Exxon Says NY Distorting Climate Record in Fraud Probe

(Bloomberg) -- Exxon Mobil Corp. accused New York Attorney General Eric Schneiderman of wildly distorting in court how the company calculates the long-term financial impact of climate change on its assets.

Last week, Schneiderman for the first revealed detailed findings from a two-year probe, including " significant evidence" that Exxon may have used two sets of numbers -- one public and one secret -- to calculate the impact of global warming on its reserves.

That filing was “filled with inflammatory, reckless and false allegations of an ‘ongoing fraudulent scheme’ and ‘sham’ business practices," Irving, Texas-based Exxon said Friday in a court filing in Manhattan. The oil giant urged a judge to reject a fresh subpoena in the case.

The dispute is heating up as Republicans in Washington consider their next step after Schneiderman said in February he’d ignore a subpoena issued in a related probe by the House Committee on Science, Space, and Technology, which seeks to derail his investigation. The lawmakers claim Schneiderman may have improperly coordinated his probe with environmentalists and violated the free speech rights of scientists who disagree with climate change.

A hearing in Schneiderman’s case is scheduled for June 16 in Manhattan.

Exxon will argue that Schneiderman, who has received millions of pages of the company’s internal documents, overlooked or ignored evidence that it uses calculations other than proxy costs to account for climate change in many scenarios. It also says the attorney general failed to interview Exxon employees who could have explained the matter in detail.

Schneiderman’s probe is a cover for the attorney general’s “transparent political ambitions," Exxon said in its filing on Friday.

Exxon has a separate lawsuit against Schneiderman pending in federal court in New York in which the company seeks to force an end to the probe on the grounds that it was started in “bad faith" as part of an environmental witch hunt.

“From the outset of this investigation, it has been clear that the attorney general is working backwards from an assumption of ExxonMobil’s guilt, searching in vain for some theory to support his prejudgment,” the company said in the filing.

Schneiderman’s filing last week focused on Exxon’s claim that it applies so-called proxy costs to greenhouse gas emissions to approximate "the range of potential future government actions with respect to climate change." The attorney general said Exxon may have vastly exaggerated its use of such calculations to mollify investors.

“The Attorney General’s office has a substantial basis to suspect that Exxon’s proxy cost analysis may have been a sham," spokeswoman Amy Spitalnick said in an email. “This office takes potential misrepresentations to investors very seriously and will vigorously seek to enforce this subpoena."

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net. To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net Peter Blumberg, Joe Schneider.

Copyright 2017 Bloomberg News.

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Steve Gar | Jun. 13, 2017
this reminds me of the shakedown of the insurance companies and broker/agents that NY conducted. Using the ruse of brokers were paid secret commissions for selling their products, they forced guilty pleas and levied fines high enough that it nearly balanced the NY state budget. The insurers following a standard practice that paid a broker for their services (of selling their products)...now the customer pays the commission and fees, so it was a new tax. This will result in the same, when they get a guilty plea, they will use this to extort funds from other oil companies, prices will rise to cover...a hidden TAX

Steve Ratcliff | Jun. 12, 2017
I think that the attorney general of New York is a crook.....very dishonest person. Trying to extort money from Exxon.


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