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Murray Energy

Exposing a Ticking Time Bomb: How fossil fuel industry fraud is setting us up for a financial implosion, and what whistleblowers can do about it

By John Kostyack, Karen Torrent, Laura Peterson, and Carly Fabian - National Whistleblower Center - July 2020

In the past several years, U.S. states, cities, counties and individuals concerned about climate change have filed important lawsuits against fossil fuel companies, asserting that the companies are responsible for climaterelated damage due to their carbon pollution. These cases confront “what might be the greatest scam in history,” in the words of historian Naomi Oreskes: the massive disinformation campaign designed to stall action on climate change by persuading decision makers and the public that it is not a problem to be taken seriously.

In this report, the National Whistleblower Center focuses on a related deception that, with a small handful of notable exceptions, is unaddressed in the climate change lawsuits filed to date: the dramatic understatement of risks posed by climate change to fossil fuel companies’ own financial condition and to the economy at large. We describe an important pathway to ensuring proper disclosures of climate risks: collaborative work by whistleblowers, prosecutors and regulators to enforce anti-fraud laws.

This report is a call to action for executives of fossil fuel companies and others with knowledge of improper accounting and disclosure practices, such as external auditors, to take the steps needed to obtain protected whistleblower status and work with the Securities and Exchange Commission (SEC), other regulators and law enforcement officials to help expose and prosecute fraud. For the first time, legal strategies are provided for whistleblowers and others to expose and prosecute climate risk fraud in the fossil fuel industry. This is also the first report to use the methods of professional fraud investigators to identify fossil fuel industry financial disclosure practices that are likely to be fraudulent.

Climate risks—comprised of “transition risks,” the financial risks to some companies due to the world’s shift away from fossil fuels, and “physical risks,” those associated with climate change- related damage to property— uniquely threaten the finances of fossil fuel companies. Fossil fuel companies, fearful of losing access to investment capital and loans, are therefore highly motivated to conceal their exposure to these risks.

Concealment of climate risks is a matter of great public interest because when it is successful, it harms investors, the environment and the economy. Investors who provide capital to these companies suffer because they invest based on a false sense of the companies’ readiness for the transition to a low-carbon economy and for the physical shocks of climate change. This deception undercuts efforts to address climate change because it slows the shift of investments to businesses developing and deploying low-carbon technologies. It harms the economy by leaving financial institutions such as banks and insurers less prepared for the stresses of rapid asset deflation.

Read the report (PDF).

A Coal CEO Allegedly Coerced His Employees To Donate To Political Candidates. Here’s Who Benefited

By Emily Atkin - Think Progress, September 25, 2014

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

Earlier this month, the United States’ largest independent coal company was slapped with a lawsuit by a former employee, claiming she was illegally fired for refusing to give money to political candidates chosen by her boss. That boss, Murray Energy CEO Robert Murray, allegedly sent letters to his employees asking them to support pro-coal candidates for political office, keeping track of who made the requested contributions and who didn’t. Employees of Murray Energy and its subsidiary companies were aware that failing to contribute could impact their jobs, the lawsuit claimed.

This incident is not the first time Murray has been accused of pressuring his employees to give money to his preferred candidates and his political action committee, the Murray Energy PAC. “The pressure to give begins as soon as employees enter the company,” the New Republic’s Alec MacGillis reported in a 2012 investigative piece. “At the time of hiring, supervisors tell employees that they are expected to contribute to the company PAC by automatic payroll deduction — typically 1 percent of their salary, a level confirmed by a 2008 letter to employees from the PAC’s treasurer.”

Murray has adamantly denied the veracity of the allegations. In a statement to ThinkProgress, a spokesperson called the latest lawsuit “baseless,” “blatantly false,” and “totally concocted,” deeming it an “attempt to extort money from Murray Energy Corporation.” The claims that Murray knows which of his employees donates and who does not are “totally fabricated,” the spokesperson said, a fact that Murray has “repeatedly stated.”

Still, the allegations raise questions about the ethics and legality of Murray Energy employee donations. Federal Election Commission rules state that corporations can’t make their employees donate to specific candidates or parties “as a condition of employment.” If corporations do ask their employees to contribute to certain funds, they must inform the employee “of his right to refuse to so contribute without any reprisal.”

In the latest accusation of coercion against Murray, the former employee cited fundraising letters she received from Murray in late May of 2014. Those letters asked for contributions to four Republican candidates for U.S. Senate: Scott Brown from New Hampshire, Ed Gillespie from Virginia, Terri Lynn Land from Michigan, and Mike McFadden from Minnesota.

The Fine Print I:

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The Fine Print II:

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