Oil giants could face massive claims after New York attorney general probes Exxon Mobil on climate change
10 November 2015
An old statute that gives New York state prosecutors unusually broad authority to prosecute securities fraud could prove a powerful weapon as Attorney General Eric Schneiderman probes Exxon Mobil Corp over whether the oil firm mislead the public and shareholders about the perils of climate change.
The 1921 Martin Act, a wide-reaching state law, was dusted off in the early 2000s by former New York Attorney General Eliot Spitzer who used it to aggressively target Wall Street firms.
Now, Schneiderman is wielding the statute in his probe of Exxon, the world's largest publicly traded oil company. He subpoenaed Exxon on November 4, demanding extensive financial records, emails and other documents to probe the company's knowledge and disclosures about climate change going back to the 1970s.
Prosecutors might seek to investigate other companies that helped to fund organisations that queried climate science, such as the Global Climate Coalition, of which BP and Shell were members during the 1990s, industry observers said.
Investigators are likely to search for discrepancies between the companies’ private and public statements for evidence that oil groups may have dismissed the dangers posed by climate change to shareholders and the public, while being advised privately that it was a serious threat.
Experts say that internal company documents may contradict what Exxon Mobil said in public about climate change, potentially opening up a legal argument that it failed to warn its shareholders or the public about risks that its scientists were aware of.
Exxon Mobil has strenuously denied the allegations being made against it. “We unequivocally reject the allegations that Exxon Mobil has suppressed climate-change research,” a spokesman said.
An investigation by the Los Angeles Times found evidence of discrepancies in statements made about climate change between Exxon Mobil scientists and the group’s top management.
In 1990, the board said that an “examination of the [climate change] issue supports the conclusions that the facts today and the projection of future effects are very unclear”.
However, at about the same time, Ken Croasdale, an Exxon Mobil scientist working on Arctic oil projects in Canada, told an engineering conference: “Certainly any major development with a lifespan of say 30 to 40 years will need to assess the impacts of potential global warming. This is particularly true of Arctic and offshore projects in Canada, where warming will clearly affect sea ice, icebergs, permafrost and sea levels.”
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