Ethics Expert: ExxonMobil’s Behavior Since Torrance Refinery Blast Is Worse Than Volkswagen’s

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A business ethics expert slammed ExxonMobil’s conduct as more egregious than Volkswagen’s as more allegations surfaced Wednesday about the oil giant’s apparent stonewalling in the face of regulatory scrutiny.

Professor Stephen Byars contrasted ExxonMobil’s behavior in the aftermath of a February explosion to revelations that Volkwagen likely falsified emissions data for as many as 11 million diesel vehicles worldwide, sending its stock diving and prompting its CEO to resign.

Byars, who teaches business ethics courses at the USC Marshall School of Business, noted that in contrast to ExxonMobil, Volkswagen publicly accepted responsibility for its wrongdoing and acted quickly in a bid to restore public trust.

ExxonMobil, meanwhile, allegedly has failed to cooperate with a federal investigation into the cause of the Feb. 18 explosion and ignored subpoenas.

“In some ways, that makes the behavior of ExxonMobil more egregious because there’s not been communication from the corporate side of ExxonMobil that says we realize there’s a problem at the Torrance refinery and we will bring it online as quickly and as safely as we can,” Byars said.

“It does absolutely no good to stonewall or clam up,” he added. “Companies that survive scandalous behavior are generally the ones that own up to their mistakes. … Most consumers will forgive mistakes if they feel the corporation is genuinely interested in making things right.”

ExxonMobil, in contrast, has made few public statements of any substance in the months since the blast, beyond those at a state oversight hearing held shortly after it occurred when local politicians compelled company officials to address the community.

Now Santa Monica-based nonprofit Consumer Watchdog, in a letter to Gov. Jerry Brown, U.S. Attorney General Loretta Lynch and state Attorney General Kamala Harris, alleged the company may be hiding a key employee and withholding documents from investigators.

“Consumer Watchdog has received confidential information that the key Exxon employee who reportedly made decisions leading to the explosion is being hidden from investigators,” the letter reads in part. “(He) has been reassigned to an administrative position at the plant and told to stay away from the investigation and to keep quiet.”

The group accused the company of a “reckless disregard” for safety and said it’s also “refusing to divulge risk assessments on equipment involved in the explosion.” Consumer Watchdog said it was “sheer luck” the explosion did not ignite thousands of pounds of potentially deadly hydrofluoric acid stored nearby.

The watchdog group noted that federal and state laws “prevent subversion of law enforcement investigations.”

South Bay U.S. Reps Ted Lieu and Maxine Waters already have said the U.S. Chemical Safety Board is seeking Justice Department assistance to compel the company to comply with the investigation.

Word that ExxonMobil may have been putting up new obstacles did not sit well with Lieu, a former Torrance city councilman who already has strongly criticized the company for its “pushback” to state and federal investigations.

If true, the allegations are “incredibly troubling,” Lieu said.

“Because of all the actions the company has been taking lately, it does raise a lot of red flags about why all of a sudden they are obstructing state and federal investigations,” he said. “It wasn’t until the last few months they did a 180-degree turn. It does make you wonder what they’re hiding.”

ExxonMobil, in an email response late Wednesday, denied the latest allegations and reiterated its commitment to safety.

“We deny any deliberate wrongdoing and have cooperated with the agencies investigating the incident,” spokeswoman Gesuina Paras said. “The allegation made by Consumer Watchdog that we hid an employee from investigation is untrue. The employee in question has cooperated and has, in fact, given testimony three times to agencies investing the incident.

“Although the employee assumed a new position during the incident investigation, this appointment had been scheduled before the incident occurred,” she added. “Such moves are commonplace, and neither resulted from the February 18 incident nor had any bearing on the subsequent investigation.”

Officials with the South Coast Air Management District did not respond Wednesday to a report that ExxonMobil was abandoning its plans to resume large-scale gasoline production using an outmoded piece of pollution control equipment that would violate air quality standards.

ExxonMobil reportedly will build a new one, a process that may not finish until February, although the company declined to provide any confirmation of that.

“We continue to work cooperatively with the South Coast Air Quality Management District on a potential restart plan and will not speculate on a time line,” Paras said.

Meanwhile, the city of Torrance has scheduled a community workshop beginning at 5:30 p.m. Oct. 13 to discuss issues surrounding ExxonMobil’s refinery.

Presumably, the meeting will address safety and environmental issues surrounding the refinery, although City Manager LeRoy Jackson said Tuesday that a meeting format and agenda were not yet available.

Residents have become increasingly concerned about the refinery’s ability to operate safely after Cal/OSHA issued 19 citations to the company in the wake of the blast.

Councilman Mike Griffiths, who made the formal announcement at the tail end of Tuesday’s council meeting, said he also knew of no details of the workshop beyond what he read.

“I’m feeling very much in the dark, like most people,” Griffiths said. “I would like to have more of the facts publicly known. And I’m disappointed ExxonMobil has decided not to provide more information publicly. Obviously, to me, safety is the No. 1 concern of the residents of Torrance.”

Byars agreed with Griffiths, who is running for a City Council seat next year.

“One of the dimensions of acting ethically is to be mindful of the community surrounding one’s business and to be mindful of environmental concerns,” he said. “When you pile one insult upon another, one injury upon another … it adds up.

“Eventually, our memories are not going to be short, they’re going to be long,” he added. “We will remember how this particular oil company treated us and we may not be so forgiving in the future.”


Reporter covering Torrance, Lomita, Rolling Hills Estates, Palos Verdes Estates. Nick also covers soccer as a sports columnist. Reach the author at [email protected] or follow Nick on Twitter: @lasoccerblog @NickGreen007.

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