New York AG Shifts Exxon Climate Investigation Amid Waning Support
With waning support from other state's attorney's general for his climate lawsuits, New York AG Eric Schneiderman is now focusing Exxon's reports to investors.
Seventeen state attorneys general (AGs) are backing away from their prior commitment to New York Attorney General Eric Schneiderman’s investigation of ExxonMobil’s past climate research.
As a result, Schneiderman’s investigation is shifting its focus from what Exxon knew about climate change and what research Exxon funded to what it has told its investors about the potential effect laws and regulations being considered by governments around the world could have on its oil and gas operations and future development plans.
Of the 17 AGs originally involved in the investigation—15 Democrat state AGs, one Democrat from the District of Columbia, and one Independent from the Virgin Islands—few ultimately pursued any legal action. The 17 AGs had joined Schneiderman at a press conference held on March 29 to announce a joint effort called AGs United for Clean Power, which promised to investigate and potentially prosecute Exxon and other companies, researchers, and think tanks that have questioned the theory of catastrophic human-caused climate change.
Most of the AGs backed out of the effort, refusing to sign on to Schneiderman’s suggested “division of labor” and rejecting his “Common Interest Agreement,” which was designed to hide their collaboration with environmental groups.
The only two AGs besides Schneiderman to take substantive action after the press conference have now halted their legal proceedings against Exxon. The Virgin Islands attorney general closed his probe and withdrew his subpoenas and the Massachusetts AG has suspended her investigation.
E-Mails Expose Concerns
E-mails obtained by the Energy & Environment Legal Institute (EELI) reveal various state AGs questioned Schneiderman’s strategy for going after Exxon from the beginning.
For example, prior to the March press conference, the director of communications for Virginia’s AG said he was concerned- the draft press release suggested the AGs would be working together on investigations, but, as he stated in an e-mail, “At this point, we don’t know what we’re going to agree to, or really what Virginia’s laws and our authorities could allow us to do, so it makes me nervous to say we’ve ‘agreed to work together’ on key investigations.”
The e-mails also show Vermont’s AG suggested the entire event should be scaled back to avoid publicity, giving states more time to understand the legal basis for Schneiderman’s investigation.
“These e-mails help explain why Schneiderman found himself going from seventeen Doppelgängers one day to being almost completely alone within mere weeks of his bombastic ‘publicity stunt’ press conference with former Vice President [Al] Gore,” said Chris Horner, senior legal fellow for EELI, in a press release issued after the e-mails were released. “His untethered political crusade was just too much for even like-minded activist AGs he personally selected.”
Investigation Shifts Focus
With Schneiderman alone in his pursuit of Exxon, he has shifted the focus of his investigation from what Exxon knew about climate change based on research it funded to what it is saying about Exxon’s future prospects in the face of possible climate change regulations. An article appearing in the August 21 issue of the New York Post quotes Schneiderman saying, “Exxon might be overstating the value of its reserves, by failing to discount for the risk that climate warriors might drastically limit the use of carbon fuels … [Exxon could be] overstating their assets by trillions … [amounting to a] massive securities fraud.”
David Schnare, general counsel for EELI, says some AGs are stonewalling the public’s right to access the e-mails, but he says the ones released so far demonstrate the AGs had collaborated with environmental foundations.
“We have obtained many records, but for the most part, the AGs are stonewalling,” said Schnare. “What we have learned so far is that this is a sordid story about how dark money, much of it from the Rockefeller foundations, has expanded its funding of climate alarmism by co-opting some state attorneys general, giving New York AG Eric Schneiderman the lead role.
“Their investigation was, and was viewed as, nothing more than an attempt to stifle free speech,” Schnare said. “They were pilloried by legal scholars on both the left and the right, as well as by many other state attorneys general who had not joined their now not-so-merry band.
“The immediate result was most of the original 17 AGs that worked with Schneiderman have walked away from his efforts,” Schnare said.
“Realizing his racketeering probe is a failure, Schneiderman is falling back on his old approach [of] using unfounded accusations corporations have not made stockholder disclosures that tell the truth about the effect of government policy on the value of their assets,” Schnare said. “In essence, Schneiderman threatens a company with an investigation and the company folds, giving New York money and a promise to not do what they hadn’t done in the first place. This is the least-costly way to deal with such a Schneiderman attack.
“This time it probably isn’t going to work, because a corporation’s predictions about the effect of government action on asset value is just that, a prediction,” said Schnare. “Even when the prediction turns out to be in error, the norm with predictions, it isn’t fraud and isn’t subject to enforcement and subsequent punishment.”
H. Sterling Burnett, Ph.D. (email@example.com) is the managing editor of Environment & Climate News.