Exxon Likely to Miss NY Climate Probe Deadline

Delivering four decades of documents may take into 2016 as state attorney general continues investigation of Exxon's climate research and communications.

Exxon Mobil chairman and CEO Rex Tillerson speaks at an event organized by the Economic Club of Washington on March 12, 2015. Credit: NICHOLAS KAMM/AFP/Getty Images

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ExxonMobil Corp. will probably miss a Dec. 4 deadline for turning over to New York state prosecutors almost four decades of documents on climate change, according to people familiar with the attorney general’s investigation of the fossil fuel giant.

It may take Exxon into next year to fully comply with a subpoena issued last month by the office of New York Attorney General Eric Schneiderman, according to the people, who said they couldn’t comment on the record because they aren’t authorized to discuss the investigation. The delay reflects the sheer scope of the records investigators are seeking on the company’s climate science research and communications about it, they said.

“It’s a very large and complex undertaking to recreate 30 or 40 years documenting the history being sought by the attorney general,” said Pat Parenteau, a professor of environmental law at the Vermont Law School. “I don’t think the attorney general could have reasonably expected Exxon to meet such a deadline.” At the same time, he said, “What the deadline does do is show Exxon that the attorney general is serious.”

Although there is no penalty for missing the deadline, one of the first things Exxon and the attorney general’s office will most likely agree to is a timeline for the company to turn over documents, Parenteau said. Even then, he said, it’s probable that Exxon will not be required to turn over everything at once but rather to incrementally surrender the records.

The company may come under pressure to provide the same materials to other investigators. Attorneys general in California and 15 other states have also been asked by Climate Hawks Vote, an environmental activist organization, to investigate whether Exxon misrepresented the risks of climate change to investors and the public.

Presidential candidates, lawmakers, climate scientists and environmentalists have also repeatedly urged the U.S. Justice Department to probe the matter under federal racketeering statutes. The calls followed an investigative series of stories published by InsideClimate News that revealed Exxon scientists were warning company executives as far back as more than three decades ago of the potentially catastrophic consequences of global warming. The Los Angeles Times later published similar findings.

Exxon didn’t respond to a request for comment.

New York prosecutors are seeking Exxon documents related to its climate change studies and how that research factored into the company’s business decisions, and the way in which it portrayed those internal findings to investors and the public. Schneiderman discussed the probe in an interview aired on PBS NewsHour last month.

“The public record is troubling enough that we decided we had to bring this investigation,” Schneiderman said. “We…have issued a broad subpoena to Exxon because of public statements they have made, and how they’ve really shifted their point of view on this in terms of their public presentation and public reporting over the last few decades.”

At one time Exxon was at the forefront of rigorous climate science and then “changed tactics for some reason,” he said in the interview. “We’re interested in what they were using internally and what they were telling the world.”

If the investigation shows that Exxon made misleading statements about climate science, Schneiderman suggested it could amount to “some form of fraud.”

New York investigators have been looking into Exxon’s disclosures to shareholders and the Securities and Exchange Commission for about a year.

New York authorities based their probe on the state’s powerful shareholder-protection statute, the Martin Act, as well as the state’s consumer protection and general business laws. The 1921 Martin Act forbids “any fraud, deception, concealment, suppression, false pretense” or “any representation or statement which is false.”

The law gives the state broad powers of discovery and allows prosecutors to file a case against a company for misrepresenting or omitting material facts about securities offerings without having to prove the company intentionally misled investors.

The Exxon investigation could drag out for years, Parenteau and other legal experts said.

But setting an early deadline serves as starting point to get lawyers for the state and the company to begin serious talks about the investigation, said John Marti, a former federal prosecutor in the U.S. Attorney’s Office for the District of Minnesota. It allows the attorney general’s office to more specifically articulate what it is seeking and allows to Exxon begin raising any objections, he said.

“Both parties have a mutual interest in resolving the matter as quickly as possible,” said Marti, who is now in private practice. “Setting that first deadline is a way to insure the company is working diligently to collect those documents and turn them over so that the case can proceed without delays.”