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Recap: ExxonMobil's New York Fraud Trial


hello and welcome to drilled. We are doing a quick update episode today on the Exxon fraud. Trial just concluded in New York are reporter Emily. Gertz was there a few times during the trial including including the opening and closing arguments and during rex tillerson's testimony so she's brought us some details and we've also got a few minutes of the trial to play for you as well. How so caught up with Union of concerned scientists? Kathy Moldy to get her take on this. She's been following the case closely and we talked a little bit about how the New York case he's stuck up against the Massachusetts case. Here we go. What was the scene like on the opening day of the trial? Yeah the opening day of the trial. Yeah well I didn't see all of this but ahead of the trial Opening which was around the middle of the afternoon like one of the local three fifty eighty chapters a staged big demo hold Exxon accountable kind of thing and that some pictures from that did come out in in like the times and stuff and then and there was a really long line to get into the hearing room which was where there were like. I duNno seating for. I don't know outside of the area where the all the parties in the case are not very big and so they you know they managed to cram about Sh- which I don't know let's say thirty or forty ish people into the courtroom sort of a gallery and then all everyone else and there were like dozens of people. Online were were sent over to an overflow room where they had a livestream coming in so there was a lot of people. They're interested in the case and then the two sides each gave their opening arguments. They had a lot of exhibits that they put up on the screen as they gave the opening arguments. It's you know the the G. Office went I. 'cause they're the the they brought the lawsuit and laid out their case for why what Exxon did constituted constituted fraud and then the lawyer for Exxon got up and gave his case and which was basically to say. This wasn't wasn't fraud it was clear all along exactly how Exxon was doing this and the ag that this is not about securities fraud at all this is about about the attorney general having an agenda to persecute Exxon and are evidences. That Eric Schneiderman did this press conference a year. You're to ago you know with Al Gore. Talk me you know in the wake of in the wake of the reporting by La Times and inside climate on what Exxon Exon new and Or you know ex- on the road not taken and they're like so they have this press conference and they were determined to find some way to haul Exxon into court and that's what this case is really about. It has nothing to do with securities fraud. I watched the opening online too. And he liked the like one of the last thing she said was something like that. Basically compared this case to Russians hacking the election. Yeah Yeah it was pretty straight wasn't it was. Yeah I'm going to Apprai- a little bit of that tape here how they agee's involved to invent a AH something Russia too much. I should mention here that that is Ted Wells. He is is a litigation partner with the firm. Paul Weiss he is also the attorney. Who Offended Philip Morris in the Rico case against Big Tobacco Echo and he's been excellent attorney for quite some time e really seem to be getting kind of fluster towards the end which is unusual for for these oil company lawyers I he was to work trade? He worked up a good head of steam. Definitely this this whole angle of how how persecuted. Exxon is is one of their really potent arguments and and yet at the same time. The ahead I went and did a lot of did my best has to get familiar with all the sort of motions and things that led up to the trial and The they on the one hand Exxon's motions to to exclude. All sorts of angles of the prosecution were denied but at the same time the prosecution Russian the judge also really sort of narrowed the path for the attorney. General's office to bring in like information about about how Exxon misled the public for so many years like that that that arguably predated the actions that the AG sake constitute the fraud and so that stuff isn't coming is barely coming up in the trial which perhaps may have been very dissatisfying to some of the activists. It's but this is really. I mean it's really about this like did Exxon conduct business in above board or did it mislead investors. That's basically weekly and whether it misled the whole world about climate change is is hardly coming up on cross examination. Tillerson went so far as to say well you know Exxon Exxon did a lot of the original research that that has proven that climate change is real. And you know it's like he can say that because the prosecution mission is is is almost practically forbidden from bringing up anything about how it then buried all try did its best to bury all that research and you know so it's quite fascinating. I talked to Cathy. mobis Z.. Accountability Campaign Director for the climate and energy program at the Union of concerned concerned scientists. About this too Kathy's following this case against Exxon and various other cases for a while and she had one interesting detail about what some of the accounting stuff shows about the denial campaigns and their impacts on climate change. Here she is. The New York case is pretty narrowly focused focused on how the company accounted internally for the cost of its high carbon business and You know got into into a lot of of detail about the the terminology and so I think it's Really drew attention to to the way that Exxon Mobil did. It's planning which may have led to exploration and development of carbon intensive live resources like the Canadian oil sands that will be harmful to our climate but also may wind up being stranded ended assets if if if policies are are strengthened around climate change. Okay back to my conversation with emily. I think on the the second or third day of the trial Maura Healey officially filed her suit in NASA -Chusetts and that suit the investigation started the same time that New York fraud mitigation started. The Massachusetts suit includes all of the GREENWASHING and denial campaign. Let's think Maura Healey might have been at the press conference that that the Eric Schneiderman press conference Only I think there's an equivalent of the Martin Act in Massachusetts so for them make the making strong case may be substantially different. So like I wonder if some of the discovery in that case we talked about last time could come into play there. BECAUSE THAT'S A. That's a Boston air. That's a Massachusetts assists community there. That's claiming that while Exxon was saying one thing about climate change that that it was doing another thing to protect its business so the Heeley case looks like it's going to be really different but but Exxon will go after every single thing. Try to get as much of it excluded as possible if and and not even go to trial. Obviously they'll do their best to get the whole thing thrown out so they were trying to get her to hold off on filing oiling until after the New York case and she was just like no. I didn't know that. Yeah they were initially. They said you know she couldn't file until after the New York trial had stopped which is not true and then when and she sent them the sort of like notice of intent to file they said well you know. We'll do the new conference in discussion discussion after the New York thing which is sort of a courtesy that you wait until you have this conference with council on the opposing side to file. But you don't it's not required. There's no legal obligation and so he's choice to just go ahead and file like right in the middle of the first week is is definitely a sort of ask you that that whole trial is I dunno. Yeah no it's interesting. Because they tried to sue her personally with the exact same argument that that was used in the opening. Statement of the New York case that is politically motivated. And you know it's a witch hunt and all this kind of stuff on so I think there's a little more like personal heat in the Massachusetts. Well yeah I mean if nothing else like you know I think we're on our third attorney general. Since since since Schneiderman Schneiderman announced the investigation so it would be very right it would be very hard for them to to bring to make to you attempt to like even infer like a personal donal animosity on the part of the office. You're right But Moore heelys fortunately has has managed not to do anything that forced her to resign from office. Unlike unlike our attorney general at well it must it must be very frustrating to them. You know. They can't get these cases moved like whenever there's a federal suit one of the first things they do is try to get it moved down to Texas right. And that's you know can't do that if it's the state ag so we'll and then with all of the the cases that have been filed in State Court. They tried to get it removed to federal court because they have some precedent at least the ability cases of of the cleaning rack. Basically preempting any state action on this stuff. So that's what's interesting about. The New York gauges approach to is like it has. You can't make that clean. Air Act argument with Ray with securities fraud in New York state. Did you go back on Wednesday. Stay also for Tillerson I did. I did I went back for Tillerson. was there a different sense of of anything when you went back for the tillerson testament there wasn't as big crowd crowd. I mean there was definitely a lot of people certainly. There was a lot of press there but you didn't get the big crowd of activists that we saw the first day. There were two things things I think the first is that you know by this time. The trial has been going on for what two weeks almost and there was already kind of a little bit of a fraught atmosphere. You're coming in from what I read because first of all the AG has been relying a lot on the the same set of documents when they do there examinations of witnesses and one gets the sense from side comments. Like I won't show that map again. That the the judge has seen a lot of this stuff stuff now repeatedly and is is the judge beginning to get impatient. Well like the week before. Tillerson came in. He actually told the prosecution Russian. He said if you guys can't make efficient use of our time I'm going to end the trial. Because they were setting up witnesses and then Exxon was not hot cross examining so they had these big holes in the schedule that that the judge felt were needless and so I did notice that a press person from the AG is sending out on background updates on the witness list and the witness list did start to get a little more heavily populated at that point as you know. They began to sort of q people up against the possibility that Exxon would not take up a lot of time with cross examination. So so you yeah so yeah coming in. You know there's been a little already a little bit of strife between the prosecution and the judge. Let's say and so but you know other than that it. It was all very calm. I mean Tillerson was extremely self contained very composed. You look very relaxed. He was Kinda Tan actually and like I didn't get a sense of any sense of defensiveness from him. While he was being examined. There was a lot of. I don't recall here. You know at certain in points and one thing that people remarked on afterwards meaning reporters I was chatting with was that people had been kind of expecting the prosecution offers to bring up. This wayne tracker email account issue. Are you familiar with that. Yes and win. Yeah and they I mean in and the attorney from the. AG's office was like one of their information technology specialists. and which would have. I think created some expectations expectations that they were going to discuss with him. Why were you using this alias account? Why did the messages from and that account? Why weren't they you know saved the way Your your main account was when it became clear that there was a legal action underway. The Exxon has excuses for that. Like well we just didn't you know we didn't we didn't take. We didn't flag that account for conservation. Or whatever so but none of that ever came up they just sledded. Go completely spoke to emily the day before or the closing arguments in the Exxon trial. That was today November seventh. I watched those closing arguments may solve this morning. And it struck me that Ted Wells seem to really be focusing on the reputations of Exxon's executives and how they've been harmed by the charges brought in this case it's not unusual for excellent and to sue attorneys organizations activists. Whoever they can over things like reputational personal risk so I don't know whether he's laying the groundwork there but he was really emphasizing and is closing? Here's a little snippet of that is almost is a joke. But it's because reputations of people have in her disappearance by the witnesses term early elite engineers. The person's GonNa really every day you try to win energy world to this country from The way in which we have just because he really serious serious We not say that problem is Chris. It does not regulate arch people's reputations and meanwhile L. Maura Healey in Massachusetts formally filed her complain against Exxon so that will be going to trial at some point soon and that case is a little different from this one. Here's Cathy Moulvi again. On that one fascinating there is in terms of the charges of of defrauding investors serves It's situated in a much larger question of the Hispanic risks that climate change poses to our entire economy and what that needs for For the planet and for ExxonMobil's business show that's really putting fundamental issues on the table and fundamental issues is that are that are in the mainstream. The Task Force convened by Michael Bloomberg Several years ago that That taskforce on climate related financial disclosures was was put together with the recognition that climate change poses the same kinds of systemic risks to our global economy. Hunanese that the financial crisis did ten years ago. So that's one big gift friends. The other big difference is that Massachusetts lawsuit include consumer complaint and Specifically Charges Exxon Mobil with greenwashing in its advertising to consumers the Commonwealth and and it's a parent misrepresentation and that the company is taking action to address climate. Change Range when actually the company is expanding aggressively. It's it's possible field US okay. That's it for for this one. We will definitely be following the Massachusetts case as well and we'll bring you updates on all the various litigation as we get them. Thanks for listening. Being drilled is produced and distributed by critical frequency. The show was created and reported by me. Our music is by Martin. Martin Wissembourg were in sort of an in-between season right now and we're doing a few interviews and series but we will have another investigative series coming coming at you. It's a great story so hope you tune. In in the meantime you can check out our first and second series in this feed. 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