Longtime ExxonMobil CEO and former Secretary of State Rex Tillerson testified in a case pitting the company against the state of New York. ExxonMobil faces civil charges of defrauding investors by funding climate denial, even as its own scientists studied the climate impacts of fossil fuel extraction.
DIMITRI LASCARIS: This is Dimitri Lascaris reporting for The Real News Network from Montreal, Canada.
Rex Tillerson has worn different hats in recent years. A long time and now retired Exxon Mobil CEO, a Secretary of State under President Donald Trump, and now a witness called to court in a case pitting Exxon against the State of New York for the company’s role in financing climate change denial campaigns. On October 30th, Tillerson testified before the Manhattan Supreme Court. He was examined by the company’s own legal counsel, Ted Wells, and was cross-examined by an attorney for the New York Attorney General’s Office.
In his testimony, Tillerson denied that the company misled investors on the causes and impacts of climate change as the New York Attorney General has alleged. New York State’s Attorney General also alleges the company covered up the potential costs investors would incur due to regulations which might be implemented to halt global heating. In his testimony, Tillerson claimed that ExxonMobil “took the issue quite “seriously.” He also said, “Climate change will be with us forever.” But at the same time, he admitted that he didn’t ever recall greenhouse gas costs being a determining factor in any decision made at ExxonMobil. The testimony came as Massachusetts brought a similar lawsuit against the company and as news broke that the company hid the climate impacts of extracting tar sands oil in Alberta, one of the largest and dirtiest deposits of crude oil on the planet.
Here to talk about it and the broader context are two guests. Alex Kaufman is an award-winning senior reporter to Huff Post covering climate change, energy, and environmental policy. He has reported from Brazil, Greenland, China, and Vietnam. Todd Paglia is the Executive Director of the group Stand.earth, which has worked on the broader campaign documenting what Exxon knew about climate change and he formerly worked as a consumer advocacy attorney for Ralph Nader. Thank you both for coming onto The Real News today, gentlemen.
TODD PAGLIA: Thank you.
ALEX KAUFMAN: Thanks for having me.
DIMITRI LASCARIS: So Alex, let’s start with you. You’ve attended the trial. You’re based in New York City. What has it been like inside the courtroom and what are your big takeaways from the Tillerson testimony?
ALEX KAUFMAN: Well, so, just to be clear, I was not in the courtroom, but I’ve been closely following this as it has developed. I mean, the big takeaway here is that Rex Tillerson pretty much denied knowledge of anything when there were intense questioning, when there were intense questions coming from the prosecutors of what he actually knew and how he regarded the potential for any kind of greenhouse gas policies to come down the pike and affect the business.
He downplayed the fact that these were things that he was even considering, as you mentioned in the opening, and later when he was pressed on more specific topics, he said that he didn’t remember or that he would not have had such granular knowledge Secretary of State under Trump and he was first pressed about this by Democrats in the Senate on what he understood about climate change and it’s was pretty much a very similar performance.
DIMITRI LASCARIS: And Todd, as I mentioned at the outset, you’re an attorney, you’ve practiced for years, you’ve come on the Real News to discuss this case in particular. In your assessment, how does Tillerson’s testimony stand up to the overall evidentiary record that we’ve seen thus far?
TODD PAGLIA: I think it’s looking pretty weak. Like Alex said, he actually had quite a bit of detailed recall of a variety of things and, as is a pattern with Rex and other government and corporate folks, their recollection seems to fade when it comes to the matter at hand. But the bottom line is that under Rex Tillerson’s watch Exxon maintained two sets of books. One for internal assessments of investments and one that they broadcast to investors to have them at least look like they’re taking climate change seriously, not only the issue, but also the risk of future climate regulation. And I think the company in wrecks are in big trouble here.
DIMITRI LASCARIS: Exxon and other oil industry participants have repeatedly played down the lawsuit and in fact there’s been quite a backlash from the industry even to the point that some who have campaigned to hold Exxon accountable and other oil companies accountable face racketeering charges for their advocacy efforts. In his opening statement, Exxon attorney Ted Wells, who Real News climate team reporter and producer Steve Horn has shown to have ties to big tobacco, who’s been involved in the NFL cover up of the concussions issue, said that “climate change is real and must be dealt with, but the Attorney General’s argument is unconnected from the truth. The allegation is false, twisted, and not connected to reality.”
Alex, could you talk to us about the industry’s efforts to intimidate advocates in the ExxonKnew campaign from having these companies held to account for what they’re alleged to have done?
ALEX KAUFMAN: Sure. The ExxonKnew campaign has been one that the company has fought tooth and nail against from the very beginning. Just even today, even as Twitter announced yesterday that it was going to discontinue political advertising, I look in my Twitter feed and it was filled with rebuttals written by supposed news websites like Energy in Depth that are in fact funded by the oil and gas industry directly. So this is something that they take very seriously. This is a liability that they are deeply concerned with. With regard to this case specifically in New York, I think it’s noting that the Attorney General, Leticia James, is specifically going after the company for defrauding investors using the very powerful Shareholder Protection Law, the Martin Act, in New York.
So for a lot of climate advocates that have been following this space, it is a little bit of a roundabout way of dealing with this. It is a pressure point and I think it is aimed at making Exxon a less appealing investment for shareholders. But something like the Massachusetts Attorney General’s case, which is looking more directly at how Exxon was marketing its products directly to consumers, gets more at what the actual relationship between Exxon and the public is and was. And I think that that’s something that is going to spook the industry probably a little bit more depending on how it goes.
DIMITRI LASCARIS: Todd, as Alex just mentioned, the New York litigation is focused on how investors were impacted by allegedly false and misleading statements made by ExxonMobil to investors. There are, however, other attempts to hold the fossil fuels industry and Exxon, in particular, accountable for other constituencies who have been damaged and maybe damaged in the future as a result of these alleged false and misleading statements.
For example, I understand that in California there are efforts to hold Exxon accountable for losses and damages to the state’s coastal cities. There is now apparently legal proceedings in Massachusetts and in Baltimore, where the Real News is headquartered, the company faces similar charges. Could you talk to us about legal initiatives that seek to vindicate the rights of the people who are directly impacted by climate change, including those who live in coastal cities in the United States?
TODD PAGLIA: Yeah, I mean, I think we’re going to see more and more of that coming, Dimitri and I think that there’s going to be an onslaught of new legal challenges for this industry. And I think the other side of this though is that, if you look at what’s happened with investors over the last decade or so, especially the powerful invest divest invest movement, 70% of divestment has been from coal.
And I think these efforts that we’re seeing, the subterfuge coming from Exxon and the other big majors, are really an effort to not only avoid legal liability to prevent also though their shareholders from starting to leave them. Their finances are looking weaker and they are increasingly under threat legally, and I think the divestment campaigns, the next move we’re going to see worldwide is increasing focus now that coal is really economically challenged and also facing lots of legal liability in other ways, you’re going to see really big moves on divesting from the oil majors and the big oil players. And I think that’s also in the background here and what they see coming and it needs to happen fast.
DIMITRI LASCARIS: And finally, I’d like your thoughts from both of you, and I understand that my question’s going to call upon you to speculate to some degree, but in my prior life I was a class actions attorney and I had occasion to encounter situations where corporations and indeed entire industries that engaged in mass wrongdoing were so besieged by litigation that eventually their business model just became no longer feasible, no longer profitable, it’s not something that they could economically pursue. Do you think that there’s a significant prospect that this may ultimately happen to the oil industry, the fossil fuels industry? That legal claims, liability claims, being asserted not only the United States, but globally, could pose an existential threat to the industry as a whole? And why don’t we start with you, Alex?
ALEX KAUFMAN: I think that’s a big question. I think the oil industry is most often compared to the tobacco industry, which is a fair analogy, particularly in the sense that a lot of the same players who orchestrated the tobacco industry’s misinformation campaign about the cancer and health risks of smoking went on to orchestrate a similar campaign about climate change for the oil majors. Now, I think the big difference here is that oil is integrated into so, so, so many different parts of our lives. It’s much harder to extract I think from the economy and to extract from just normal modern consumption then cigarettes and smoking where.
So I think that has yet to be seen. I think it’s important and few people really take note of the fact that as the oil industry is seeing the shift away from its product in the transportation sector, with the growth of electric vehicles, which they are no longer able to prevent, you’re seeing this massive investment in petrochemicals and the production of plastics. And that’s moving ahead at a breakneck speed and we’re seeing the production of single use plastic products go up just tremendously over the next 20 to 40 years. So I think that is a huge concern that we have to think about. These are companies that understand these risks and can quickly use their massive war chests to diversify. And I think it’s going to be a lot harder than it was to go after tobacco or a lot of other industries that have been convicted of wrongdoing in this kind of way.
DIMITRI LASCARIS: And Todd, what are your thoughts about this? I mean, you were an attorney who actually litigated for the vindication of consumer rights against various corporate malfeasers. As an attorney, I think about the cost, just the cost of defending these lawsuits. The stakes are so high that I imagine the company has every incentive to leave no stone unturned. Management is being distracted from the normal business of making as much profit as possible for the executives and the shareholders. Do you think that in the longer run this actually could pose, litigation itself, could pose an existential threat to the industry or do you think that the industry is so deeply entrenched in our economy that we’re going to have to find other ways to bring it down?
TODD PAGLIA: I think that lawsuits alone are not going to do it. It’s going to be increasingly a factor, a bigger cost, and also it takes their eye off the ball when you have to focus on staying alive as opposed to expanding your plastics market and what have you. But there’s two things that are working against us. One is they still have a tremendous amount of money even though their financials are beginning to falter and look a lot less appealing.
Number two, our court systems are broken in a certain way. If you’re willing to spend enough money, you can drag a case on for 20 years, and we don’t have that kind of time anymore. But I think on the upside, these cases are going to increasingly add costs, take away focus. I think we’re going to see a move, moving from coal to divesting away from oil and gas. And you’re also seeing a lot more fights in the last three years, more infrastructure fights where pipelines, oil train terminals, and other key pieces of infrastructure were defeated and often at the local level. So I think those factors are going to end up really taxing this industry and eventually driving them out while EVs and all the other cleaner solutions start to gain speed.
DIMITRI LASCARIS: Well, I’ve been speaking to Alex Kaufman and Todd Pallia about the testimony of Rex Tillerson and the ExxonKnew litigation in the state of New York. Thank you, gentlemen, for joining us today.
TODD PAGLIA: Thank you.
ALEX KAUFMAN: Thank you.
DIMITRI LASCARIS: And this is Dimitri Lascaris reporting for the Real News Network.
DHARNA NOOR: Hey, y’all. My name is Dharna Noor and I’m a climate crisis reporter here at The Real News Network. This is a crucial moment for humanity and for the planet. So if you like what we do, please, please support us by subscribing at the link below. Thank you.