By Karen Savage
Emails deleted from former Exxon chief executive Rex Tillerson’s alias account—which used the name “Wayne Tracker”— corroborate other evidence indicating that Exxon deceived the public by using two sets of numbers when assessing climate risks, according to New York Attorney General Letitia James.
As the state prepares for the trial that accuses Exxon of misleading investors about climate risks, James’ office asked the New York Supreme Court to grant a motion for an adverse inference—or sanction—against Exxon for failing to preserve those emails. The AG had subpoenaed them in 2015 during its state’s investigation of the company.
The investigation culminated last year in New York’s lawsuit against Exxon, alleging that the company deceived investors for years by deliberately downplaying the climate risks to its business and long-term financial health. The trial is scheduled to begin later this month.
If the motion is granted, both parties will proceed with the premise that the destroyed “Wayne Tracker” emails were unfavorable to Exxon and “would have corroborated other evidence indicating that ExxonMobil senior management, including Mr. Tillerson, revised the [greenhouse gas] proxy cost schedules” because it had disclosed to shareholders in a 2014 document that it used a used a higher proxy cost in its internal communications while using a more optimistic set of numbers for the public.
The suit alleges that the fraud “reached the highest levels of the company,” including Tillerson, who left the company in 2017 to become President Trump’s first Secretary of State.
During the investigation, it was revealed that Tillerson had two company email addresses, one under his real name and another under the ‘Wayne Tracker’ alias.
After receiving the AG’s subpoena, Exxon placed individual email accounts connected to Tillerson and other high-level members of Exxon’s senior management on a litigation hold to prevent messages and documents from being automatically deleted from the user’s mailbox.
The Tracker account, however, was not placed on hold, in part because it was configured as a non-personal account tied to another employee. The company did not explain why the account was configured in that manner.
Despite that, the existence of the Tracker email was “general knowledge” among the company’s tech support team, according to Robert Lauck, an Exxon IT staff member.
The AG’s office said Exxon did not immediately notify it of the account’s existence and failed to preserve emails from the Tracker account prior to Aug. 18, 2015.
During a 2017 investigative examination—a process similar to a deposition—Exxon attorney Michele Hirshman admitted she knew about Tillerson’s second account in early 2016. Hirshman said her office forwarded documents from the account to the attorney general’s office, but said she didn’t specifically notify them of the existence of the account.
“I knew about them and I read them and I said, well, this will be an interesting test of whether the Attorney General’s office is reading the documents,” Hirshman said.
Hirshman, along with lead attorney Theodore V. Wells, is one of several attorneys from Paul, Weiss, Rifkind, Wharton & Garrison who are representing Exxon.
“ExxonMobil’s failure to preserve emails from the Tracker account prior to Aug. 18, 2015 has had serious consequences for this litigation,” Samantha Liskow, assistant attorney general, wrote in the court filing.
At issue is the method used by Exxon to calculate risks posed to its business by climate change.
Prior to 2014, Exxon publicly “laid out a specific set of [greenhouse gas] proxy cost figures to convey to the market how seriously it was taking the risk that governments would adopt more exacting and costly climate change regulations,” said Liskow.
At the same time, however, an internal Exxon document, dubbed the Corporate Plan Dataguide, directed company employees “to apply lower [greenhouse gas] proxy costs to the company’s projected emissions than the costs the company publicly represented it was applying,” Liskow wrote, adding that Tillerson reviewed and approved both the public and private sets of numbers.
“Rex [Tillerson] has seemed happy with the difference previously [.],” wrote one Exxon manager in an email.
Exxon aligned its private and public numbers in 2014, a decision Tillerson said in his deposition he would have been responsible for making as a member of the management committee. But Tillerson also said he couldn’t remember the discrepancy in the proxy costs or why they were later aligned.
The attorney general’s office said the missing emails could have shed light on the issue.
“In this context, ExxonMobil (sic) failure to take active steps to prevent the destruction of pre-August 2015 documents from the Tracker account—Mr. Tillerson’s primary email account—is highly significant,” Liskow wrote, adding that the Tracker account was created in 2007 and existed during the period in question.
Other Exxon officials, including current corporate controller David Rosenthal, have testified they used the Tracker account to communicate sensitive and important matters to Tillerson.
In a March 2017 letter, Wells downplayed the importance of the Tracker account, which he said was used by Tillerson to communicate with only a “limited amount of senior executives.”
But Tillerson contradicted that statement when he said the Tracker address was his “primary email account,” used by “people that typically corresponded with me for business reasons.”
Exxon did not immediately respond to a request for comment about the AG’s motion.
The AG’s office says Exxon had a legal responsibility to preserve and produce the requested documents.
Exxon took “no steps to ensure the preservation of the primary email account used by its CEO and chairman of the board to communicate with individuals within and outside the company for business purposes, despite knowing that Mr. Tillerson’s emails contained information potentially relevant to the [attorney general’s] claims,” Liskow wrote in her request to sanction the company for destroying the Tracker emails.
“Here, ExxonMobil’s conduct was at least negligent, if not grossly negligent.”