This story says
ExxonMobil (XOM) is under investigation by New York’s top law enforcement officer about whether the global oil and gas giant lied to investors and the public about the risks and financial impact of climate change.
New York Attorney General Eric Schneiderman subpoenaed the Irving, Texas-based firm Wednesday night, seeking financial records, statements and other climate-change-related material dating back to 1977, according to a government official with direct knowledge of the matter. The official discussed the issue on condition of anonymity because the subpoena and other details of the investigation remain secret.
How can we stop this sort of behavior on the part of the NY Attorney General?
My suggestion: have the Texas Attorney General launch an investigation into alleged lying by a major New York firm. Goldman Sachs?
I think that is a great idea, provided that some exploratory work is done to try and anticipate where this would lead, consequences, etc. Why stop with Goldman? Throw JPMorgan Chase, Morgan Stanley and the others into the pot also.
Isn’t the jurisdiction for NY officials dependent upon the fact that the NYSE is in NY? If so the way to stop it is a big player like Exxon to delist on the NYSE and switch to some new exchange. I thought NASDAQ might work but I see their corporate HQ is also in NYC. But does the actual trading occur there?
Perhaps the best solution and one more robust given the current world climate is for and exchange to be established in Texas.
And how about this one: “If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”
Why wouldn’t the relevant enemies love more such conflict?
So is the concern here that Schneiderman shouldn’t be doing this because there’s no consensus on the causes of climate change?
I’m not being intentionally dense, but I think I must be missing the subtext here, because I think the government plausibly has a role when it comes to the possibility of businesses being dishonest with shareholders or funding dishonest research about a matter of public safety.
Which is it?
Wait, so you think the government should be able to come down on companies (and presumably individuals too) for engaging in what government officials determine to be ‘dishonest’ research and advocacy? Whoo boy, progressives have REALLY fallen out of love with free speech, haven’t they!? Did you also like that idea for having climate Nuremberg trials?
https://reason.com/archives/2006/10/23/scientific-nuremberg-trials
In fact, perhaps we could consider this the first ‘climate Nuremberg’ investigation?
You say that you are not being intentionally dense, but do you truly not understand the difference between lying to investors by providing false financial information (earnings, revenues, etc.) and not implementing policies that environmentalists wish that Exxon would implement? As the article points out, Exxon has even disclosed to its investors on its 10-K that adverse regulation related to climate change could negatively impact its business so there is no deception of investors here.
Suppose a conservative prosecutor were to go after companies for falsely promoting the idea that diversity policies enhanced the firms’ bottom lines? Would that be a proper use of investor-protection laws, regardless of one’s views on workplace diversity?
“New York’s Martin Act gives the state’s attorney general broad authority to investigate suspected financial wrongdoing and how it could affect investors.”
The fundamental accusation here, by the way, is that Exxon executives are *not concerned enough* about shareholders’ interests. Does any environmentalist truly believe that the main problem with oil execs is that they *are not greedy enough* on behalf of their shareholders, i.e., that they don’t put *enough weight* on maximizing shareholder value? Of course not.
This is a fishing expedition by a unprincipled, grandstanding New York attorney general (all of which, of course, is redundant). Exxon clearly did put in the warning that climate change (and related government policies) could affect their financial performance:
“These requirements could make our products more expensive, lengthen project implementation times, and reduce demand for hydrocarbons, as well as shift hydrocarbon demand toward relatively lower-carbon sources such as natural gas” the company warned, adding that new rules “may also increase our compliance costs, such as for monitoring or sequestering emissions.”
What the hell else should they say? The government claim is that the warning is not strong enough. Which — given the above — is transparent, politically-motivated BS. But what is even worse is the demand for all records going back decades. What could *that* possibly have to do with whether or not the current disclosures are strong enough!?
You know, I really hate Republican stands on gay marriage, the drug war, and immigration, but the willingness of progressives to dispense with due process and free speech protections when they’re inconvenient and try to win by any means necessary, rules be damned, scares me a whole lot more right now.
I think your hypothetical investigation would be fine if the organization didn’t have good evidence that workplace diversity indeed would improve bottom lines. And if they justified those expenditures to investors in vague terms, I don’t think a prosecutor would be out of line to dig around and see whether the org’s actual research plausibly indicated what the org claimed it did.
I am reminded that for many of these sorts of things, the investigation is the punishment. Findings of fact are secondary. Dragging companies and individuals through the process is what matters.
Commenter BC mentioned it above, but to emphasize: I’m fairly confident that repealing (or passing a federal law that supersedes and makes impotent) the Martin Act is the answer to the hypothetical posed by ASK.
What’s your plan for getting a bill preempting the Martin Act through the Senate over a Democrat filibuster?
If it could be passed it could be repealed or changed. But until then, if a law has a weird jurisdictional oddity combined with too much discretion for a politician there may be ways to adjust his incentive structure.
Who would be doing the adjusting? Congress is not going to do anything cutting back on the Martin Act via preemption as long as there are 41 Democrats in the Senate. The NY state courts have not shown any inclination to rein in the AG. The NY state legislature is not about to adjust Schneiderman’s incentive structure; half the legislators are as nutty as he is, and the rest are just hacks not looking to make waves. Any possibility of the federal courts stopping Schneiderman under the 14th amendment is theoretical because big corporations like Exxon are not inclined to launch that sort of litigation. They would rather pay the ransom.
Arnold suggests tit-for-tat. As with dictators, it may not be that attacking the politician’s population hurts the politician.
Another idea is to get pictures of him and his mistresses.
The mistress channel of attack didn’t work out too well with Bill Clinton. Anyway, I wouldn’t assume Schneiderman is vulnerable on that ground – he’s much more of a grim, true-believer ideologue than Eliot Spitzer was.
Arnold’s idea is not going to help. The NY AG’s office has been extorting the Wall Street investment banks and insurance companies for years in this manner for years, often, I think, in cooperation with other state AGs, letting them in on the action. These types are quite happy to damage their own state’s economy and hub industries if it serves their political goals.
If they are fabricating research against global warming, that is protecting shareholders. That is the opposite of the one “government interest” with one legal basis. It sounds like their financial documents are full of statements about government-induced damage to shareholders. So, it would be difficult to logically prove that they are both trying to reduce the damage while damaging shareholders. In fact, it looks like the exact opposite. So, on first blush, this looks politically motivated and not rule of law motivated.
As an aside, when I saw the headline about Neal Cash’n’Carry posing as a homeless man, my FIRST thought was “what office is he running for?” So, what office is this prosecutor running for?
The same office as the last NY AG to go on a moral crusade against business–Governor.
The question was how to limit abuse of prosecutorial discretion – I think.
Short of assassination, of course, which would serve (and may ultimately, to cull the Political Class.
Every jurisdiction, with terms to fit its particular legal (and legally supervised administrative functions) should adopt Law (preferably at the constitutional level where appropriate) to the effect that any person **serving** in a position invested with prosecutorial discretion of any kind (defined), whether appointed or elected, cannot, for a specific period of years after such service ends be qualified (is disqualified) from service in any other elective position, other than in the judiciary. The periods can be determined to match the extent of the “reach” of the discretion held. In NY, probably 8 years for the AG. Federal prosecutors would be covered as well.
It won’t eliminate the disease, but will reduce its outbreaks.
Sadly, Exxon’s failings are moral rather than criminal.
How so?
Why investigate Goldman Sachs? Why shouldn’t Texas AG investigate New York AG?
How ’bout the governor’s office?