Fossil fuel companies are actively downplaying the effects of climate change while violating IRS charity rules by supporting groups with the express purpose of promoting their agendas, watchdog and environmental groups said Thursday, laying out charges against Exxon Mobil Corp. and a host of other oil and mining companies.
First, a pair of watchdog groups, Center for Media and Democracy and Common Cause, issued a report showing how the nonprofit American Legislative Exchange Council, or ALEC, has falsely claimed tax-exempt status as a charity, and that oil giant Exxon Mobil “has intentionally misused the organization for nearly two decades to advance its legislative agenda.”
“It has become painfully obvious over the past few years to the press and the public that ALEC is corporate lobby front group masquerading as a charity — at taxpayer expense,” said Arn Pearson, general counsel for the Center for Media and Democracy.
“If the laws governing nonprofits are to mean anything, the [Internal Revenue Service] needs to take action to enforce them in this case,” he said. ALEC has been actively involved in campaigns to defeat clean energy and renewable energy proposals in the states, as well as various emission-control proposals at the federal level.
The watchdog groups want the IRS to investigate Exxon’s use of ALEC’s 501(c)(3) charity designation as an arm of corporate advocacy and says imposing both civil and criminal penalties against the company and ALEC is necessary. The groups said that over a 17-year period, Exxon and its foundation “poured more than $1.7 million into ALEC’s operations in order to finance lobbying activity by ALEC on legislation and public policies that interest and benefit the corporation, while improperly and illegally claiming a tax deduction for those expenditures.”
ALEC and Exxon Mobil both dismissed the allegations presented by the groups as “frivolous” and ridiculous,” adding that no wrongdoing has taken place.
The report comes a week after environmentalists filed the first class-action lawsuit against Exxon Mobil based on the threat posed by climate change. The lawsuit argues that numerous oil storage facilities owned by the company in the Northeast pose a serious threat to public health, as the oil giant has taken no action to secure them against the threat of sea-level rise and flooding caused by climate change.
The threat of oil spills as a result of man-made global warming places a number of densely populated communities along the East Coast at substantial risk, according to the lawsuit filed in the federal district court of Massachusetts.
Second, the Union of Concerned Scientists, an environmental activist group, on Thursday issued a comprehensive report detailing eight fossil fuel companies’ inaction on addressing climate change. It says none of the companies, including Exxon Mobil, “has made a clean break” from supporting “disinformation on climate science and policy.”
The companies reviewed by the group of activist scientists include Arch Coal, BP, Chevron, ConocoPhillips, CONSOL Energy, Exxon Mobil, Peabody Energy and Royal Dutch Shell.
“Across the board, these eight companies continue to disparage the science and undermine the urgency of action — either directly or through the trade associations and industry groups they support,” Kathy Mulvey, the lead author of the report.
She alluded to news accounts over the last year that have spurred investigations by a group of Democratic state attorneys general who subpoenaed Exxon and think tanks aligned with the company.
“In the wake of numerous exposés that revealed companies’ records of working to deceive the public about global warming, many of the companies now insist that they no longer promote denial and accept the reality of climate change,” Mulvey said. “This study belies those claims.”
The group said that despite the claims of taking action to combat greenhouse gas emissions, “none is adequately planning for a world free from carbon pollution, as laid out by the international climate agreement” that was signed in Paris last year and will take effect next month.
Only two of the companies, BP and Shell, have consistently discussed publicly the “legitimacy of climate science and the consequential need for swift and deep reductions in fossil fuel emissions,” the group said.
The report, which provides a scorecard for the companies based on their climate policies, gave Shell an “advanced” score, while BP received a “good” rating.
By comparison, Exxon received an “E” for “egregious” for making statements as recently as this year that cast doubt on the science of climate change, according to the report.
