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Using Bloomberg's activists to sue Exxon is ethics violation, group complains of N.Y. AG

By John O'Brien | Dec 10, 2018

Underwood  

NEW YORK (Legal Newsline) – A controversial program arming states with environmental activist prosecutors has led to an ethics complaint being filed against New York Attorney General Barbara Underwood.

Last year, it was announced in August that a nearly-$6 million funding grant from Bloomberg Philanthropies, administered through the NYU School of Law’s recently formed State Energy and Environmental Impact Center, would dispatch special prosecutors to the offices of several state attorneys general to advance policies aimed at the development of renewable energy, protecting the environment and addressing climate change.

Washington, D.C., and nine states, including New York, received the free help. Then earlier this year, Underwood sued Exxon over climate change disclosures, with one of these prosecutors signing the complaint.

This resulted in Government Justice Center, Inc., of Albany filing an ethics complaint with the New York State Joint Commission on Public Ethics. Named are Underwood and special assistant attorneys general Matthew Eisenson and Gavin McCabe.

“(S)pecial assistant attorneys general ultimately paid by billionaire former New York City Mayor Michael Bloomberg are engaged in specious litigation against fossil-fuel companies on behalf of New York,” the complaint says.

Initially, Washington, D.C. and six states were chosen for the first phase of this program: Illinois, Maryland, Massachusetts, New Mexico, New York and Washington. In December, it was announced that Oregon, Virginia and Pennsylvania would join the list.

A total of 14 NYU School of Law fellows were sent to these attorney general offices to be paid strictly through the NYU School of Law, not from public funds.

McCabe, as a representative of Underwood’s office, appeared on an amicus brief in support of New York City’s climate change lawsuit, which seeks to hold the oil industry liable for renovations allegedly needed to combat rising sea levels.

A federal judge threw that case out, and another threw out the similar cases of Oakland and San Francisco. Both decisions are being appealed.

Having prosecutors paid by the Bloomberg program is a violation of Executive Law, the complaint says.

“The Legislature has not appropriated the amounts necessary to compensate SAAGs Eisenson and McCabe,” the complaint says.

“Attorney General Underwood and her predecessor have utilized SAAGs Eisenson and McCabe outside their statutory authority. This end run around the Executive Law provision deprives the Legislature of its oversight function through its ‘power of the purse.'

“Absent Legislative oversight, Mr. Bloomberg, through the Center and the OAG, is pursuing a private political agenda through the instrument of the state and the OAG’s fossil fuel lawsuits.”

The AG’s volunteer lawyer program may have, in the past, been a harmless opportunity for lawyers to reinvent themselves or for recent graduates to gain experience. But now, this “long-ignored violation of Executive Law” has been weaponized against the oil industry, the complaint claims.

“After years of discovery from Exxon and others, the OAG filed a lawsuit having nothing to do with what Exxon knew and when,” the complaint says.

“Instead, it seeks to hold Exxon liable for not accounting sufficiently for what it does not, and cannot, know, namely what governments are going to do in the future to put prices on carbon that may affect the value of Exxon fossil fuel assets.”

Underwood’s lawsuit is the result of a probe begun long ago by former AG Eric Schneiderman, who has since resigned because of an assault scandal.

That probe, it is alleged, was a major step in a coordinated attack on the oil industry by private lawyers, government officials and environmental advocates.

“Exxon built a facade to deceive investors into believing that the company was managing the risks of climate change regulation to its business when, in fact, it was intentionally and systematically underestimating or ignoring them, contrary to its public representations,” Underwood said.

Cities and counties around the country, as well as the State of Rhode Island, have used private lawyers at Hagens Berman and Sher Edling to sue energy companies like Exxon, Chevron and BP. The private lawyers are working on contingency fees and still looking for some good news on their cases.

Meanwhile, the Bloomberg program has been dubbed “law enforcement for rent” by the Competitive Enterprise Institute.

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Organizations in this Story

Competitive Enterprise Institute New York Attorney General New York University School of Law State of Rhode Island

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