By Karen Savage
A New York Supreme Court judge said Exxon must hand over financial spreadsheets and answer questions from New York Attorney General Barbara Underwood, who is investigating whether the oil giant deceived its shareholders about the risks of climate change.
The ruling was handed down by Judge Barry Ostrager in New York Supreme Court Wednesday after a hearing on a motion by the state to compel Exxon to comply with investigatory subpoenas issued by the New York attorney general’s office. Ostrager gave the company 30 days to turn over some of the documents; others he said the company must answer investigators’ questions about, because Exxon argued it would be burdensome to turn over all of them.
Ostrager made it clear he wants the investigation to conclude quickly instead of dragging on indefinitely.
The first subpoena was issued in 2015 as part of an investigation by Eric Schneiderman, then New York’s attorney general, into possible shareholder deception by Exxon. Last year, Schneiderman issued a second subpoena.
Underwood took up what Schneiderman started after she she replaced him in May and, like Schneiderman, Underwood contends that Exxon is dragging its feet and has not fully complied with the subpoenas. Her office filed a filed a motion in June to compel compliance with the subpoenas
Attorneys for Exxon, which has accused the attorney general’s office of conducting a politically motivated investigation, argue they have complied with the investigation.
Documents already turned over have revealed several “smoking guns,” according to Manisha M. Sheth, New York’s executive deputy attorney general.
Investigators have previously asserted that Exxon used two sets of figures—or proxy costs— to determine how future climate risks will impact the company’s bottom line, one for internal use and another that was shared publicly.
At the hearing, Sheth presented the court with internal Exxon emails written by corporate greenhouse gas manager Bob Bailes that she said confirms that assertion. Also included is a 2011 email indicating Exxon considered reconciling the two proxy costs, but decided not to because “Rex has seemed happy with the difference previously,” referring to former chief executive Rex Tillerson.
The attorney general’s office announced last year it had discovered that Tillerson had used a second, incognito email in the name of “Wayne Tracker” while at the helm of the company. When the investigators asked for those emails to be turned over, the company said many had been permanently deleted.
Sheth also presented emails from 2016 that show that Bailes “effectively admitted Exxon misled investors” and the company “used ‘alternate methodology’ to avoid ‘massive [greenhouse gas] costs.” The emails also disclosed the use of “legislative” costs to avoid large write-downs in the value of Exxon assets.
Ostrager granted the demand by Underwood’s office that Exxon turn over cash flow spreadsheets used by the company to make investment decisions and documents the company provided to the Securities and Exchange Commission related to its evaluation of asset depreciation, reserves calculations and climate change.
Exxon has maintained that it did not conceal climate-related risks. The company did not immediately respond to a request for comment about Ostrager’s ruling.
In July, more than a hundred environmental, faith and community groups signed a letter supporting Underwood in her continuing investigation.
“While Judge Keenan may have dismissed New York City’s lawsuit, he didn’t dismiss the reckless actions of these companies,” said Mae Boeve, executive director of 350.org, referring to the recent dismissal of New York’s climate suit against five major oil companies.
“From Sandy-like storms and flooded subways to record heat waves, the costs of Exxon’s destruction is being paid for by New Yorkers,” Boeve said.
“Attorney General Underwood’s commitment to continue investigating all that Exxon knew and hid about climate change shows fossil fuel companies can’t shirk the necessary accountability.”