Read the Marketwatch.com article below about Chevron’s decision to press charges against Juhasz, as well as this blog about reaction to Chevron’s latest strong-armed tactic to muzzle its critics. (Also see this press release about Chevron trying to hire a journalist to spy on people sick with cancer and other illnesses as a result of the oil contamination in Ecuador)
Watson might be thin-skinned about Ecuador because he was the architect of the merger between Chevron and Texaco. The merger is a potential disaster for Chevron given that the size of Texaco’s old Ecuador liability could surpass the $31 billion that Chevron paid for the company. Watson has continually failed to answer questions about this potential conflict of interest.
By John Letzing, MarketWatch
SAN FRANCISCO (MarketWatch) — As the nation’s second-largest oil company, Chevron Corp. is accustomed to a cavalcade of activists at its annual shareholder meetings.
But Chevron (CVX 80.88, +0.80, +1.00%) is working with authorities who are prosecuting a particular shareholder activist, who harangued executives at the annual meeting in Houston last May. Antonia Juhasz was removed from the meeting and then arrested outside, after blasting Chevron’s environmental record and starting a derisive chant, according to people at the meeting. The meeting wrapped shortly afterward.
Juhasz has been charged with criminal trespass and disrupting a meeting or procession, and now faces up to six months in jail. She said the charges are an overreaction and doesn’t accept them. Her attorney said they will fight them.
Juhasz’s prosecution may result in an odd instance of a shareholder activist being not just removed, but also arrested and prosecuted for trespass and disruption. It raises questions about the best way for firms to deal with activists who use small amounts of stock to get into annual meetings to make a public statement.
“This is very, very unusual,” says Sanjai Bhagat, a professor at the University of Colorado at Boulder’s Leeds School of Business, when asked if he heard of shareholder activists being faced with jail time for actions at corporate events.
Chevron spokesman Morgan Crinklaw said in a statement that the company is “cooperating fully with the [Harris County, Texas] district attorney’s office as they move forward in their prosecution.”
Juhasz, who runs the energy program at San Francisco-based advocacy group Global Exchange, deferred questions about the shareholder meeting to her attorney, John Parras. Parras said he will argue that Juhasz did not disrupt the meeting, which could have continued after her turn at the microphone during a question-and-answer period. “The larger question is, can shareholders within a corporation use the process to make the corporation better or more responsive to their concerns,” he added.
The incident has led to the hobbling of one of the company’s most vocal critics. Juhasz said she now must limit what she says publicly about the company for fear of hindering her defense.
Chevron’s Crinklaw deferred some questions about the Juhasz case to the district attorney’s office of Harris County, Texas. George Flynn, a spokesman for the office, said the authority to dismiss criminal cases belongs solely to the district attorney’s office, though it “certainly takes the sentiments of the complainants into consideration in making any decision to proceed to trial.” A preliminary court date has been scheduled for Thursday.
‘Lives lost, wars fought’ and more
San Ramon, Calif.-based Chevron held its 2010 annual meeting far from its San Francisco Bay Area headquarters. It came at a tense time for the oil giant.
‘The larger question is, can shareholders within a corporation use the process to make the corporation better or more responsive to their concerns.’
The BP PLC (BP 39.24, -0.05, -0.13%) oil spill had begun only about a month earlier in the Gulf of Mexico, drawing greater scrutiny to the industry; meanwhile, a high-profile lawsuit was proceeding against Chevron in Ecuador, alleging the company was responsible for massive environmental damage. Chevron has denied the charges.
Four other protesters also were arrested outside of Chevron’s gathering and face trespassing charges, according to media reports at the time. But Juhasz was unique as a stockholder pulled from the meeting, the reports said. She says she owns 14 shares in the company, which were donated. Each charge against her is punishable by up to 180 days in county jail, though the sentences in the case would run concurrently if she is convicted, according to the Harris County district attorney’s office.
Juhasz stands out as a particularly active critic, who has co-authored exhaustive “alternative annual reports” for Chevron, detailing the “lives lost, wars fought, communities destroyed, environments decimated, livelihoods ruined and political voices silences” because of the company. Until recently, her program was called the Chevron program at Global Exchange, though it was recently renamed. Juhasz said the name change of the program is not related to her arrest. However, she pointed out that her day-to-day duties have been constricted by her status as a defendant. “I’m definitely being limited in my actions,” she commented.
Boston University Prof. James Post said he can’t recall a similar case where a shareholder activist had criminal charges filed against them: “A company almost never wins in a case like that.”
Companies are better off, Post suggested, when they allow critics to vent and then move on. “Corporate democracy can be an ugly thing,” he added.
The company does not have video footage of the shareholder meeting, according to Chevron’s Crinklaw. “When Ms. Juhasz disrupted the meeting, it was after she and other activists had already posed a series of questions to the chairman,” he said. “Her actions clearly show that she was not interested in what the company had to say, only making a disturbance.”
A person who attended the meeting, but declined to be identified due to a lack of authorization to speak to the press, said it seemed possible to continue the event following Juhasz’s expulsion. However, the person said the event could not likely have continued while she remained in the room.
Chevron has a legal history with its work in Ecuador. The company recently won the legal release of outtakes from a 2009 documentary about a lawsuit filed against it there.
At the shareholder meeting in Houston earlier this year, several media outlets reported arrests and disruptions at the event. In a statement issued on the same day, the company announced that stockholders were informed of Chevron’s “reliable operations and superior execution.”
John Letzing is a MarketWatch reporter based in San Francisco.