Witch hunt: Dem Attorney General #ExxonKnew Global Warming Investigation Likely Illegal, Says Law Expert

Posted By Chris White 

A legal expert in financial law said the Democrat-lead probe targeting ExxonMobil is likely illegal and a ruse to paint those investigating the company as champions “in the fight against global warming.”

The Exxon subpoena into the company’s knowledge about internal climate change reports is an abuse of extraordinary powers. It allowed attorneys general (AGs) to subpoena private documents without either obtaining a court order or filing a complaint, Merritt Fox, a professor of law at Columbia Law School, wrote Monday at National Law Journal.

Fox was referencing New York Attorney General Eric Schneiderman’s investigation into Exxon, which, according to a New York Times report, demanded “extensive financial records, emails and other documents” from the oil producer dating all the way back to the 1970s. The New York attorney general also demanded information on global warming skeptic groups Exxon had once helped fund.

Schneiderman argued the oil company hid internal knowledge about the effects climate change has on oil production from investors to justify his investigation. He used a little-known financial and securities law to justify his investigation.

Fox argued that the Martin Act, which allows the AG to investigate and eventually prosecute companies for committing fraud, requires the likelihood that a reasonable investor would consider the omitted important information and decided “not to vote or buy, sell, or hold, and that it has to significantly alter a total mix of information available to this reasonable man or reasonable investor.”

Exxon had only a smattering of scientists working on climate change, most of which shared similar views as climate scientists already in the public realm. Exxon’s climate scientists published their findings in peer-reviewed journals.

“Consequently, even if all the ­internal statements of the Exxon scientists had been added to the public mix, it is extremely unlikely that a reasonable investor would have changed her mind about whether to buy or sell Exxon shares,” Fox added.

Full story here

UPDATE:

Yet another legal expert has joined at least 12 others in calling New York Attorney General Eric Schniederman’s investigation of ExxonMobil legally flimsy.  This morning, Columbia Law Professor Merritt B. Fox published an op-ed in the National Law Journal with a scathing review of Schneiderman’s use of the Martin Act to investigate ExxonMobil, noting that the whole affair is an “abuse” of “extraordinary powers.” As Fox states,

 

“The Martin Act grants the attorney general extraordinary powers to subpoena private documents without either obtaining a court order, which is required in most ordinary New York criminal proceedings, or the filing of a complaint, which is required in an ordinary civil action and is subject to court review. The Exxon subpoena is an abuse of these extraordinary powers.” (emphasis added)

 

Fox continues,

“The bigger, more unambiguous problem for Schneiderman’s investigation, however, is its misuse of tools designed for another purpose. The Martin Act regulates speech made in connection with transactions in securities. Its subpoena powers are to assist investigations of possible violations. It is very unlikely, no matter what the subpoena turns up, that the attorney general will be able to plausibly argue that Exxon in fact committed such a violation.” (emphasis added)

This abuse of power sets a troubling precedent because “At the extreme, the Martin Act subpoena power could be used to bully corporations into any kind of desired reform under the guise of a securities investigation.”

More here

62 thoughts on “Witch hunt: Dem Attorney General #ExxonKnew Global Warming Investigation Likely Illegal, Says Law Expert

      • I’m waiting for someone to ask Hillary what she knew about all this. I can’t believe this conspiracy was undertaken without a nod and some direction from her and Bill,

      • “Hillary Clinton is calling for a federal investigation of ExxonMobil’s climate change activities just months after the company neglected to renew its sponsorship of the Clinton Global Initiative annual meeting.” — freebeacon.com

        So, contributing to the Clinton Crime Family Foundation is like paying protection money to the Mob. Stop making payments, and they’ll find a way to make you wish you hadn’t.

      • Hey, what’s the connection between the Clinton Global Initiative and Saudi Arabia effectively dumping oil?

      • John,

        Hillary is slowly but steadily being reduced to a babbling idiot by her accelerating neurological deficits. By November she will be in a walker and mostly mumbling her speeches and forgetting what to say unless prompted. Asking her what she knows of the ExxonKnew probe is like asking a baby to recite the Gettysburg address.

      • It’s a shake-down. If ExxonMobil starts dumping serious cash into Democrat-run non-profits, the lawsuits will all go away.

    • Rules for me and rules for thee. When I plead ignorance of the law, I go to jail; when a Democrat pleads ignorance of the law, nothing happens.

      • Or when a democrat breaks the law. This one is my current personal favorite:

        US Code Title 18, Part 1, Chapter 101, Section 2071, Paragraph a:

        “Whoever willfully and unlawfully conceals, removes, mutilates, obliterates, or destroys,
        or attempts to do so, or, with intent to do so takes and carries away any record,
        proceeding, map, book, paper, document or other thing, filed or deposited with any
        clerk or officer of any court of the United States, or in any public office, or with
        any judicial or public officer of the United States, Shall be fined under this title or
        imprisoned not more than three years, or both.”

        US Code Title 18, Part 1, Chapter 101, Section 2071, Paragraph b:

        “Whoever, having the custody of any such record, proceeding, map, book, document, paper,
        or other thing, willfully and unlawfully conceals, removes, mutilates, obliterates,
        falsifies, or destroys the same, shall be fined under this title or imprisoned not more
        than three years, or both; and shall forfeit his office and be disqualified from holding
        any office under the United States.”

        You would think after Watergate she would have remembered that it’s not always the crime, it’s the cover-up.

        Share the love.

    • This is sooooo true. I had this passing idea that democrats would like republicans in the 1970s happily take down a president for even minimal illegal activities but the clinton years and now the hillary clinton years show us that democrats don’t really care about if their leaders are corrupt or even subvert their own elections. It’s astonishing the lack of concern democrats have for the process of their own party or the leaders statements which are not simply misstatements or slight exageration but outright perjury.

  1. Nothing new here, though it’s nice that there are people speaking out about this clear abuse of authority. It supports everything we’ve said for months now. Even if every last accusation is true, it still could not be considered fraud or fall afoul of the Martin Act even in very generous interpretations.

    In fact, it would take a very generous interpretation to not consider the DAs to be directly violating the law, the constitutional rights of US citizens, and their oaths as attorneys.

  2. The E=green and Federal agencies have been using lawsuits to make new laws and regs for decades. The EPA gives grants to E=green they then sue for a new power like water controls or species act changes – the EPA or agency then constructs a settlement expanding powers and signing non disclosure agreements so the public can never find out.

  3. Why doesn’t Exxon just come out and say that yes, they were aware of claims by the ‘consensus climate science’ linking CO2 emissions to climate change, but to be fair, the claims of the sceptics that dispute the consensus were also examined and that a rigorous process driven by the rules of scientific discovery led to the conclusion that claims of climate change driven by CO2 are wildly exaggerated. Owing to the fiduciary responsibility they have to their shareholders, they refused to fall in to the trap set by climate alarmists that seemed designed to harm Exxon and its shareholders.

    • I thought Exxon’s conclusion was that the system was too complicated to say anything a definitive as “claims of climate change driven by CO2 are wildly exaggerated.”

      • The complexity is not with the science, but with the politics. Claiming that the science is too complex is a cop out to diffuse the potential backlash from the half of the population that has bought into the false narrative coming from the self serving consensus built by the IPCC. Surely, the science of an oil refinery is far more complex than climate science. Compared to the wide variety of complex systems I’ve studied, the science driving the climate is relatively simple and from a macroscopic perspective can be boiled down to obeying the Stefan-Boltzmann Law and Conservation of Energy.

      • CO2: Think about a closed system with known inputs and outputs, all measurable, all known reactions that take place over a period of minutes or hours – refinery (any type).

        Then think about an open system with unknown inputs and unknown outputs and very little in the way of adequate measurement with variations that take place over millennia – climate.

        I know which one I think is more complicated.

      • Bet few know that termites contribute more CO2 than humans. There is an estimated 1000 pounds of termites for every human on earth. My my why do they never talk about that little known fact?

      • RW, Having dug into this a bit because of curiosity about what Schneiderman might dig up, it seems their internal position was more nuanced than just complexity. And completely misrepresented by UCS and the New York PR hatchet job funded by the Rockefellers. The UCS garbage is on their website and I archived in case the legal situation gets hot and they try to disappear it. Exxon concluded the GHE is real. But the net effect (sensitivity) depends on highly uncertain feedbacks, plus (at that time) uncertain carbon cycle sinks. Some of the internal stuff represents clear differences of internal scientific opinion based on different perspectives about significance and uncertainty. A lot of that also got aired in the various published papers the internal scienctists co-authored. One big issue they had internally was attribution, since the warming from ~1920 to ~ 1945 is not attributable to CO2, a position even AR4 took in 2007. Mostly natural. Yet the warming from ~ 1975-2000 is statistically indistinguishable from the earlier period, a fact Richard Lindzen kept pointing out. So how much of the later period warming is anthropogenic was and remains unknowable. From what I have been able to access so far, Exxon never even stated that doubt publicly. They never concluded or said CAGW was wildly exaggerated. They never concluded it was worse than IPCC said then concealed that research. The senior execs appear to have ended up more or less dunno, best as I can tell from the outside, with what glimpses inside exist. One old board briefing that surfaced was sort of a yes to AGW but uncertainty about how much so unclear whether UNFCC actions like Kyoto were called for. The UCS snippet was just the yes part without the consequences uncertainties. Exxon even worried about developing its massive but high CO2 (70%) Indonesian offshore gas discovery, and what that released CO2 might add to whatever AGW. This was mostly before FAR, although if I recall correctly the decision was made final in the mid 1990’s Ultimately, it decided NOT to develop the field.

      • Wayne,
        The climate is also a closed system, and a simple one at that. It’s input is well defined from the Sun and its output are the emissions required by COE to offset that input. The input to the system has both quantifiable periodic behavior like that arising from orbital and axis variability and quantifiably unknown variability like that of the Sun related to Maunder cycles. Relative to the effect CO2 has, neither are relevant. All that matters is the effect forcing can have on the surface temperature.

        If instantaneously doubling CO2 is equivalent to instantaneously increasing NET solar input by 3.7 W/m^2 (at least it is based on the IPCC definitions) and each W/m^2 of the current average 239 W/m^2 of NET input from the Sun is contributing 1.6 W/m^2 to the NET average surface emissions of about 385 W/m^2 at its average T of about 287K, the equivalent 3.7 W/m^2 from doubling CO2 can increase surface emissions by no more than 1.6*3.7 = 6 W/m^2. This corresponds to an upper limit on the possible surface temperature increase of only about 1.1C which is well below the stated lower limit of 1.5C. If you think feedback increases this, you obviously don’t understand the nature of feedback (but then again, neither does climate science), nor the implications of Stefan-Boltzmann that owing to the T^4 dependency, the incremental sensitivity must be less than the average for all prior W/m^2 of forcing.

        What part of the feedback model do you think amplifies each W/m^2 from the Sun into 1.6 W/m^2 of NET surface emissions? If you think non radiant power at the boundary between the surface and atmosphere makes a difference, what effect does this have, above and beyond the effect its already having on the 287K average surface temperature from which NET emissions are calculated?

        The apparent complexity of climate science is nothing but an illusion from the confusion that arises as there is so much wrong with the IPCC’s version of ‘science’, yet the many co-dependent errors based on bad assumptions have been canonized by them since the very first AR nearly 3 decades ago, confusing warmists and skeptics alike.

      • @ristvan wrote:

        […]The UCS snippet was just the yes part without the consequences uncertainties.[…]

        This is an interesting twist by UCS. Their much favoured stick-Mann willfully added trees, upside-downers and/or stuff from completely different (non-tree) record sources. While the UCS legal beagle(s) willfully subtracted relevant details.

        Amazing. Simply amazing, eh?;-)

      • This discussion has caused me to wonder, if the falsification of results of a study for the government would also be covered by:

        US Code Title 18, Part 1, Chapter 101, Section 2071, Paragraph a:

        “Whoever willfully and unlawfully conceals, removes, mutilates, obliterates, or destroys,
        or attempts to do so, or, with intent to do so takes and carries away any record,
        proceeding, map, book, paper, document or other thing, filed or deposited with any
        clerk or officer of any court of the United States, or in any public office, or with
        any judicial or public officer of the United States, Shall be fined under this title or
        imprisoned not more than three years, or both.”

        US Code Title 18, Part 1, Chapter 101, Section 2071, Paragraph b:

        “Whoever, having the custody of any such record, proceeding, map, book, document, paper,
        or other thing, willfully and unlawfully conceals, removes, mutilates, obliterates,
        falsifies, or destroys the same, shall be fined under this title or imprisoned not more
        than three years, or both; and shall forfeit his office and be disqualified from holding
        any office under the United States.”

        Perhaps combined with a writ of mandamus to force the appropriate authorities to take action? I’m thinking specifically of people like Mann, et al.

    • I think Wayne is referring to the fluid dynamics when he says ‘open’ (atmosphere) and ‘closed’ (refinery).

      • The other word for all the apparent complexity in the atmosphere is weather which is definitely more complicated, but the weather and the climate are two different things. The climate is the LTE response to change while weather is how the system chaotically transitions between states. Trying to predict the climate by extrapolating weather for decades (which is basically what GCM’s do), is silly when basic thermodynamic first principles can tell what the LTE response to change must be by considering the atmosphere a black box whose response is quantified by the current readily measured LTE conditions at its boundaries between outer space and the surface.

    • These AGs haven’t thought this through. The LAST place they want to take the climate debate is a court of law where BOTH SIDES can present their evidence. This circus is very good optics for a gullible public, but it will be very bad for belief in AGW as a driver of policy once a court is forced to determine that the science isn’t “settled.”

      • Check the case of Mann V Steyn – go to court and then it opens locked door during discovery – all documents must be produced – like fake data sets, selected test sites and the computer model data and math sets.

        All faked data is then exposed as is the use of taxpayer money funneled through agencies to non profits and Universities in grants?

  4. The “witch hunt” is old school, an enterprise that was limited in both time and space. Today, it is “baby hunt” and “baby trials” that are first-order causes of a catastrophic global climate change. #ProgressivesNormalized

    • It’s about the children (a.k.a. Posterity), right? #DemocratLies

      A faith. A quasi-religious/moral philosophy. A conflation of logical domains. An orthodox establishment that is notoriously selective.

      This is the twilight [zone] of human enlightenment.

  5. The significance of this should not be underestimated. National Law Review is a big deal. Fox of Columbia Law would be an expert on New York’s Martin Act, which is what Schneiderman relies on— unlike the other AGs. Martin Act does not require intent, it does not require investor reliance, and it does not require actual harm, all elements of common law, federal, and other state statutes on securities fr***. All it requires is material misrepresentation (the latter by witholding material information under the ‘Merchants of Doubt’ theory). For Fox to say there can be no Martin Act violation unless some big smoking gun turns up is a big deal. He is saying Schneiderman cannot prove either material or misrepresentation. There is no smoking gun. The UCS stuff was all taken way out of context and then spun. Exxon co authored more than a hundred published climate papers, and participated in IPCC processes. Unlike Big Tobacco, It never took a public position that IPCC was wrong. It has for years warned investors at least since 2007 in the risks section of its 10k filings that climate change policies could adversely affect its business.
    This puts Schneiderman in the same 18USC241 criminal conspiracy to deprive civil rights pot as the other AGs, Naomi Oreskes, and the UCS.

  6. They keep referring to ecologically disruptive energy converters (e.g. windmill and photovoltaic complexes) as “clean” power. I wonder what they think it means. #EnvironmentalistsKnew

  7. I pulled down the Martin Act that Chris White says the AGs are using against ExxonMobil. I am not a lawyer but I can tell you right now that this is a prime example of a stealth law that never should have become passed in a democratic society. First, it is much too long to inform the public in any meaningful sense. Secondly it is full of legalese that should be stricken wholesale. Third, it meanders in trying to determine its purpose which seems to include everything from business secrets to real estate. And there is no ethical argument given for the various penalties it sees fit to impose for violations of its own edicts. This kind of drivel is what feeds the pockets of expensive lawyers we can do without. If you were to ask me what is the alternative, I can give you a couple of hints. Number one is to require that a law must be readable by an ordinary person. This could be accomplished by requiring that no bill is allowed to be more than five pages long. Dwight David Eisenhower as president required that any items reaching his desk could not be more than one page long. It worked for his presidency and the same principle has to be drilled into our lawmakers as well. They just totally lack discipline now and produce drivel like the Martin Act. There is more to making democratic laws comprehensible to people but curbing their length by force and putting a limit on how many laws are allowed to be produced must be the first step. Doing all this effectively is what being a public servant is all about.

    • Good point. The Affordable Health Care Bill was a stack of pages seven feet tall. It is a law we all could go to jail for breaking, because who has ever read the darn thing?

  8. This year’s Ted Stevens Witch Hunting Award goes to…..we have a 17-way tie. The life time achievement award goes to Al Gore, inventor of the internet and a new category of political science.

  9. It’s only illegal if those in charge of enforcing the law say so… and they’re the ones breaking it. That’s one of the biggest casualties with the cause-driven Progressive Left – rule of law is simply a means to force through agenda and punish one’s enemies.

    But they are awfully high and mighty about it.

  10. It’s worse than illegal. It’s un-American. Its an insult to the men who died in building and protecting this country to be a free and open society ruled by law. It is despicable beyond measure. I cannot come up with enough adjectives to describe how heinous the behavior. Tar and feathers and a wooden rail to ride Schneiderman out of the country for such an act of treason is the only appropriate response.

    If that is not possible, then build a statue of Schneiderman with a dunce cap on and attach a plaque with the inscription, “The most stupid and petty man to ever hold office. May it never happen again.”

    • Well, there is a flawed bronze recall item out there that was supposed to represent Lucille Ball. It would work.

    • The only thing it is not is treason. We aren’t in a state of war, and that only applies during one.
      Just because they play fast and loose with definitions doesn’t mean we shouldn’t hold ourselves to higher standards.

      • “The only thing it is not is treason. We aren’t in a state of war, and that only applies during one.”

        Just because Obama and Hillary Clinton refuse to recognize we are in a war, doesn’t change the fact that radical Islamic terrorism is at war with the United States and the rest of the world. A war is only over when both sides stop fighting. In this case, the U.S. has stopped fighting, but the enemy has not, so the war continues.

      • Congress declares war, my friend, and there is no way this could be considered aiding and abetting ISIS.

  11. Let us not ever call it “climate change” as that could mean anything, any weather, the original story was warming, and temps have been flat for years. The ploy has been busted, now all the warmunists are just talking to each other in an echo chamber.

  12. These are dangerous and un-American AGs. They are unfit to be the next fill-in-the-blank officeholders they are aiming for.

  13. Those interested in digging further should look at the UCS mess-I just reviewed it again. One email from one disgruntled former Exxon greenie employee with no backup support. Hearsay. The Willie Soon funding affair, much ado about nothing. Alleged forgeries where there is no evidence for the allegation. A western coal marketing proposal having nothing to do with Exxon, which in any event was voted down and not implemented. An API presentation by an outsider taken out of context.
    Then look at the bigger hash from Columbia School Journalism posted at InsideClimateNews, ironically funded by Rockefeller Doundation. Explains vividly why MSM is not to be trusted.
    Those two messes are what Schneiderman relied upon for press conference and subpoenas.

    Also highly recommend Andy Mays detailed analysis of the released internal Exxon documents, and the published Exxon papers. Two snapshots in time, circa 1980 and circa mid 1990s. Short form at CE, long form with all references linked at Andy May’s blog site. Complexity, uncertainty, many unknowns. No climate signal detectible before ~2000 due to natural variability. (And no signal since, just the pause.) Exxon actively studied ocean carbon sinks for DoE because that was a big unknown. Concluded could not do all climate research by itself, so actively participated in FAR, TAR, AR4, and AR5. No shred of evidence Exxon ever said these were wrong or exaggerated. National Review published a review of that 10/12/15.
    Exxon should sue Naomi Oreskes for libelous slander in her book ‘Merchants of Doubt’.

  14. Seems to me that this paragraph reads incorrectly

    Schneiderman argued the oil company hid internal knowledge about the effects climate change has on oil production from investors to justify his investigation. He used a little-known financial and securities law to justify his investigation.

    It should read more like

    Schneiderman argued the oil company hid internal knowledge about the effects Oil Production has on Climate Change from investors to justify his investigation. He used a little-known financial and securities law to justify his investigation.

    Last I looked, a warmer climate made it easier to drill through permafrost.
    Now a Colder Climate does have a negative effect on Oil Production. Oil is thicker and harder to pump, Cold temps freeze/age above ground pipelines faster, Permafrost is harder to drill through

    • If permafrost melts you likely need more expensive infrastructure to support drilling and transportation. In any event, permafrost isn’t all that tough to drill through compared to 3 miles of rock.

  15. “A legal expert in financial law said the Democrat-lead probe targeting ExxonMobil is likely illegal …”
    ——————-
    Since when has the law mattered to this administration’s Department of Justice?

  16. I am not too happy about the way either party has been handling this whole affair. The AGs are on a dishonest and politically motivated witch hunt, and Exxon-Mobile SEEMS TO BE (someone correct me if I am wrong) in a “hunker down, ignore it and it may go away” mode. If Exxon had any moxie they would hold a press conference and publicly and vociferously confront the AGs. They should say “We are tired of this nonsense and it is time for the AGs to either put up or shut up. It is time they made their case in the courts and not in the media. The AGs have the burden of proof which means they must provide an abundance of credible evidence to establish 1) that the globe has been measurably warming, 2) that it is predominantly due to human activity – and, more specifically, the burning of crude oil products, 3) that Exxon-Mobile was aware of that “fact”, 4) that Exxon-Mobile had an affirmative duty to warn its investors and prospective investors, and 5) Exxon-Mobile failed to notify said investors. It is time the AGs came forward with their evidence and experts so that vigorous and honest discovery can take place and “let [the] Facts be submitted to a candid world”. ”

    As I have suggested before, how many of the alarmist AGW “scientists” are going to allow their work and papers to be made available to, and questioned by, Exxon-Mobile’s lawyers and its science experts; how many are willing to be put under oath – under penalty of perjury- and give testimony in a deposition and at trial where they will be cross-examined. Why do you think the M. Mann vs. National Review, Steyn case gone on for 4 years with no discovery of Mann’s records and papers, no deposition of Mann; and that there have been no other scientists or scientific organizations filing amicus briefs in Mann’s support with the courts? Exxon-Mobile should go on the offensive.

    Just my 2 cents worth.

  17. This sounds like the Wisconsin “John Doe” investigations into conservative groups by Democrat state district attorneys.

  18. Of course the AG’s know their lawsuit is illegal and an abuse of power. Trouble is, businesses are such pansies, so non-patriotic, that they almost all cringe into submission when they hear the voice of Big Government scold them. Now especially, since the rule of law is dead – Democrats do not have to obey the law because so many judges are corrupt and purely political (socialist).

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