The ExxonMobil probes are meant to determine whether the company decided to continue pulling oil out of the ground despite acknowledging global warming is a growing issue, the leader of the investigation told reporters Friday.
New York Attorney General Eric Schneiderman, who is leading the Exxon investigation, told The New York Times that the probes will flesh out whether Exxon overstated its assets by trillions of dollars, even as its internal research suggested the company should know better. If that is true, he said, then “there may be massive securities fraud here.”
“If, collectively, the fossil fuel companies are overstating their assets by trillions of dollars, that’s a big deal,” Schneiderman told The NYT. “And if the company’s own internal research shows that Exxon Mobil knows better, he added, then executives with the massive oil producer could be held legally liable.
The probe was initially meant to investigate concerns Exxon covered up internal reports from decades showing global warming as a legitimate issue, and one that could ultimately affect the company’s bottom line.
Schneiderman began his Exxon investigation in November, which, according to a New York Times report at the time, was “demanding extensive financial records, emails and other documents” from the oil producer dating all the way back to the 1970s. The New York attorney general also demanded information on global warming skeptic groups Exxon had once helped fund.
Schneiderman’s new position, however, depends on the idea that the oil company’s forecast could be viewed as fraudulent, which is ridiculous, Exxon spokesperson Alan Jeffers told reporters.
“If it turns out to be wrong, that’s not fraud, that’s wrong,” he said. “That’s why we adjust our outlook every year, and that’s why we issue the annual forecast publicly, so people can know the basis of our forecasting.”
The company also noted that allegations the company developed a fully fleshed out definition of global warming before leading climate scientists is “preposterous.”
The attorney general turned climate justice warrior’s evolving position may be due in part to recent news showing U.S. attorneys general have begun striking critical stances toward Schneiderman’s investigations.
Emails released by conservative legal group Energy & Environmental Legal Institute (E&E Legal) Thursday showed state attorneys general are not in lockstep with Schneiderman’s investigation.
“I just returned from the evening’s activities. I will update you tomorrow but clearly Eric is himself the wild card for all,” Iowa’s Deputy Attorney General Tam Ormiston wrote in an email to his communications director after attending a meeting with Schneiderman.
The shift in position may also be part of an effort to redefine the investigation, which has come under siege as legal analysts continue to criticize the original intent behind the crusade to take down Exxon.
Schneiderman’s subpoena into the company is an abuse of extraordinary powers, Merritt Fox, a professor of law at Columbia Law School, wrote Monday at National Law Journal. It allowed attorneys general (AGs) to subpoena private documents without either obtaining a court order or filing a complaint.
Fox argued that the Martin Act, which allows the attorney general to investigate and eventually prosecute companies for committing fraud, requires the likelihood that a reasonable investor would consider the omitted important information and decided “not to vote or buy, sell, or hold, and that it has to significantly alter a total mix of information available to this reasonable man or reasonable investor.”
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