Chevron Lies in Failed Attempt to Silence Critics

Shareholder Nonprofit Finds Oil Giant Refused to Seat Attendees at Shareholder Meeting with Legitimate Proxies

If you are thinking about criticizing Chevron about its oil drilling practices, go hire a lawyer now. Dozens of American citizens have had to lawyer up during the past year because of Chevron executives’ Putinesque refusal to suffer any criticism whatsoever. Sheila McNulty, who covers the oil industry for the Financial Times out of Houston, reported this week that an inquiry by the United States Proxy Exchange found Chevron inappropriately refused a number of people with legitimate proxies to attend its last shareholder meeting, including four people who were arrested after Chevron called the police. About 20 people had traveled from Ecuador, Nigeria, Burma and Angola to attend the meeting but were refused. The people arrested were American activists who have criticized Chevron in the past.

Arrests unlikely to curb Chevron shareholder meeting protests

January 24, 2011 12:48 pm by Sheila McNulty

At Chevron’s last shareholder meeting, five people were arrested. The company has for years now been having a hard time with protestors – particularly about a lawsuit about environmental damage allegedly left in Ecuador by one of the companies it acquired. And certainly the arrests of those who the company says were troublemakers at the meeting must have been a welcome turn of events for Chevron.

Yet it really has not worked out as Chevron might have hoped. There will likely be continued protests at its upcoming shareholder meeting.

Todd Ward of the prominent Houston law firm DeGuerin & Dickson took the defendants’ case without payment because he felt those arrested had been treated unfairly and it was the right thing to do.

The Harris County district attorney let one of the protestors go. The other four were offered deferred adjudication, whereby all charges would be dropped if they did not protest at the next shareholder meeting. Only one accepted that. The other three refused.

Among them was Mitch Anderson, corporate campaigns director at Amazon Watch, which has been a thorn in Chevron’s side over Ecuador. He pled guilty, the court accepted the day he already had spent in jail upon being arrested as time served, and he is free to continue protesting.

Although he insists he was not guilty, Mr Anderson says he wanted the case behind him so he could get back to work:

I plan on being as vocal at the upcoming shareholder meeting as I was in the past. Chevron has failed to own up to its responsibility for environmental contamination in Ecuador. And with a court decision looming, this is too vital a time for us to be restricted from shedding light on the Ecuador environmental disaster.

Chevron does not believe it is responsible for whatever environmental damage remains in Ecuador.

Mr Anderson considers the arrests part of that publicity battle and, in his words, pure harrassment. He claims he had a valid proxy – the same document he has used to attend past meetings. In all, the protestors say some 19 people were told their proxies were invalid. Chevron said it could not confirm that.

But it does insist Mr Anderson’s proxy was invalid. And, besides, it insists it did not make the arrests or prosecute Mr Anderson and the others – the county did. The company only called the police to get the trespassers from blocking the path of shareholders. What happened next was out of its hands.

Nonetheless, Chevron said the protestors arrested were being disruptive. One had tried to lead shareholders in an anti-Chevron chant; others had sat in front of the exits, blocking the doors. And others had refused to move beyond the barricade to keep out those without valid proxies. This was interfering with the ability of those who were there to listen to participate in the meeting:

We do not condone behavior which could compromise the safety and security of our employees and stockholders. The Harris County District Attorney’s office has prosecuted four individuals for their actions at Chevron’s Annual Stockholders’ Meeting. We are confident that this matter is being handled appropriately by the District Attorney’s office, and we will continue to cooperate with them until it is resolved.

Yet, regardless of how all five cases are finally resolved by the courts, Glyn A Holton, executive director of the United States Proxy Exchange (USPX), a non-profit dedicated to facilitating shareowner rights, is disappointed in the whole affair.

Following the shareholders’ meeting, he said, volunteers of the USPX obtained and reviewed a number of sets of proxy credentials presented for admission. Some of these were presented by individuals who were admitted. Others were presented by individuals who were denied admission. The latter included the credentials of four of the individuals who were denied admission and were arrested:

All credentials we reviewed were legitimate and should have been sufficient to gain admission to the meeting. As far as we can determine, Chevron enforced no consistent standard for admitting or not admitting individuals based on their credentials. Admission decisions appear to have been made either arbitrary or based on criteria unrelated to the credentials presented. We found instances where two people presented identical credentials; one was admitted, and the other was not.

He gave some examples, including this one:

The Missionary Oblates of Mary Immaculate beneficially own 7,628 shares of Chevron stock in an account with Manufacturers and Traders Trust Company. Manufacturers and Traders Trust Company executed a legal proxy appointing the “Missionary Oblates of Mary Immaculate (beneficial owners) Represented by Henry Clark” proxy for those shares, “with full power of substitution”. The Missionary Oblates of Mary Immaculate combined this with their own legal proxy also naming a Henry Clark to represent them at the annual meeting. Clark presented them at the annual meeting and was denied admission. His credentials were among the strongest we reviewed.

Chevron did not address the individual examples cited by Mr Holton. It only said:

We stand by the protocols we have established related to our Annual Meeting. Chevron is transparent about the legal requirements needed to gain entry to the meeting and consistent in our enforcement of those requirements.

A trial might have been good to settle the issue once and for all. Without it, it seems, Chevron may have won the battle, with the guilty pleas, but it may well still lose the war of public opinion. For just one of those arrested must stick to the sidelines during the upcoming shareholders meeting. And, with the Ecuador situation still unresolved, something tells me this meeting will be just as aggressive – if not more so – than the last.