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."
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