Legal Battles & Threats Question Leadership of CEO Watson & General Counsel Pate
Chevron’s troubles in Latin America are escalating and calling into question the ability of its Chairman and CEO John Watson and General Counsel Hewe Pate to manage the oil giant in crisis.
Chevron CEO John Watson
General Counsel Hewe Pate
In Brazil, federal prosecutors filed criminal charges today against 17 Chevron executives for deploying substandard drilling practices and lying about the cause, safety plans and the cleanup of a November oil spill off its coast. An $11.2 billion civil lawsuit had been filed already.
In Ecuador, an appellate court upheld a lower court $18 billion judgment that found Chevron in violation of essentially the same charges -- dumping billions of gallons of toxic water of formation and pure crude throughout an area the size of Rhode Island, then lying about it and covering up a shoddy cleanup.
Surely Brazilian authorities had Ecuador in mind when they barred the Chevron executives from leaving the country earlier this week for fear the oil giant’s bigwigs would become fugitives from justice.
An “overreaction” is the way several U.S. analysts, covering the oil industry, have described Brazil’s reactions, but that’s only because they are weighing the relatively small size of the spill, not Chevron’s enormous disrespect for the rule of law in Brazil and in other Latin American countries.
Brazil is smart to recognize that Chevron is capable of doing anything to avoid being held accountable. It only has to look at Ecuador’s experience for evidence.
Chevron basically became a fugitive from justice when Watson, Pate and other high-level officials said that, regardless of the law and court decisions, it would never pay the Ecuador judgment.
Chevron’s refusal to post a bond while it appeals the judgment to Ecuador’s National Court allows the Ecuadorians to begin enforcement proceedings against the company, but they must do so outside the country because Chevron has sold most of its assets in Ecuador.
Confiscating the Chevron executives’ visas is wise, too.
In 2009, Chevron paid for the relocation of one of its Ecuador operatives and his family so he would not have to face a possible criminal investigation in Ecuador for secretly videotaping a judge and offering him a bribe.
Prior to Chevron’s public release of the videos, the company obtained visas for Diego Borja, a self-described “dirty tricks” operative, and his family and relocated them to San Ramon, California, its headquarters, and later to Houston, Texas.
Ecuadorian prosecutors would like nothing better than to question Borja and Hansen but, alas, they are not within their reach, thanks to Chevron.