ExxonMobil Investigation Reminiscent of Tobacco Wars of 1990s


Coalition of investigating attorneys general can protect the public’s health and welfare in almost any way legally possible, says Dan Zegart, Senior Fellow at the Climate Investigations Center

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Story Transcript

JESSICA DESVARIEUX, PRODUCER, TRNN: Welcome to the Real News Network. I’m Jessica Desvarieux in Baltimore.

Did ExxonMobil mislead its investors and the public by hiding the fact that burning fossil fuels significantly contributes to climate change? That’s a question that 20 attorney generals say they will be looking into in the coming months. What triggered this investigation was a report by news outlet Inside Climate News. It exposed internal memos between Exxon Mobil senior executives. They state that as early as 1978 the oil giant knew that the emission of carbon dioxide when you burn fossil fuels significantly contributes to climate change.

Now joining us to discuss all of this is Dan Zegart. He is a senior fellow at the Climate Investigation Center, and he’s an investigative journalist. Thanks so much for joining us, Dan.

DAN ZEGART: Thank you, Jessica. Glad to be here.

DESVARIEUX: So, Dan, we have two more state attorney generals saying they are going to investigate Exxon along with New York State attorney generals who said that they will investigate Exxon Mobil. What’s the significance of this expansion?

ZEGART: Well, it’s, this is an extremely important development for several reasons. One is that for those who have followed the tobacco wars, who did follow the tobacco wars back 20 years ago when the attorneys general took on the tobacco industry, this is a very familiar pattern that took place then. Of course, that resulted in 50 attorney generals suing the tobacco industry and eventually bringing them to the table for an almost $300 billion settlement and some significant changes in the way they did business in the United States.

So when we see other attorney generals jumping on the bandwagon, so to speak, it’s a clear indication that politically they view this as feasible, and secondly that they believe that there is a legal theory and that they can use their offices to prosecute that theory under fraud statutes and under other remedies that they have at hand to potentially bring companies like Exxon Mobil and other fossil fuel giants to the table, or get some kind of a judgment against them to make them do business in a different way.

DESVARIEUX: All right. I’m going to play the part of the defense attorney here. Even if, let’s say, these senior executives knew about the potential dangers of burning fossil fuels and how they would affect climate change, couldn’t they argue that the science was not indisputable at the time? What do you make of that argument?

ZEGART: Well, it’s absolute nonsense. I mean, first of all, the fossil fuel companies have, particularly the oil companies and particularly of all of those Exxon Mobil, which has an enormous research capability, the largest of all the fossil fuel companies, they’ve known for many, many years, going back probably to the 1950s, that fossil fuels contributed to what was then called the greenhouse effect. There are scientific papers going back into the ’50s showing that their scientists were participating and aware of discussions with mainstream scientists on this very topic. So we’re going back a long, long way.

Turn the clock back to the ’70s and you have, already we have from ICN, the online news network, we have acknowledgment by them that this is in fact true, that climate change is happening, that fossil fuels are in fact causing it.

We also know from the way they did business. Shell, for instance, in the Arctic, and others counting on, very much aware of the melting of the ice caps so that they could profit from it by drilling. Raising their drilling rigs out in the open ocean according to very careful calculations of how much sea level rise was going to take place. So these are absolute beacons showing that not only was, [were] the fossil fuel companies aware of climate change. They, in fact, were aware of it long before most Americans.

DESVARIEUX: All right, Dan. Give us an update on New York Attorney General Eric Schneiderman’s investigation into Exxon Mobil. Have they started to make much progress? This investigation started back in October, I believe.

ZEGART: Yeah, actually I think it started in early November and apparently they received the first, they’re going to be getting what they call rolling production, which [is] production of documents, in other words material that the company’s going to turn over to the AG, to the attorney general. They’ve gotten the first batch of that as of December. According to Schneiderman, thousands and thousands and thousands of pages of documents, so we don’t know what’s in that trove of documents, but we do know that the actual production of evidence is underway.

What we don’t know, and there were very few details about it at Tuesday’s press conference, in fact, no details, was what exactly they hope to accomplish. Where do they want to take this? Do they want to get a court to declare that they must change their way of business? Are they going to try to get certain damages based on the damage that’s been caused by climate change? These are things we don’t know, and that applies to the two new states that you mentioned that have entered the fray, Massachusetts and the Virgin Islands–Sorry, not a state but a US territory that has an attorney general and was also involved, back in the day, in the tobacco settlement.

So you have, right now, very few specifics, but we do know that things are rolling, and it may encourage not only other states. It may encourage private parties to enter the fray and to file their own legal actions.

DESVARIEUX: Dan, I’m glad you kind of mentioned the different tools that they have in their toolbox, these attorney generals. What are the types of remedies that the states could pursue and lessons that they could learn from the whole tobacco industry debacle that took place, and what would you suggest, in terms of, if people are looking for some sort of justice here, what should be the consequences for oil giants like Exxon Mobil?

ZEGART: Okay. Well, taking the first part, the toolbox. The AGs, the United States attorney generals, state attorney generals in this country, have an, almost an unrivaled set of tools, and New York and California in Particular. New York has something called the Martin Act that allows the attorney general to go after almost any information from almost any party relating to fraud. And most of what the attorney generals will be looking at is whether Exxon Mobil and perhaps others fraudulently misrepresented, in other words they knew better but they said it anyway, that climate change was either not occurring or that it wasn’t caused by human activity.

So they’ll be using fraud statues. They’ll be using consumer protection statutes that are common, all 50 states. And there may be some special theories that are developed along the way. We don’t know. But basically the attorney generals are empowered to protect the public’s health and welfare in virtually any way that’s legally possible. So this is a very, very wide open kind of situation.

Now, as far as what they would like to achieve, that’s a good question. We really didn’t get an answer to that on Tuesday. But, it’s possible that they could force the companies to do business in a different way, to, perhaps, stop developing new sources of fossil energy, to be more open with investors.

There’s certainly a strong question of investor fraud here, of investors not being informed about what the potential dangers to the company’s businesses were from climate change as we find that we can’t take any more of this stuff out of the ground, oil and gas and coal and burn it. So what value do these quote-unquote assets actually have in an environment where carbon is constrained? Their assets would lose value rather rapidly, but investors are not really being told this. So there’s all sorts of things, from what they tell investors all the way up to how they actually operate in the business world.

DESVARIEUX: And it could lead to jail time, is that right, Dan?

ZEGART: Well, if the companies, for instance, in New York the Martin Act allows for, the act that is being used by Attorney General Schneiderman, it allows for parallel criminal and civil inquiries, and that’s pretty common. So absolutely, were there a question of criminal culpability it’s not impossible that there could be some sort of criminal penalty for even executives of these companies.

DESVARIEUX: All right, Dan Zegart joining us. Thank you so much for being with us.

ZEGART: Thank you. I love being here. Thank you again.

DESVARIEUX: And thank you for joining us on the Real News Network.


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