Tuesday, June 28, 2016

U.S. Supreme Court Decision Undermines Chevron's Defense in Ecuador Pollution Case

Chevron's faltering "racketeering" (or RICO) case against the Ecuadorian villagers the company poisoned with its toxic dumping was just rendered a nullity by the U.S. Supreme Court, dealing another major blow to the oil giant as it attempts to evade paying the $11 billion pollution judgment.

(For full background on last week's U.S. Supreme Court decision in the RJR Nabisco case and how it hurts Chevron in the Ecuador case, see here.)

Chevron in 2010 deployed hundreds of lawyers to attack and try to demonize indigenous villagers who has just won a multi-billion dollar judgment in Ecuador against the company. Three layers of courts in Ecuador had found Chevron guilty of dumping billions of gallons of toxic waste. Chevron was also reeling after having been embarrassed by brutal exposes of its jungle misconduct in prominent media outlets, including 60 Minutes, Vanity Fair, and The New York Times.

Chevron of course believes the rule of law should apply only when it wins in court, not when it loses.

Angry and desperate, Chevron went on the counterattack. It sold its assets in Ecuador and then filed a retaliatory RICO action in the United States against the villagers and their lawyers claiming the entire judgment was a product of "sham" litigation despite overwhelming evidence against the company. (See here for photos and testimonies of some of Chevron's victims in Ecuador.)

Rather than being assigned randomly, Chevron's RICO case was grabbed by a headline-hungry U.S. judge who never disclosed he had personal investments in Chevron when he presided over the case, despite clear signs he was motivated by bias.

The judge, Lewis A. Kaplan, constantly disparaged the villagers and their country from the bench. A prominent law scholar, New York University Professor Burt Neuborne, blasted Kaplan for engaging in "judicial slander" to undermine Chevron's victims. Other international legal scholars and U.S. civil society groups such as Amnesty International and Earth Rights blasted the judge for his intellectual dishonesty and animus toward the indigenous groups.

A subsequent bench proceeding (Kaplan refused to seat a jury of impartial fact finders) looked more like a Soviet-era show trial. Chevron corporate executives cheered from the gallery and virtually every ruling went in favor of the company. Meticulously choreographed, the Chevron-Kaplan show trial was a mockery of justice from the start, and the case should have been thrown out immediately, as underscored by the U.S. Supreme Court decision.

Aaron Page, a U.S. lawyer who represents the Ecuadorians, put it perfectly:
Chevron's RICO case in Ecuador already was doomed because of its countless legal excesses and absurd factual findings. Now, the Supreme Court has ruled you can't bring a RICO case, even a legitimate one, based on harm that took place abroad. This is another example of why Chevron's RICO case should have been thrown out on day one.
It is worth reviewing a few of the lowlights of what can only be described as a hostile takeover of our taxpayer-funded federal court system by a wealthy private corporation:

**Chevron and its investigators (Yohi Ackerman and Andres Rivero) paid $38,000 in cash out of suitcase and more than $2 million overall to an admittedly corrupt former judge in Ecuador, Alberto Guerra. In exchange, Guerra became Chevron's star witness and lied on the stand by claiming he had been in a meeting where a "bribe" was discussed.

**Subsequent to the RICO trial, Guerra admitted admitted under oath that he made up key parts of his testimony. He also confessed to accepting bribes when he was a judge, and paying bribes to judges when he was practicing law. It also emerged that Guerra admitted lying to Chevron to induce the company to pay him more money for his testimony. "Money talks, but gold screams," Guerra told Chevron in a taped conversation.

**Chevron put Guerra on the stand in the RICO case after the company's lawyers at the U.S. firm of Gibson Dunn coached him for 53 consecutive days. After the coaching, Guerra began to claim he had information the plaintiffs wrote the trial court judgment.  The claim was a lie, as an independent forensic analysis later proved. Neither Chevron nor its outside lawyers have been held accountable for coaching a witness to lie in a federal court.

**The judge also let Chevron pay more than $15 million to Kroll, a private investigations service populated by former FBI and CIA agents, to spy on lawyers for the villagers -- a clear violation of the law and professional ethics. U.S. attorney Steven Donziger was followed and harassed by six separate Kroll agents in Manhattan. Kroll also admitted it prepared 20 to 30 reports on Donziger in an attempt to dig up dirt and discredit him.

**Chevron also convinced Kaplan -- who has a long history of hostility toward plaintiff's lawyers -- to actively promote its scheme. Kaplan denied the Ecuadorians a jury so he could write the decision himself, which was largely cribbed from Chevron's briefs. Kaplan also allowed secret witnesses and refused to consider any of the environmental evidence (such as soil and water samples) that clearly proved the oil company was guilty. For a deep dive into Kaplan's miscarriage of justice, read the 65-page factual summary in this appellate brief.

In short, from his Manhattan trial court, Judge Kaplan tried to rule that Ecuador's entire judiciary was illegal. Worse, he tried to singlehandedly overturn a critical ruling from another country's Supreme Court. And he allowed Chevron's made-up facts into his courtroom to justify a defective ruling that has embarrassed the federal judiciary and been lambasted by legal scholars from nine countries around the world.

Although Guerra was busted for perjury, Chevron has kept him on its payroll to this day. The $2 million in payments is only what Chevron disclosed it had paid Guerra as of 2013. Today, that number is surely an order of magnitude greater, but Chevron refuses to disclose the real value of the slew of benefits it has bestowed on this tawdry criminal.

When the dust clears and the villagers collect on their judgment -- most likely in Canada, where they are advancing toward a seizure of company assets after winning a unanimous decision before the country's Supreme Court -- that will not be the end of the story.

The people in and out of Chevron responsible for this abuse of power need to be held accountable. They include, most notably, Chevron CEO John Watson, Chevron General Counsel R. Hewitt Pate and Randy Mastro, Andrea Newman, and Avi Weitzman from the outside firm of Gibson Dunn. The villagers plan to do their damn best to see that it happens.

Chevron's RICO case and the bombastic, inaccurate, and pre-ordained factual conclusions of Judge Kaplan's show trial are currently being reviewed by a New York federal appellate court. That court had a relatively easy job to begin with, given the many fatal flaws in Chevron's case. The U.S. Supreme Court's latest decision on the RICO law just made that job even easier.

















Monday, June 27, 2016

Chevron’s Garbage Fire Sale

Chevron's Richmond refinery flare at 9:30 pm. Photo credit: Jeremy Miller

Reposted from Eye on the Amazon.

Chevron sending up massive flares in Richmond is not the only sign things are getting hot for the oil giant on the run from a $11 billion verdict.

On June 19th, Chevron's Richmond refinery erupted a torrent of flames and black smoke into the air and terrified local residents. The community remembers all too well when 15,000 people were sent to the hospital when that same refinery exploded in 2012. Unfortunately, since then the public hospital in Richmond has closed. They can't afford another explosion as the closest public emergency room services are now thirty to forty minutes away in Oakland.

But that's not the only thing "on fire" at Chevron lately. Similar to the company's claims that it needs massive flares to burn off excess gas, Chevron claims there's "nothing to see here" as it tries to sell off US $5 billion in assets in its Burnaby oil refinery in British Columbia. But the company's actions and track record tell a different story. Realizing it was going to lose in its legal battle and be forced to accept responsibility for deliberately dumping 18 billion gallons of toxic waste into the Ecuadorian Amazon, Chevron instead sold off all its assets and fled that country. It's been a corporate criminal on the run ever since, but the law is finally catching up with Chevron – in Canada.

In September, the Ecuadorian plaintiffs – bolstered by a unanimous decision in their favor by Canada's Supreme Court – will begin their trial to seize Chevron's Canadian assets to cover its US $11 billion debt to the affected communities in Ecuador.

Chevron currently holds approximately US $15 billion of assets in Canada, almost all of which is at risk due to this enforcement action. Chevron refuses to acknowledge its full liability to the SEC and to its shareholders, and this latest move may give a clue as to why. Unable to replicate its customary racist attacks against Ecuador's judiciary and legal system, Chevron has to dream up new methods in Canada.

The Ecuadorians have defeated Chevron in every single legal contest which has considered the evidence of their crimes in Ecuador (Chevron's singular victory – a retaliatory RICO SLAPP suit in the US – notoriously forbade any evidence of contamination in its proceedings and is still under appeal). The writing is on the wall in Canada, and Chevron is trying to slip out quietly and escape justice once again.

To make matters worse for the oil giant, a recent U.S. Supreme Court decision on the use of RICO may preemptively doom its defense before the Second Circuit Court of Appeals in New York. As respected appellate attorney Deepak Gupta wrote, the Supreme Court decision "further limits private RICO actions by requiring proof of a quantifiable, redressable and domestic injury – something Chevron has steadfastly refuse to identify." The decision also made clear that the RICO statute could not be used to attack a final judgment from a foreign court, as Chevron has tried to do in the Ecuador case. Aaron Page, a U.S. lawyer for the Ecuadorians called it a "nail in the coffin" of Chevron's RICO case. He added, "Now, the Supreme Court has ruled you can't bring a RICO case, even a legitimate one, based on harm that took place abroad. This is another example of why Chevron's RICO case should have been thrown out on day one."

Bottom line on these developments: no matter how desperate it gets, Chevron can't hide its actions in Canada or its pollution in Ecuador or Richmond.

Thursday, May 26, 2016

Chevron CEO Watson Shows He Is Out of Touch On Ecuador Litigation, Fossil Fuels

Chevron CEO John Watson and his Board of Directors seemed terribly out of touch at the company's annual meeting this week where they were once again pounded by the environmental group Amazon Watch and its allies. Watson simply refused to deal with his two key challenges: the $11 billion Ecuador pollution judgment, and climate change.

For shareholders, it was hardly a performance that inspires confidence in the future. Chevron's revenues are down 75% compared to last year and its stock price continues to lag behind its peers. Nobody wants a Luddite running an oil company, but that is what Watson is in danger of becoming.

On Ecuador, Watson arrogantly dismissed the comments of renowned indigenous leader Humberto Piaguaje. A Secoya elder who has seen his village devastated by Chevron's pollution, Piaguaje had traveled from his jungle home to confront Watson directly about the enormous court judgment won by thousands of villagers in 2013. The decision against Chevron has been confirmed by no fewer than 18 appellate judges in Ecuador and Canada.

Yet Watson refuses to pay up, prompting the villagers to try to seize Chevron assets in Canada. Given that Chevron has extremely valuable oil fields and other properties in Canada, it is likely the villagers will collect the entirety of their judgment in that country.

Watson had the gall to suggest to Piaguaje that his thoughts about how Chevron's pollution destroyed the ancestral lands of indigenous groups were not really his own. Surely, Watson said, these thoughts were planted in his head by lawyers. After Piaguaje asserted that Chevron's "blame the victim" strategy in Ecuador is racist, Watson became visibly flustered and turned off the microphone after saying, "I've been trying to answer questions on Ecuador for seven years. I am not going to take any more questions." (For more details, see this account from Amazon Watch and this article by Courthouse News.)

Watson -- who received $22 million in compensation last year -- was even more arrogant on the climate change issue. In contrast to several European-based oil majors, Chevron under Watson's leadership opposed all six resolutions designed to drag the company into the modern world on this most critical of challenges. Watson obviously has no plan to deal with Chevron's stranded asset problem as the world transitions to a clean energy economy. This is a great example of how poor citizenship and flawed decision making combust into a perfect storm of corporate stupidity.

Here are some more signs from the annual meeting that Watson has his head in the sand:

*Watson did not even acknowledge that because of the Ecuador judgment Chevron faces the seizure of billions of dollars of company assets in Canada, where the country's Supreme Court recently ruled for the villagers. Chevron is on the firing line of one of the most important environmental cases in history, yet Watson was mum about what appears to be a threat to the company's business model.

**Also on the Ecuador litigation, Watson was silent on how Chevron's key witness from Ecuador has repudiated his own testimony and admitted lying to get more money from the company. Chevron has paid the witness at least $2 million and moved his entire family to the U.S.; the company's entire defense hinges largely on the testimony of this one witness.

**Watson also completely ignored a whistleblower video that shows Chevron scientists trying to defraud Ecuador's courts by hiding evidence of the company's pollution. The video was given to Amazon Watch by a company insider.

**During the meeting, Watson failed to beat back a shareholder resolution from Newground Social Investment critical of Chevron's mishandling of the Ecuador litigation. The resolution received support from 30% of all shareholders, or a majority of all shares not controlled by the company. This was a stinging rebuke to company management, which has used 60 different law firms to fight the villagers.

**Watson also refused to discuss how Chevron recently dropped a key legal claim against the villagers because the company concluded that its arguments were certain to be rejected by courts.

**Finally, Watson again failed to acknowledge the humanitarian catastrophe in the area of Ecuador where the company operated from 1964 to 1992. Cancer rates have skyrocketed and hundreds if not thousand of people have died from oil-related diseases since Texaco (bought by Chevron in 2002) started to systematically dump toxic waste into the Amazon in the 1960s.

Watson was the Chevron executive who in 2001 fought hard for the merger with Texaco knowing that it had left billions of gallons of toxic waste in its wake. Watson didn't respect the sophistication and determination of indigenous groups at the time; he obviously still doesn't.

Chevron Board members, who are paid around $400,000 per year, remain silent in the face of this fiasco. Most would rather collect their fee by getting along with management when they should focus on exercising their fiduciary duties on behalf of shareholders.

What a sorry commentary on the company and its leaders.

Tuesday, May 24, 2016

With Assets Under Threat, Chevron CEO Faces Judgment Day Over Ecuador At Annual Meeting

Chevron CEO John Watson is getting roughed up in the days leading up to the company's annual shareholder meeting this week as risk related to his historic $11 billion environmental liability in Ecuador continues to increase. The judgment has now been confirmed unanimously by Ecuador's Supreme Court while Canada's Supreme Court has ruled the affected communities can try to seize some of the company's $15 billion worth of assets to pay for a clean-up.

(For background, see this press release.)

In all, 18 consecutive appellate judges in Ecuador and Canada have rejected Chevron's arguments and ruled in favor of indigenous and farmer villagers from the Amazon who first brought suit in 1993. Chevron's global game of forum shopping is running out of steam -- the company is facing a true litigation catastrophe in Canada -- and Watson no doubt will be called out by shareholders at the meeting for his abhorrent and irresponsible mistreatment of indigenous groups in the Amazon.

The annual meeting, at company headquarters in San Ramon, will be highlighted by a face-to-face showdown between Watson and renowned Ecuadorian indigenous leader Humberto Piaguaje. Piaguaje, a Secoya elder, has traveled from his jungle home to attend the meeting. He is being hosted by Amazon Watch, a U.S.-based environmental group that is organizing a major protest outside during the meeting.

Watson and Chevron's Board will be on the hot seat over a number of issues:

**The company's Ecuador liability -- originally $9.5 billion -- is getting worse by the day as statutory interest in Canada (where the villagers are trying to enforce their judgment against Chevron's assets) has pushed up the amount to roughly $11 billion. Just last week, two top Chevron executives were forced to answer questions under oath in a deposition in Canada; a critical court hearing is scheduled for September that has the chance of knocking out all of the oil giant's defenses.

**Under Watson's leadership, Chevron is flailing not only over the Ecuador issue but over its core business. The company recently reported its first quarterly loss in 13 years; revenue is down 75%; and climate change threatens to leave shareholders with billions of dollars of "stranded assets" as the world moves away from fossil fuels.

**A major Chevron shareholder, Newground Social Investment, has filed a resolution that asserts that Watson's management team "has mishandled a number of issues in ways that significantly increase both risks and costs to shareholders. The most pressing of these issues is the ongoing legal effort by communities in Ecuador to enforce a $9.5 billion Ecuadorian judgment for oil pollution." The resolution follows a complaint to the SEC by a U.S. Congresswoman that suggests the company is trying to downplay its Ecuador liability. Newground also published a letter on the SEC website calling for shareholders to vote for the resolution.

**It is increasingly clear that Chevron is responsible for one of the world's most dire humanitarian catastrophes in Ecuador. Numerous independent studies confirm that cancer rates in the region where Chevron operated have skyrocketed; thousands of indigenous peoples and farmers have died of cancer and other oil-related diseases. Yet at great cost, Watson continues to pay 2,000 lawyers from 60 law firms to fight some of the most vulnerable people on the planet.

In the press release put out by Amazon Watch, Piaguaje said
Our leaders plan to confront Mr. Watson with judgments from multiple courts mandating that the company pay its pollution bill to the people of Ecuador.  Mr. Watson needs to accept responsibility for Chevron's environmental crimes in Ecuador, apologize to the company's victims, and abide by court orders that compensation be paid. Until he abides by the rule of law, Mr. Watson and Chevron's Board members will be considered by us to fugitives from justice subject to arrest for crimes against humanity under principles of universal jurisdiction.
Well said, Humberto. Perhaps you should consider making a citizen's arrest of Watson at the meeting.

In previous shareholder meetings, Watson has suffered a series of biting rebukes over the Ecuador liability. One resolution critical of Watson's mishandling of the case received a whopping 38% support from shareholders.

In addition, in 2011 several of Chevron's institutional shareholders with more than $580 billion in assets under management sent Watson a letter urging settlement of the Ecuador case. Amazon Watch also sent a letter to Chevron signed by 43 corporate accountability and human rights groups blasting the company for trying to silence its critics.

Chevron's shareholders should use the annual meeting to re-assess whether the conflicted Watson -- who made $22 million in compensation last year from a Board that he controls -- has the vision to fully grasp what it means to serve shareholder interests.


Tuesday, April 5, 2016

Chevron Reeling? Oil Giant Abandons Key Claim In Ecuador Pollution Case

Chevron is reeling again in the Ecuador pollution case. The company's plan to evade paying for a court-ordered clean-up of the billions of gallons of toxic waste it dumped in the Amazon rainforest -- decimating indigenous groups -- seems to be faltering like never before.

After suffering defeats before 18 separate appellate judges, Chevron quietly abandoned its last major claim in Ecuador to challenge the $10 billion environmental liability imposed on the company by Ecuador's Supreme Court in 2013.

Chevron's decision to sit on its hands at such a critical juncture severely damages its prospects in Canada, where the affected communities are targeting company assets to pay for a clean up of their ancestral lands. (Here is background on Chevron's increasing legal difficulties in Canada; here is an explanation of the company's jurisdictional shell game.)

Chevron abandoned its "fraud" allegations in Ecuador by letting the statute of limitation lapse on a key claim under the country's Collusion Prosecution Act (CPA). The move is a flagrant illustration of how the company's evidence has collapsed in recent months. Ignoring the CPA claim all but nullifies Chevron's international arbitration action against Ecuador's government, where the company cynically has been trying to stick taxpayers in Ecuador with its enormous clean-up tab.

Chevron's decision follows a series of devastating courtroom setbacks.

The company's star witness, Alberto Guerra, recently admitted to accepting bribes and then lying under oath after being paid $2 million (see here and here) by the company. Some of the Chevron funds were handed over to Guerra as cash out of suitcase by company lawyers Andres Rivero and Yohi Ackerman.

The company's forensic evidence regarding the supposed "ghostwriting" of the trial court decision also has fallen apart; a new report proved the judge wrote the judgment by saving it 484 times on his office computer. Chevron is also facing negative fallout from a whistleblower video showing its scientists plotting to hide pollution evidence from the Ecuador court.

Caught committing fraud, Chevron paid an estimated $2 billion to dozens of law firms to try to turn the tables on the very people it poisoned by manufacturing false evidence using paid stooges like Guerra. Chevron's strategy is designed to shroud the company's crimes and wrongdoing in a fog so thick that the financial risk can be hidden from shareholders, artificially propping up the company's stock price. In the meantime, Chevron's notoriously passive Board of Directors (with CEO John Watson as Chairman) sits on its hands while villagers suffer and die.

This disastrous corporate strategy, designed and funded by Watson and Chevron General Counsel R. Hewitt Pate, is now in full backfire mode.

The mind-blowing story behind Chevron's latest retreat is in this press release issued by the Amazon Defense Coalition. The ADC represents the 80 impoverished indigenous and farmer communities in Ecuador who obtained the court judgment. Another press release explains how Chevron is facing a potential "litigation catastrophe" in the Ecuador case.

Three layers of courts in Chevron's preferred forum of Ecuador found that the oil giant deliberately dumped billions of gallons of toxic waste into the rainforest, causing an outbreak of cancer that has killed or threatens to kill thousands. (For a summary of the overwhelming evidence against Chevron, see here.)

In another sign of its bad faith, Chevron stripped its assets from Ecuador in 2007 after insisting that the trial take place in the South American nation. Once Ecuador's Supreme Court in 2013 affirmed the final judgment, there was no way to force Chevron to pay up without targeting company assets in other countries, which the villagers are doing in Canada and Brazil.

Chevron's latest decision to give up the CPA claim "is an example of the company bailing out of any court where it knows its incredibly weak evidence will not carry the day," said Luis Yanza, a leader of the affected communities and a Goldman Prize winner.









Thursday, March 24, 2016

Alec Baldwin Helps Expose Chevron's $10 Billion Ecuador Pollution Disaster

Actor and journalist Alec Baldwin has used his popular podcast "Here's The Thing" to interview human rights attorney Steven Donziger about Chevron's pollution disaster in Ecuador's rainforest.

The interview, broadcast on National Public Radio's outlet in New York, is here.

Donziger, who for two decades has helped Ecuador indigenous and farmer communities win a historic $10 billion environmental judgment against Chevron, used the interview to explain the ongoing environmental devastation, high cancer rates, and public health crisis caused by the oil major's decision to discharge billions of gallons of toxic waste into the Amazon rainforest. Chevron operated in Ecuador under the Texaco brand from 1964 to 1992.

Three layers of courts in Ecuador -- the country where Chevron insisted the trial be held -- have found the company guilty. Chevron admitted that it abandoned an estimated 1,000 unlined toxic waste pits in the Amazon that continue to contaminate soils, groundwater, and rivers. Ecuador's Supreme Court unanimously confirmed the judgment against Chevron in 2013.

The affected communities are trying seize Chevron assets in Canada and other countries to force the company to comply with the judgment. Chevron stripped its assets from Ecuador in 2007 in anticipation of losing the case. The Canadian Supreme Court last year unanimously denied Chevron's attempt to block the asset collection action, leading to major new difficulties for the company.

Just recently, Amazon Watch exposed a devastating whistleblower video showing Chevron technicians trying to hide the company's pollution from Ecuador's court. Here is a summary of the overwhelming evidence against Chevron; a summary of the independent media coverage documenting Chevron's wrongdoing; and a 60 Minutes segment on the case.

Baldwin's podcast is enormously popular and often reaches millions of listeners. In recent months, he has interviewed people as diverse as actors Sarah Jessica Parker and Dustin Hoffman, Comedian Amy Schumer, Doctors Without Borders President Joanne Lui, and environmental activist Antonia Juhasz.


Tuesday, February 2, 2016

Chevron At War With Canada Supreme Court; Company Also Faces Accusations of Terrorism and Tax Evasion

As Chevron faces a potential litigation catastrophe over its $10 billion pollution liability in Ecuador, we have decided to publish a news summary from the front lines of the historic battle by indigenous communities to hold the company accountable for its "Amazon Chernobyl" disaster.

The summary will chronicle examples of Chevron's illicit behavior and sub-standard business practices in Ecuador and elsewhere -- including, most recently, the shocking news that the company is being sued for making payments to Saddam Hussein's private slush fund.

We understand that we might have a space problem given the ample material related to Chevron's unethical litigation practices, payments to witnesses, and other fraudulent shenanigans taking place under the regime of current CEO John Watson (annual compensation: $25 million) and his sidekick, Chevron General Counsel R. Hewitt Pate. But we will try.

Here is our first installment of The Chevron Chronicles:

Chevron violating Canada Supreme Court decision: Chevron's arrogance and the moral bankruptcy of its "perpetual litigation" strategy under Watson's leadership is now on full display in Canada. The villagers last week demonstrated in a new legal filing that Chevron yet again is defying a Canada Supreme Court order granting them jurisdiction to try to seize company assets to pay for their $10 billion judgment. Despite the Supreme Court order, Chevron for the fourth time has filed legal papers to nullify jurisdiction.  The company now faces the nullification of its defenses given that it already litigated them (and lost) in Ecuador, where it insisted the trial be held. For background, see here; for the Canada Supreme Court decision against Chevron, see here.

Chevron is now 0-18 among appellate judges in Canada and Ecuador: As further proof that Chevron views courts as little more than pawns in a larger strategy to win by might what it can't win by merit, the company has now lost before all 18 appellate judges in Canada and Ecuador who have heard the case. Using some of the 60 law firms and 2,000 lawyers Chevron has retained to fight the villagers, the company is still trying to re-litigate many of the same issues (including jurisdiction) already decided by the 18 appellate judges. As Alan Lenczner, the Canadian lawyer for the villagers, said in his latest filing: "Deep pockets against the resources of indigenous people in the Ecuadorian Amazon and repeated, interminable delay until 'hell freezes over' are Chevron's weapons." Chevron's desperation in Canada is so palpable that the company enlisted the notorious convicted felon Conrad Black to serve as a spokesman for its cause.

Chevron charged with providing material support to terrorists: Chevron's propensity to put profits in front of people in Ecuador -- which ended up causing numerous deaths from cancer -- are just the tip of the iceberg. Several victims of terrorism sued Chevron in California last October for financing a Saddam Hussein slush fund that was used by the Iraqi government to reward the families of suicide bombers targeting Israeli civilians. Chevron already paid a $30 million fine to the U.S. government for violating the Foreign Corrupt Practices Act in Iraq. The latest civil lawsuit alleges: "Due, in part, to Chevron's substantial assistance, Saddam Hussein had the means to finance and direct over twenty separate acts of violent terrorist attacks inflicting death, disfigurement, and lasting psychological trauma and pain upon plaintiffs, eighteen U.S. nationals and over 300 foreign nationals then living in Israel."

Chevron's fraud in Ecuador proven by whistleblower video: The explosive Chevron whistleblower video that shows company scientists trying to defraud Ecuador's courts continues to gain traction.  The video has now been viewed more than 2 million times on the Internet and does more than anything to illustrate how the devious company uses obfuscation to hide the truth about its toxic legacy.  Combined with the stunning admission by the company's star witness that he lied in open court, Chevron now faces a major uphill battle in Canada even under the best of circumstances.

Chevron faces allegations of tax evasion in Australia and fraud in Tennessee: In Australia-- where Chevron is the largest foreign investor -- a stunning new report details how how the company has become a tax cheat extraordinaire.  Chevron has been ripping off the Australian government by stashing its earnings in a subsidiary in Delaware and using other paper financial transactions to drain profits out of the country to reduce its tax payments. As business columnist Michael West wrote, "Secretive oil major Chevron Corp has taken the art of tax avoidance to its ultimate form thanks to a scheme so aggressive that it goes beyond merely reducing exposure to income tax, but rather, has been designed to make a profit from the Australian Tax Office."

Separately, the Attorney General of Tennessee sued Chevron for fraudulently siphoning $250 million from a state environmental clean-up fund. A 2009 report from award-winning journalist Antonia Juhasz documented Chevron's environmental problems in dozens of countries around the world

Of course, an oil company like Chevron does not run into trouble with the law so frequently unless it is management's policy to see what it can get away with. As it is doing in Canada to evade paying the Ecuador pollution judgment, Chevron is playing a cynical game with courts and regulators. If this was a fair world, Chevron's executives would face prison for their horrific acts.

Instead, for being the Dick Cheney-esque mastermind behind this subterfuge, Chevron's General Counsel Pate reaps millions of dollars per year in compensation while the company's victims around the world suffer illness and death. Most of Chevron's Board puts up with Watson and Pate by turning a blind eye to these repeated acts of wrongdoing.

Judges and regulators need to connect the dots and take notice of the full range of Chevron's wrongdoing around the world. Only then will they not fall prey to the company's cynical and manipulative jurisdictional shell game.

Courts also must reprimand Chevron like any other abusive litigant trying to use its superior resources to evade its moral and legal responsibilities to those it has harmed.



Tuesday, January 5, 2016

Here Are Five Reasons Why 2016 Could Spell Disaster for Chevron's Ecuador Strategy

The year 2016 is shaping up to be particularly dreadful for Chevron in the Ecuador pollution case despite massive expenditures by the company -- estimated to be $2 billion and rising -- to pay dozens of law firms to try to derail the litigation.

Chevron and its CEO John Watson now face potentially catastrophic difficulties given critical setbacks in 2015 suffered by the oil giant both in and out of the courtroom. That's the word from a devastating new press release about Chevron's declining prospects put out by the villagers.

Here are the five main reasons (although there are many others) that explain why Chevron and Watson are moving closer to being forced to pay the full amount of the $10 billion environmental judgment in Ecuador:

  • The oil giant faces a "litigation catastrophe" in Canada due to a blockbuster 7-0 decision by the country's Supreme Court that issued in 2015. The decision rejected all of Chevron's jurisdictional arguments and gives the green light to the villagers to seize company assets to pay for their clean-up. Chevron has $15 billion of assets in Canada.

  • A unanimous 5-0 decision in favor of the villagers by Ecuador's Supreme Court also makes the Ecuador judgment enforceable against Chevron assets in dozens of countries around the world, posing huge risk to company shareholders.

  • Chevron must deal with the negative fallout from the complete collapse of its star "racketeering" witness, Alberto Guerra. Guerra admitted to lying on the stand after being paid $2 million by Chevron and coached for 53 consecutive days by company lawyers; he is also the company's most important witness in the Canada enforcement action.

  • Chevron also must overcome highly embarrassing and rock solid video proof that company scientists tried to defraud Ecuador's courts by hiding massive oil pollution during judicially-supervised field inspections. The videos were disclosed by a company whistleblower.

  • A stunning new independent evidentiary report by a team of prominent American scientists yet again validates the overwhelming scientific proof that Chevron dumped billions of gallons of toxic waste into the rainforest, decimating indigenous groups and farmer communities.
Paul Paz y Miño, a director with the environmental group Amazon Watch, had this to say about Chevron's prospects:
All told, 2015 was a disastrous year for Chevron in the Ecuador pollution case and 2016 might be even more challenging for the company as it tries to dig out of its ever-deeper hole. Make no mistake about it, Chevron is now moving backwards in its abusive campaign to evade the Ecuador judgment despite spending massive sums of shareholder money on an unethical, illegal, devious, and ultimately futile jurisdictional shell game.
Steven Donziger, the longtime U.S. legal advisor to the affected communities and a target of a desperate company espionage campaign, criticized CEO Watson for "marching the company so far out onto a limb it appears there is no longer a viable path to turn back without Watson himself losing face and possibly his job." Donziger said it was clear the company has no coherent exit strategy with Watson at the helm.

That might explain why Chevron under Watson's misguided leadership refuses to cut bait and deal with the obvious risk its reckless scorched-earth strategy has created. The company's Ecuador liability grows larger by the day due to statutory interest while Watson seems to have little clue on how to reverse course. As usual, Chevron's notoriously callow Board of Directors with Watson as "Chairman" does nothing.

Aside from the problems mentioned above, Chevron also faces a shareholder revolt over the pollution liability; new computer forensic evidence from noted authority J. Christopher Racich that puts the lie to the company's claim the Ecuador judgment was "ghostwritten"; increasing protests by environmental groups over the company's human rights abuses in Ecuador and elsewhere; and evidence that Chevron lawyer Andres Rivero tried to bribe the Ecuador trial judge.

In addition, Chevron General Counsel R. Hewitt Pate has been hit with accusations of market manipulation over the Ecuador judgment. That was after a private panel of three arbitrators rejected Chevron's primary defense to the environmental claims. Also in 2015, Chevron's main outside law firm (Gibson Dunn) on the Ecuador case again was blasted by a federal judge for its ethical lapses.

To put it mildly, 2015 was a very bad year for Chevron on the Ecuador pollution case despite the use of 60 law firms and 2,000 lawyers to try to shake the rainforest villagers. Making a bad situation even worse: cratering oil prices have shaved billions of dollars off of Chevron's book value.

Again, all of the juicy details of Chevron's Ecuador setbacks are in the latest press release.

Note to Chevron's Board: figure out a way to get Watson and his team under control or Chevron shareholders will face even greater wrath from the Ecuador judgment in 2016.

Monday, December 21, 2015

Market Manipulation? Chevron General Counsel Pate Has Some Explaining to Do to the SEC

The forum shopping by Chevron's General Counsel R. Hewitt Pate in Gibraltar to evade the company's $10 billion Ecuador liability seems to have backfired. We understand the desperation: largely under Pate's watch Chevron has spent an estimated $2 billion on 2,000 lawyers and 60 law firms in a futile attempt to fend off impoverished villagers who in 2013 won a historic environmental judgment against the company.

Now, Chevron might have to explain Pate's apparent market manipulation to the Securities and Exchange Commission.

Unable to shake the villagers, Pate resorted again to publishing a misleading press release to try to cover up his recent courtroom setbacks that now threaten company assets. These setbacks include the recent meltdown of the company's star witness -- he admitted lying on the stand -- and a unanimous decision against Chevron by Canada's Supreme Court allowing the villagers to try to seize the oil giant's assets to force compliance with their judgment.

The question arises: is Pate putting out misleading press releases to try to save his own skin in the face of increasing angst over the Ecuador liability from Chevron's Board? Or does Chevron's Board actually sanction what appears to be market manipulation from its General Counsel?

The latest misleading Chevron press release -- issued last week with a juicy quote from Pate himself -- had the following headline: Supreme Court of Gibraltar Rules Against Donziger Offshore Company; Awards Chevron $28 Million.

According to thestreet.com, Chevron's stock price bumped up with the publication of the Chevron release. Chevron's misleading interpretation of the default judgment was largely parroted by Paul Barrett of Businessweek and other pro-business journalists.

Let's break it down and assess whether the latest Chevron press release violates the holy grail of securities law which requires a company to be completely honest about any material issue in all of its public statements.

First, we note that the "Supreme Court" of Gibraltar as described by Pate is not really a Supreme Court. The Gibraltar court for purposes of this case consisted of one solitary trial judge. This judge was required by law to rule in favor of Chevron because the case was not defended.

Second, Gibraltar is not a real country. It is a tiny British protectorate of only 30,000 citizens that occupies 2.6 square miles of territory connected to Spain on the southern side of the Iberian Peninsula. A relic of the British Empire, Gibraltar is so small the country's main road doubles as an airport landing strip.

Nevertheless, the elected leader of Gibraltar refers to himself as "Prime Minister" while the local trial court is called a "Supreme Court". Pate thought he would pull a fast one and make it seem like the ruling was a considered decision by several top-ranking appellate justices from a real country; it was decidedly not.

As the villagers pointed out in a devastatingly funny press release, the entire territory of Gibraltar is less than half the size the rural town of Ocala in North Florida. We suspect justice is probably more fair in Ocala than in Gibraltar, but that's a story for another day.

Third, the so-called default "award" is utterly worthless to Chevron. It came against an entity called Amazon Recovery Limited, or ARL. ARL has no money and will never have money. The villagers set up ARL in 2012 to collect the proceeds of their historic judgment that Chevron refuses to pay, despite orders that it do so from the Supreme Court in Ecuador. Given Chevron's targeting of ARL, the villagers long ago said they would no longer use it for its intended purpose nor waste their limited resources defending it.

The purpose of creating ARL in Gibraltar was to ensure that no official in Ecuador's government or in Chevron could interfere with the proceeds before a clean-up could take place. This is understandable given Chevron's history of trying to sabotage and corrupt the proceedings in Ecuador. That plan as envisioned by the villagers obviously did not work because of Chevron's latest subterfuge.

Luis Yanza, an Ecuadorian community leader and a director of ARL, explained it does not matter. "We are too smart to get sucked in by Chevron's abusive attempts to tie up our lawyers in irrelevant proceedings which the company uses to distract attention from its legal obligations to those it harmed," Yanza said.

Good for you, Mr. Yanza.

Fourth, Pate predictably used the latest press release to try to link the default judgment to U.S. human rights lawyer Steven Donziger. Unable to explain away the billions of gallons it dumped into Ecuador's Amazon -- oil waste confirmed by dozens of independent journalists -- Chevron years ago launched a demonization campaign against Donziger and his clients to distract attention from its own crimes and fraud. Donziger, called a "warhorse lawyer" by Rolling Stone, has advised the villagers for two decades and has admirably stood tall in the face of Chevron's attacks.

(For more on Donziger's point of view, see these counterclaims he filed against Chevron outlining the company's long history of illegal behavior in Ecuador.)

Again, we understand Pate's frustration. Donziger works alone out of his apartment in Manhattan while Pate pays dozens of law firms to try to destroy the Ecuador case by targeting him. Everything Pate has done to try to try to bring down Donziger, including an open-ended espionage campaign and launching what is probably the most expensive retaliation campaign in U.S. history, has come up short. Pate initially had Chevron sue Donziger personally for $60 billion dropping all damages claims out of fear a jury would rule against the company.

As the villagers point out, Donziger was not a director of the company against which Chevron has its illusory default judgment in Gibraltar. Nor did he participate in a single meeting. The directors were Yanza, two other villagers, a representative from the internationally respected accounting firm Grant Thornton, and a British barrister. So why other than market manipulation would Pate call it a "Donziger offshore company" in the headline?

In the latest press release from the villagers, Donziger described Pate's strategy better than we ever could:
Pate forum shopped the world to extract a judgment from an irrelevant jurisdiction that commands no respect on the global stage in a case that was understandably and quite properly never defended on the merits because it does not matter. The Gibraltar judgment has zero value to Chevron other than as a public relations stunt to distract attention from its growing financial risk due to advances in enforcement actions targeting company assets in Canada and elsewhere.
Donziger added there was element of racism to Chevron's attempts to discount the ability of the villagers to govern their own affairs:
Pate and his colleagues in Chevron act as if no indigenous person from Ecuador's rainforest has either volition or intelligence. They seem to believe the villagers are simply dumb people manipulated by outsiders. I understand this mentality because that's how Texaco viewed the Ecuadorian people when it deliberately destroyed their lands and waterways. Today, that approach reeks of racism. It is also based on patently false assumptions as anybody can see by simply talking to the internationally recognized community leaders who have battled Chevron so successfully for years.
Chevron shareholders whose dividends are under threat might note that the $28 million default judgment was to obtain partial reimbursement for the exorbitant fees Pate paid to the law firms the company has used to attack the villagers and Donziger. Bills submitted in Gibraltar showed some of these lawyers were charging more than $1,200 per hour to carry out the campaign.

Pate, who earned almost $8 million from Chevron the year he lost the Ecuador case, has gotten in trouble before by trying to make Chevron's litigation position appear stronger than it is. In 2013, Pate put out another press release falsely trumpeting a decision from a private international arbitration as a "victory" in the Ecuador litigation when in fact it was nothing of the sort.

In 2012 and 2013, Pate also had no answer for detailed reports submitted to the SEC showing Chevron was deliberately misleading shareholders about its growing  risk in Ecuador. Those rather harrowing reports of company malfeasance, which prompted a shareholder revolt against CEO John Watson at the 2013 Chevron annual meeting, can be read here and here.

The SEC failed to catch the rather obvious market manipulation before the 2008 financial meltdown. Maybe the agency will do something this time to protect Chevron's shareholders and the financial markets from the obvious misconduct of Pate and other top-level managers.






Wednesday, December 16, 2015

The Real Facts About Gibraltar: Chevron's Lies Boosted by Paul Barrett of Businessweek

Chevron's illusory $28 million judgment for legal fees against an empty shell investment vehicle owned by Ecuadorian villagers in the tiny protectorate of Gibraltar is worthless -- despite the attempt by Bloomberg's Paul Barrett to build it up with his incomplete and dishonest reporting.

After largely ignoring the stunning legal setbacks to Chevron in recent months in Canada and elsewhere regarding the $9.5 billion Ecuador pollution judgment against the company, Barrett this week posted a story about how Chevron won a default judgment in Gibraltar.  Gibraltar has only 30,000 people and four trial judges.

Nobody defended the company because the entire litigation is part of Chevron's nefarious effort to entrap the villagers in meaningless cases in irrelevant jurisdictions. Chevron wants to suck the villagers into doing anything except what really matters -- which is seizing company assets to pay for a long-awaited clean-up of lands where the oil major dumped billions of gallons of toxic waste.

In a misleading press release parroted by Barrett on the Businessweek website, Chevron General Counsel R. Hewitt Pate claimed the "Supreme Court" in Gibraltar ruled in favor of the company. What Pate didn't tell Chevron shareholders is that the Supreme Court of Gibraltar is actually a trial court with fewer judges than most small towns in America.

Pate tried to suggest in his press release that it was the highest appeals court in the country, which it decidedly is not. Pate of course never wants to talk about how Chevron polluted the crap of Ecuador and then tried to corrupt and sabotage the trial where it was held accountable.

The dormant investment vehicle targeted by Chevron was used years ago by the company's victims in Ecuador to fund the prosecution of their environmental claims against the oil giant. The villagers also planned to use it to aggregate proceeds of the judgment that would come with selling off Chevron's seized assets. The idea was to distribute the proceeds for an environmental clean-up in Ecuador without the Ecuadorian government interfering with the process.

The villagers chose not to divert their limited resources from Canada, where they have a real chance of collecting the entirety of their historic judgment. Chevron has $15 billion worth of assets in the country and the Supreme Court recently gave the green light for the villagers to go after them, dealing a devastating blow to Pate's blocking strategy.

"We must be disciplined and focus on seizing Chevron assets to force the company to comply with orders from the courts in Ecuador where the company insisted the trial be held," said Luis Yanza, an Ecuadorian community leader. "We will not fall into the trap of defending against frivolous cases that Chevron chooses to initiate in irrelevant jurisdictions."

With the help of corporate sympathizers in the journalism world like Barrett, Chevron's beleaguered management team is using the Gibraltar ruling to try to present a false picture of "progress" in the litigation. That is all part of an attempt by Pate and Chevron CEO John Watson to keep company shareholders and the financial markets from belching too loudly about the company's growing risk in Ecuador.

Chevron is on its heels in Canada and in the United States. Chevron's star witness in its retaliatory "racketeering" case in the U.S., Alberto Guerra, recently admitted lying on the stand to try to frame New York lawyer Steven Donziger in a bribery scheme in Ecuador. In apparent violation of federal law, Chevron had paid the witness $2 million for his testimony. Chevron lawyers coached Guerra for 53 consecutive days before allowing him to present his false testimony.

A concrete example of Barrett's dishonesty is how he used only a small portion of a written statement given him by Yanza, the internationally renowned Goldman Prize winner. The statement explained why the Gibraltar judgment has no impact on the case.

Here is Yanza's full statement as sent to Barrett:
Chevron's default judgment is against a dormant investment vehicle. We believe this judgment has zero value other than as a public relations stunt designed by Chevron to project the false appearance of 'progress' in a litigation where the company recently suffered multiple setbacks, including an admission by its star witness that he testified untruthfully in the RICO case and a decision by Canada's Supreme Court allowing our communities to try to seize company assets
While after two decades of litigation Chevron has yet to pay even one dollar to the thousands of people in our country that it harmed, it is no small irony that Chevron rushed to a courthouse in a far-flung jurisdiction to try to collect millions of dollars in fees that it has paid to its army of lawyers. Rather than engage in a multi-jurisdictional campaign of evasion, Chevron's management team would better serve company shareholders by complying with the Ecuador judgment so that the humanitarian crisis afflicting our communities can be addressed immediately.
This is the only part of Yanza's statement that Barrett quotes in his story:
While after two decades of litigation Chevron has yet to pay even one dollar to the thousands of people in our country that it harmed, it is not small irony that Chevron rushed to a courthouse in a far-flung jurisdiction to try to collect millions of dollars in fees that it has paid to its army of lawyers. 
Journalists of course have a right to use only parts of statements in their stories. But Barrett's long history of uncritical service to Chevron's narrative understandably makes us skeptical of his motives. In an obvious conflict of interest, Barrett last year testified in favor of Chevron before the U.S. Congress while reporting on the case.

Barrett's latest article repeats yet again a false thematic narrative almost always found embedded in his reporting. Barrett suggests that Chevron's retaliatory racketeering case against Donziger and his clients in the U.S. somehow amounts to an "exoneration" of the company's environmental crimes and fraud. Nothing could be further from the truth.

The reality is that Chevron made a mockery of justice in the RICO proceeding. The trial judge, Lewis A. Kaplan, arrogantly disparaged the affected communities and excluded any evidence of Chevron's toxic dumping in Ecuador. He also refused to seat a jury and then accepted the paid-for testimony of Guerra, Chevron's discredited witness. The judge knew nothing of Ecuadorian law or procedure and let Chevron abuse the process throughout.

Kaplan also failed to disclose his own investments in Chevron when he presided over the case. The entire proceeding reeked of racism and was reverse-engineered to favor the oil company.

Ultimately, the RICO judgment -- like the default judgment is Gibraltar -- does nothing to mitigate Chevron's risk from it pollution in Ecuador. But with Barrett promoting these judgments with a fundamentally false narrative, they do allow Chevron yet another bite at the apple on the public relations front.

That false hope is a major factor that allows Chevron's management team to spend millions on its army of lawyers to keep the litigation going even after it lost the case in its preferred forum.

Good work, Paul. As we have said before, you could make a lot more money by joining Chevron's public relations department.

(For more background on Barrett's distortions of fact and made-up scenes in his book about the Ecuador case, see this "notice of defamation" letter sent to him and his publisher.  For a summary of the overwhelming evidence against Chevron in Ecuador, see here.)

Media Outlets: Chevron Polluted the Crap Out of Ecuador's Amazon Rainforest

According to numerous independent media outlets, Chevron indeed polluted the crap out of Ecuador's Amazon region.

We have long known that three layers of courts and eight appellate judges in Ecuador unanimously confirmed Chevron's responsibility for causing the extensive oil pollution found in the affected area. Less known is the array of respected journalists who independently have confirmed the evidence against Chevron by observing the damage with the naked eye.

These journalists include Scott Pelley of CBS News; Frank Bajak of the Associated Press; Simon Romero of the New York Times; Juan Forero of the Washington Post; and Patrick Radden Keefe of The New Yorker, among others.

Chevron, in what has to be one of the all-time great examples of a corporation sticking its head in the sand, continues to deny it has caused a major pollution problem in Ecuador. While those indigenous and farmer communities affected continue to suffer from high cancer rates, the company has refused to pay the $9.5 billion environmental judgment needed for a clean-up.

Chevron's position that there is "no problema" in Ecuador has no credibility.

Here is a brief summary, culled from the archives of from several major media outlets, of how Chevron impacted and continues to harm the environment in the area where it operated (under the Texaco brand) from 1964 to 1992.

CBS News Anchor Scott Pelley, on 60 Minutes in 2009, at an abandoned Chevron waste pit:

"Well, it rains here in the rainforest all the time, so there's water pouring out of [the waste pit] now. And if you smell the water, you can clearly smell the oil pollution in it. Runs right down the ravine... and right down into the stream, not 50 yards that way."

"Waste pits like those left behind by Chevron are supposed to be temporary and isolated from fresh water but in Ecuador one pit 60 Minutes saw has been there for 25 years and we found it's actually designed to overflow into streams."

Clifford Krauss and Simon Romero, writing in The New York Times in 2009:

Romero visited Chevron's waste pits and found that "black gunk from the pits seeps to the topsoil here and in dozens of other spots in Ecuador's Northeastern jungle."

"Evidence of [ChevronTexaco's] contamination is unavoidable at well sites near Lago Agrio and other towns in the region."

"Some pools of waste dug by Texaco combining noxious drilling mud and crude oil still lie exposed under the sun, seeping into nearby water systems."

Columnist Bob Herbert, writing in The New York Times in 2010:  

"What's not in dispute is that Texaco operated more than 300 oil wells for the better part of three decades in a vast swath of Ecuador's northern Amazon region... Much of that area has been horribly polluted."

Juan Forero, writing for the Washington Post, 2009:

"After a walk along a forest trail, [the guide] stopped at a pool that had been used by Texaco and poked a long stick into the black sludge. Waste also dripped out through a drainage pipe and ran down to a creek below."

"Chevron acknowledges that Texaco used unlined waste pits."

Patrick Radden Keefe, The New Yorker, 2013:

A guide for Keefe dug up "a fistful of black mud and held it so that the sunlight caught the telltale blue-orange tint of petroleum. At one fetid pit... he stepped gingerly onto the surface of the pool, where the solid matter in the produced water had congealed into a tarlike crust that was sturdy enough to support him.  Smiling a little, [the guide] shifted his weight from one foot to the other, until the whole surface began to undulate beneath him. He looked like a kid on a waterbed."

"[The guide] led us down a steep ravine to a creek. In the gauzy light filtering through the canopy, the water, which was only a foot deep, looked crystalline. [The guide] drove a stick into the creek bed and churned the mud until the water grew clouded by sediment... I skimmed my hand across the surface of the creek. My palm was coated in an acrid film."

Jim Wyss, writing for the Miami Herald, in 2011:

The guide "plunges his auger into the ground. Within a few inches the dirt gives off the pungent odor of petroleum. Within a few feet the dirt glistens with oil residue. When a few handfuls of the soil are dropped into a bucket of water, a thick oil slick coats the surface."

Frank Bajak, Associated Press, 2008:

In town of Lago Agrio, the epicenter of the damage, Bajak notes that "when the sun beats particularly hot... the roads sweat petroleum."

The guide "plunges a surgical glove-sheathed hand into the muck of one waste pit. He pulls up rancid, oil-coated leaves from surrounding saplings. A pipe juts out of another pit, dripping what looks like crystalline water that reeks of petroleum hydrocarbons."

Bajak notes "a fresh spill... dark and gooey. Bigger spills have smothered crops, choked birds, killed cattle."

Valerie Pacheco, AFP, 2011:

"[Lead named plaintiff Maria Aguinda] skeptically eyes the ongoing cleanup of a marsh just meters from her house, where workers dressed in oil-stained yellow overalls dredge thick black ooze into suction pipes."

"A strong petroleum smell permeates Rumipampa, home to nine families, some of whom complain of headaches."

Tom Levitt, The Ecologist, 2012:

"Billions of gallons of toxic waste from oil drilling in the 1960s, 70s, and 80s has polluted streams and rivers in the province of Sucumbios, used by indigenous communities for drinking, bathing, and fishing."

James North, The Nation, 2015:

"We set off into the rain forest. Oil pipelines of various sizes run alongside the roads; in one spot, you can count dozens of them, like strands of spaghetti. [The guide] started at Aguarico 2, a well that has been closed for years... The oil residue is still floating to the surface.  Then [we] marched down a steep slope to a stream, where you could see and smell the oil as well."










Tuesday, December 1, 2015

Chevron Enlists Convicted Felon Conrad Black to Help Its Defense in Canada

With evidence against it in the Ecuador pollution case mounting, Chevron has turned to none other than convicted felon and former media titan Conrad Black to help it try to block indigenous villagers from enforcing their environmental judgment in Canada.

A few days ago Black published an op-ed article in Canada that repeated Chevron's talking points and viciously attacked the rainforest villagers and their counsel. The article appeared in the newspaper Black founded in 1998, The National Post. In 2007, Black was convicted on fraud charges in Chicago related to the sale of his various newspapers, which at one point comprised one of the largest English-language media empires in the world.

A jury found that Black misled investors and looted company funds to support a lavish lifestyle that included luxury homes in several cities around the world. He was incarcerated in a federal prison before being deported to Canada and barred from entering the United States for 30 years.

(For more on Black's checkered background, see this story in Vanity Fair. For a summary of the overwhelming evidence against Chevron in Ecuador, see here. For evidence of the high cancer rates caused by Chevron's pollution, see here. For a whistleblower video exposing Chevron's fraud in Ecuador, see here. For a sworn affidavit outlining some of Chevron's efforts to sabotage the Ecuador trial, see here.)

Chevron is up in arms that it might finally be held accountable in Canada and forced to pay the $9.5 billion Ecuador judgment after 22 years of playing a jurisdictional shell game. Canada's Supreme Court ruled unanimously in September that the Ecuadorians could try to enforce their judgment against company assets to force compliance with the court order in Ecuador.

The Canada Supreme Court decision has created major new difficulties for Chevron's avowed strategy to "fight until hell freezes over" and not pay the judgment it owes to those it harmed. After reviewing more than 100 technical evidentiary reports, Ecuador's Supreme Court in 2013 affirmed a lower court judgment that found Chevron had deliberately and systematically dumped billions of gallons of oil waste into streams and rivers relied on by local inhabitants for their drinking water. Cancer rates in the area have skyrocketed and untold numbers of local citizens have succumbed to the disease.

The Canada Supreme Court decision is typical in cases where a scofflaw debtor tries to evade a court judgment by selling off its assets in one country and moving them to another. That's what Chevron did in Ecuador after it fought for years to venue the trial there and accepted jurisdiction.

When a defendant loses a case and runs from the law, the judgment creditor always has a right to ask another country's courts to enforce their judgment against the defendant's assets. But according to Chevron and its new surrogate Mr. Black, an exception to this rule should be made for the long-suffering Ecuadorian villagers.

According to Black, the villagers should be blocked completely from Canada's courts.

Of course, if this were a commercial enforcement case involving one of Black's businesses that was getting stiffed in another country, he would be the first to cheer the Canada Supreme Court decision. He might consider the rank double standard he is proposing for the impoverished villagers who for decades have been victimized by Chevron's gross misconduct, as the U.S. show 60 Minutes documented in this segment.

More interesting to us is how Chevron seems to consider its options so limited in Canada that it turns to a convicted felon to argue its position in the press. Conrad Black likely was not the first person Chevron approached to write an op-ed. But he likely was the only one who agreed to do it.

Chevron recently got major egg on its face after the membership of Canadian Bar Association rejected an attempt by the company to intervene in its internal affairs and enlist the organization to file a "friend of the court" brief before the Canada Supreme Court. When Chevron's secret maneuver became public, the company was forced to withdraw the brief after it had been filed. Oops.

The enlisting of Black is not the only sign of Chevron's jitters in Canada.

The company's star witness, the Ecuadorian citizen Alberto Guerra, recently admitted lying on the stand in a farcical U.S. "racketeering" trial used by Chevron to try to taint the Ecuador judgment. In violation of federal law, Chevron paid Guerra $2 million in cash and benefits for his testimony. The company later conceded its lawyers coached Guerra for 53 days before he was allowed to take the stand. (The highly flawed decision in that case is on appeal.)

Without the discredited Guerra available to testify in Canada, Chevron has no real defense. Which is why Chevron and Mr. Black argue that Canada's courts should not take up the case at all.

For years, it has been obvious that Chevron will do virtually anything to evade paying the Ecuador judgment. That includes threatening judges in Ecuador, drowning the court with duplicative motions, presenting false testimony, paying fact witnesses, trying to bribe Ecuador's government to quash the legal case, obstructing justice, and filing retaliatory lawsuits against dozens of people who worked to hold it accountable. (For more background, see this article in the Huffington Post.)

Chevron's thinking that using a convicted felon will help improve the company's tattered image in Canada suggests a profound disconnect from reality. But it is depressingly consistent with the company's past behavior.

In 2009, Chevron used convicted drug felon Wayne Hansen in a failed attempt to entrap the Ecuador trial judge in a manufactured bribery scheme. Chevron investigators later spirited Hanson out of California to Peru to avoid a subpoena where he would have been forced to answer questions about the company's sordid attempt to undermine a trial it knew it was losing on the merits.

If Mr. Black wants to publicly debate us on Chevron's crimes and fraud in Ecuador without a company apparatchik whispering in his ear, we would be happy to make one of our advocates available.




Monday, November 16, 2015

Chevron Paying Income Taxes and Salary of Corrupt Witness Who Committed Perjury in Ecuador Case

Without public disclosure, Chevron has re-upped its contract to pay $144,000 annually to former Ecuadorian judge Alberto Guerra after he admitted perjuring himself in a federal court during the company's RICO trial. The perjury happened after Chevron lawyers at the outside law firm Gibson Dunn coached Guerra on his false testimony for 53 consecutive days.

We have no choice but to call this what it is: a witness bribery scheme orchestrated by a major American oil company. Chevron's aim is to evade paying for the clean-up of what could be the world's worst oil disaster, caused deliberately on its watch when it operated in Ecuador (under the Texaco brand) from 1964 to 1992.

The discredited Guerra – who has admitted that he accepted bribes when he was a judge in Ecuador – has become a central figure in Chevron's campaign to evade paying the $9.5 billion environmental judgment in the South American nation. Chevron was found to have deliberately dumped billions of gallons of toxic waste into the streams and rivers of the rainforest. The dumping continues to decimate indigenous groups and has caused an outbreak of cancer, according to the findings of three layers of courts in Chevron's preferred forum of Ecuador.

The Chevron payments to Guerra seem to have earned the company and its ethically-challenged lawyers at Gibson Dunn a fraud and bribery complaint to the U.S. Department of Justice. Amazon Watch, an environmental group that has been fighting to hold Chevron accountable, said it will lodge a formal complaint over the witness payments and falsification of evidence.

Paul Paz y Miño, a director at Amazon Watch, said:
It is unethical, illegal, and utterly shocking that Chevron continues to pay huge sums to a completely discredited witness who has admitted to repeatedly lying and accepting bribes to testify falsely in court. This arrangement is worthy of a criminal investigation and we are asking the Department of Justice to look into it. We consider Chevron to have engaged in witness bribery.
Luis Yanza, a winner of the Goldman Environmental Prize and the longtime leader of the rainforest communities affected by Chevron's pollution, said in reference to Guerra:
Chevron and its lawyers gave a key witness cash out of a suitcase to falsify evidence to taint the Ecuador judgment so the company does not have to pay for the clean-up of oil pollution that is causing grave harm to thousands of people. This is just one example of the company's plan to threaten judges and sabotage the proceedings in Ecuador.
Guerra stunned the legal community after he admitted during a recent international arbitration proceeding that he lied on the stand during the company's retaliatory civil "racketeering" (or RICO) case targeting the lawyers for the villagers who won the historic judgment. Chevron made a mockery of justice in that case after the judge (Lewis A. Kaplan) displayed intense personal animus toward the villagers while hiding his investments in Chevron despite calls for his recusal over bias.

(As background, a federal appellate court in New York unanimously reversed Kaplan in 2011 when he earned the scorn of the international legal community by trying to block enforcement of the Ecuador judgment anywhere in the world. Without a jury or a fair trial, Kaplan then tried to overrule the final decision of Ecuador's Supreme Court by refusing to consider any evidence of Chevron's contamination and claiming the Ecuador decision was the product of racketeering. In the meantime, the villagers recently won a unanimous decision from Canada's Supreme Court authorizing them to seize Chevron assets to enforce their judgment. Here is a summary of the overwhelming evidence against Chevron.)

Guerra also recanted key portions of his testimony in the RICO case claiming that the Ecuadorian trial judgment was ghostwritten by the plaintiffs, according to reports from Courthouse News and Vice. These developments emerged recently when transcripts from the arbitration finally were released after Chevron, in yet another violation of the ethical rules, tried to keep them under wraps for months.

The transcripts show Guerra admitting that Chevron extended his contract for another year. Guerra does no work for Chevron other than make himself available to testify on the Ecuador case – a fact that many observers believe violates federal law and the ethical rules, as this legal brief and this opinion from a prominent ethics expert explain.

Yet Chevron continues to make up its own rules. In 2012, company operatives Andres Rivero and Yohi Ackerman traveled to Ecuador and paid Guerra $38,000 in cash out of a suitcase for his "cooperation" with the company. That included a promise by Guerra to try to bribe the trial judge with a down payment of $1 million with the goal of getting him to recant his decision. "Money talks but gold screams," Guerra said to the Chevron operatives at the time.

Chevron then inked a two-year deal providing Guerra a $144,000 annual salary, full payment of all income taxes, payment for the fees of three personal lawyers, health care, a car, and immigration services. The immigration services have allowed several family members to become residents of the United States after some had been living here illegally for years.

We also believe that Guerra and his team lied to the Department of Homeland Security to legalize the status of himself and his family members. By not disclosing to the U.S. government the many crimes Guerra had committed in Ecuador and later in the United States, Guerra (and Chevron) arguably violated U.S. law and committed a felony. Our investigation of this aspect of the Chevron-Guerra subterfuge continues.

All told, we conservatively estimate Chevron's paid benefits to Guerra amount to at least $250,000 annually. The amount rises considerably when one takes into account benefits paid to Guerra's three adult children and their families. Not bad for a man who testified he had $146 in his bank account when he struck the deal with Chevron.

Even with these extraordinary payments, Guerra seems to have very little skill as a Chevron stooge. Like most liars, he gets twisted into knots during cross-examination. Eric Bloom, a lawyer for Ecuador's government, shredded Guerra on the witness stand during the arbitration proceeding. (See these transcripts for the evidence. For more background on Guerra's admissions as well as the larger implosion of Chevron's RICO case, see this press release.)

Chevron lawyers Randy Mastro and Avi Weitzman coached Guerra for several weeks before letting him testify. Guerra had been removed from the bench in Ecuador for misconduct and was facing criminal prosecution until Chevron agents spirited him out of the country. Mastro also personally negotiated Chevron's payments to Guerra at precisely the same time his team was drafting a sworn affidavit for Guerra to sign that by Guerra's own admissions contained multiple lies.

Guerra admitted in the arbitration that he lied when he told Judge Kaplan he had been offered a "bribe" from the plaintiffs to write the trial court judgment against Chevron. He also confessed that critically important shipping records had nothing to do with the Chevron case, contradicting his prior testimony. He confessed that there were no emails or documentary evidence that the trial court judgment had been drafted by the plaintiffs and then given to the judge on a flash drive, as he had told Judge Kaplan.

The entire saga might expose Mastro and Weitzman to criminal prosecution, according to respected environmental lawyer Marco Simons.

One of the main targets of Chevron's retaliation campaign, U.S. attorney Steven Donziger, has filed the latest evidence of Guerra's collapse before the federal appellate panel reviewing Judge Kaplan's flawed decision. Donziger also turned the tables on Chevron by demanding the company cease the destruction of all documents related to the dispute in anticipation of further litigation by the villagers over the company's worsening misconduct.

The more Chevron fights, the more the company and General Counsel Pate seem to lose ground. Chevron's jurisdictional shell game is getting more exposed. The larger question is when Chevron's top leaders will be held accountable for the destruction of the Amazon and their own gross misconduct in evading court orders to clean up the damage.