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The National Association of Manufacturers and the Competitive Enterprise Institute sent a letter to the Securities and Exchange Commission earlier this year accusing the five plaintiffs of lying to investors by not disclosing the very effects of climate change complained of to municipal bond buyers

Climate Change

Fossil Fuel Apologists Claim Climate Change Plaintiffs Are Liars

The National Association of Manufacturers and the Competitive Enterprise Institute sent a letter to the Securities and Exchange Commission earlier this year accusing the five plaintiffs of lying to investors by not disclosing the very effects of climate change complained of to municipal bond buyers

In 2017, three California counties and two cities sued 37 fossil fuel companies, claiming they have known about the negative impact their products have on the Earth’s climate for decades and lied about. The five plaintiffs — the counties of Santa Cruz, Marin, and San Mateo and the cities of Santa Cruz and Imperial Beach — are all seaside or bayside communities that will be affected by rising sea levels.

Fifty Years Of Lies

climate change and sea level riseThe Mercury News reports the lawsuit alleges “major corporate members of the fossil fuel industry have known for nearly a half century that unrestricted production and use of their fossil fuel products create greenhouse gas pollution that warms the planet and changes our climate.”

Even though they knew there was a narrow window in which to take action before the consequences became irreversible, the defendants engaged in a “coordinated, multi-front effort” to “discredit the growing body of publicly available scientific evidence and persistently create doubt.” While pursuing those efforts, they “engaged in and profited from a massive increase in the extraction and consumption of oil, coal and natural gas, which has in turn caused an enormous, foreseeable, and avoidable increase in global greenhouse gas pollution.”

The greenhouse gases resulting from their activities have “substantially contributed to a wide-range of dire climate-related effects including global warming, rising atmospheric and ocean temperatures, ocean acidification, melting polar ice caps and glaciers, more extreme and volatile weather and sea level rise.”

Counter Attack

Whew. That’s quite an indictment. Have the companies peered deep into their corporate souls and decided to finally start atoning for their heinous behavior? Not in the slightest. In fact, they have gone on the offense, using their shills, the National Association of Manufacturers and the Competitive Enterprise Institute, to do their dirty work for them.

Both organizations sent a letter to the Securities and Exchange Commission earlier this year accusing the five plaintiffs of lying to investors by not disclosing the very effects of climate change complained of to municipal bond buyers.

So let’s see if we have this straight. The fossil fuel companies have known for decades the damage done by their products but kept their knowledge a secret. But the three counties and two cities suing them misled investors by not disclosing the very information the defendants were concealing. Got that? Is this not the very definition of chutzpah?

The Haines Report

In response, the plaintiffs hired Martha Haines, who served as the head of the office of municipal securities at the SEC from 2001 to 2011, to examine their bond filings to see if there were any false, misleading, or inaccurate statements contained in them. In her 23 page report, she writes:

In my opinion, based on the information I have reviewed:

1. None of the Municipal Governments either made an untrue statement of a material fact regarding sea level change or, where relevant, in their respective disclosure documents for the securities offerings identified in the Petition or omitted such a material fact necessary in order to make the information included therein, not misleading.
2. There is no inconsistency or conflict between the allegations in the complaints filed by the Municipal Governments in connection with their respective civil tort claims against Exxon and other fossil fuel companies
regarding sea level rise and the disclosures made by such governments in their respective disclosure documents.

I have four primary reasons for this conclusion, some or all of which are applicable depending on the particular securities offering (discussed in detail below):

a. Information that does not yet exist or is unknown necessarily cannot not be disclosed.
b. The leased premises generating the lease payments that secured the bonds at issue were at no risk from sea level change prior to the maturity date of the securities.
c. The maturity of the securities was so short that it was not reasonable to foresee any impact on their timely repayment from long-term sea level change.
d. It is not reasonably foreseeable that the issuers would ignore the risks of sea level rise once known to them, fail to take steps to adapt to and mitigate its impact and, as a result, allow their respective financial conditions to
deteriorate to the extent that they would default on their repayment obligations decades in the future.

In a classic example of understatement, Haines adds, “Issuers cannot include in disclosure documents information that does not yet exist.” Hard to argue with that.

The Response

The actions by NAM and the CEI have provoked the five municipal organizations to mount an impassioned response. In a joint statement, they level several verbal broadsides at their tormenters.

“[I]t is the CEI and NAM who have recklessly made inaccurate, irresponsible, and meritless claims about our bond offerings, both in their letters to the SEC and in their wide-ranging public relations campaign. If CEI and NAM had any interest in the truth, they would have conducted at least some due diligence before making unfounded accusations. Their incorrect and misleading claims of “possible bond fraud” and a “violation of 15 U.S.C. § 77q(a)(2)” make it clear that they are joining Exxon in a public relations campaign in response to the numerous municipal lawsuits filed against Exxon and other fossil fuel companies over the past nine months.

“Instead of levelling specious attacks at cities and counties that are standing up for their residents, workers, and businesses, NAM and CEI should be telling their oil, gas, and coal company members and funders to be more honest about their own risk disclosures and to take responsibility for the damage they are knowingly causing in communities like ours.

“This is just another well-funded, choreographed public relations scheme from the fossil fuel industry. It is designed to delay the legal process, deceive the public, and deny responsibility for what they’ve done. It’s the same playbook they’ve used for 30 years when it comes to climate change and its consequences, and it’s why our communities are dealing with very real and very expensive measures to protect our residents, workers, and businesses from rising seas and other climate change-related damages today.”

A Dastardly Scheme

A “choreographed public relations scheme?” Who could be behind such nefarious doings? According to Source Watch, the National Association of Manufacturers is generously supported by the Koch Brothers, who make the Grinch seem like a fount of human kindness. The brothers are also frequent benefactors of the Competitive Enterprise Institute, according to DeSmogBlog.

Perhaps that’s a clue as to where this in-your-face, take no prisoners, scorched-earth policy comes from. In other words, business as usual for two of the world’s most villainous people.

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Written By

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. 3000 years ago, Socrates said, "The secret to change is to focus all of your energy not on fighting the old but on building the new." Perhaps it's time we heed his advice.


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