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State and local briefly

Posted: Friday, February 11, 2000

Administration defends BP legal fee decision

JUNEAU - The Knowles administration is defending its decision to let BP Amoco pay for the state's legal battle on behalf of the company's proposed takeover of Atlantic Richfield Co.

The company already has reimbursed the state $1.5 million for the investigation that led to a settlement, known as a charter, with BP Amoco. The charter also allows the state to seek more money to challenge the Federal Trade Commission's decision to block the merger.

That has prompted sharp criticism from some lawmakers and others opposed to the merger.

``What does that do for our ability to remain independent?'' asked Rep. Beth Kerttula, a Juneau Democrat and vocal critic of the merger. ``It's the appearance of impropriety that smells,'' said Sen. Sean Parnell, an Anchorage Republican.

Attorney General Bruce Botelho defended the arrangement as partly ordinary and partly unique. When states negotiate with companies going through mergers, they routinely seek legal costs as part of a final settlement, Botelho said. ``When we undertake these kinds of investigations it should be the companies and not the public who have to bear the cost,'' Botelho said.

He cited the recent Carrs-Safeway merger as an example. The state got attorney fees in that agreement, Botelho said, along with money to monitor the deal to make sure the state's interests were protected.

The $1.5 million BP Amoco paid the state as part of the charter settlement was no different than any other settlement, Botelho said.

He said he understands how some might find that arrangement questionable, but maintains the state has not sacrificed its interests. ``What we have here is our effort to defend the terms of the settlement embodied in the charter,'' Botelho said. ``Our interests are not necessarily totally aligned with those of BP.''

Botelho wouldn't disclose how much of BP Amoco's money the state expects to spend fighting the FTC, saying it might give away legal strategy. ``How we've specifically allocated what goes toward the case is something that we hold pretty close to the vest,'' he said.



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