ExxonMobil RICO case a slam dunk?

[woodgeek]

Carbon bubble issue gathers steam?

Quote from:
http://digbysblog.blogspot.com/2015/11/a-rico-exxon-lawsuit-slam-dunk-to-win.html

Your background. Bernie Sanders and Sheldon Whitehouse in the Senate, and Ted Lieu and Mark DeSaulnier in the House, have called on the Department of Justice to investigate ExxonMobil for possibly perpetrating fraud, and if warranted, launch a RICO investigation of the company (and other fossil fuel companies) similar to the tobacco industry lawsuit it launched, and won, more than a decade ago. In addition, four House members including Ted Lieu have also called on the SEC to investigate Exxon for fraud, perhaps under the Sarbanes-Oxley law.

From Sen. Sanders' letter (quoted here):
"I am writing regarding a potential instance of corporate fraud - behavior that may qualify as a violation of federal law." I've written about this a number of times, as have others, (broken link removed to http://www.thenation.com/article/exxon-knew-everything-there-was-to-know-about-climate-change-by-the-mid-1980s-and-denied-it/). Here I want to look at what a set of investigations might mean. My source is this piece from Seeking Alpha, an investor-oriented site. At the end, I've appended arequest for our Democratic candidates for president in the form of a speech I'd like one of them to give.

A "Slam Dunk" to Win

The first point from my headline is this: So many damaging Exxon documents have already been made public, that according to Seeking Alpha, a Department of Justice lawsuit would be a "slam dunk" to win. Duane Bair at Seeking Alpha:
On October 20, 2015, Vermont Senator Bernard Sanders sent a letter to Attorney General Loretta Lynch asking the Department of Justice to investigate allegations made public through an in-depth expose by InsideClimate News. The Pulitzer Prize winning group is dedicated to providing objective facts regarding the debate around energy and climate change. The reporters spoke with hundreds of former Exxon scientists and executives, combed through thousands of pages of scientific studies and thousands of in-house memos. Their findings are astonishing. [...]Here Bair details why those findings are "astonishing." I urge you to click through if you want a fast summary of the extend of the wrong done by Exxon executives, and how far back that wrong-doing goes.

 

[Snagdaddy]

"The Sarbanes-Oxley law makes corporate executives personally and criminally liable for fraudulent statements on annual and quarterly reports that go out under their signature. The value of corporate assets — including, in the case of the carbon industry, its oil, gas and coal reserves — is part of every annual statement. If a corporation knows, for example, that climate change will inevitably "strand" (render valueless) a large percentages of those assets, and yet misdeclares and knowingly overvalues those assets ... well, that sounds like investor fraud to me."


The above argument, quoted from the digbysblog link above, is central to the issue at hand. The argument is a fallacy, based upon the nebulous idea of "climate change" and its promoters ever present argument that the science is settled...

This trumped-up issue, probably hatched, nurtured or encouraged by one of the think-tanks, is likely diversionary and/or designed to develop a "climate change" friendly outcome desired by big oil itself, including Exxon and as well as Shell and other members of big oil. Notably, "Big Oil" (Exxon, Shell, Etc.) are Brookings Institute members http://www.brookings.edu/ and CFR members http://www.cfr.org/ and have taken on active roles in making and enforcing global policy, including "climate change" policy.

This witch hunt, if completed, will probably serve to act upon corporate executives within Exxon that didn't want to play along with the "climate change" game, while concurrently cementing into place firmer "climate change" policy on an industry wide basis.

 

[jharkin]

its promoters ever present argument that the science is settled...

Otherwise known as 99.9% of climate scientists.


But good to know its all a hoax. thank goodness because otherwise the 75F days we have been having in November would be 85F days and Id need to put the air conditioners back in!

 

[BrotherBart]

Funny that Bernie cites an article from Seeking Alpha. Seeking Alpha published an article Monday titled "The RICO Case Against Exxon Is Toothless".

Summary
Allegations that Exxon committed fraud regarding climate change communications are groundless.

There isn't any evidence that the company misrepresented the science, whether willingly or not.

While the stock might be struck temporarily by a headline or rumor, a prosecution and its associated financial cost are extremely unlikely.

 

[woodgeek]

I suppose I will think the case has more merit when the Atty Genl decides to proceed. Or not.

Snagdaddy: thank you for my daily dose of twisted conspiracy porn.

 

[Snagdaddy]

Ice age on the way....

http://www.express.co.uk/news/scien...cade-long-ice-age-predicted-as-sun-hibernates

Antarctica ice growing...

http://www.express.co.uk/news/nature/617144/Antarctica-not-shrinking-growing-ice-caps-melting

Turns out that big bright star in the sky has more to do with warming and cooling the earth than any of our gasses.

The science settled? Check out the following article from zerohedge that describes who is to gain from the global warming and climate change hoax:

http://www.zerohedge.com/news/2015-...cks-down-exxon-over-climate-crimes-global-war

 

[woodgeek]

Looks like the New York AG is trying to keep busy.

"HOUSTON — The opening of an investigation of Exxon Mobil by the New York attorney general’s office into the company’s record on climate change may well spur legal inquiries into other oil companies, according to legal and climate experts, although successful prosecutions are far from assured."

NYT article: http://www.nytimes.com/2015/11/07/s...mobil-as-focus-of-climate-investigations.html

and: http://www.nytimes.com/2015/11/06/s...tion-in-new-york-over-climate-statements.html

Looks like they will subpoenaing ALEC. I'm sure their emails contain nothing embarrassing re AGW. ClimateGate in reverse, on steroids? Not mentioned: Heartland Institute.

I guess I see this more as a cultural turning point than a legal one. The current younger generation has little clue re the extent of lying and disinformation that prevailed for the last 30 years, having been raised with greenwashed fossil energy cos. If all this does is air the oil cos extensive dirty laundry and launch a thousand facebook memes it might be of far greater value than a few $B in fines.

For example, smoking rates really took a dive not when the science of smoking causing cancer was well established, but more so after the legal challenges, where it became clear that the industry had been playing smokers for fools for 30 years. Hard to think you're cool for smoking when you're a tool.

@Snagdaddy: Re Tyler Durden, the first rule of AGW fight club is that you don't talk about AGW fight club!

 

[jharkin]

Zerohedge?

For real?


Thats a tin hat conspiracy website.

Turn off Fox news, Zerohedge and drudge for a minute and read some other sources. The US republican party appears to be the only major group around the globe that thinks its a hoax. The opinion in the scientific community and public opinion across most of hte globe overwhelmingly supports the science.

Let me guess, do you believe in abiotic oil too?


If you are looking for who is to gain you had it right in the OP - the executives of Exxon and other oil majors will make more money on Monday than most climate scientists will see in their entire lifetime. Its not that hard to understand...

 

[Snagdaddy]

If you are looking for who is to gain you had it right in the OP - the executives of Exxon and other oil majors will make more money on Monday than most climate scientists will see in their entire lifetime. Its not that hard to understand...

The little money the climate scientists get for their work (directly or indirectly from the government) evaporates the moment they find the wrong findings. They are a few missteps away from becoming walmart employees. This is why modern science is contaminated.

Turn off Fox news, Zerohedge and drudge for a minute and read some other sources

Suggest some other sources to read. I have visited CNN, MSNBC, PBS, and probably most of the major online newspapers. Foxnews is in this same category. The problem is that the news from these sites seems to be coming from the same location....

By the way, the comment section on the Zerohedge site is a must read.

a "conspiracy cookie" to keep "woodgeek" happy:

http://www.infowars.com/this-is-why-you-should-be-skeptical-of-government-funded-science/

 

[Jake86]

Not a scientist, not sure what this means regarding the climate change controversy, but read there is significant warming of the poles on Mars. Is this man made global warming? Who's to blame? I want to know!

 

[Jake86]

I'll give you my stove, when they pry it from my cold, dead, burnt hands!

 

[jharkin]

What was I thinking! Of course it's a conspiracy expertly orchestrated by millions of scientists and hundreds of governments worldwide for decades.

They did such a great job faking satellite photos of referring glaciers, must be done in the same lab where they faked the moon landings.

Thanks for the education, I'm out.

 

[TradEddie]

The little money the climate scientists get for their work (directly or indirectly from the government) evaporates the moment they find the wrong findings

Select the most famous scientists in history, and ask why are they famous?
Aristotle, Galileo, Newton, Einstein.

None of those became famous for repeating the work or proving the hypotheses of others, they are famous for challenging the status quo in scientific opinion and proving existing science was wrong.

For any scientist seeking to get rich or famous, proving that AGW is a hoax or a mistake would be the greatest achievement of their lives. A Nobel prize for certain, and job offers from every major university in the world. To suggest that 99.9% the world's climate scientists are falsifying evidence to maintain their paltry salaries is laughable.

TE

 

[Snagdaddy]

According to the American Association for the Advancement of Science, the science has been settled on climate change for a long time now.

http://www.aaas.org/news/aaas-reaffirms-statements-climate-change-and-integrity

To suggest that 99.9% the world's climate scientists are falsifying evidence to maintain their paltry salaries is laughable.

I didn't claim what you said I claimed. Maybe re-read my posts.

When melting glaciers are caused by volcanic activity in a local area, of course warming is happening but its causes (underwater volcano) are hidden or not mentioned while only the warming is studied. This is just one example how science today is compartmentalized to achieve an overall goal. "Finding the wrong findings" would be to actually factor in the volcano or the sun into the data. This won't happen because the sun and volcanoes "don't exist under the current model".


The (big) oil companies support the idea of man-made climate change as an issue driving internal policy. This beggars belief by some but the evidence of it is very plain.

 

[woodgeek]

The (big) oil companies support the idea of man-made climate change as an issue driving internal policy. This beggars belief by some but the evidence of it is very plain.

More or less. ExxonMobil has applied a carbon tax to their long term projected earnings for many years now. This did cause a stir among the enviros back when they started. More recently, a number of other oil majors (mostly UK and EU based) signed a letter asking world leaders to develop a carbon trading regime. To a naive environmentalist, these developments would appear to be cause for cheer, or evidence of 'progress'.

https://www.hearth.com/talk/threads/oil-majors-call-for-carbon-pricing.144152/

I am a bit more cynical about the motives of these companies.

Based on recent discussions of the Carbon Bubble, and now the RICO case, it is a bit clearer what they are up to.

While the oil majors have been discussing a future carbon trading regime as part of their financials, I think this is a smoke screen. Rather than confirm or deny the reality of climate change explicitly, or acknowledge the potential for AGW to affect their long term future earnings or to strand their assets, they simply 'factor it in' with a (rather low) carbon price, while maintaining perpetually growing future revenue projections. Rather than discuss the deeper issues regarding the future of their business (i.e. many of their assets have no value, and their future revenue is likely to be revised downward) they move the dialog to esoteric questions of 'how much would the price of carbon be?' and reminding everyone that 'oil cannot be replaced' in the global economy.

The heart of the RICO case is that while it is perfectly legal for a corporation to lie to the american people, it is not legal for them to lie to their own shareholders. Kinda like getting a gangster for not paying his taxes. ExxonMobil recently made a statement to its shareholders (discussed here in the green room) re the carbon bubble, and asserting that there was no risk to them. They cited their own bountiful future revenue projections in the face of competition, and pointed out that their projections were conservative relative to that of the independent EIA (which is required by its charter to make projections that discount future renewable energy incentives). "No reason to worry shareholders...we will be selling more oil forever."

https://www.hearth.com/talk/threads/to-strand-or-not-to-strand-that-is-the-question-for-xom.143389/

IOW, a crock of chit.

So, when the carbon bubble comes to fruition, there will be the questions of what did ExxonMobil know, and when did they know it?

Compared to a movement whose result will be to leave a lot of oil in the ground (esp North American oil), carbon pricing looks like kiddie pool. Taxes are unpopular, and their rates can be manipulated by bought politicians. If our best plan for reducing CO2 emissions were a carbon tax, the majors know they could make it an albatross around the neck of the party that started it, for decades to come, while at the same time they could reduce its cost to the level that would allow business as usual, again for decades to come.

Basically, the oil majors want a carbon tax because what is coming down the pipe will be much worse for them. IMO, the Saudis have seen the handwriting on the wall (not all of the oil in the ground will be pumped and sold), and are undertaking their current operation (with $40 oil prices as the result) so that they can get a bigger slice of the finite sized pie that remains. The majors understand this too, are more or less powerless to change the situation, and are not telling their shareholders.

 

[woodgeek]

In other news... California is in on the investigation of Exxon defrauding its shareholders.

http://www.nytimes.com/2016/01/21/science/california-said-to-target-exxon-in-climate-inquiry.html

and WTI oil appears to be down to $26 and change.

 

[BrotherBart]

California is tinkling up a rope.

 

[woodgeek]

While most shareholders are still of the opinion that Exxon and the other majors will be allowed to develop all their stated reserves, the case will be buried on page 17.
If/when the 'leave it in the ground' movement gets some traction with the younger generation, maybe some shareholders will start asking why they weren't warned of the risk...until then, I am inclined to agree with BB.
That said, California did more or less singlehandedly give us the alternative to oil...the EV.

 

[dougstove]

... IMO, the Saudis have seen the handwriting on the wall (not all of the oil in the ground will be pumped and sold), and are undertaking their current operation (with $40 oil prices as the result) so that they can get a bigger slice of the finite sized pie that remains. The majors understand this too, are more or less powerless to change the situation, and are not telling their shareholders.

I wonder whether the Saudi royal family is seeking to cash out before the various extremists they have fostered come home to roost.

To quote one of their princes, the stone age did not end because we ran out of stones.

 

[begreen]

Saudi's have a lot of entitlements but it is an oppressive state. The Saudi state is trying to avoid another Arab spring, but their coffers are running low while the population grows. Many things are free there, like healthcare and education. Now budgets are shrinking and they are considering taxes for the first time. There is also a huge wealth disparity. Grumbling at the street level is the result. Mounting sales of Iranian oil are not going to help the Saudi situation at all.
http://www.middleeasteye.net/columns/collapse-saudi-arabia-inevitable-1895380679

 

[woodgeek]

I'm no fan of the Saudi's but the article argues they are doomed based on the export land model....not super reliable.

They are under strain, but they have no sovereign debt and are sitting on the cheapest petro on the planet...not a bad position in a (hypothetical) future of declining demand.

 

[blades]

Carbon tax - scam- a way to make money from nothing by creating something from nothing and then charging for it. Sorry I do not buy into the carbon credit trading scams. Ultimately all it will do is drive the cost of fuel of any type higher and there by burying the common man even further down in the mud while all the while an elite few are laughing at the duplicity of the populace. Hangs right in there with Global warming or in the fifties global freezing ( yes the talking heads were pushing that scam back then) Course I am kind on the over the hill side- mean, grouchy, crotchety, don't believe much unless the science behind it is perfect and I can still add, subtract, divide and multiply with out a machine. Guess I fell out of one too many trees, fell of my bike sans protective equipment and one too many times Huh?

 

[begreen]

We can look at an example to see how a carbon tax might work by looking at British Columbia. So far they seem happy with what it is accomplishing. It's resulting in reduced fuel consumption AND reduced income tax and some of the lowest corporate tax rates in Canada. The key is to make it revenue neutral. If big problems are not dealt with in a rational way they will fester to the point of crisis.

http://www.economist.com/blogs/americasview/2014/07/british-columbias-carbon-tax

 

[blades]

I agree with you Begreen, but I also have a very keen sense of what will take place DC wise, your last two sentences sum it up. All DC can see $$$$$ and you know as well as I it will not be revenue neutral. Heck they were talking trading carbon credits ( and look who is in theory will make up the board of directors of the only authorized trading point) So it becomes a political football, all about money in someones pocket, not about environmental issues at any level. So that is the glitch I object to and call the whole thing like I do - scam. The article referenced takes a bit of a pie eyed view gushing on the front side and very weak on the back side imop. With the current administrations war on a particular segment of resources and are own lovely out of control EPA, there in makes a recipe for crisis. Just a minute now while I go crawl under my rock (Granite- maybe the radon is getting me ?)

 

[dougstove]

Carbon tax: government revenue (for roads, aircraft carriers, medicare, whatever) taken on the base of carbon energy consumption, incentivizing labour and capital to cut energy (and pollution)>

Income tax: government revenue (ditto above) taken on income, incentivizing energy and capital to cut labour.

Anybody who works and pays income tax should favour a carbon tax over an income tax.

Carbon credit trading is a different story, subject to bankster profiteering.