Exxon Mobil Audit Files Ruled Fair Game in Fraud Probe

MANHATTAN (CN) — A state appeals court ruled Wednesday that the files of Exxon Mobil’s auditor are fair game as New York Attorney General Eric Schneiderman hunts for evidence of fraud in Exxon Mobil’s climate-change denials.

Schneiderman opened his investigation of the Texas-based oil giant in November 2015, after a Pulitzer Prize-winning series of articles reported that Exxon Mobil had been misleading the public about climate change for decades.

As reported by The Los Angeles Times and InsideClimate News, Exxon Mobil organized a misinformation campaign of think tanks, junk scientists and lobbyists to counter the findings about the global-warming crisis its own scientists reached in the 1970s.

Schneiderman’s office has been investigating whether Exxon Mobil misled shareholders in a way that would amount to securities fraud, and the Manhattan Supreme Court agreed this past October to enforce a subpoena against PricewaterhouseCoopers, Exxon Mobil’s London-based auditor.

“New York does not recognize an accountant-client privilege,” Justice Barry Ostrager wrote at the time.

Exxon Mobil’s appeal, which a five-judge panel denied Wednesday, hinged on whether Texas rules should apply because of its base there.

“We reject Exxon’s argument that an interest-balancing analysis is required to decide which state’s choice of law should govern the evidentiary privilege,” the unsigned decision from the Appellate Division, First Department, states.

“Our current case law requires that when we are deciding privilege issues, we apply the law of the place where the evidence will be introduced at trial, or the place where the discovery proceeding is located,” the court added.

Neither Schneiderman nor Exxon Mobil’s attorney Ted Wells, from the New York office of Paul Weiss, immediately responded to requests for comment.

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