Revealed: documents from the early 1990s show oil giant looked to make tax-exempt donations to promote the companys interests
Oil giant Mobil sought to make tax-exempt donations to leading universities, civic groups and arts programmes to promote the companys interests and undermine environmental regulation, according to internal documents from the early 1990s obtained by the Guardian.
The documents shine a light on the ways corporations have used their money to buy influence, amass prestige and shape public policy through grants to academic programmes and advocacy groups.
The documents come to light as ExxonMobil, formed when Mobil merged with Exxon in 1999, is now facing investigations by multiple state attorneys general over claims it failed to communicate known climate crisis-related risks to investors and the public.
The documents, dated in 1993 and provided to the Guardian by the Climate Investigations Center, show the Mobil Foundation justified spending by detailing major benefits to Mobil they expected in return for more than 80 proposed grants for 1994 a practice not-for-profit experts said may have violated federal law.
The foundation wrote that its grants for not-for-profits could help Mobil fight environmental regulation, fund scientists whose work had been favorably received by the industry and prepare Mobil to defend itself against lawsuits following oil spills and industrial accidents.
For example, in a one-page entry listing past Mobil grants, the company was successful in having the National Safety Council Board of Directors pass a resolution opposing the mandating of any alternative fuel, the foundation wrote. Grants for the council totalled nearly a quarter-million dollars, according to the entry, which recommended further grants for the coming year.
The internal grant-making recommendations and records, many marked confidential, cover $1.2m worth of funding about 10% of the foundations annual budget. More than two-thirds of the roughly 120 full-page grant recommendations predict specific benefits for the oil giant.
Justifications for offering money to not-for-profits and universities included:
Global warming is likely to be the key international environmental issue of the 1990s, the foundations internal records predicted in 1993, adding that climate regulation was a real possibility within the next five years. The foundation recommended a $25,000 grant to the Lamont-Doherty Earth Observatory at Columbia University to help Mobil develop personal relationships with some of the key experts on this issue and enable Mobil to participate in the debate on these regulations.
The Mobil Foundation recommended contributing a total of $25,000 to the Harvard Center for Risk Analysis, saying the center had already effectively argued against tighter fuel economy standards and influenced Americas toxic air pollution laws, and its stances may help keep Mobils costs down in future.
Mobils environmental expenditures exceeded $1bn in 1992, the document said. Without a greater appreciation of scientific risk analysis, those costs will continue to escalate as environmental rules and programs are made excessively stringent in response to the publics unfounded panic over relatively minor incidents.
The Academy of Natural Sciences in Philadelphia describes its Environmental Associates Program as a group of corporate executives concerned about environmental effects of industrial activities.
The program was founded by Dr Ruth Patrick, who helped to draft the Clean Water Act, a major federal law giving the Environmental Protection Agency (EPA) power to write rules to protect people against harm from water pollution.
Based on the contacts of the Academy, the Mobil Foundation wrote, the Environmental Associates Program has the potential to challenge the EPA behind the scenes on the effectiveness of a regulation for the environment and whether sound science supports the proposed law.
The Mobil Foundation recommended offering the National Research Council, part of the National Academies, funding for a study of an oil spill clean-up method, writing: By helping to fund the study, Mobil may be offered the opportunity to participate or to receive early access to the findings.
Leaders of Mobil and its foundation had offered public hints that they expected to harvest benefits from the companys charitable giving.
Should corporations ever engage in pure philanthropy, giving money away because it gives one a nice feeling and the shareholders dont seem to mind? Herbert Schmertz, Mobils vice-president of public affairs for about two decades and a former Mobil Foundation president, asked during a 22 September 1987 talk on philanthropy and corporate social responsibility.
I guess Id answer that by saying I dont know whether corporate philanthropy as Ive sort of defined it, which is just to get a warm feeling, ever existed, he said. But if it did, Id have to say that its a dying concept in terms of corporate giving.
A 1998 book thanking Richard Mund, who served as Mobil Foundations executive director from 1979 to 2000, for his edits offers a similar view of corporate grant-making, advising that companies identify a significant business reason for grants and obtain as much business value from social investments as is allowable and practical.
Tax experts told the Guardian that the Mobil Foundations stated intent to benefit Mobil through charitable grants would have raised serious red flags for illegal self-dealing, had it come to light before the statute of limitations ran out.
The public would have a very hard time finding out any of this, said Naomi Oreskes, author of Merchants of Doubt and a Harvard University professor of the history of science, adding that typically one can only see the organization and amount, but no details of what or why.
What I see here is a pattern of charitable giving that is anything but disinterested, she said.
A spokesperson for ExxonMobil said: Our philanthropic arm follows all laws and required disclosures. The ExxonMobil Foundation has a strategic focus supporting education with an emphasis on math and science, promoting women as catalysts for economic development and preventing deaths from malaria.
A lawsuit filed in October by the New York attorney general alleges ExxonMobil defrauded investors for years about the risks climate crisis regulation posed for the fossil fuel giant.
In January, the US supreme court allowed Massachusetts attorney general Maura Healeys investigation into how ExxonMobil described climate crisis risks to consumers and investors to move forward by refusing to hear the companys appeal. A spokesperson for Healey declined to comment on the newly revealed documents, citing ongoing litigation.
The ExxonMobil Foundation was also formed after the 1999 merger of Exxon and Mobil.
Corporate watchdogs said issues associated with private industrys use of not-for-profits to influence American policy have become more pronounced since the 1990s, particularly in the wake of the supreme courts Citizens United decision, which protected political spending by corporations and which critics say fuelled a rapid expansion of so-called dark money advocacy groups whose funding is more difficult to trace.
Its extremely troubling, Lisa Graves, president of the board of the Center for Media and Democracy, said.
One of the primary rules for nonprofits is that theyre supposed to be in the public interest, she said, not for private benefits.