Exxon Mobil Investigated for Possible Climate Change Lies by

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Exxon Mobil Investigated for Possible Climate Change Lies by

Postby admin » Tue Dec 08, 2015 12:34 am

Exxon Mobil Investigated for Possible Climate Change Lies by New York Attorney General
By JUSTIN GILLIS and CLIFFORD KRAUSS
NOV. 5, 2015

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An Exxon Mobil refinery in Los Angeles, Calif. The New York attorney general is investigating the oil and gas company. Credit T. Fallon/Bloomberg, via Getty Images

The New York attorney general has begun an investigation of Exxon Mobil to determine whether the company lied to the public about the risks of climate change or to investors about how such risks might hurt the oil business.

According to people with knowledge of the investigation, Attorney General Eric T. Schneiderman issued a subpoena Wednesday evening to Exxon Mobil, demanding extensive financial records, emails and other documents.

The investigation focuses on whether statements the company made to investors about climate risks as recently as this year were consistent with the company’s own long-running scientific research.

The people said the inquiry would include a period of at least a decade during which Exxon Mobil funded outside groups that sought to undermine climate science, even as its in-house scientists were outlining the potential consequences — and uncertainties — to company executives.

Kenneth P. Cohen, vice president for public affairs at Exxon Mobil, said on Thursday that the company had received the subpoena and was still deciding how to respond.

“We unequivocally reject the allegations that Exxon Mobil has suppressed climate change research,” Mr. Cohen said, adding that the company had funded mainstream climate science since the 1970s, had published dozens of scientific papers on the topic and had disclosed climate risks to investors.

Mr. Schneiderman’s decision to scrutinize the fossil fuel companies may well open a new legal front in the climate change battle.

The people with knowledge of the New York case also said on Thursday that, in a separate inquiry, Peabody Energy, the nation’s largest coal producer, had been under investigation by the attorney general for two years over whether it properly disclosed financial risks related to climate change. That investigation was not previously reported, and has not resulted in any charges or other legal action against Peabody.

Vic Svec, a Peabody senior vice president, said in a statement, “Peabody continues to work with the New York attorney general’s office regarding our disclosures, which have evolved over the years.”

The Exxon inquiry might expand further to encompass other oil companies, according to the people with knowledge of the case, though no additional subpoenas have been issued to date.

The people spoke on the condition of anonymity, saying they were not authorized to speak publicly about investigations that could produce civil or criminal charges. The Martin Act, a New York state law, confers on the attorney general broad powers to investigate financial fraud.

To date, lawsuits trying to hold fuel companies accountable for damage they are causing to the climate have failed in the courts, but most of those have been pursued by private plaintiffs.

Attorneys general for other states could join in Mr. Schneiderman’s efforts, bringing far greater investigative and legal resources to bear on the issue. Some experts see the potential for a legal assault on fossil fuel companies similar to the lawsuits against tobacco companies in recent decades, which cost those companies tens of billions of dollars in penalties.

“This could open up years of litigation and settlements in the same way that tobacco litigation did, also spearheaded by attorneys general,” said Brandon L. Garrett, a professor at the University of Virginia School of Law. “In some ways, the theory is similar — that the public was misled about something dangerous to health. Whether the same smoking guns will emerge, we don’t know yet.”

In the 1950s and ’60s, tobacco companies financed internal research showing tobacco to be harmful and addictive, but mounted a public campaign that said otherwise and helped fund scientific research later shown to be dubious. In 2006, the companies were found guilty of “a massive 50-year scheme to defraud the public.”

The history at Exxon Mobil appears to differ, in that the company published extensive research over decades that largely lined up with mainstream climatology. Thus, any potential fraud prosecution might depend on exactly how big a role company executives can be shown to have played in directing campaigns of climate denial, usually by libertarian-leaning political groups.

For several years, advocacy groups with expertise in financial analysis have been warning that fossil fuel companies might be overvalued in the stock market, since the need to limit climate change might require that much of their coal, oil and natural gas be left in the ground.

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Attorney General Eric T. Schneiderman of New York, shown in May, issued a subpoena Wednesday demanding extensive financial records, emails and other documents from the company. Credit Hans Pennink/Associated Press

The people with knowledge of the case said the attorney general’s investigation of Exxon Mobil began a year ago, focusing initially on what the company had told investors about the risks that climate change might pose to its business.

News reporting in the last eight months added impetus to the investigation, they said. In February, several news organizations, including The New York Times, reported that a Smithsonian researcher who had published papers questioning established climate science, Wei-Hock Soon, had received extensive funds from fossil fuel companies, including Exxon Mobil, without disclosing them. That struck some experts as similar to the activities of tobacco companies.

More recently, Inside Climate News and The Los Angeles Times have reported that Exxon Mobil was well aware of the risks of climate change from its own scientific research, and used that research in its long-term planning for activities like drilling in the Arctic, even as it funded groups from the 1990s to the mid-2000s that denied serious climate risks.

Mr. Cohen, of Exxon, said on Thursday that the company had made common cause with such groups largely because it agreed with them on a policy goal of keeping the United States out of a global climate treaty called the Kyoto Protocol.

“We stopped funding them in the middle part of the past decade because a handful of them were making the uncertainty of the science their focal point,” Mr. Cohen said. “Frankly, we made the call that we needed to back away from supporting the groups that were undercutting the actual risk” of climate change.

“We recognize the risk,” Mr. Cohen added. He noted that Exxon Mobil, after an acquisition in 2009, had become the largest producer of natural gas in the United States.

Because natural gas creates far less carbon dioxide than coal when burned for electricity, the company expects to be a prime beneficiary of President Obama’s plan to limit emissions. Exxon Mobil has also endorsed a tax on emissions as a way to further reduce climate risks.

Whether Exxon Mobil began disclosing the business risks of climate change as soon as it understood them is likely to be a major focus of the New York case. The people with knowledge of the case said the attorney general’s investigators were poring through the company’s disclosure filings made since the 1970s, but were focusing in particular on recent statements to investors.

Exxon Mobil has been disclosing such risks in recent years, but whether those disclosures were sufficient has been a matter of public debate.

Last year, for example, the company warned investors of intensifying efforts by governments to limit emissions. “These requirements could make our products more expensive, lengthen project implementation times and reduce demand for hydrocarbons, as well as shift hydrocarbon demand toward relatively lower-carbon sources such as natural gas,” the company said at the time.

But in another recent report, Exxon Mobil essentially ruled out the possibility that governments would adopt climate policies stringent enough to force it to leave its reserves in the ground, saying that rising population and global energy demand would prevent that. “Meeting these needs will require all economic energy sources, especially oil and natural gas,” it said.

Wall Street analysts on Thursday were uncertain whether the case would inflict long-term damage on the company, which has already suffered from a plunge in commodity prices.

“This is not good news for Exxon Mobil or Exxon Mobil shareholders,” said Fadel Gheit, a senior oil company analyst at Oppenheimer & Company. “It’s a negative, though how much damage there will be to reputation or performance is very hard to say.”

John Schwartz contributed reporting.
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Re: Exxon Mobil Investigated for Possible Climate Change Lie

Postby admin » Wed May 25, 2016 4:37 am

Exxon and Its Allies Invoke First Amendment to Fight Climate Fraud Probes: Lawyers hired by Exxon and CEI have experience waging long battles with government attorneys on controversial issues, including tobacco.
by Neela Banerjee
April 22, 2016

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Massachusetts Attorney General Maura Healey, center, joined a coalition of her colleagues seeking climate action and considering investigations of Exxon. Credit: Reuters

Exxon, the Competitive Enterprise Institute and their allies are invoking free speech protections in a pugnacious pushback against subpoenas from attorneys general seeking decades of documents on climate change. Their argument is that the state-level investigations violate the First Amendment rights of those who question climate science.

Exxon has sued to block a subpoena issued by the attorney general of the U.S. Virgin Islands, and in an unusual step, named as a defendant the Washington, D.C. law firm and attorney representing the territory in the inquiry. In its complaint against the Virgin Islands subpoena, Exxon wrote, "The chilling effect of this inquiry...strikes at protected speech at the core of the First Amendment."

In a pointed letter to Virgin Islands Attorney General Claude Walker on April 20, CEI's attorney called the subpoena "offensive" and "un-American," and warned to "expect a fight." Andrew Grossman, outside counsel for CEI, wrote, "You have no right to wield your power as a prosecutor to advance a policy agenda by persecuting those who disagree with you."

The conservative non-profit Energy & Environment Legal Institute, an ally of CEI, recently released emails that show that the attorneys general considering investigating Exxon were briefed by two environmentalists. E&E got the emails through a Freedom of Information Act request to the Vermont attorney general's office. Though such meetings with environmental and industry advocates are widely considered routine, E&E described the meetings as secretive collusion, an idea that has been echoed on conservative websites and among some mainstream media outlets.

The AGs have not changed course amid the counterattack. But Exxon and its allies appear to be aiming as much at public opinion as at state law enforcement. After InsideClimate News and later the Los Angeles Times published stories last year detailing Exxon's cutting edge climate research in the 1970s and its subsequent efforts to disparage climate science, the company initially argued it has conducted climate science without interruption for 40 years. It also answered a subpoena by New York Attorney General Eric Schneiderman and produced 10,000 pages of records by the end of 2015.

Now, its emphasis appears to have shifted. As the company tries to defend its climate contrarian stance, Exxon argues that it has voiced honest dissent on the science that a conspiracy of environmentalists and attorneys general wants to silence. "Our critics, on the other hand, want no part of that discussion. Rather, they seek to stifle free speech and limit scientific inquiry while painting a false picture of ExxonMobil," spokeswoman Suzanne McCarron wrote in a post on the company's blog on April 20 titled "The Coordinated Attack on ExxonMobil."

Exxon and CEI's lawyers have experience waging long battles with government attorneys on controversial cases. Exxon's law firm Paul, Weiss, Rifkind, Wharton & Garrison and CEI's attorneys, BakerHostetler, represented the tobacco industry for years. Exxon's firm also represents the National Football League as it deals with the scandal over its concussion research.

CEI's lawyers, Andrew Grossman and David Rivkin, have launched a project called Free Speech in Science, which aims to "stop the intimidation" of those who disagree with accepted climate science. In an op-ed in the Wall Street Journal, the lawyers compared climate deniers to Galileo and added, "As the scientific case for a climate-change catastrophe wanes, proponents of big-ticket climate policies are increasingly focused on punishing dissent from an asserted 'consensus' view."

Christopher Horner is a senior fellow at CEI and a fellow at E&E Legal. Horner and his colleague, David Schnare, have a long history of submitting Freedom of Information Act requests for the emails and documents of leading climate scientists, such as NASA's James Hansen, and government officials, such as former EPA administrator Lisa Jackson. In one of their most public efforts, Horner and Schnare, then working as part of the American Tradition Institute, unsuccessfully attempted to gain access to the papers of climate scientist Michael Mann during his tenure at the University of Virginia.

Schnare denied that E&E's current FOIA request to the Vermont attorney general's office was done in partnership with CEI. E&E has filed requests with other states, he said. "Because this is an evolving story, and as we learn more about the extent of this conspiracy, we will continue our investigation, following the coordination and collusion wherever they lead," Schnare wrote in an email.

The Vermont documents that E&E shared in a press release show that attorneys general met in March for 45 minutes each with Peter Frumhoff of the Union of Concerned Scientists and Matt Pawa, a lawyer who has sued fossil fuel companies over climate change.

E&E said the emails showed the AGs "secretly teamed up with anti-fossil fuel activists in their investigations against groups whose political speech challenged the global warming policy agenda."

"The office routinely collaborates with other states and receives input from outside organizations," said Matt Mittenthal, a spokesman for New York Attorney General Eric Schneiderman. "Ultimately, decisions on which cases we pursue are based solely on the merits and the law—and nothing else."

Attorneys general for several fossil-fuel friendly states have also joined the chorus decrying the investigations. Like Exxon and CEI, they have framed the issue as one of free speech. "It is one thing to use the legal system to pursue public policy outcomes; but it is quite another to use prosecutorial weapons to intimidate critics, silence free speech, or chill the robust exchange of ideas," Louisiana Attorney General Jeff Landry said in March.

Walker, however, has countered by saying, "the First Amendment does not shield any company from being investigated for fraud."

ICN reporter Phil McKenna contributed to this story.
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