Reimbursement is legal and correct

Posted: Tuesday, February 22, 2000

Questions have been raised recently about BP reimbursing the State of Alaska for the state's legal expenses in connection with the company's proposed acquisition of Arco. We, the undersigned attorneys general who served under four governors, Bill Egan, Jay Hammond, Bill Sheffield, and Steve Cowper, wish to make the following points about this matter.

The payment of legal expenses by a company to a state as a result of an antitrust judgment or settlement is a long-established policy in Alaska and other states. Alaska has followed this policy since its antitrust law was passed in 1975 and its consumer protection laws were adopted in 1970, and there are numerous examples of companies reimbursing such legal costs during this time.

The charter signed by the state and BP was a settlement of claims Alaska might have brought under Alaska's antitrust law. Therefore, any legal expenses incurred by the state as a part of that settlement, including defending the charter in court, should not burden Alaskans, but should be reimbursed to the state treasury by BP. Incumbent Attorney General Bruce Botelho and Gov. Tony Knowles were correct in the negotiating this provision as a part of the charter.

Many people appear to be under the misimpression that BP will be responsible for directly paying the state's bills month by month. That is not the case. All money spent by the Department of Law in negotiating the settlement with BP and defending the settlement in federal court already had been appropriated by the Legislature. As part of the obligations BP incurred in the settlement, it agreed to reimburse the state for these already appropriated funds. BP has nothing to say about how the funds are spent; they have no control over the state's legal position. Their only obligation is to pay back the money that the Legislature has authorized.

Requiring a company to reimburse a state for antitrust enforcement is sound public policy, which protects the state's independence without being a financial burden to its citizens.

Avrum GrossWilson CondonNorman Gorsuch and Grace Schaible

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