New York State’s Attorney General has one of the nation’s most powerful legal tools to take on corporate wrongdoers. The “tool” is the “Martin Act,” which grants the Attorney General expansive law enforcement powers to conduct investigations of securities fraud and bring civil or criminal actions against alleged violators.
The nearly 100-years old Martin Act was not used frequently until then-Attorney General Elliot Spitzer began using it to bring civil cases against Wall Street firms. It has since become the basis for a number of high-profile cases.
It was that tool used last week by Attorney General Barbara Underwood to initiate legal action against oil giant ExxonMobil. The lawsuit, based on a three-year investigation, alleges that ExxonMobil deceived investors on how the company was addressing the financial threats posed by a warming planet.
The investigation is effectively a response to media reports on how Exxon knew decades ago that the burning of fossil fuels would heat up the planet to dangerous levels.
During the late 1970s and early 1980s, cutting-edge research on climate change was conducted by Exxon. The oil giant even equipped one of its supertankers, the Esso Atlantic, as an oceanic laboratory to measure for CO2 in the air and water.
The company’s studies from decades ago confirmed the role of fossil fuels in global warming, and Exxon researchers at the time warned top executives of the potentially catastrophic effect – risks that posed threats to millions of humans and civilization itself.
Yet, instead of acting responsibly, the company spent the next two decades discrediting the findings of its own researchers and others who were increasingly raising the alarm as well. Exxon and other oil, coal and gas companies spent millions of dollars to advance fake science, support front groups, pay lobbying expenses and make campaign contributions to undermine the science and to block any political momentum emerging from the consensus that global warming was real.
Losing those decades has resulted in the near-crisis situation that the planet is in today. Recently, the world’s climate experts warned that energy policies must change – both dramatically and quickly – within a decade if the world has any change of minimizing the harm from climate change.
The success of Exxon and others in building a powerful force to undermine science and elect climate change deniers has pushed the world to the precipice.
Whether the world will heed the new warning is debatable. President Trump and the Congressional leadership ignore – in fact mock – the science on climate change and advance policies that will accelerate the global warming day of reckoning.
It is likely that the national policies of the United States will lead to unimaginable suffering for hundreds of millions – perhaps billions – of people, all of which would have been avoidable if Exxon had been a responsible corporate citizen.
Since the legal tool is the Martin Act, the Attorney General’s lawsuit is framed less about climate change and more about the impact that Exxon’s climate change deceptions had on investors and would-be investors.
The AG stated, “Exxon built a facade to deceive investors into believing that the company was managing the risks of climate change regulation to its business when, in fact, it was intentionally and systematically underestimating or ignoring them, contrary to its public representations.”
The Attorney General said that Exxon’s fraud had a direct impact on New York investors. For example, New York State’s pension funds were placed at risk.
Exxon called the lawsuit “tainted” and meritless.
We are, and will continue to be, feeling the harmful effects of global warming resulting from the burning of fossil fuels. It is important that those responsible – corporate, individual and political – are held accountable for their actions. Whether the suit brought by the New York Attorney General is successful or not, the world is learning more and more about the deceptions of the fossil fuel industry. Hopefully, as that knowledge becomes widely public, it will turn into the power needed to force the actions necessary to avert climate disaster.
Blair Horner is executive director of the New York Public Interest Research Group.
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