Exxon’s records and emails before 2015 vanish- US court told – Guyana US$460M pre-contract costs in limbo

Nov 03, 2019 News

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By Kemol King

A troubling disappearance of records vital to New York’s investigation of oil giant, ExxonMobil, could lead the New York Supreme Court to assume that those files held content which could have been damaging to Exxon’s case, and its record on climate change.

It has also led a Canada-based engineer to question the implications the deletion of those files could have on Guyana’s ability to verify the US$460M pre-contract costs that the oil company has hoisted onto the backs of the Guyanese people.
Guyana is still to verify the accuracy of that amount.
In the New York case, the company has been sued by that US state for allegedly misrepresenting the cost of climate change on its operations.
A court document seen by Kaieteur News said that the state had requested, by way of a subpoena, documents from ExxonMobil, at the outset of its investigation in 2015.
The company’s then Chief Executive Officer (CEO) and Chairman, Rex Tillerson, was the custodian of those documents, including emails which the state thought it necessary to peruse.
When the New York Attorney General’s office brought to the court’s attention an email account used by Tillerson – [email protected] – ExxonMobil revealed that it failed to preserve any emails from that account before August 18, 2015, the document states.
The deletion from the “Tracker Account” was reportedly caused by the company’s failure to disable its automatic “file sweep” deletion program for the Tracker account, despite the fact that the company was able to successfully turn off that program for every other custodian, after the subpoena was served.
The NY AG’s office has said that the unavailability of those documents is seriously consequential to the litigation it has brought before the oil company. This is compounded by the fact that Tillerson had testified of the Tracker account being his primary email account, and that [email protected] which the company had preserved and previously characterized as his “primary” email, was the one that he “almost never looked at”.
The state said that the Tracker account contained information about key events occurring in 2014, during which Tillerson approved public reports that misrepresented ExxonMobil’s internal practices concerning its management of climate change risks.
The state also said that Tillerson, in 2014, also authorized a change in ExxonMobil’s internal practices that attempted to but ultimately did not correct those misrepresentations.
The state has asked the Court to grant an ‘adverse inference’ which assumes that the lost content was damaging to Exxon’s case, including that the earlier emails “would have corroborated other evidence indicating that ExxonMobil senior management,” including Tillerson, did plan the fraud that the state accused the company of, according to The New York Times.
Though a judge had expressed skepticism about that argument, he will allow the state to renew the argument during the trial, the publication reported.
The development has caused engineer, Darshanand Khusial, to question whether the documents were really accidentally deleted, arguing that a company as large and as rich as ExxonMobil is very unlikely to use such a faulty program to handle the automatic deletion of its documents, which just so happen to be vital to New York’s investigation.
He further argued that even if the contents of that email account were deleted, a company like ExxonMobil would typically keep all records backed up on offline disks which a faulty program could not reach.
“Recall that the pre-contract costs up to December 2015 was US$460 million and those costs have been incurred as far back as 1999,” Khusial wrote in a letter to this publication.
In his experience, having worked at IBM (one of the world’s largest and oldest technology firms), deletion programs like the one employed by ExxonMobil are usually employed companywide, not just for emails controlled by the company’s executives.
So the engineer poses the question – If this ‘file sweep’ program employed by ExxonMobil is blindly deleting files before August 2015, then how will ExxonMobil prove its share of the US$460M pre-contract costs?
IHS Markit Limited is the London-based firm that the Energy Department has contracted to audit billions of dollars ExxonMobil and its partners said they invested in the Stabroek Block and will move to recover, starting next year.
Khusial said that the pre-contracts costs to be verified by that company are probably constituted by numerous individual items too small and likely deemed immaterial for public company disclosures.
“Thus, one can speculate the individual items necessary to conduct a reasonable audit are not in any public documents disclosed to organizations like the US Securities Exchange Commission (SEC).” he wrote.
Did Government keep detailed records it could provide IHS Markit with on Exxon’s operations from 1999 to 2015 that could help with the firm’s probe? If not, what records are being verified and what are the criteria to deem them authentic? These are all pressing questions posed by the engineer.
He is obstinate in the view that Government must put measures in place to ensure that the billions of dollars of oil to be extracted by ExxonMobil on the Stabroek Block, and other concessions the company controls, are subjected to the utmost scrutiny and safeguarded from misrepresentations.

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