Web of ExxonMobil’s Legal Troubles Extends from White House to Calgary
Ongoing legal challenges facing ExxonMobil, the world’s largest investor-owned oil company, are reverberating from Donald Trump’s cabinet table in Washington to a bureaucratic backwater of Exxon’s Calgary-based Canadian subsidiary, Imperial Oil.
In Washington, agreements with Russian parties under now-secretary of state Rex Tillerson’s watch as Exxon CEO may have violated U.S. sanctions against Russia. In response, “Treasury officials fined ExxonMobil $2 million for signing eight business agreements in 2014 with Igor Sechin, the chief executive of Rosneft, an energy giant partially owned by the Russian government,” the Washington Post reports.
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“The business agreements came less than a month after the United States banned companies from doing business with him.”
Tillerson’s old company promptly “filed a legal complaint against the Treasury Department—naming Treasury Secretary Steven Mnuchin as the lead defendant.” The company called the fine “unlawful” and “fundamentally unfair.”
According to the government, while Tillerson was CEO of Exxon at the time, he “did not personally sign the documents sealing the agreements with Rosneft,” the Post notes. “But in its announcement, the Treasury said that ‘senior-most executives knew of Sechin’s status’ and that they ‘caused significant harm to the Ukraine-related sanctions’ by engaging in business agreements with him.”
“I can’t think of another case where you’ve had a senior government official on both sides of the ‘v,’ essentially,” former Treasury Department official Adam Smith told the paper. Tillerson’s engagement with Russia as Exxon’s CEO raised a red flag during his confirmation hearings for the position of Secretary of State.
In an unrelated case, meanwhile, the National Observer reports that New York State Attorney General Eric Schneiderman is seeking testimony from a Canadian involved in Imperial Oil’s planning scenarios, as he seeks to determine whether Exxon kept two sets of books for its shadow price on carbon. One, intended for investors, showed the oil giant conscientiously pricing in a plausible nominal cost for its carbon production, against the day when public policy forces it to do so. The other, by which it made actual operating decisions, employed a much lower cost. Schneiderman asserts the difference constituted a fraud on Exxon investors.
According to the Observer, New York has secured a court order for testimony from Jason Iwanika, stating that the Imperial employee initially “pushed back” when Exxon instructed him to use the lower, internal price for Imperial’s tar sands/oil sands planning, rather than the official public one. Later, Schneiderman said, Iwanika agreed to use the lower rate.
Imperial Oil did not respond to the Observer’s requests for comment, and it was unclear whether Iwanika would appear in Schneiderman’s witness box.
Schneiderman’s other enquiries have revealed the strange fact that as Exxon’s CEO, Tillerson maintained an email alter ego under the name Wayne Tracker. The New York Attorney General has been trying to force Exxon to turn over the Tracker email trail, as well.