Tuesday, April 10, 2018

Chevron Should Be Booted From Transparency Initiative Over Corruption Concerns, Say Civil Society Groups

Several civil society groups, including London-based Global Witness and Oxfam America, are seeking to boot Chevron from the board of a major international transparency initiative designed to combat oil industry corruption. This seems like a long overdue step for what has to be one of the most morally bankrupt oil companies on earth. Readers of the Pit might remember that in 2015 in Davos, Chevron won the Public Eye Award for being the world's worst corporation over its Ecuador environmental disaster.

Chevron is now well into its seventh year of trying to stiff Ecuadorian indigenous peoples and farmer communities out of their $12 billion environmental judgment, won in 2011 after an 8-year trial delayed repeatedly by the company's strategy of subterfuge. Three layers of courts in Ecuador, where Chevron had insisted the trial be held, found the company deliberately dumped billions of gallons of toxic oil waste onto rainforest ancestral lands and abandoned roughly 1,000 open-air toxic waste pits prior to fleeing the country in 1992. (See here for the overwhelming evidence of what is now considered the world's worst oil-related environmental disaster.) 

The very idea that Chevron -- which later fabricated evidence and bribed a witness with $2 million to try to evade its liability to the people of Ecuador -- could be leading any type of anti-corruption initiative is laughable.

Chevron faces this backlash in part because of its refusal to disclose tax payments in compliance with the standards of the Extractive Industries Transparency Initiative (EITI), which was founded in 2003 with the backing of the British government to root out corruption in the oil industry. The EITI has created model anti-corruption laws now adopted by 51 countries (including Canada) that require oil, gas, and mining companies to disclose any payments to foreign governments. 

The U.S. Congress passed the EITI standards into law in 2010 as part of Dodd-Frank, but Chevron for years has worked with industry lobbyists to block the rules required for implementation. Now that the Trump Administration is doing the oil industry's bidding, the EITI rules opposed by Chevron and the American Petroleum Institute are all but dead in the United States. Several American oil companies still comply voluntarily with the rules, but not Chevron or Exxon.

Chevron and Exxon sought to weaken the transparency rules while serving on the Board of the EITI and professing to support them. They then cynically blamed the absence of a rule in the U.S. whose implementation they blocked for their own failure to comply with the EITI standards. 

Here's what 12 civil society leaders from around the world wrote in seeking to boot Chevron (and Exxon) from the EITI Board:
"We urge that the ... EITI Board meeting include a discussion about the refusal of ExxonMobil and Chevron to disclose their tax payments through the terms of implementation of the EITI Standard in the United States. We believe strongly that the refusal to engage in the most basic aspect of compliance constitutes a repeated and willful violation of the EITI Code of Conduct ... and an act of bad faith that is counter to the spirit of the EITI movement itself. These actions not only contributed to the demise of the U.S. EITI process, but damaged the credibility of the EITI both in practice and in the eyes of the global community.

Our advice to the EITI: given Chevron's horrendous record of toxic dumping in Ecuador and its burgeoning tax problems in Australia, the company never should have been part of the EITI leadership to begin with. That's like putting the arsonist in charge of the firehouse.

We at the Chevron Pit know that abusive and hypocritical behavior is deeply rooted in Chevron's management culture. Company officials like General Counsel R. Hewitt Pate actually receive large bonuses for committing corrupt acts against the Ecuadorians and then losing legal cases against them based on the evidence. CEO John Watson had five shareholders who criticized his Ecuador policy arrested at the 2010 annual meeting. Pate in 2013 also served subpoenas on more than 100 civil society advocates, journalists, and activists who were trying to help the Ecuadorian communities.

Last year, Chevron was slammed with a $1 billion fine in Australia for ripping off the company's tax authorities. Chevron had set up a tax-avoidance scheme whereby a Chevron subsidiary in Delaware loaned money at exorbitant interest to a Chevron subsidiary in Australia. Payments on the loans from the Australian subsidiary to the Delaware subsidiary then "disappeared" the company's sizable Australian profits. This enabled Chevron to avoid taxes in Australia entirely even though it made billions of dollars annually from its operations in the country.

In the Ecuador pollution case, Chevron desperately wanted the litigation over its toxic dumping in the Amazon heard in Ecuador even though the villagers originally sought relief in U.S. courts. That was, until it started to lose the case and began attacking Ecuador's courts while selling off all of its assets in the country to evade any eventual liability. A Chevron official recently threatened the Ecuadorian indigenous peoples with a "lifetime of litigation" if they continued to pursue their claims. That forced the villagers into Canadian courts where they are trying to seize some of the company's estimated $15 billion worth of assets in the country to force compliance with their judgment.

Even with these intimidation tactics, it is becoming apparent that Chevron is losing the enforcement action in Canada despite deceitfully trying to downplay the risk in its public filings. Journalists in the industry are recognizing Chevron is in serious trouble. (See here.) Appellate courts in Canada have delivered three straight unanimous decisions in favor of the villagers. Now, the Canadian public is beginning to see how Chevron can be a very ungrateful guest when it comes to respecting tax laws.

This is highly relevant after Chevron recently disclosed that its wholly-owned 7th-tier subsidiary in Canada (Chevron Canada) was funneling billions of dollars annually to the governments of Nigeria and Indonesia. Not only are these payments from a low-level foreign subsidiary to foreign governments highly suspicious from a corruption standpoint, they undercut Chevron's legal argument in the enforcement case that the assets of its Canadian subsidiary should be off-limits to the villagers given that it is only a Canadian company. A critical legal argument on that issue is scheduled for April 17-18 in Toronto.

Chevron's disingenuous claim that its shareholders should be allowed to reap huge profits from Chevron Canada while its assets should be immunized from any liabilities has never held much water legally. But we can thank EITI for requiring the rather stunning Chevron disclosure that Chevron Canada is not what the company had claimed, but is in fact at the epicenter of a global profit-making machine that spreads into Asia and Africa.

Canadian tax authorities and the U.S. Department of Justice -- which already has a criminal referral letter about Chevron over the Ecuador pollution case -- might want to find out just why Chevron is sending huge payments via a 7th-tier subsidiary in Canada to foreign governments that are themselves known for tolerating and even encouraging corruption.

These are not the only problems faced by Chevron over the Ecuador pollution matter.

Chevron's main defense to enforcement in Canada is a retaliatory U.S.-based "racketeering" case attacking the villagers that supposedly found "fraud" in Ecuador's courts. But that case -- handled by a woefully biased U.S. judge who refused to seat a jury -- has collapsed after it turned out company lawyers at the Gibson Dunn law firm paid a Chevron witness to lie on the stand, among other problems. No fewer than 21 appellate judges in Ecuador and Canada, including the Supreme Courts of both countries, have either rejected or ignored those findings. (For more detail about Chevron's corrupt and even criminal acts in that U.S. case, see this excellent analysis by human rights lawyer Aaron Page and this analysis by Marissa Vahlsing of Earth Rights International.)

Chevron scientists recently were caught on video trying to defraud the Ecuador court by trying to hide evidence of the company's pollution. Chevron also cheated during the Ecuador trial by using a wholly inappropriate laboratory test (called TCLP) designed to "miss" any trace of toxins in its soil samples that were submitted to the court. (See here for more of Chevron's junk science.) Company lawyers threatened Ecuadorian judges with jail time and once filed 39 motions in 50 minutes to paralyze the proceeding, which took eight long years while untold numbers of people died of oil-related diseases. (See this story on the cancer death of legendary nurse Rosa Moreno). 

Aside from its EITI problems, Chevron is also under real heat from its own shareholdersSeveral have criticized management's "material mishandling" of the Ecuador litigation. Chevron is also under fire for its toxic dumping in Ecuador from the leadership of the Assembly of First Nations, the national indigenous federation in Canada which represents 634 nationalities in the country. Greenpeace co-founder Rex Weyler accused Chevron of committing "ecological crimes" in Ecuador after touring the impacted area last year.

It is clear is that Chevron does not deserve to be on the Board of the EITI or any anti-corruption initiative given its pattern of truly savage behavior toward the people of Ecuador and the shroud of secrecy it maintains over its operations. Interestingly, just days ago the Canadian Broadcasting Company and activist groups (including Friends of the Earth and Amazon Watch) filed motions in Canada to lift Chevron's completely over-broad confidentiality in the enforcement case brought by the Ecuadorians. Chevron imposed that order to hide huge chunks of what must be a very embarrassing court record.

That court record apparently includes details from a recent deposition of a Chevron Canada official by a lawyer for the Ecuadorians. The official likely was asked why a 7th-tier wholly-owned subsidiary that Chevron claims should not be responsible for paying court-ordered compensation to the people of Ecuador is instead paying billions of dollars to foreign governments on the other side of the world. 

Chevron should be booted from the EITI Board and Canadian courts should lift the secrecy order post haste from this important public interest litigation. Courts need to shine a bright light on a company that appears to be in a class by itself when it comes to disrespecting indigenous groups and using corrupt tactics to evade its legal obligations. More public scrutiny -- both in and out of court -- is absolutely critical to ensure real accountability for Chevron in the Ecuador litigation.

Monday, March 26, 2018

Chevron Hurting Again As Shareholders Show Renewed Anxiety Over $12B Ecuador Pollution Judgment

R. Hewitt Pate Randy Mastro

Chevron's management team, led by new CEO Michael Wirth and longtime General Counsel R. Hewitt Pate, faces deepening problems in Canada as Ecuadorian indigenous peoples and farmer communities continue what is fast becoming a very realistic campaign to seize company assets to collect on their historic $12b pollution judgment.

Clear indications of Chevron's deteriorating litigation position: many Chevron shareholders are expressing deep anxiety about the company's scorched-earth approach when dealing with indigenous peoples. In the meantime, Canadian courts continue to rule in favor of the villagers and against Chevron on several critical issues.

This press release from the Front for the Defense of the Amazon ("FDA") -- the community-based group in Ecuador's rainforest that brought the claims against Chevron in 1993 and has led the campaign to hold the company accountable -- captures some of the recent developments. But there is much more to suggest Chevron's management team is under bone-crushing pressure on Ecuador and that it might get even worse.

That management team -- including Pate, the architect of the company's scorched-earth litigation policy since 2009 -- have spent (or squandered) huge sums of shareholder funds to hire 60 law firms and 2,000 lawyers to try to beat back the indigenous groups and farmer communities. The Chevron effort has been led by the Gibson Dunn law firm. Gibson Dunn has used hundreds of lawyers to bill Chevron an estimated $1 billion over the last five years.

These Chevron expenditures, as large as they are, now appear to be largely for naught. The company surely thought they would be enough to kill off the claims. But what is arguably the world's most important corporate accountability campaign and indigenous rights litigation continues to pick up steam.


**Chevron's RICO Judgment Is Backfiring: The Ecuadorians won their historic judgment against Chevron in 2011 after Chevron insisted the trial be held in Ecuador and accepted jurisdiction there. But Chevron's high-water mark in the case took place in 2014 when controversial U.S. judge Lewis A. Kaplan presided over a farcical non-jury civil "racketeering" (known as "RICO") trial financed by Chevron and designed -- in clear violation of international law -- to attack the Ecuador judgment from the company's hometown court. Chevron's case was led by Randy Mastro, a notoriously nasty lawyer from Gibson Dunn who once fanned the flames of racial discord in the early 1990s for right-wing New York City Mayor Rudy Giuliani.

It is now undeniable that Kaplan's ruling for Chevron was the product of the company's fabricated evidence and paid-for witness testimony, a fact which earned Chevron and Mastro a criminal referral letter to the U.S. Department of Justice -- something the company has yet to disclose to shareholders. A RICO judgment that the company once thought was its best defense has now arguably become one of its worst liabilities. And Pate, who is up to his neck in financing this Gibson Dunn-led corruption, is shockingly still using the ethically-challenged Mastro as the company's lead lawyer on the case.

How effective has the Pate/Mastro alliance been? At least 21 appellate judges in Ecuador and Canada have rejected or ignored the Kaplan RICO ruling, including the entire Supreme Courts of both countries which issued separate unanimous decisions in favor of the villagers affirming all or parts of the underlying judgment. These decisions have rendered Kaplan's judgment a nullity for purposes of blocking enforcement. Let's not forget that Pate's entire objective in bringing the RICO case was to block enforcement of the Ecuador judgment. (For a full explanation of Chevron's corruption of the RICO case, see this report.)

**Canadian Courts Have Little Love For Chevron: Chevron's litigation position in Canada is faltering despite having hired four of the country's best law firms on top of the 60 law firms Chevron hired in the U.S. The Canada Supreme Court in 2015 unanimously rejected Chevron's attempt to block the villagers from collecting company assets on jurisdictional grounds. The Ontario Court of Appeal also ruled against Chevron twice, including on a preposterous attempt by Pate to impose a $1 million costs order on the impoverished villagers. Chevron also faces a possible major tax fraud issue in Canada involving the transfer of billions of dollars from its subsidiary to the governments of Nigeria and Indonesia, which will do little to endear it to authorities or the public.

Chevron is now hurtling toward an enforcement trial in Toronto where its "RICO" evidence risks a humiliating collapse in front of shareholders and the public. Canadian judges are attuned to indigenous rights and human rights issues in ways that U.S. judges are not, creating a hostile litigation environment for a company responsible for toxic dumping on the ancestral lands of First Nation's groups.

Making matters worse for Chevron, the FDA has attracted extremely competent support, including well-known commercial litigator Alan Lenczner, renowned aboriginal rights lawyer Peter Grant, former National Chief Phil Fontaine (of Canada's Assembly of First Nations), Grand Chief Ed John, and Greenpeace co-founder Rex Weyler. (See here for comments by Fontaine and John and here for Weyler accusing Chevron of committing "ecological crimes" in Ecuador.)

**Chevron's Defense In Canada Rests On A Thin Reed: Chevron's defense in Canada is now down to a very thin reed. The company will claim in a hearing before the Ontario Court of Appeal scheduled for April 17 that its wholly-owned Canadian subsidiary, Chevron Canada, should be immunized from asset collection. The goal is impunity for corporate human rights abuses.

Since Chevron Canada purports to control all of Chevron's assets in the country, if the Canadian court agrees with Chevron then indigenous groups in Ecuador likely will not collect a single dollar on their judgment. Given the extent to which indigenous groups and vulnerable peoples across the planet will suffer from corporate harms if Chevron's extreme argument becomes law,  it is highly unlikely Canadian judges will agree. Chevron's position is just legally and practically untenable in the modern world of globalized commerce.

**Shareholders Angry With Chevron Management: Key Chevron shareholders are again taking note of the increasing risk in Canada. The U.S. firms Zevin Asset Management and Newground Investment have led the fight to hold company management accountable for its "material mishandling" of the case. Last year, two resolutions related to the Ecuador liability received substantial support despite being opposed by management.

Even more shareholders -- including the pension fund from Vermont -- are backing the resolutions this year, where they are likely to garner even more support while indigenous leaders from the rainforest plan to confront CEO Wirth face to face. Shareholders with an estimated $500 billion of assets have urged company management to look for a settlement.

**Chevron's Attacks On Human Rights Defenders Suggest Desperation: When Chevron begins to lose ground in court, it often tries to distract attention by attacking the lawyers for the Ecuadorians. Those attacks are a good barometer of how desperate company management feels at any given time. In recent weeks,  as the company's litigation prospects dim, Chevron has renewed its attacks on U.S. human rights defender Steven R. Donziger, the only lawyer still working on the case who helped to launch the original litigation in 1993. Chevron earlier conceded in an internal email that its long-term strategy was to "demonize" Donziger.

In yet another sign of anxiety, Pate recently ordered Mastro to go back to Judge Kaplan (four years after the end of the RICO case) to try to block Donziger's ongoing efforts to help his clients finance the enforcement litigations. Chevron is trying to claim Donziger should be held in "contempt" for doing his job as a lawyer, which includes ensuring his clients have sufficient resources to pursue their human rights claims in the face of Chevron's attack campaign. Pate's latest move is nothing more than a ruse to try to intimidate supporters of the communities. Chevron once sued more than 100 bloggers, journalists, and activists who have in some way helped the affected communities.

Chevron also has mounted some bizarre attacks on Alan Lenczner and Peter Grant, the two prominent Canadian lawyers representing the Ecuadorians. Chevron is trying to block Grant from arguing the case within the framework of indigenous rights. The company also baselessly accused Lenczner of violating a ridiculously over-broad confidentiality order it imposed on the litigation to try to hide its own bad news from the media and the public.

**Chevron's Lack of Public Disclosure of Its Ecuador Risk: Chevron is also lying again to shareholders. Although we will explain this in more detail in a future blog, the company's response to the Ecuador lawsuit in its public disclosures to the Securities and Exchange Commission -- which regulates public markets in the U.S. -- is, to put it mildly, extremely misleading.

Chevron in its disclosures does not explain how its RICO judgment has collapsed or is the product of its own fraud, as orchestrated by the Gibson Dunn firm; that certain company officials and outside lawyers are the subject of a criminal referral letter for fabricating evidence; that the company faces a humiliating trial in Canada; that appellate courts in Ecuador and Canada have consistently ruled against Chevron; or that company officials appear to be selling off their Canadian assets, possibly to evade the ongoing liability to the people of Ecuador. U.S. and Canadian authorities have every obligation to investigate these evasive actions.

There is little doubt that new Chevron CEO Wirth inherited a litigation disaster when he assumed leadership of the company in February. The question is whether Wirth has the good sense to try to clean it up. To do so, the obvious first move is to muzzle Mastro and find a more reasonable General Counsel to take over from Pate. Wirth also needs to explore an exit strategy before the company's business problems in Canada grow even worse and more indigenous peoples die from cancer in Ecuador in the area where Chevron abandoned and refused to properly remediate 1,000 unlined toxic waste pits.

When it comes to the Ecuador matter, Chevron's litigation department is like a crack addict on a trip gone seriously awry. Each short-term high only leads to a greater desire for another which leads to an unpleasant downward cycle of massive spending producing ever-diminishing returns. This irritates shareholders, harms indigenous peoples, discourages governments from doing business with Chevron, and creates enormous reputational risks. Throw in Chevron's lack of responsiveness to global warming and one sees a business model that is simply not sustainable over the long haul.

In the meantime, Mastro and other lawyers at Gibson Dunn buy new vacation homes and live high off the company's hog of litigation stupidity. Pate receives $8 million in annual bonuses for architecting a failed strategy. Chevron's CEO gets yelled at by indigenous peoples at the annual meeting.

It is clear that the Pate/Mastro gig is almost up. The question is whether Wirth recognizes it.

Oil waste pit left by Chevron in Ecuador

Thursday, January 4, 2018

Chevron's Use of Paul Manafort Might Be Another Attempt to Corrupt Ecuador Environmental Judgment

Given that Chevron's campaign to try to undermine the $9.5 billion environmental judgment against it in Ecuador hit major turbulence in 2017, it should not be surprising that the company might look for new avenues to corrupt the legal process to evade paying compensation to the indigenous peoples and farmer communities that it poisoned.

What looks like the latest Exhibit A in Chevron's Ecuador corruption file concerns none other than Paul Manafort, former Trump campaign manager and erstwhile Chevron lobbyist in the Ukraine and Russia. Manafort was indicted as part of the Robert Mueller investigation in October on multiple counts of money laundering and lying to the federal government. The indictment might have been expected, but we were absolutely stunned to find out recently that Manafort was in Ecuador in May (while Mueller was hot on his heels) for a top-secret meeting with the country's newly elected President, Lenin Moreno.

We suspect that we are not the only ones thinking that Manafort was in Ecuador to carry out another phase of Chevron's long-running "dirty tricks" campaign, with a hoped-for bonus payment for manipulating the new government such that the oil company might finally evade the judgment after years of trying and massive (and thus far futile) expenditures on at least 60 law firms. The many disturbing questions raised by the Manafort meeting in Ecuador ultimately might have to be answered by Mueller, or via an investigation with the power to force answers out of Chevron.

We at The Chevron Pit are highly skeptical that the Manafort meeting in Quito was an innocent coincidence. What we do know is that it happened during a period when Chevron's army of D.C.-based lobbyists have been furiously trying to leverage the Trump Administration to pressure Ecuador's new government to undermine the case as part of a supposed "re-set" of bilateral relations between the two countries -- in essence, just another form of attempted oil industry blackmail designed to externalize the costs of pollution onto the backs of vulnerable indigenous peoples.

Manafort for months kept quiet about the news of his meeting with Ecuador President Moreno, an indication something is foul-smelling. He only admitted it when he was forced to disclose to a U.S. federal court the details of his foreign travel as he was seeking bail. That opened our eyes to a Pandora's box of circumstantial evidence that seems to point the way of our suspicions.

Consider the facts as known and Chevron's obvious motivation:

**It is clear that Chevron's current management team is increasingly desperate regarding its Ecuador liability (now $12 billion with interest) as three straight Canadian appellate courts have issued unanimous rulings against the company in a judgment enforcement action to seize assets to force compliance with the rule of law in Ecuador. In total, 21 appellate judges have ruled against Chevron and in favor of the Ecuadorian rainforest communities in Ecuador and Canada, including the entire Supreme Courts of both countries. Not a single appellate judge in either country has ruled in favor of Chevron. Chevron shareholders publicly accused CEO of John Watson of "materially mishandling" the litigation. When it comes to Ecuador, it's steaming hot in the Chevron management kitchen at the moment.

**The Manafort meeting comes at a time when Chevron and certain of its attorneys at its outside U.S. law firm Gibson Dunn & Crutcher face a potential criminal probe by the U.S. Department of Justice over witness bribery, fabrication of evidence, and other corrupt acts carried out at the behest of the company in the Ecuador matter. Chevron's long pattern of trying to corrupt the environmental case (documented here by Amazon Watch) -- including a ham-fisted effort by company operative Diego Borja to orchestrate a sting operation against a sitting Ecuador trial judge -- strongly suggest the meeting was not an attempt by Manafort to lobby the government over Chinese investments, as has been claimed. Disturbingly, Gibson Dunn also has a long history of fabricating evidence and crossing the ethical line on behalf of corporate clients mired in scandal.

**It is undisputed that Chevron was slammed with its Ecuador liability after three layers of courts  found evidence it systematically and deliberately dumped billions of gallons of toxic waste into the rainforest, decimating local indigenous and farmer communities and causing a massive outbreak of cancer that has killed or threatens to kill thousands. One reason Chevron CEO Watson and General Counsel R. Hewitt Pate are in such a jam (aside from their lack of interest in a real settlement of the claims) is because the company insisted the trial be held in Ecuador. Chevron thought then it could use political pressure to engineer a dismissal of the case. We believe Watson still thinks politics and lobbying can solve his problem.

**With regard to Manafort, the high-powered lobbyist was indicted for activities mostly related to his prior work for Ukranian President Viktor Yanukovych, a patently corrupt dictator. Manafort also has extensive ties to Russian oligarchs and was a Chevron-paid lobbyist when he worked in the Ukraine with a charge to seek oil and gas deals for the company via the Yanukovych government, according to an expose published in 2016 in The New York Times.

**According to our sources in Ecuador, the meeting between Manafort and President Moreno was arranged by none other than the notorious Ivonne Baki, a a major Chevron lobbyist in the South American nation. Baki, who attended the meeting, has her own long history of trying to leverage her influence as a government official in Ecuador to assist Chevron in its campaign to undermine the legal claims of the indigenous peoples and farmer communities it harmed. The fact these communities comprise the very people Baki took an oath to protect seems not to matter to her. Baki is also reportedly is a good friend of Donald Trump, having hosted (on behalf of Ecuador's government) the Trump-owned 2004 Miss Universe Pageant in Quito.

It is worth reviewing some of the history of Chevron's and Baki's corrupt acts in the legal case to understand the possible context for Manafort's sudden and bizarre foray into the highest echelon of Ecuador's power structure.

This article by Mitch Anderson of Amazon Watch provides a partial summary of some of Baki's numerous corrupt acts on behalf of Chevron dating back to the 1990s, when as Ecuador's ambassador to the United States she signed a letter drafted by Chevron that was submitted to a U.S. court seeking dismissal of the case prior to trial. In 2012, Baki worked with Chevron to float the idea of a $500 million "donation" from the company to Ecuador's Yasuni environmental initiative in exchange for an illegal "dismissal" of the legal claims in the environmental case -- a move that we believe was in full motion before Anderson exposed it in The Huffington Post.

Baki's dealings with Trump is perfectly in keeping with her character. With the rural poverty rate in Ecuador in 2004 around 65%, Baki (as Minister of Tourism) made a fool of herself by spending at least $5 million of precious government money to defray Trump's Miss Universe production costs. Trump and Baki used the impoverished taxpayers of Ecuador to subsidize the Miss Universe pageant; Trump made greater profits, and Baki increased her influence. (As a curious aside, the 2004 pageant in Ecuador was hosted by none other than Billy Bush of the Access Hollywood tape.)

Aside from Baki, Chevron repeatedly has tried to corrupt Ecuador's government to evade its liability. In the early 1990s, just after the communities filed their lawsuit, Chevron hired the Clinton-era U.S. ambassador to Ecuador, Richard Holwill, to try to convince Ecuador's then-President to illegally quash the case. In 2010, Chevron hired a former high-level State Department official to lobby the Obama Administration to float the idea of a $700 million "aid package" to Ecuador that would not be granted unless the case was dismissed. Multiple clandestine efforts by Chevron to use the U.S. State Department and the U.S. embassy in Quito to kill off the case were amply documented by the Wikileaks cables.

In 2016, Chevron leveraged a certain official in Ecuador's then government to pressure a young lawyer on the legal team for the communities to unilaterally lift an embargo order against the company without consulting his clients. This one move resulted in the outrageous payment by Ecuador's government to Chevron of a $112 million judgment won under very suspect facts in a separate arbitration case. By law, the funds should have been used to help satisfy the environmental award and to start the remediation of Chevron's damage. The lawyer who lifted the embargo order, Pablo Fajardo, immediately was fired by the plaintiff's group in the case, the Front for the Defense of the Amazon (known as the "FDA" by its Spanish acronym).

Chevron also lied about a sham clean-up it conducted in Ecuador in the mid-1990s, where it spent less than 1% of the real cost of a remediation while covering up open-air waste pits with dirt (our Karen Hinton helped expose this in 2014); it also paid a witness, Alberto Guerra, $2 million in cash and benefits to fabricate evidence and perjure himself in a U.S.-based retaliatory civil RICO case. (See here and here for evidence of the Chevron-Guerra corruption scandal.)

It is awfully curious to us why Manafort, who appears to be cash-desperate as he faces mounting legal bills, would be in Ecuador while under the microscope of a high-profile investigation. He's either more of a fool than we thought, or was lured by a possible pay-out from Chevron that would be enough to compensate him for the enormous risk of engaging in acts that could have been worth billions of dollars to the oil giant.

If Chevron's interests were put forth in the meeting with Moreno, there is little doubt that additional crimes were committed not just by Manafort but also by any contacts in Chevron who put him up to it. A U.S. corporation trying to corrupt a foreign court judgment not only violates the criminal law in the host country, but also runs afoul of U.S. laws such as the Foreign Corrupt Practices Act.

Either way, we would encourage Mueller and the DOJ to determine what exactly happened during the Manafort trip to Ecuador. Chevron's shareholders should also demand that the company hire independent counsel to determine whether CEO Watson has created yet more risk due to the company's corrupt acts in Ecuador, both in prior years and with the Manafort meeting in Quito.

(We will continue to pursue this story as it unfolds. For further background on Chevron's fraud in the Ecuador case, see this report from 2006; see this press release and related links regarding multiple meetings held by Chevron officials with Ecuadorian government officials; and this video regarding how company scientists conspired to hide pollution from Ecuador's courts.)

Tuesday, December 19, 2017

2017: Chevron Had A Bad Year In $12 Billion Ecuador Litigation

For Chevron and its CEO John Watson, 2017 was a very bad year for the company's campaign to evade paying a $9.5 billion environmental liability (now $12b with interest) in Ecuador.

Watson in 2017 not only suffered a major legal setback in the Ecuador case in Canada, he also was severely criticized by major investors who lashed out over his "material mishandling" of the litigation. Chevron has spent huge sums (at least $2 billion on 60 law firms) in an increasingly futile attempt to try to get the impoverished indigenous peoples and farmer communities to "give up" and become obedient subjects of corporate power. That obviously isn't happening.

If 2017 taught us anything about the Ecuador litigation, it is that the affected communities and their supporters will keep coming and coming no matter what massive level of resources Watson throws at them. It is becoming increasingly clear that Chevron is spending and wasting massive amounts of shareholder funds to attack the rule of law in Ecuador. That effort has earned the company a new criminal referral to the U.S. Department of Justice and increased risk for shareholders.

It bears remembering that three layers of courts in Ecuador, in the venue where Chevron insisted the trial be held, affirmed the company's liability. That includes a unanimous decision from the country's Supreme Court. Yet Watson and his team repeatedly have threatened the communities they poisoned with a "lifetime of litigation" if they persist.

Here are some of 2017's lowlights for Chevron and CEO John Watson in the Ecuador litigation:

**In October in Canada, Chevron suffered another unanimous defeat (that's three in a row) before an appellate court in a case where the Ecuadorians are trying to seize company assets to recover their judgment. A panel from the Ontario Court of Appeal found that Chevron was illegally trying to impose an exorbitant $1 million costs order on the indigenous groups as a way to end the litigation.

**In Ecuador, the national indigenous federation (CONAIE) signed a political alliance with Canada's national indigenous group (the Assembly of First Nations) -- which represents 634 chiefs and is considered the world's most powerful indigenous federation -- to hold Chevron accountable for its environmental destruction and violations of indigenous rights in both countries.

**Chevron shareholders furious with Watson's failure to resolve the Ecuador litigation dominated and disrupted the company's annual meeting in May. A resolution that cited Watson's "material mishandling" of the Ecuador litigation and rebuked him personally received a whopping 39% of shareholder support. It is no coincidence (see below) that Watson was pushed into "retirement" a few weeks later.

**In a related development, Chevron unceremoniously announced that Watson (who is only 62) will be leaving Chevron in January of 2018. One reason, according to informed sources familiar with the thinking of Chevron's Board, is that he and General Counsel R. Hewitt Pate grossly overspent on the Ecuador litigation. One Chevron law firm, Gibson Dunn, reportedly bilked the company out of more than $1 billion in fees. That firm is now under scrutiny for engaging in potential criminal acts on behalf of Chevron.

**Chevron's highly flawed "racketeering" judgment from a severely compromised U.S. trial judge is now backfiring against the company (see here and here). Evidence emerged that Chevron illegally paid its star witness, Alberto Guerra, at least $2 million in cash and benefits and coached him for 53 days before he presented false testimony. The witness later admitted under oath that he perjured himself (see this excellent blog by Paul Paz y Mino of Amazon Watch) while a new forensic report demonstrates unequivocally that Chevron's lawyers fabricated evidence to try to taint the Ecuador judgment.

**Chevron and some of its executives have gone so far into the gutter on Ecuador that they now face a potential criminal probe from the U.S. Department of Justice. The Ecuadorian communities sent a referral letter to the DOJ demanding an investigation to determine whether the company's obstructionist tactics have crossed over into criminality. Worse, it appears that none other than Chevron lobbyist and former Trump campaign manager Paul Manafort was in Ecuador in May to do some dirty work for for the company just prior to his arrest in the Mueller investigation.

**The indigenous groups also picked up some key allies during the year that are starting to hound Chevron. Rex Weyler, the legendary co-founder of Greenpeace, visited the affected area in Ecuador and accused Chevron of committing "ecological crimes" and showing "disrespect" to the communities where it operated. Phil Fontaine, the thrice-elected leader of Canada's national indigenous federation, said it was  "unconscionable" that the company has been allowed to get away with its environmental atrocities for so long.

Chevron notched a Pyrrhic victory of sorts when it used its army of lawyers to pressure individual judges in Argentina and Brazil to temporarily deny, on purely technical grounds, enforcement actions filed by the villagers. That was after Chevron officials engaged in highly suspicious "contacts" with local authorities that have the odor of corruption wafting in the air.

In Argentina, CEO Watson flew personally on his corporate jet to Buenos Aries to meet with the President. Suddenly, a new "investment" was announced. Five days later, Argentina's Supreme Court dismissed the enforcement action on technical grounds. Coincidence? In Brazil, a judge under pressure from the company denied a separate action after Chevron presented the false Guerra testimony.

No fewer than 21 appellate judges in Ecuador and Canada have sided with the villagers, while not a single appellate judge in either country has sided with Chevron. That's not a good track record for Watson in the two most important countries in the litigation.

Another sign of Watson's desperation is that Chevron is now seeking to recover $33 million in legal fees personally from the American human rights and environmental lawyer Steven Donziger. Donziger, a stalwart fighter for social justice who has worked with the affected communities in Ecuador for more than two decades, seems to be more than the company's 60 law firms and 2,000 legal personnel care to handle. Watson's attempt to silence Donziger and intimidate the communities will not work.

Carmen Cartuche, who heads the Front for the Defense of the Amazon (the non-profit group that brought the case) had this to say: "Chevron's CEO can literally go to hell. Attacking our lawyers only makes him look weak and it will not work. We will never give up and ultimately Chevron will pay for the crimes it committed on our precious lands. In the meantime, Chevron's shareholders need to wake up to the fact that their company is being run by a greedy man with no long-term vision for Ecuador other than to attack those people who his company has poisoned."

Watson has turned his back on those in Ecuador to whom Chevron owes a major responsibility. This hard-line posture undermines Chevron's moral integrity and cuts into its bottom line by casting a cloud over the ability of the company to operate on a global scale without community-based resistance.

Here's hoping that 2018 is the year Chevron's incoming CEO, Mike Wirth, takes the necessary steps to address the company's Ecuador risk in a balanced manner. Imitating John Watson's scorched-earth approach would be a very bad move indeed.

Thursday, November 9, 2017

21-0: Ecuadorian Communities Are Dominating Chevron In Canada's Appellate Courts

Chevron's strategy to block enforcement of its $9.5 billion environmental liability in Canada is on the rocks. The company now has lost three straight decisions (see here, here, and here) in Canada's appellate courts to Ecuadorian indigenous peoples and farmer communities. To cover up this debacle, Chevron General Counsel R. Hewitt Pate continues to bullsh*t -- sorry, mislead  -- company shareholders about the growing risk faced by his company.

Chevron's string of losses in Canada comes after Mr. Pate hired several large Canadian law firms -- who send mostly older white men in suits to court -- to try to block indigenous peoples from collecting a judgment the oil giant was ordered to pay to remediate the extensive damage to the rainforest caused by its systematic dumping of oil waste from 1964 to 1992. As journalist Alexander Zaitchik wrote in his latest article on the case: "Ecuadorian Villagers Are Fighting Chevron In Canada -- And Winning."

The affected communities in Ecuador are not just winning, but dominating.

Thirteen appellate judges in Canada have ruled in their favor since the enforcement action was filed. In Ecuador, eight appellate judges have ruled in favor of the villagers. None have ruled for Chevron in either country. For those keeping score, that's 21-0 in favor of the villagers in appellate courts in Ecuador and Canada. (Here is a summary of the overwhelming evidence against Chevron.)

Chevron's latest reversal in Canada came last week when a three-judge panel on the Ontario Court of Appeal strongly criticized the company for trying to end the Ecuador litigation by imposing a $1 million costs order on the indigenous groups. The decision was a stunning setback for Chevron.

Chevron's courtroom carnage in Canada dates to 2013 when Ecuador's Supreme Court ruled unanimously in favor of the indigenous groups after an eight-year trial in the forum where the company insisted the trial be held. Chevron refused to pay the judgment and sold its assets in Ecuador, threatening the indigenous groups with a "lifetime of litigation" if they persisted.

To force compliance with the law, the affected communities then filed suit in Canada to seize some of Chevron's extensive holdings in the country. Chevron predictably tried to block that action on jurisdictional grounds as part of its campaign to obtain impunity.

Chevron lost the jurisdictional issue in spectacular fashion not only at the Ontario Court of Appeal but also in a stunning 92-page decision issued by all seven justices on the country's Supreme Court. Both decisions were unanimous.

Stuck with an impending trial where it would have to put on the same fabricated evidence of "fraud" that it concocted in the United States to try to evade the Ecuador judgment, Chevron launched a new strategy to try to kill off the case by imposing the costs order.

It would be hard to imagine a greater travesty of justice than a costs order given that Chevron owes its victims $12 billion and refuses to pay. Further, the company surely spent more on legal fees to get the costs order than any amount it would have received from the costs order had it been allowed to stand. Again, that subterfuge was blocked in a third unanimous appellate opinion issued last week.

A score of 21-0 in favor of the communities among appellate judges sounds more like a lopsided football score. In the annals of courtroom battles, it's virtually unprecedented -- not too far from Georgia Tech's infamous 222-0 thrashing of Cumberland College in 1916. That was the most lopsided score in college football history.

The only decision that Chevron has won in the long-running case is one based on clearly fraudulent evidence issued by a compromised U.S. judge Lewis A. Kaplan. (See this report for full documentation of Chevron's fraud in Kaplan's courtroom.) Chevron tries to cite the Kaplan findings in its favor but that decision is now clearly backfiring against the company.

In Canada, the Ontario Court of Appeal made it clear that it would have nothing to do with Kaplan's ruling despite tenacious efforts by Chevron lawyer Larry Lowenstein to act as if trumps the extensive findings of Ecuador's courts -- the only courts to actually hear the voluminous evidence of Chevron's toxic dumping and wrongdoing in the Amazon.

Chevron's next manuever in Canada is to try to eliminate its wholly-owned Canadian subsidiary (Chevron Canada) as a defendant in the enforcement action. The Ontario Court of Appeals will hear argument on that issue soon. If the past is prologue, the appellate tally will look even worse for Chevron after that matter gets resolved.

If all of this appears to have produced a little too much stress for Pate, that certainly would be understandable. Chevron's top lawyer has spent an estimated $2 billion of shareholder funds on the company's defense. Just days ago, he hastily issued a misleading press release claiming the Ecuador judgment was obtained "fraudulently". Chevron then backpedaled and re-issued the same release later in the day with softer (but still misleading) language.

Pate's idea is to try to leave the impression that Chevron is "winning" the case around the world. But an 0-21 record in appellate courts in the two most important jurisdictions is sort of hard to wash away no matter how aromatic the Chevron propaganda. Most companies would have fired their General Counsel long ago for such an atrocious track record when the stakes are so high.

Worse for Pate is that major Canadian citizens, such as national indigenous leaders Phil Fontaine and Ed John along with Greenpeace co-founder Rex Weyler, recently have lined up behind the Ecuadorian indigenous groups. British rock musician Roger Waters of Pink Floyd is also speaking out publicly against Chevron for its refusal to remediate its toxic pollution in Ecuador.

In his article about the string of victories by the Ecuadorians in Canada, Zaitchik quoted the lead Ecuadorian lawyer for the indigenous groups, Patricio Salazar:
"Chevron's entire strategy is based on obstruction and delay. Canadian courts need to put an end to this abuse of the civil justice system. It is unfortunate that this Chevron maneuver to impose a court tax on the people it poisoned got as far as it did."
Steven Donziger, Chevron's main U.S. critic who is being personally targeted before Kaplan with a preposterous $33 million costs order, had this to say to Zaitchik:
"We are confident Chevron's scorched-earth strategy of obstruction and delay will soon run its course, and the company will pay the full amount necessary to clean up its awful pollution in Ecuador which continues to decimate indigenous peoples. Chevron has thrown at least $2 billion and 2,000 lawyers at us to try to obstruct court proceedings. That strategy has failed."  
Well said by both lawyers.

Chevron's Board of Directors needs to think about getting rid of Pate so it can address its Ecuador problem before the repercussions start to negatively affect company operations around the globe. Absent action by the Chevron Board, it might be time for Chevron shareholders to take control of this rapidly deteriorating situation.

What is definitely clear is that Chevron's current management team seems utterly clueless when it comes to Ecuador.

Wednesday, November 1, 2017

The Takeaway: Chevron CEO Big Loser in Latest Canada Court Decision Over Ecuador Pollution Judgment

The latest attempt by Chevron CEO John Watson to foist his company's RICO fraud from the United States onto Canadian courts just got slapped down by a three-judge panel from the Ontario Court of Appeal. This suggests the oil giant faces major hurdles in Canada in its campaign to evade enforcement of a $12 billion liability owed to Ecuadorian indigenous peoples and farmer communities.

The latest Canada decision, which can be read in full here, can only be described as a powerful rebuke to Watson, Chevron General Counsel R. Hewitt Pate, and the company's army of Canadian lawyers who are being paid big bucks to obstruct and delay the case. Consider these key takeaways from the decision:

  • Chevron's SLAPP-style harassment attempt to impose a $1 million costs order on the impoverished indigenous groups always was a classic corporate maneuver to evade liability by trying to end the litigation without a resolution on the merits. The Appeals Court vacated the order in its entirety. Chevron General Counsel Pate sent at least 20 high-billing lawyers to court, implicitly disclosing that the company was spending more in legal fees to obtain the costs order than it would have received had it been granted. Worse, almost all of the Chevron lawyers were bland white men in suits whose job apparently is to block aboriginal peoples from collecting money they need to clean up an environmental disaster caused by Chevron. The fundamental disparity in resources – Chevron makes $225 billion annually while the indigenous groups live in poverty due largely to Chevron's pollution – could not have been more stark.
  • Chevron's attempt to leverage U.S. Judge Kaplan's completely flawed civil RICO (or "racketeering") decision against the indigenous groups appears to have backfired yet again. It is becoming more apparent in Canada that the Kaplan decision is a debacle for Chevron and actually favors the aboriginal groups on a variety of levels. It is now seen as a product of Chevron's fraud in presenting false testimony from a disgraced witness paid $2 million who later admitted lying in court. No Canadian court wants to be told by a U.S. oil company that it must defer to a U.S. judge – especially one who conducted a hocus-pocus proceeding in favor of Chevron. Violating his duty of neutrality, Kaplan obviously bent over backwards to help the oil major. He also failed to disclose his own ethically dubious investments in the company when presiding over the RICO trial.
  • The three Canadian judges implicitly rebuked both Judge Kaplan and the Canadian motions judge who relied heavily on Kaplan's erroneous decision to impose the costs order, while ignoring the Ecuadorian trial court decision at the heart of the case. The Ecuador decision, we might add, was issued by the very court where Chevron for years insisted the trial be held. The panel wrote: "There can be no doubt that the environmental devastation to the appellants' lands has severely hampered their ability to earn a livelihood. If we accept the findings that underlie the Ecuadorian judgment – findings that have not yet been undermined in our courts – Texaco Inc. contributed to the appellants' misfortune." You can say that again – cancer rates in the area are skyrocketing, and untold numbers of people already have perished due to Chevron's refusal to abide by the Ecuadorian court order.
  • The Canadian court also found that Chevron obviously doesn't need its costs paid. How obvious is this? The company already has used at least 60 law firms and 2,000 lawyers since the inception of the case. It grosses $225 billion per year. And yet, nary a word was written in all prior decisions on the issue. The Canadian panel confronted it directly: "Chevron Corp. and Chevron Canada have annual gross revenues in the billions of dollars. It is difficult to believe that either of these two corporations... require protection for cost awards that amount or could amount to a miniscule fraction of their annual revenues."
  • The decision was also an implicit rebuke to the duplicitous Larry Lowenstein, Chevron's lead lawyer in Canada and a partner in the prestigious Osler law firm. Lowenstein made a cameo before the appeals panel and tried to peddle the Kaplan decision as being the final word on the case. As said, that decision is a product of Chevron's fraud. Lowenstein used Kaplan to try to dupe Canada's judges, but they would have none of it. Osler cannot be so desperate for business that it would stoop to this level of "service" for a company known in environmental circles as a major polluter.
While the latest decision removes a major roadblock for the Ecuadorian indigenous groups, there is still substantial work to be done even after five years of litigation in Canada's enforcement courts. Chevron no doubt has many tricks up its sleeve, including trying to hide its Canadian assets in wholly-owned subsidiaries. Courts in Canada need keep their door open to human rights victims and resolve the claims in this matter without further indulging the company's dirty tricks campaign.

Five years already is way too long for any enforcement action, much less one where thousands of indigenous lives hang in the balance and where a final judgment has been rendered in the preferred jurisdiction of the debtor.

Monday, October 16, 2017

Chevron Lawyer Larry Lowenstein Continues to Mislead Canadian Courts About Company's Fraud in Ecuador

To help Chevron block enforcement of the Ecuador environment judgment in Canada, company lawyer and Osler partner Larry Lowenstein flat-out lied last week to a panel of three judges on the Ontario Court of Appeal in Toronto. It is the vulnerable indigenous communities in Ecuador who pay the price for Lowenstein's bad form in service of one of the world's worst corporate polluters.

Lowenstein made an interesting cameo for Chevron last Wednesday before the appeals panel in Toronto that heard argument over a $1 million costs order the oil major is trying to impose on the impoverished indigenous groups. Those indigenous groups in 2013 won a $9.5 billion environmental judgment against Chevron, as determined by three layers of courts in Ecuador in the venue where the company insisted the trial be held and where it had accepted jurisdiction.

Since then, Chevron has hired 60 law firms and used roughly 2,000 lawyers to evade paying the judgment. It also sued an American human rights lawyer for the Ecuadorians for $60 billion before dropping all money damages claims to avoid a jury. It is now suing the same lawyer (Steven Donziger) for $33 million in fees, trying to bankrupt him. (For background, see here.)

This is how Chevron rolls. Without lawyers willing to do its bidding, Chevron could never get away with such blatant misconduct.

It is preposterous to think a large oil company that generates $225 billion in annual revenue needs the "protection" of a $1 million costs order against impoverished indigenous groups. Chevron no doubt is spending more money on legal work to get the costs order than the amount sought in the order. This is clearly another Chevron tactic to deny its adversaries access to the justice system.

Chevron's use of the costs order against indigenous groups is a vital part of the company's global intimidation model. It is a brazen attempt to close the courthouse doors to communities trying to force Chevron to clean up the mess the company left on their ancestral lands. This is consistent with a threat the company made in 2009 promising the indigenous groups "a lifetime of litigation" if they continued to pursue their claims.

"We will fight this case until hell freezes over, and then we will fight it out on the ice," said Charles James, Chevron's former General Counsel.

As the latest front man for Chevron's impunity campaign, Lowenstein claimed to the appeals panel that the Ecuador judgment was based on an "egregious fraud" because that's what a pro-business U.S. judge, Lewis A. Kaplan, determined after a lopsided "racketeering" trial held in 2013. During that trial, the court refused to consider any evidence of Chevron's environmental contamination. And Kaplan held undisclosed investments in Chevron during the proceeding, called a "Dickensian farce" by noted U.S. trial lawyer John Keker.

(Here is a press release and a detailed 33-page report documenting Kaplan's blatant bias against the Ecuadorian villagers and his erroneous findings.)

In speaking before the appellate panel, Lowenstein ignored the overwhelming evidence against Chevron in the Ecuador proceeding. He ignored the false testimony used by his client in the RICO matter and obfuscated evidence of the company's fraud in Ecuador and the United States. His courtroom act was designed to dupe the Canadian judges into thinking Chevron was the victim of the people it poisoned, rather than the other way around.

Lowenstein also tried to leave the impression that the decision against Chevron in Ecuador can never be enforced because of the one batshit crazy ruling by Kaplan, the compromised U.S. trial judge who seemed to think he had the authority to overturn Ecuador's entire Supreme Court.

Consider what Lowenstein failed to disclose to the appellate panel about Chevron's role in creating a catastrophe in the rainforest so massive it is called the "Amazon Chernobyl" by locals:

**Chevron was found by three layers of courts in Ecuador to have dumped billions of gallons of oil waste into the rainforest over a two-decade period, decimating indigenous groups and causing numerous cancer deaths. The court decisions were based on 105 technical evidentiary reports. Here is a summary of the overwhelming evidence; a legal brief that explains the history of the company's dumping and cover-up; and a summary of the high cancer rates.

**Initially sued by indigenous villagers in New York in 1993, Chevron praised Ecuador's justice system thinking it could engineer a political dismissal of the case by shifting it to the South American nation. With the scientific evidence mounting in its preferred forum of Ecuador, Chevron sold its assets to evade paying the judgment. 

**Ultimately, Chevron was ordered to pay $9.5 billion in damages and costs. This amount is a pittance compared to the roughly $50 billion BP has paid for its much smaller Gulf of Mexico spill in 2010. 

**Chevron retaliated by suing the indigenous groups and their lawyers before Kaplan, who invited the company to file the action. Chevron then made a mockery of justice by dropping all damages claims on the eve of trial to avoid a jury. Chevron also bribed a witness with $2 million to claim that the judgment in Ecuador was "ghostwritten"  -- testimony that since has been proven false but was nonetheless adopted by Kaplan.

**The bribed Chevron witness, Alberto Guerra, later admitted under oath that he repeatedly lied before Kaplan. Separately, a forensic examination by the American expert J. Christopher Racich demonstrated that the Ecuador trial judge wrote the decision on his office computer, contradicting Guerra's false claim that it had been given to the trial judge on a flash drive.

**In total, 18 judges appellate judges in Ecuador and Canada have ruled in favor of the villagers and rejected Chevron's "fraud" claims. (The Second Circuit Court of Appeals refused to review Kaplan's erroneous findings, as did the U.S. Supreme Court.) Lowenstein also ignores that 17 prominent human rights groups and 19 international law scholars have sided with the indigenous groups against Chevron.

Because of its corrupt acts and disdain for the rule of law, Chevron now finds itself in serious trouble. It faces possible criminal and civil jeopardy for its cover-up in addition to its $12 billion environmental liability (rising $300 million per year because of interest) to the people of Ecuador. Company management also faces a shareholder revolt over its unethical behavior.

Another big Lowenstein whopper before the Toronto court came when he claimed that Donziger, one of the American lawyers for the villagers, "controls" monies that will be deposited in trust for a clean-up.The trust is actually controlled by the affected communities, not their lawyers. 

Lowenstein's little speech reminded us of the bit part played years ago by a professor from Notre Dame who also allowed himself to be used by Chevron for money. That professor, Douglas Cassell, was slapped down by Notre Dame's administration for hiding the fact he was shilling for the oil giant while trying to act like a disinterested scholar. For background, see here.

The personal reputation of Lowenstein, and by extension that of the Osler partnership, is in play. The American law firm Gibson Dunn suffered a huge setback recently after its own unethical work of behalf of Chevron in the United States was exposed. Osler obviously is Chevron's answer to Gibson Dunn in Canada -- a law firm with a willingness to cross the ethical line to "rescue" a client from a scandal of its own making. 

Lowenstein's partners at Osler naturally claim they run one of the leading business law firms in Canada. If misleading courts and shareholders is how Osler deploys its legal skill, then those partners might need to rethink their business model. They also might disclose how much the firm charges Chevron for this tawdry service.