Tillerson Will Take The Stand In NY Exxon Climate Fraud Trial; He Built The "Potemkin Village"
The shareholder fraud lawsuit brought by the New York attorney general against Exxon Mobil has entered its second week, and on Wednesday a star witness is scheduled to take the stand: Rex Tillerson, the company’s former chief executive and a former secretary of state in the Trump administration.
Oddly enough, some of the questions he is likely to face will concern an online alter ego by the name of Wayne Tracker.
The state’s case argues that Exxon Mobil told the public and its shareholders that it was fully accounting for the potential costs of climate change regulation to their business, and from 2014 on publicly stated that it was using such “proxy costs” as part of its economic outlook. The state argues that in fact, Exxon was using a much lower number internally, and that the oil industry giant for years “in effect erected a Potemkin village to create the illusion that it had fully considered the risks of future climate change regulation and had factored those risks into its business operations.”
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That deception, if there was one, occurred on Mr. Tillerson’s watch; he was chairman and chief executive of the company from 2006 until 2017. (After retiring from the company, he served as Secretary of State for one tumultuous year.) Attorney general Letitia James’s case relies heavily on public statements from Mr. Tillerson, including his comments at a 2016 shareholder meeting in which he said that when it comes to the potential costs of issues like climate change regulation to their business, “we have accommodated that uncertainty in the future and everything gets tested against it,” and that the cost “gets put into all our economic models when we make investment decisions as well.” The state argues that Exxon did not do that and “when it began to appear that maybe Exxon was not following through on what it said about its use of a cost of carbon, the company share price took a hit” to the tune of hundreds of millions of dollars. That loss to investors is the argument that puts the case under the Martin Act, New York’s powerful shareholder protection law.
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https://www.nytimes.com/2019/10/30/climate/rex-tillerson-exxon-climate-change-case.html
