Elizabeth Warren targets Exxon with ‘anti-corruption plan’

Source: By Carlos Anchondo, E&E News reporter • Posted: Wednesday, November 13, 2019

Democratic presidential candidate Sen. Elizabeth Warren (D-Mass.) targeted Exxon Mobil Corp. yesterday in debuting a policy proposal that would prosecute companies for perjury if they knowingly lied to federal regulators.

Warren said her plan to combat misinformation would prevent companies such as Exxon from using industry-funded research to mislead government regulators and would hold so-called bad actors accountable for lying to federal agencies.

“Exxon knew about the risks of climate change decades ago,” Warren wrote in a post on Medium. “But their response to discovering the truth was to do everything possible to hide it from the world for as long as possible. That’s time we can’t get back.”

If Warren’s “anti-corruption plan” was enacted, companies that intentionally mislead agencies could face up to $250,000 in fines or jail time for corporate executives who consciously submit “false or fraudulent” information to regulators. The proposal calls for a ban on agencies and courts from using research that has not been peer-reviewed or that is funded by industry. The plan also would create an Office of the Public Advocate, which would work with the public on “important legal changes” made by federal agencies during the rulemaking process.

Exxon did not respond to a request for comment but told E&E last week that the company was “committed to doing our part” as it relates to balancing the impacts of climate change with the world’s energy demands.

Last month, Exxon created a webpage called “Understanding the #ExxonKnew controversy,” which the company described as a “coordinated campaign perpetuated by activist groups with the aim of stigmatizing ExxonMobil.” The American Petroleum Institute declined to comment.

This is not Warren’s first tussle with oil and gas companies, after Exxon and Chevron Corp. — two of the largest U.S. oil companies — voiced concerns about her plans to impose a fracking ban, something other Democratic presidential hopefuls have also pledged (Energywire, Nov. 4).

James Coleman, an associate professor of law at Southern Methodist University, said it’s hard to prove perjury, and he did not believe Warren’s plan is “well calibrated to address that.” Coleman, who has written about inconsistent messages that oil companies send to regulators and investors, said the examples Warren provided are mostly “exaggeration and selective omission.”

“Companies do sometimes lie to regulators, but the bigger problem is that they are not fully candid — their statements about regulations are mostly predictions about the future, and they often exaggerate,” Coleman emailed after reading the Medium post.

Coleman also pointed to the difficulty of enacting a new law and said even a Democratic majority might not want to enact “such a large expansion of perjury law.” Rather than wait for a new law, he said it would be easier to discount company predictions about the impacts of regulation unless they are willing to back them up with evidence and have warned their investors.

James Spindler, a professor at the University of Texas, Austin, School of Law and McCombs School of Business, said there are already a lot of areas, such as in federal securities laws, where criminal penalties are in place for fraudulent statements. He said it’s very rare to be able to prove that an individual at a corporation knowingly made a false statement, echoing Coleman.

“Using the Exxon example, it’s just hard to see what that proposal would impose on Exxon that it wasn’t already subject to,” Spindler said.

David Turnbull, strategic communications director with Oil Change U.S. — which aims to keep fossil fuel money out of politics — said he was “thrilled” to see Warren’s plan, adding that pieces about considering only peer-reviewed research and establishing an Office of the Public Advocate could be enacted by the executive branch. Lies to the public, shareholders and government entities “have resulted in a distortion of the public discourse on the climate crisis,” Turnbull said.

Warren’s proposal comes on the heels of the end to a New York trial over Exxon’s climate risk disclosures (Climatewire, Nov. 8).