Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every
Speaker 1: day we bring you insight and analysis into the most
Speaker 1: important legal news of the day. You can find more
Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud
Speaker 1: and on Bloomberg dot com slash podcasts. Law enforcement agencies
Speaker 1: are still on high alert after a series of suspicious
Speaker 1: packages were mailed to high profile figures in the Democratic Party,
Speaker 1: including former Presidents Barack Obama and Bill Clinton. In a
Speaker 1: news conference yesterday, NYPD Deputy Commissioner of Intelligence and counter
Speaker 1: Terrorism John Miller confirmed the explosive devices were connected. It
Speaker 1: appears that an individual or individual sent out multiple similar packages.
Speaker 1: Joining me is William Banks, professor at Syracuse Law School. Bill.
Speaker 1: On the one hand, it looks like this was well coordinated.
Speaker 1: They came at the same time. But on the other,
Speaker 1: wrong addresses, misspellings, insufficient postage. What's your take on the
Speaker 1: person or persons behind the bombs? It does look like
Speaker 1: it was not a terribly sophisticated uh campaign or attack
Speaker 1: with the misspellings, use of you know, the post the
Speaker 1: postal service and stamps, wrong addresses and the like. On
Speaker 1: the other hand, you know there there were you know,
Speaker 1: or about ten of these I guess that have been
Speaker 1: detected so far, and they didn't manage to get at
Speaker 1: least through the postal system without being detected. So it's
Speaker 1: certainly a worrisome case. The Secret Service. Secret Service, of course,
Speaker 1: takes special measures to screen the mail of the public
Speaker 1: figures it protects, but some of the people here are
Speaker 1: obviously not under Secret Service protection. Reportedly, the one center
Speaker 1: Robert de Niro, the actor, was discovered at an office
Speaker 1: in New York. Are we coming to a time when
Speaker 1: packages will have to be picked up that a post
Speaker 1: office or screened before they're delivered? Uh? That would not
Speaker 1: be a crazy uh thought. I think that's possible in
Speaker 1: the future. You know, we have postal inspectors now, and
Speaker 1: they've been doing much more, particularly since the the Antrax
Speaker 1: letters soon after nine eleven, the type and rate of
Speaker 1: postal inspection of packages increased greatly, not just the public
Speaker 1: officials but to all of us. But it's impossible to
Speaker 1: routinely screen every piece of mail that is of a
Speaker 1: package size to determine what's in it. So it could
Speaker 1: be that will have remote collection. Uh. It could be
Speaker 1: also that that will learn something will will identify who
Speaker 1: these perpetrators or a single perpetrator, Uh is it was
Speaker 1: and uh and the threat will be diagnosed and perhaps
Speaker 1: it will go away. You know. We we've had a
Speaker 1: number of instances like this. UM we go back to
Speaker 1: the Antax letters is probably the most prominent example since
Speaker 1: nine eleven, but back before that, the Unit bomber. It
Speaker 1: took an awfully long time to find Ted Kasinski, I
Speaker 1: think sixteen years or something like that. Yeah, they never
Speaker 1: did actually apprehend the antifacts mailer, although they likely identified him,
Speaker 1: and he committed suicide before he was apprehended. These can
Speaker 1: be very easy cases to solve the very hard cases,
Speaker 1: and I think it's fair to say that our investigative techniques,
Speaker 1: the science of it all, forensics as well as surveillance
Speaker 1: capabilities in d N a far advanced compared to what
Speaker 1: they were even after the Antrax letters. Is it incredibly
Speaker 1: lucky that none of the bombs exploded? Or were they
Speaker 1: meant to cause fear rather than injury? Yeah, we're not
Speaker 1: sure yet, but it could well be the latter because
Speaker 1: some of these, at least from the reporting I saw,
Speaker 1: had timers. You don't use timers on devices that are
Speaker 1: sensored the mail obviously, because you know the mail is
Speaker 1: of indeterminate length. Uh So they could have been fake
Speaker 1: or without any kind of way to to explode. But
Speaker 1: those that were capable of exploding, certainly some of them were.
Speaker 1: They were certainly powerful enough to have injured or killed
Speaker 1: a person. What's your reaction to President Trump's response. He
Speaker 1: did make a call for unity yesterday morning, but last
Speaker 1: night a rally, and in tweets today he blamed the
Speaker 1: media and his opponents for anger in our society. Yeah,
Speaker 1: his his first public statement was a very good statement.
Speaker 1: I wish you would stick to those those are appropriate.
Speaker 1: That's what the President United States should be saying, not
Speaker 1: just larn split routinely. And I'm afraid that his rhetoric
Speaker 1: has certainly contributed to the atmosphere that makes the fear
Speaker 1: all the more palpable. It's a really sad a moment
Speaker 1: I think in our society. I want to turn to
Speaker 1: another topic for a moment, which is The New York
Speaker 1: Times is reporting that President Trump continues to use an
Speaker 1: unsecured iPhone and that American intelligence reports indicate that Chinese
Speaker 1: spies are often listening. Trump tweeted about the story and
Speaker 1: says that he rarely uses a cell phone and when
Speaker 1: he does, it's government authorized, and he said it was
Speaker 1: a fake story. What is the danger with the president
Speaker 1: using an unsecured iPhone. It's a great danger. And it's
Speaker 1: not only the Chinese you're listening to. Anyone with a
Speaker 1: sort of a modulate degree of hacking capability can listen
Speaker 1: in on an iPhone. So the Russians are listening, the
Speaker 1: Iranians are listening, who knows who else. And he's talking
Speaker 1: to his friends. I'm not sure he's conducting business on
Speaker 1: his personal iPhones. I hope not. But but they're learning
Speaker 1: things about his style or what he likes to talk about,
Speaker 1: what his interests are, what's on his mind. That's a
Speaker 1: very dangerous thing to do, and his staff should try
Speaker 1: to put a kabash on it as quickly as possible.
Speaker 1: So even if he's not talking about classified information, if
Speaker 1: he's just talking to its friends, it's still dangerous. Of
Speaker 1: course it is, because again you're learning about the man,
Speaker 1: and what you can gain by learning about the man
Speaker 1: in terms of the of the negotiations or diplomacy or
Speaker 1: communications that another state needs to have with him. It's
Speaker 1: a real advantage for them. I don't think we're capable
Speaker 1: of doing the same thing with foreign leaders that they're
Speaker 1: capable of doing with him because of the security of
Speaker 1: their devices. Is this a similar concern that the continuing
Speaker 1: debate over Hillary Clinton's emails raised? Well? Yeah, I think
Speaker 1: her the shortcomings and her security to the extent that
Speaker 1: I recall the details, were not nearly as grave as this.
Speaker 1: Uh it was an email server that might have allowed
Speaker 1: some things to slip through that should not have been
Speaker 1: uh insecure. If he's doing this on a regular basis
Speaker 1: using his own phone that's not been secured, just that
Speaker 1: for everyday communications, it's so much more serious. Claw Do
Speaker 1: you remember, I'm just trying to remember. Did President Obama?
Speaker 1: Was he forced to use a BlackBerry or something for
Speaker 1: security reasons? Yeah? Either whatever he was, he either went
Speaker 1: from BlackBerry to iPhone or vice reversa on account of
Speaker 1: the security I think he was there was. I remember
Speaker 1: a report that he was unhappy but resigned to the
Speaker 1: fact that he had to give up on his favorite device.
Speaker 1: That's what I remember. All right, Thanks so much, Bill.
Speaker 1: As always, that's William Banks. He's a professor at Syracuse
Speaker 1: Law School. In August, lawyers for ex On Mobile stood
Speaker 1: before a New York judge and told the state's attorney
Speaker 1: general to put were shut up in its three year
Speaker 1: investigation into the oil giants public disclosures about climate change. Well, yesterday,
Speaker 1: Attorney General Barbara Underwood did just that. She filed a
Speaker 1: fraud lawsuit against Exxon in state court in Manhattan. Joining
Speaker 1: me is Charles Warrant, chair of the environmental law practice
Speaker 1: at Cramer eleven Chuck. The lawsuit alleges that Exson misled
Speaker 1: investors regarding climate change, basically setting up two sets of
Speaker 1: books for proxy costs. Tell us more about the allegations, yes,
Speaker 1: what and what they're really saying is that in their
Speaker 1: proxy statements that they issued to the public, they listed
Speaker 1: their costs related to climate change, and they listed them
Speaker 1: really at higher levels than they actually applied them internally.
Speaker 1: And so if they had used those public cause what
Speaker 1: the suit is saying, if they had actually taken their
Speaker 1: costs as they were um represent to the public, they
Speaker 1: would have caused they have had to write, you know,
Speaker 1: a lot of write downs and and shorter asset lives
Speaker 1: and things like that that would have cost them money
Speaker 1: and so they're saying that they didn't apply it to
Speaker 1: their oil sands projects in Canada, and and they had
Speaker 1: sort of an undercounting of greenhouse gas related expenses by
Speaker 1: more than twenty five billion dollars over the lifetime. Those
Speaker 1: are some of the you know, those are some of
Speaker 1: the things that they're saying. And so they're saying this
Speaker 1: was really a fraud perpetrated on the public because they
Speaker 1: were giving the public one set of costs that they
Speaker 1: said were related to the climate change, but they were
Speaker 1: using another set lower when they were actually doing things
Speaker 1: on the ground, and so they weren't writing off things
Speaker 1: that they might have writed written off, they weren't attributing
Speaker 1: more costs when they should have attributed more costs, and
Speaker 1: so that's what they're saying. They're saying it's a fraud
Speaker 1: under the State Martin Act, which is there New York
Speaker 1: securities law, which is a fairly broad statute and has
Speaker 1: been used by Attorney General of the State of New
Speaker 1: York to bring all kinds of suits related to stock issues,
Speaker 1: stock market manipulation, and things like that. So, Chuck, this
Speaker 1: is a change from the kind of climate change lawsuits
Speaker 1: we've been seeing and which have been getting dismissed, which
Speaker 1: blamed the fossil fuel industry for creating climate change. This
Speaker 1: is really going back to the basics of a shareholder
Speaker 1: fraud lawsuit that the a G. S Office has used
Speaker 1: so many times before. That that's correct, tune, that's exactly
Speaker 1: what they're doing. They're saying that Excellent has committed a
Speaker 1: fraud on the public and and people who bought their
Speaker 1: securities based on these statements proxy statements, public statements have
Speaker 1: been defrauded. The state has been defrauded, and they want
Speaker 1: them to pay, you know, stop doing it and pay
Speaker 1: penalties and to the extent there are any profits that
Speaker 1: are related to it, to give up those profits. And
Speaker 1: then this is more in the it's it's obviously they
Speaker 1: had the climate change, but it's more in the context
Speaker 1: of your normal securities type lawsuit that the government would
Speaker 1: bring against a company. X On, as we've discussed before,
Speaker 1: has been waging a no holes barred counterattack against investigations
Speaker 1: by the New York AG as well as the Massachusetts
Speaker 1: a G. Saying the investigations have politically motivated, violent at
Speaker 1: the First Amendment and so on. Who seems to be
Speaker 1: winning that battle at this point. No, well, at this point,
Speaker 1: really the governments have won both New York and Massachusetts,
Speaker 1: have you know, beaten back the efforts by x and
Speaker 1: to get the lawsuit dismissed or quash too because of
Speaker 1: political considerations, First Amendment, considering all kinds of those things,
Speaker 1: and they really have been unsuccessful at this point, and
Speaker 1: it doesn't look like they are going to succeed. I mean,
Speaker 1: so it looks like this is some this is a
Speaker 1: suit that will end up unless there's some kind of
Speaker 1: a settlement, uh, you know, going to trial at some point, Chuck.
Speaker 1: During the hearing before the New York judge in August,
Speaker 1: the New York a G the deputy New York ag
Speaker 1: said that there was some smoking gun evidence that they had.
Speaker 1: Do they disclose that in the lawsuit? In the allegations, Um,
Speaker 1: you know, I haven't seen that, but they probably could
Speaker 1: mean some of the things that they talked about related
Speaker 1: to the oil sands stuff in Canada and things like that,
Speaker 1: and maybe that's what they're talking about. I'm not I'm not,
Speaker 1: but I haven't seen that, Jim. So they're they're also
Speaker 1: alleging that this went to the top and that former
Speaker 1: CEO Rex Tillerson knew about these Yes, absolutely, they said
Speaker 1: they have alleged that direx Tillerson was intimately involved in
Speaker 1: doing this and played a key role in this whole effort. Chuck.
Speaker 1: You know, Exon has been tru ing in different ways
Speaker 1: to you know, revive or brush up it's it's reputation
Speaker 1: in this area. How much damage will this lawsuit due
Speaker 1: to that? Well, I think it will do some damage, June,
Speaker 1: There's no doubt about it. I think a lot will
Speaker 1: depend obviously on how it plays out the lawsuits. But
Speaker 1: as you indicated, Exxon has done a lot of work.
Speaker 1: They funded a lot of climate change reports. Uh, they're
Speaker 1: not denying that climate change is, you know, as man made.
Speaker 1: They're investing in a lot of renewable energy sources. I
Speaker 1: think they're doing that, you know, because it makes sense
Speaker 1: from a number of perspectives, and so they're trying actually
Speaker 1: quite hard, I think too, you indicated to burnish their
Speaker 1: reputation in this area. And it's obviously a suit like
Speaker 1: this doesn't help. And I think a lot will depend
Speaker 1: on how it plays out. And you know, whether whether
Speaker 1: you get a lot of uh, things that are shown
Speaker 1: to have occurred, you know, and things that they suppressed.
Speaker 1: It's almost like the tobacco lawsuits. Where as those lawsuits unfolded,
Speaker 1: information came out that the company's new way beforehand about this,
Speaker 1: and that's the kind of I think those are the
Speaker 1: kinds of things that they run the risk of having
Speaker 1: happened to them. All right, Thanks so much, Chuck. That's
Speaker 1: Charles Warren of Kramer Levin, Exxon spokesperson has said these
Speaker 1: baseless allegations are a product of closed door lobbying by
Speaker 1: special interests, political opportunism, and the Attorney General's inability to
Speaker 1: admit that a three year investigation has uncovered no wrongdoing.
Speaker 1: Thanks for listening to the Bloomberg Law Podcast. You can
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Speaker 1: and on Bloomberg dot com slash podcast. I'm June Brosso.
Speaker 1: This is Bloomberg