The first week of the New York attorney general’s trial against ExxonMobil didn’t go as planned for the state… to put it mildly. After being reprimanded by New York Supreme Court Justice Barry Ostrager for wasting the court’s time on multiple occasions, last week concluded with Justice Ostrager threatening to rest the case early after the NY AG failed to bring additional witnesses during their allotted time. This week, the Justice Ostrager has already criticized a NY AG video deposition for having “no relevance to this case whatsoever.”
Enter: Rex Tillerson, ExxonMobil’s former CEO, who will testify Wednesday morning. Like the preceding investigation, the NY AG’s office will likely make much-ado-about-nothing, and may even attempt to vilify Tillerson’s use of two separate email accounts as part of his role as CEO of the company.
The catch? Justice Ostrager already dismissed this narrative at the pre-trial hearing, saying “no harm, no foul,” in response to the issue.
But His Emails!
In addition to his primary account, Tillerson utilized a secondary email address under the pseudonym “Wayne Tracker” to communicate about time-sensitive matters with other top executives in the company, helping to prioritize them over the rest of the emails in his busy CEO inbox. This is a common practice among corporate executives.
The NY AG and its activist allies suggested this email address was primarily used to discuss matters including risk-management related to climate change, and that the emails would have confirmed that ExxonMobil’s senior management had tweaked internal numbers related to greenhouse gas emissions. Because of a technical snafu, some of the Wayne Tracker emails were not preserved, which the NY AG says is evidence that ExxonMobil failed to comply with its subpoena.
But counsel for ExxonMobil provided emails from accounts which corresponded with the Wayne Tracker account. By the very nature of email communication, even though some of the Wayne Tracker records were not preserved, those emails would have been captured by the email accounts sending and receiving communications from the Wayne Tracker email address and relevant records would have been captured in the over 4 million pages shared with the NY AG.
Fortunately, the judge seems unconvinced; at the pre-trial hearing, Justice Ostrager signaled that he “saw no sign the purge was deliberate and denied [the NY AG]’s request for a negative inference to be drawn against Exxon,” according to reporting by Bloomberg.
A Political Media Circus
Instead of resolving their concerns bilaterally – in alignment with the court’s “requirement that parties attempt to resolve disputes before bringing them to the Court” – the NY AG informed the court and the media concurrently, giving ExxonMobil only 24 hours to respond before filing the letter in the public record.
Both Justice Ostrager and ExxonMobil rightfully questioned the appropriateness of such an action, which served the NY AG’s greater public relations campaign against the company, rather than the expeditious resolution of the investigation:
“It seems to me, with all due respect to the AG’s office, if they’ve reviewed some, most, or all of the 416,000 documents that [ExxonMobil] produced comprising of more than two million pages, and they’ve thought that somebody’s name appeared who wasn’t previously identified as custodian, they could have called [ExxonMobil] up and said we want this person to be identified as a custodian?” – Judge Ostrager
“Such an approach does not serve the productive resolution of discovery disputes, but it does serve the NY AG’s well-established preference to litigate his case in the press rather than court.” – ExxonMobil
Further solidifying that this issue is a political stunt – rather than born out of genuine concern about the email account– is the NY AG’s seeming lack of interest in investigating this issue behind closed doors. As Ted Wells, counsel for ExxonMobil, revealed in his opening statement for trial:
“Not once in the three-year investigation did they ask to interview Rex Tillerson; not once in the three-year investigation did they ask to interview any person on the Management Committee… And for them to return a complaint with that type of allegation about how a fraud was sanctioned at the highest level, it speaks volumes about the integrity of the investigation and the integrity of the allegations in the complaint.”
A Reality Check: Tillerson’s Climate Progress
Under Tillerson’s leadership, ExxonMobil implemented a proxy cost on carbon a full seven years before shareholders requested the company release their “Energy and Carbon – Managing the Risks” report in 2014. Activist shareholders who testified last week previously commended the company for being, “the first energy company to respond to investor concerns and, in exchange for withdrawal of the proposal, commit to publish a report on how it assesses carbon asset risk.”
As Tillerson testified under oath in his deposition:
“I had taken the view and we had taken the view as a corporation that the risk of climate change was serious and that appropriate action was going to be needed…We’re in the energy business so we’re going to be impacted by this and we needed to begin to understand how it might impact us.”
Tillerson’s proxy cost was innovative, not just among energy producers, but within the business community as a whole and has since served as a “source of comfort” for company shareholders.
Conclusion
The NY AG’s investigation has been a long running politically motivated circus, aimed at garnering press attention, rather than mounting substantive claims against the company. If last week wasn’t enough of an indication of their weak case, any attempt to showboat their debunked Wayne Tracker conspiracy certainly will be.
