Report debunks fuel industry’s fraud claims against county
Former SEC official backs San Mateo County, which is suing 37 firms for lost parcel value
“This is just another well-funded, choreographed public relations scheme from the fossil fuel industry.” — County news release
A former federal securities officials is debunking fossil fuel industry claims that San Mateo County — and four other cities and counties — fabricated information in a lawsuit filed against the industry last year.
In its July 2017 lawsuit, San Mateo County argued that 37 fossil fuel firms were directly responsible for 20.3 percent of all greenhouse gas emissions in the county between 1965 and 2015. The county cited a 2009 Pacific Institute report that found San Mateo County faces the highest risk from a projected sea level rise. That report also said that the fossil fuel industry is to blame for in excess of $40 billion worth of lost parcel value in future years.
Santa Cruz and Marin counties as well as the cities of Santa Cruz and Imperial Beach also have filed similar lawsuits.
In a March 27 letter to the SEC, Exxon, the National Association of Manufacturers and other industry groups argued that the county and other state municipalities are engaged in “potential municipal bond fraud,” and that information they share in bond disclosures regarding climate impacts differs from information in their lawsuits.
“Over the course of our work advocating for manufacturers in America, we have seen several examples of municipalities asserting specific impacts of
climate change,” National Association of Manufacturers Executive Director Lindsey de la Torre wrote. “Conversely, bonds offered by these same municipalities state that such predictions are impossible to measure.”
But in an April 27 report, Martha Mahan Haines — who headed the U.S. Securities and Exchange Commission’s Office of Municipal Securities from 2001 to 2011 — found that none of the municipalities made any untrue statements regarding the fossil fuel industry’s climate impact. She also said that the five local cities and counties were in compliance with federal securities laws.
There is “no inconsistency or conflict” between statements in their lawsuits and statements in bond disclosures, the report said. Haines, who prior to working at the SEC spent more than 20 years as a municipal bond attorney, was asked by San Mateo County to compile the report, which it sent to the SEC.
San Mateo County officials called the industry’s latest claims in the SEC letter “inaccurate, irresponsible and meritless.”
“This is just another well-funded, choreographed public relations scheme from the fossil fuel industry,” an April 30 county news release said. “It is designed to delay the legal process, deceive the public and deny responsibility for what they’ve done.”
The county’s lawsuit hasn’t seen much movement since it was filed in San Mateo County Superior Court because the fossil fuel industry took the case to federal court. The federal court ordered the case be sent back to the state courts, but the fossil fuel industry is appealing that decision, according to Chief Deputy County Counsel David Silberman. All five counties and cites are joined in the suit.
“We’re not supposed to be in federal court, it doesn’t have jurisdiction,” Silberman said. “We could lose years of effort over this ... (while fossil fuel firms) continue to rake in billions of dollars in profits every year and sea levels continue to rise.”