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Speaker 1: Who is Wayne Tracker? Well, Wayne Tracker is the email

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Speaker 1: pseudonym used by now Secretary of State Rex Tillerson when

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Speaker 1: he was ex On CEO to discuss climate change risks

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Speaker 1: and other sensitive topics of as the CEO of Xon.

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Speaker 1: As part of an ongoing investigation to whether Exon misled

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Speaker 1: investors about its role in global warming, New York Attorney

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Speaker 1: General Eric Schneiderman has subpoena at internal x On Communications,

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Speaker 1: and Exon is now acknowledged that most of the Tracker

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Speaker 1: emails were deleted pursued into regular company practice. But Schneiderman's

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Speaker 1: investigation may lead to Tillerson testifying, even as many other

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Speaker 1: states attorney general's accused Schneiderman of abusing his power with us.

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Speaker 1: To talk about Attorney General Schniderman's investigation into Excen and

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Speaker 1: climate change are Jeff Kramer, Managing director of the Berkeley

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Speaker 1: Research Group, and Paul Barrett, editor of Bloomberg Business Week. Paul,

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Speaker 1: You've been following the story for a long time as

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Speaker 1: Schneiderman sort of cast his net looking for information about

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Speaker 1: what ex On new and what it told investors and

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Speaker 1: whether it was misleading. Do you think that we're heading

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Speaker 1: in the direction where Rex Tillerson, the sitting Secretary of State,

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Speaker 1: is going to have to testify before the Attorney General

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Speaker 1: in a deposition or a trial. Yeah, I think it's possible,

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Speaker 1: but probably unlikely, is how I would I would put it. Um. Uh.

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Speaker 1: Attorney General Schneiderman made some kind of casual sound and

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Speaker 1: comments to the Associated Press a couple of days ago,

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Speaker 1: um saying that he has the authority to depose Mr Tillerson. Um,

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Speaker 1: But he didn't really indicate that he that was his plan. Um.

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Speaker 1: And I think it's it's possible that this case will

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Speaker 1: get resolved in a settlement of some sort before it

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Speaker 1: reaches that stage. Jeff Tillerson is known as as a

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Speaker 1: guy who uh sort of changed or helped evolve excellens

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Speaker 1: climate change policies. He he at one point told shareholders

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Speaker 1: at the risk of climate change are very serious and

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Speaker 1: we wearrant thoughtful action. Why is it in light of

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Speaker 1: that that he is in the middle of the Schneiderman

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Speaker 1: investigation in the first place. It's a good question. I mean,

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Speaker 1: he certainly did more than less a prior CEOs at

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Speaker 1: x on or or or Mobile or the any of

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Speaker 1: the other similar situated companies. But the fact remains that

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Speaker 1: he was at the top of the chain, and as

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Speaker 1: the Attorney general or any prosecutor who's pursuing these cases,

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Speaker 1: you work at the bottom and keep going up. So well,

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Speaker 1: I agree that he may be on the list. We're

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Speaker 1: a long way from him getting deposed or anything of

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Speaker 1: the sort. But it is interesting, as you know, he's

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Speaker 1: actually done more at least coming out a little bit

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Speaker 1: more so than other CEOs who are similarly situated. Paul.

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Speaker 1: The New York Attorney General's Office has indicated that they're

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Speaker 1: finding things that leads them to believe there may be

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Speaker 1: that X may in fact of mislead investors about climate change.

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Speaker 1: What what do we know about what their act finding here? Well,

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Speaker 1: they've presented some sketchy evidence so far. I mean, I

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Speaker 1: don't think it's not filled out or robust, but they

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Speaker 1: claim they have evidence that the company uses two sets

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Speaker 1: of numbers to estimate the the cost that should be

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Speaker 1: associated with potential regulation of of carbon releases, one set

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Speaker 1: for public consumption and then another set that are used internally.

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Speaker 1: If it turns out that that's true, um, that would

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Speaker 1: uh go towards supporting the theory that the company has

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Speaker 1: downplayed the potential costs to its doing business of future

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Speaker 1: climate regulations, which seems to be now the core of

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Speaker 1: what Schneiderman is pursuing. Jeff, how impressed are you with

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Speaker 1: that that uh potential evidence and what do you see

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Speaker 1: as the potential risk to Exxon of this probe? Well,

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Speaker 1: I think unlike other securities fraud where investors rely on

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Speaker 1: statements made by the company maybe because they don't have

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Speaker 1: any information, this one is a little unique because it's

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Speaker 1: a subject that's literally a front page of the newspaper

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Speaker 1: a lot of days, so there's a lot of information

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Speaker 1: out there. So while people may listen uh to uh

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Speaker 1: Exxon and their investments and see what Exxon says about

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Speaker 1: their liability with respect uh to future regulations, people can still,

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Speaker 1: you know, look, do their own research and figure out

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Speaker 1: what climate change could impact the oil industry. It's not

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Speaker 1: shocking for someone to think that there could be an impact.

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Speaker 1: So that's slightly different than other less they securities fraud cases.

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Speaker 1: Their potential liability here could be huge. I mean, if

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Speaker 1: you play this out and we're several steps obviously away

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Speaker 1: from this, but the money is staggering just because the

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Speaker 1: company is so large, and its implications could be large.

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Speaker 1: But I don't think we're gonna get to the point

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Speaker 1: where we're gonna find out what the ultimate damages could be. Uh.

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Speaker 1: Not that anyone necessarily in a blink in the next

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Speaker 1: couple of years, because you've got an election coming up

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Speaker 1: for this Attorney general. But sooner or later, I think

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Speaker 1: they're just going to write a check and it goes away. Well, Paul,

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Speaker 1: let's talk about what kind of settlement one could imagine

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Speaker 1: in this kind of case where you know, if Schneiderman

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Speaker 1: is in fact trying to get a settlement here and

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Speaker 1: Excen is likely to do so, what kind of what

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Speaker 1: would the parameters of such a settlement Like, I'm not

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Speaker 1: even sure that Exxon will end up having to write

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Speaker 1: a check to to settle this case. UM. I kind

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Speaker 1: of suspect that it'll get settled with an agreement, UM,

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Speaker 1: whereby the company will will acknowledge um certain uh costs

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Speaker 1: that are going to be imposed by climate regulation and

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Speaker 1: agree to make certain kinds of disclosures uh and and

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Speaker 1: that sort of thing. Uh. There was a case that

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Speaker 1: preceded this one out of the New York Attorney General's

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Speaker 1: Office involving the coal company Peabody, and that case was

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Speaker 1: resolved UM with with greater disclosure UM and Uh the

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Speaker 1: Attorney General's office declared victory and moved along. So I

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Speaker 1: think it in the end, it's it's possible that that's

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Speaker 1: what something comparable to that will happen with the x

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Speaker 1: On case. Jeff. There's also an investigation of Schneiderman himself

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Speaker 1: with regard to this, this crow of of Exxon, and

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Speaker 1: that's coming from Congress and Congressman Lamar Smith of Texas.

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Speaker 1: UM looking into the arrangements between the Attorney General's office

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Speaker 1: and environmental groups and some other things. How much of

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Speaker 1: a distraction or a much of an issue do you

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Speaker 1: see that as being for Eric Schneiderman and his investigation. UM, Well,

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Speaker 1: it's certainly odd and less anyone wonder how how powerful

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Speaker 1: the oil lobby is. You only have to look at

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Speaker 1: the people that are coming after the prosecutors here, not

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Speaker 1: just Congress, but a dozen or so uh other states,

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Speaker 1: and his his peers, his his other attorne, any generals

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Speaker 1: in different states who are Republicans are coming after the

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Speaker 1: investigators themselves and trying to get information about the investigation.

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Speaker 1: So it is very unusual. UH. This general seems to

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Speaker 1: be just pushing off to the side, so I don't

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Speaker 1: think it's a major distraction. However, it is certainly unique

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Speaker 1: in any state or federal UH prosecution that the prosecutors,

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Speaker 1: while their motives might be challenged, no one's ever actually

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Speaker 1: asked for their investigative notes and who they might have

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Speaker 1: talked to. That's very unusual. Well, our thanks to Jeff Kramer,

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Speaker 1: Managing director at the Berkeley Research Group, and Paul Barrett,

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Speaker 1: editor of Bloomberg Business Week, for being with us today

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Speaker 1: on Bloomberg Law. That's it for this edition of Bloomberg Law.

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Speaker 1: Will be back tomorrow thanks to our technical director Sean

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Speaker 1: Kilby and our producer David Sutraman. You can find more

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Speaker 1: legal news at Bloomberg Law dot com and Bloomberg BNA

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Speaker 1: dot com, plusant and valuable website for the legal community

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Speaker 1: at Big Law Business dot com. Coming up on Bloomberg Radio,

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Speaker 1: Bloomberg Markets with Carol Master and Corey Johnson. Corey, what

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Speaker 1: if you got coming up? Well? With these a strong

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Speaker 1: employment numbers, We're gonna try to dig into someone who

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Speaker 1: knows them really well. Chrisley was a former Deputy Secretary

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Speaker 1: of Labor under President Obama, and we're gonna have him

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Speaker 1: on the show to really help us dig through these

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Speaker 1: numbers and maybe gleam some trends that he saw when

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Speaker 1: he was at the Labor Department himself. Well, that's a

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Speaker 1: good reason to keep listening. Stay tuned for all of

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Speaker 1: that and more here on Bloomberg Radio. This is Bloomberg