Posted by News Express | 3 June 2017 | 1,259 times
New York’s top prosecutor on Friday accused Exxon Mobil of misleading investors about how it accounts for climate change risks, court filings show, offering a rare look inside an ongoing fraud investigation as it pressed the company to turn over more documents.
Attorney General Eric Schneiderman said in a court filing he had evidence of “potential materially false and misleading statements by Exxon” that could have led investors to think the U.S. oil giant company properly assessed the risks when it actually ignored a formula to estimate the impact of future environmental regulation on new deals.
Schneiderman’s filing came a day after President Donald Trump announced plans to withdraw the United States from the Paris climate accord, in which nearly 200 countries pledged to lower their greenhouse gas emissions to try to slow global warming. World leaders and many U.S. executives condemned the decision.
“ExxonMobil’s external statements have accurately described its use of a proxy cost of carbon, and the documents produced to the Attorney General make this fact unmistakably clear,” said Exxon spokesman Scott Silvestri. “We will respond fully to the Attorney General’s inaccurate and irresponsible allegations about proxy cost in our court filings.”
‘MAY BE A SHAM’
Schneiderman’s filing focused on the method Exxon used to give its investors estimates of the regulatory cost of greenhouse gas emissions on new projects. The company frequently showed investors a number it called a “proxy cost” for greenhouse gasses as a way to assure them it was accounting for potential changes to government policy that would make producing and burning fossil fuels more expensive.
“The exercise described to investors may be a sham,” Schneiderman wrote, because Exxon may not have actually applied it when estimating profits and losses on its investments.
“Exxon’s own documents suggest that if Exxon had applied the proxy cost it promised to shareholders, at least one substantial oil sands project may have projected a financial loss, rather than a profit, over the course of the project's original timeline,” Schneiderman wrote.
The New York prosecutor is not the only authority examining Exxon’s climate-related statements to investors. Exxon said on Sept. 20 the U.S. Securities and Exchange Commission was investigating how it valued its oil and gas reserves in the wake of low prices and potential curbs on carbon emissions.
Exxon has been fighting Schneiderman’s requests for information about its climate change policies in both state and federal court, claiming it should not have to turn over records because the New York prosecutor’s probe is politically motivated and abusive to the company.
Its resistance has created a highly unusual condition: State and federal prosecutors normally only reveal their findings once they’ve completed the process and are ready to file charges.
But Exxon’s attempts to fight Schneiderman’s subpoenas – it even sued Schneiderman and Massachusetts Attorney General Maura Healey, who is also probing the company, in federal court – have led Schneiderman to use evidence he’s uncovered so far to argue his case for why Exxon should be forced to hand over more documents.
Exxon has already turned over 2 million documents as part of the investigation, leading to the discovery that Secretary of State Rex Tillerson, who until December was chief executive of Exxon, used a separate email address and an alias, “Wayne Tracker,” to discuss climate change-related issues while at the company.
Schneiderman is seeking records he says Exxon has been withholding, as well the ability to interview Exxon employees who might know about Exxon's internal climate change discussions.
On May 23, a New York State appeals court ruled Exxon should turn over records Schneiderman was requesting.
Exxon shares were down 1.5 percent Friday at $79.49. Crude prices fell on worries Trump’s decision to withdraw from the global climate accord could ultimately result in an overabundance of oil production. (Reuters)
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