disbursed. Most Funded Activities Are Consistent With the Agreement and Restoration Plan, but Some Exceptions Persist

For the most part, the approved activities to help restore injured resources funded by the Trustee Council—habitat acquisition, general restoration, and monitoring and research—appear consistent with the agreement and the policies in the restoration plan. For the habitat acquisition activities, we reviewed the nine large parcel purchases and found that they were located in the oil spill area and were to either help or enhance damaged resources. Through the end of fiscal year 1997, the council had completed actions to acquire about 456,000 acres of land in fee simple and in easements in the spill area at an overall cost of $265 million. The council paid 2-1/2 times the government appraisal value for these three large parcels—about $88 million, compared with an appraised value of $34 million. Public Participation Process for Land Acquisition Similar to the Process for Other Restoration Activities

The public participation processes followed by the Trustee Council for acquiring land and approving other restoration activities such as monitoring, research, and general restoration projects are similar. Return on Settlement Funds Could Be Increased

Independent auditors hired by the Trustee Council have noted two opportunities for increasing the return on Exxon settlement funds. Funds disbursed from CRIS to Alaska for approved restoration activities are deposited in the State of Alaska, Exxon Valdez Oil Spill Settlement Trust. The Trustee Council disagreed with our statement that the funding of three research projects identified in the report—regarding sockeye salmon, killer whale, and pink salmon—appear questionable because the projects may not be sufficiently linked to the oil spill or should be considered part of a federal or state agency’s existing mission. We reviewed various documentation, including the memorandum of agreement between the federal government and Alaska and the Trustee’s Council restoration plan, which, in essence, represents the council’s implementing policies for carrying out council activities. In addition, we interviewed the Executive Director of the Trustee Council, council staff, and Department of Justice officials in Anchorage and in Washington, D.C.
To determine whether the council has funded activities that may not be consistent with the memorandum of agreement, we examined the requirements of the agreement for funded projects as well as the council’s implementing policies, such as the restoration plan. To determine how the prices paid for land acquisitions compare with government land appraisals and whether the public participation process for the habitat protection acquisition program is similar to the public participation process for other types of restoration actions, we reviewed the council’s habitat acquisition plans for both large and small acquisitions; government appraisal documents that describe the appraisal process; council documents that show the location, acreage, type of property acquired for each acquisition, the government appraisal value, and the amount paid for each parcel. A recorded menu will provide information on how to obtain these lists.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the management of the Exxon Valdez settlement funds, focusing on: (1) how much Exxon had paid, to whom the funds had been disbursed, and how the money had been used; (2) whether the Trustee Council has funded activities that may not be consistent with the agreement and the council's implementing policies; (3) how the prices paid for land acquisitions compare with government land appraisals; (4) if the public participation process for the habitat acquisition program is similar to that used for other restoration actions; and (5) whether the trust funds are being managed to maximize the overall returns.

What GAO Found

GAO noted that: (1) through the end of fiscal year 1997, Exxon had made settlement payments of $620 million; (2) $521 million has been reimbursed or disbursed for various activities; (3) these funds were to: (a) reimburse agencies or credit Exxon for oil spill cleanup or damage assessment costs ($198 million); (b) buy land to protect or enhance damaged resources ($187 million); (c) conduct monitoring, research, or restoration projects ($116 million); and (d) provide administrative, science management, public information and related costs ($20 million); (4) the remaining $99 million represents funds not yet disbursed; (5) most of the activities funded by the Trustee Council appear consistent with the terms of the memorandum of agreement and the council's implementing policies; (6) all of the activities that dealt with habitat acquisition and general restoration and most research and monitoring activities appeared consistent with the agreement and restoration plan in that they were linked to the oil spill, limited to restoration of natural resources in Alaska, and included in the types of restoration activities specified in the memorandum of agreement between the federal government and the state of Alaska; (7) a few monitoring and research projects have been funded even though they have questionable linkage to the spill or appear to run counter to the Trustee Council's policy of not funding projects that would normally be funded by a federal or state agency; (8) the Trustee Council has paid about 56 percent above the government-appraised value for the lands it has acquired; (9) nearly all the amount paid above the government-appraised value is a result of five large parcel acquisitions; (10) for these five acquisitions, involving about 360,000 acres bought outright or containing some type of easement, the council paid from 2 to almost 4 times the government-appraised value; (11) the public participation process followed by the Trustee Council for acquiring land is similar to the process followed for decisions on other restoration activities; (12) GAO found that the council's processes for both habitat acquisition and other restoration activities appear to provide ample opportunities for the public to review information and comment; and (13) the Trustee Council's independent auditors have identified two major ways for increasing returns on settlement funds.