Court Papers Claim Rex Tillerson Approved Misleading Carbon Accounting Scheme While ExxonMobil Boss

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By Dan Zegart, orginally published at Climate Investigations Center.

Former ExxonMobil CEO and now-Secretary of State Rex Tillerson personally approved a scheme for accounting for the financial impact of greenhouse gas emissions on the company’s business that deliberately misled investors, one that continued right through ExxonMobil’s May 31st shareholders’, according to an explosiveย court filingย by the New York Attorney General, Ericย Schneiderman.

Schneiderman claims that beginning in 2007, ExxonMobil used one set of figures in describing carbon-related risks to investors but internally used another, secret set.ย  The net result was to vastly understate the financial danger to theย company.

The June 2nd court filing also accuses the ExxonMobil of destroying countless documents despite the fact that it had a legal obligation to preserve all records potentially relevant to the attorney general’s investigation, which is probing possible fraud in ExxonMobil’s disclosures about climate change to investors and theย public.ย 

โ€œThese failures directly resulted in the destruction of months, and in many cases, more than a yearโ€™s worth, of emails and other electronic documents belonging to key custodians including the companyโ€™s top management and reserves analysts,โ€ the attorney generalย writes.

Material from a secret email account maintained by Tillerson’s under the name โ€œWayne Trackerโ€ was also evidentlyย destroyed.ย 

An ExxonMobil lawyer acknowledged that she โ€œknew in ‘early 2016’ about the second email address for Rex Tillerson โ€”ย the Wayne Tracker email address โ€” and that she did not disclose that email address to OAG, stating that it would ‘be anย interesting testย of whether the Attorney Generalโ€™s office is reading the documents,’ โ€ according to the filing (emphasis in the original) in state court inย Manhattan.

This omission led to โ€œmonths of automatic destruction of relevant correspondence involving Mr. Tillerson,โ€ the court papersย charged.

Courts can impose substantial financial and other sanctions – and even criminal penalties – for destruction of evidence.ย ย 

The attorney general did present a number of preserved emails that seem to show Tillerson’s fingerprints on the decision-making for how to minimize to the public the likely impact of a carbon-constrained business environment – such as new national and international greenhouse gas regulationsย  – not only on ExxonMobil’s business operations, but on the value of its oil and gasย assets.

A May 2011ย email exchangeย between ExxonMobil managers describes two different price calculations for the potential cost to the company of a ton of emitted carbon dioxide, one used internally and one presented to the public as the ย โ€œproxyโ€ for GHG costs that the company supposedly used in calculating the impact on ExxonMobil’sย bottom-line.

โ€œI have pointed out the difference in past reviews,โ€ writes Tom R. Eizember, thenย Planning Manager for Corporate Strategic Planning at theย company.

โ€œRex has seemed happy with the difference previously – appeared to feel itย provides a โ€œconservativeโ€ basis (but only if viewed from the perspective of claiming economics credits to reduce emissions; it is not conservative vs EO from the perspective of debiting actions that increase emissions),โ€ Eizemberย continues.

The AG‘s court filing provides a significant amount of new, explosive information about what the investigation, which began in 2015, is undercovering about the world’s largest oil company’s climate secrets. These are backed up by 33 exhibits that include internal corporate emails, a transcript of an investor conference call, and XOM‘s own reports on carbonย risk.

Main image: A 2015 protest in Washington DC. Credit: Flickr/Johnny Silvercloudย (CC BYSA 2.0)

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