New York Attorney General Barbara Underwood is accused of ethics violations in her suit against ExxonAn oil industry ally says New York Attorney General Barbara Underwood is receiving improper funding for her climate fraud suit against Exxon. Photo credit: New York Attorney General Barbara Underwood via Flickr

By Karen Savage

A nonprofit with ties to the fossil fuel industry has filed an ethics complaint against the New York attorney general’s office, alleging that Attorney General Barbara Underwood and two special assistant attorneys general are violating state ethics laws in their climate-related litigation against Exxon.

The Government Justice Center, led by board members who work for organizations that have received funding from oil industry and climate denial groups, alleges that Underwood is “accepting funding from an entity to conduct litigation by New York State on that entity’s behalf.”

The complaint alleges that Matthew Eisenson and Gavin McCabe, two special assistant attorneys general working on the office’s securities fraud case against Exxon as well as other work, are violating state law because they are paid through the NYU School of Law’s State Energy & Environment Impact Center.

Known as the State Impact Center, it was established last year with funding from Bloomberg Philanthropies, a nonprofit founded by former New York Mayor Michael Bloomberg to support state attorneys general in “defending and promoting clean energy, climate and environmental laws and policies.”

Eisenson and McCabe were both hired by the New York attorney general’s office through the State Impact Center’s fellows program. According to the Center’s website the Center “has offered all state attorneys general the opportunity to hire NYU Law Fellows to work under their direction as special assistant attorney generals on clean energy, climate change, and environmental issues.”

The Government Justice Center contends that Underwood’s office hired Eisenson and McCabe specifically to “help pursue a private party’s political and litigation agenda.” The Center says the use of the NYU fellows program also violates the law by giving the impression that Underwood’s office can be improperly influenced by Bloomberg.

The attorney general’s office said the arrangement violates no ethics laws and has been cleared by the state’s Joint Commission on Public Ethics.

The Government Justice Center said the alleged violations stem from Eisenson’s and McCabe’s names being included in signature blocks of recent climate change-related litigation, including Underwood’s suit against Exxon for securities fraud, and a friend-of-the-court brief supporting New York City’s climate liability suit against five major oil companies.

“The presence of the special assistants in those cases, funded by Mr. Bloomberg, raises questions regarding whether Mr. Bloomberg and the Center are unduly influencing decision-making and litigation,” wrote Cameron J. Macdonald, executive director and general counsel for the Government Justice Center, who wrote the complaint.

Paul Nolette, a political science professor at Marquette University who studies state attorneys general and their role in national policy making, said it is common for attorneys general to tap into the expertise of various interest groups.

“Overall I don’t see it [the complaint] as a particularly strong argument, in part because this type of arrangement has been very common amongst AGs for quite some time and that includes situations where AGs have worked with private class action attorneys on a contingency fee basis, which has also raised ethics concerns, but generally speaking, courts across the country have allowed that arrangement to occur,” Nolette said.

“Clearly the [State Impact] Center has an agenda of ‘we want to fight climate change’ but that alone is not particularly unusual or what I would consider unethical,” he said.

“We don’t hide anything that we do,” said Christopher Gray, communications director for the State Impact Center. “We are not securities lawyers, we work on environmental policy. The idea that we’re directly involved in a meaningful way, doesn’t meet the facts.”

“This is another attempt by what appears to be a dark money group to de-legitimize the ExxonMobil investigation, which pre-existed the founding of the State Impact Center and which we don’t have any oversight or influence over,” Gray said.

According to its charity registration statement, the Government Justice Center was founded in 2016 to provide “public interest litigation focused on government waste, negligence, misappropriation and other improper actions.”

The organization’s board members include director James Copeland, a senior fellow and director of legal policy at the Manhattan Institute. Exxon gave $115,200 to the Manhattan Institute in 2017 for public information and policy research. The group posted a Youtube video in March that was made to look like a real news story titled “The ‘Overheated’ Costs of Climate Change.” It featured former TV newscaster John Stossel, who interviewed senior fellow Oren Cass, who maintains that the costs of the climate crisis are overestimated.

Treasurer for the Government Justice Center is Brandon Muir, who is also the executive director of Reclaim New York, an organization chaired by Rebekah Mercer. Since at least 2015, the Mercer Family Foundation has funded numerous organizations known for promoting climate denial, including the Manhattan Institute and the Heartland Institute.

Tim Hoefer is president of the Government Justice Center and director of the Empire Center for New York State Policy, which was a project of the Manhattan Institute.

Government Justice Center director and retired judge Robert S. Smith, spent more than 25 years as partner at Paul, Weiss, Rifkind, Wharton & Garrison, the firm hired by Exxon to defend itself against a growing number of climate change-related lawsuits, including Underwood’s securities fraud case.

The ethics complaint echoes a report published earlier this year by the Competitive Enterprise Institute, which relied on public records requests to allege that attorneys general are involved in a coordinated scheme by private interests to persuade elected officials to hold oil giants responsible for climate change. That alleged conspiracy includes Massachusetts Attorney General Maura Healey, who is also investigating Exxon for possible fraud.

“This seems to me to be just one additional part of this massive brawl between the New York attorney general’s office, the Massachusetts attorney general and ExxonMobil. I’m not terribly surprised that they filed this ethics complaint, but it doesn’t strike me as something that’s really going to go anywhere,” Nolette said.

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