Exxon Gets Backing of GOP-Led States in Fight Over Climate Probe

(Bloomberg) -- Texas Attorney General Ken Paxton and 10 of his Republican counterparts are joining forces in court to help derail a probe into whether Exxon Mobil Corp. misled investors about climate change.

The investigation by New York Attorney General Eric Schneiderman and his Massachusetts counterpart, Maura Healey, is an attempt to censor scientific opposition to the theory that human activity is warming the planet, the group said in a filing this week in federal court in Manhattan.

Schneiderman and Healey, both Democrats, "falsely presume that the scientific debate regarding climate change is settled," the group said, adding that the state probes are using government power to chill free speech.

New York and Massachusetts have been investigating since 2015 whether Exxon misled the public and investors for years about climate change by withholding information about how it could impact the company’s finances. Exxon’s lawsuit seeks to block their subpoenas for millions of pages of documents and executives’ internal emails about climate change.

"We will continue to pursue our fraud investigation under New York law, despite attempts by Exxon and Big Oil’s beneficiaries to delay and distract from the serious issues at hand,” Amy Spitalnick, a spokeswoman for Schneiderman, said in an email.

States’ Rights

Exxon, based in Irving, Texas, has repeatedly denied wrongdoing and claims the state probes were started in "bad faith" because the outcome had been predetermined based on ideological coordination with environmental groups and even former Vice President Al Gore, an outspoken opponent of climate change.

"The attorneys general have raised important constitutional and legal issues in support of our position that the investigations by New York and Massachusetts are politically based and in bad faith," Exxon spokesman Alan Jeffers said by email.

In Monday’s filing, the attorneys general of the mostly Republican-led states said their investigative power "does not include the right to engage in unrestrained, pretextual investigative excursions to promote one side of an international public-policy debate."

However, it’s common for state officials to pursue investigations that are international in scope. Attorneys general in states led by Republicans and Democrats have probed human trafficking, allegations of consumer fraud and environmental violations by German automaker Volkswagen AG, and mortgage fraud by international banks. 

Public Issues

Attorneys general have also undertaken probes related to high-profile issues of public policy. Texas started an inquiry after an undercover video purported to show one of Planned Parenthood’s senior directors discussing the sale of fetal tissue. Several other investigations into the video found no wrongdoing.

The filing in the Exxon case follows questions about the role of former Chief Executive Officer Rex Tillerson, now U.S. Secretary of State, after Schneiderman found that Tillerson had used a secondary email account under the alias “Wayne Tracker” to discuss climate-change risks and other important matters with the company’s board. Exxon failed to disclose the emails under a subpoena, Schneiderman said in court filing. The company has denied that the move was intentional and instead blames a technical glitch.

The other states that signed the brief in support of Exxon are Louisiana, South Carolina, Alabama, Michigan, Arizona, Wisconsin, Nebraska, Oklahoma, Utah and Arkansas. Louisiana is led by a Democratic governor, but the attorney general who signed the brief is a Republican.

The case is Exxon Mobil Corp. v. Schneiderman, 17-cv-02301, U.S. District Court for the Southern District of New York (Manhattan).

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, Paul Cox, Andrew Martin