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Can ExxonMobil Be Found Liable for Misleading the Public on Climate Change?

Scientists at the biggest U.S. oil company understood as early as anyone that fossil fuel emissions were heating up the earth’s atmosphere.

Last fall, ExxonMobil executives hurried along the hushed, art-filled halls of the company’s Irving, Texas, headquarters, a 178-acre suburban complex some employees facetiously call “the Death Star,” to a series of emergency strategy meetings. The world’s largest oil explorer by market value had been hit by a pair of multipart investigations by InsideClimate News and the Los Angeles Times. Both reported that as early as the 1970s, the company understood more about climate change than it had let on and had deliberately misled the public about it. One of Exxon’s senior scientists noted in 1977—11 years before a NASA scientist sounded the alarm about global warming during congressional testimony—that “the most likely manner in which mankind is influencing the global climate is through carbon dioxide release from the burning of fossil fuels.”

The two exposés predictably sparked waves of internet outrage, some mainstream media moralizing, and the Twitter hashtag #ExxonKnew. The Washington Post editorial page, for one, chided Exxon for “a discouraging example of corporate irresponsibility.” Bill McKibben, the founder of the environmental group 350.org, which spearheaded protests against the Keystone XL pipeline, wrote an impassioned article in the Guardian accusing Exxon of having “helped organize the most consequential lie in human history.”

Kenneth Cohen, then the company’s vice president for public and government affairs, convened near-daily meetings to form a response. “We all sat around the table and said, ‘This feels very orchestrated,’ ” says Suzanne McCarron, who succeeded Cohen when he retired at the end of last year. McCarron still seems shocked that her company could come under sustained attack. “We wanted to know who’s behind this thing,” she says. While Exxon tried to identify its new nemesis—made difficult, perhaps, by the release of the two reports being coincidental—the executives also decided to nitpick the journalism and sent lobbyists to Capitol Hill to argue their side. That didn’t go so well. “I couldn’t get any journalist to actually evaluate the coverage,” Exxon spokesman Alan Jeffers says, with evident frustration.

The crisis might have died down, a week or two of bad PR and nothing more, but several politicians saw an opening. On Oct. 14, four weeks after the first InsideClimate report, Democratic Representatives Ted Lieu and Mark DeSaulnier, both from California, asked U.S. Attorney General Loretta Lynch to launch a federal racketeering investigation of Exxon. “It occurred to me that this looks like what happened with the tobacco companies a decade ago,” Lieu says. Democratic presidential candidate Hillary Clinton added her support for a Department of Justice inquiry. “There’s a lot of evidence that they [Exxon] misled people,” she said two weeks later.

Stoked by 40 of the nation’s best-known environmental and liberal social-justice groups—including the Environmental Defense Fund, Sierra Club, and Natural Resources Defense Council—the anti-Exxon animus only intensified. And if there wasn’t a coordinated campaign before, now there was: The groups all signed an Oct. 30 letter to Lynch also demanding a racketeering probe. (Lynch has since asked the FBI to examine whether the federal government should undertake such an investigation.) The same day, Lieu and DeSaulnier tried to interest the Securities and Exchange Commission in a fraud probe against Exxon, a request that’s pending. Five days later, on Nov. 4, New York Attorney General Eric Schneiderman opened a formal investigation into whether Exxon had misled investors and regulators about climate change.

“We cannot continue to allow the fossil fuel industry to treat our atmosphere like an open sewer or mislead the public about the impact they have on the health of our people and the health of our planet,” former Vice President Al Gore said at a subsequent news conference organized by Schneiderman. Compelled by the New York AG’s subpoena, Exxon has so far turned over some 1 million pages of internal documents.

Hours after Schneiderman issued his subpoena, Exxon Chief Executive Officer Rex Tillerson went on Fox Business Network. “The charges are pretty unfounded, without any substance at all,” he said. “And they’re dealing with a period of time that happened decades ago, so there’s a lot I could say about it. I’m not sure how helpful it would be for me to talk about it.” These remarks themselves weren’t terribly helpful—certainly not to Tillerson’s company.

McCarron and her colleagues can sound a tad overwrought when discussing all this. “The goal of the coordinated campaign is to delegitimize the company by misrepresenting our history of climate research,” she says. “Tackling the risk of climate change is going to take a lot of smart people, and we’ve got some of the best minds in the business working on this challenge.”

A company that has 73,500 employees and reported $269 billion in 2015 revenue would seem not to have much to fear from a bunch of tree-huggers and a grandstanding state AG. And yet the #ExxonKnew backlash comes at a financially perilous time for Big Oil. A glut-driven collapse in crude prices has rocked the entire industry. On July 29, Exxon announced second-quarter profit of $1.7 billion, its worst result in 17 years. That followed a rocky spring when ferocious wildfires reduced production in the oil-sands region of western Canada. (The frequency and intensity of such fires may be related to climate change, Exxon’s Jeffers acknowledges, adding, “But we just don’t know.”)

Most important, though, #ExxonKnew comes as climate change, after being on a legislative back burner, has gotten hot again. Signs of this include President Obama’s rejection last November of the Keystone pipeline from western Canada, the Paris summit in December that produced an international agreement to lower greenhouse gas emissions, and the U.S.-China plan, finalized on Sept. 3, committing the world’s two largest economies to implement the Paris accords. It’s too soon to say how much of a danger Schneiderman’s investigation poses to Exxon or if the corporation will ever be charged billions of dollars for carbon pollution. But it can’t ignore the risk of the sort of litigation storm that engulfed Big Tobacco in the 1990s. ExxonMobil doesn’t want to become the Philip Morris of climate liability.

#ExxonKnew has taken shape over the past year, but Peter Frumhoff traces its roots to January 2007. That’s when the Union of Concerned Scientists, a Cambridge, Mass.-based nonprofit, published a 64-page report alleging that Exxon used the cigarette industry’s tactics to “manufacture uncertainty on climate change.” Founded in 1969 by physicists worried about nuclear issues, the UCS has branched out over the years. Frumhoff, a 59-year-old Ph.D. ecologist, serves as its director for science and policy. He dresses in grad-school casual and seems highly amused by Exxon’s notion that he’s a central player in a conspiracy against the company. For starters, Frumhoff is a snap to track down and operates quite openly—violations of the conspirator’s imperative to plot in secret.

The 2007 report, which Frumhoff oversaw, compared Exxon to cigarette manufacturers that only five months earlier had been found liable by a U.S. district judge for violating the federal Racketeer Influenced and Corrupt Organizations Act (RICO). “ExxonMobil has underwritten the most sophisticated and successful disinformation campaign since Big Tobacco misled the public about the incontrovertible scientific evidence linking smoking to lung cancer and heart disease,” the report asserted.

With a relatively modest expenditure of $16 million from 1998 to 2005, Exxon helped fund a network of some 40 advocacy organizations that raised doubts...


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