KAMALA D. Harris, Attorney General of California, opened an investigation whether Exxon Mobil Corp. lied to the public and its shareholders about the risk to its business from climate change, and if such actions could amount to fraud and violations of environmental laws.
Harris’ office is reviewing what Exxon Mobil knew about global warming and what the company told investors, a person close to the investigation told the Los Angeles Times.
The move follows published reports, based on internal company documents, that suggest that the company–then known as Exxon–used climate research as part of its planning in the 1980-90s, as well as other business practices, but simultaneously argued publicly that climate-change science was not clear cut.
Those documents were cited in stories by reporters for Columbia University Energy and Environmental Reporting Fellowship, in partnership with the LA Times. The nonprofit InsideClimate News also published several stories based on the documents.
Shortly after the news reports, Harris’ office launched the investigation in response to the findings, the source said. New York’s Attorney General Eric Schneiderman is also investigating the major oil company as a result of the published reports.
US Rep. Ted Lieu (D-Torrance), who has called on federal authorities to investigate Exxon Mobil, applauded Harris’ decision. “I commend Harris for taking this action,” he said, adding that he has sent letters appealing to US Atty. Gen. Loretta Lynch and the U. Securities and Exchange Commission, urging a federal investigation of Exxon Mobil, for securities fraud and violations of racketeering, consumer protection, truth in advertising, public health, shareholder protection or other laws.
Lieu said the investigation means that any damages won from Exxon Mobil could greatly benefit California residents.
“I hope the decision by Harris, representing a state with the eighth-largest economy in the world, will prompt other states and the Justice Department to investigate. I think this action will be taken very seriously by Exxon Mobil,” Lieu said.
Legal experts say the SEC requires that “companies disclose the risks of climate change to their business operations,” but that the agency has taken almost no action to enforce it.
The investigations by California and New York are seen as a major step to fill that void.
Exxon Mobil already has received a subpoena for documents dating from 1977 from the office of Eric Schneiderman, who has at his disposal New York’s Martin Act, which gives the state’s attorney general broad power to prosecute companies for financial fraud. The law also applies to any company doing business in New York.
Unlike federal securities law, the New York statute does not require the state to prove that a company intended to defraud consumers—only that it misrepresented relevant information or withheld it from investors.
Richard Keil, an Exxon Mobil spokesman, has said that the company denies any wrongdoing in regard to the climate change reports.
“We unequivocally reject allegations that Exxon Mobil suppressed climate change research contained in media reports,” Keil said in a statement, issued in response to the letters sent in October by Lieu and Rep. Mark DeSaulnier (D-Concord). Keil also issued a statement with the same quote in early November 2015, when the New York investigation became public.
Exxon Mobil continues to scrutiny from several current and former US lawmakers–including Hillary Clinton, Bernie Sanders and Al Gore–for criminal investigations, based on the media reports gaining attention.It is unclear what approach Harris intends to take in California’s investigation, and a representative declined to comment.
