Exxon Strikes Out on Hiding Accountant’s Books

MANHATTAN (CN) — New York’s highest court handed a critical victory Tuesday to state prosecutors investigating Exxon for fraud on climate change, refusing to let the oil giant shield its auditor’s files.

The state attorney general, who began the investigation in November 2015, applauded the New York Court of Appeals on Tuesday for its ruling on the case with PricewaterhouseCoopers.

“As we’ve said from the start, Exxon had no legal basis to interfere with PwC’s production,” Attorney General Eric Schneiderman said in a statement.

Exxon appealed to the state’s highest court after Judge Barry Ostrager balked at its argument that attorney-client privilege protected its PwC files.

“New York does not recognize an accountant-client privilege, and controlling authority holds that: ‘The law of the place where the evidence in question will be introduced at trial or the location of the discovery proceeding is applied when deciding privilege issues,’” Ostrager ruled in October 2016.

The Court of Appeals did not include any explanation Tuesday in its order affirming Ostrager.

In a pointed dig at objections by Exxon at a recent court hearing meanwhile Schneiderman vowed to advance his case. “Our fraud investigation continues to move full speed ahead, despite Exxon’s continued strategy of delay,” the attorney general said.

Judge Ostrager complained this past June about the years-long build-up.

“I don’t think the scope of this investigation is so massive, and the issues they’re investigating are so arcane and requires so much sleuthing to get to the bottom of [it], that ExxonMobil’s entire business has to be audited,” Ostrager had said at a hearing. 

It was a Pulitzer Prize-winning series of articles by The Los Angeles Times and InsideClimate News in 2015 that sparked Schneiderman’s investigation.

The article series explored Exxon’s understanding of how man-made global warming would affect its business, finding that the oil giant misled shareholders about the bleak forecast.

Drawing intervention by the attorney general of Massachusetts, Schneiderman’s probe has been widely likened to the racketeering lawsuit that laid waste to tobacco executives’ denials that smoking caused cancer.

Though the U.S. Virgin Islands initially joined Schneiderman’s probe as well, the debt-saddled territory retreated from the lawsuit last year amid reports that it was outgunned by Exxon’s massive legal war chest.

Exxon’s attorney Ted Wells did not immediately respond to an email request for comment.

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