More evidence of the cultural rot deep within Chevron’s management structure has surfaced with a devastating new report in the San Francisco Chronicle that the company is now under a criminal investigation for lying to authorities over toxic gas flaring at its Bay Area refinery. For Chevron CEO John Watson and General Counsel R. Hewitt Pate the news could not have come at a worse time.
We already have reported that under Watson and Pate's leadership Chevron faces a hair-raising $19 billion liability in Ecuador for the dumping of billions of gallons of toxic waste into Amazon waterways, and then undertaking a fraudulent remediation to cover it up. Chevron also recently paid a huge fine to the Justice Department for violating the Foreign Corrupt Practices Act in Iraq and has been sanctioned by various courts in Ecuador and the U.S. for engaging in unethical litigation practices.
The Chronicle reported in Sunday’s editions that the U.S. Environmental Protection Agency is conducting a criminal investigation of Chevron after learning the company has installed pipes to re-route toxic pollutants around monitoring equipment at its Richmond refinery before burning them off into the atmosphere, where they pose a risk of cancer and respiratory ailments.
According to the Chronicle: “Air quality officials say Chevron fashioned a pipe inside its refinery that routed hydrocarbon gases around monitoring equipment and allowed them to be burned off without officials knowing about it.”
A local county supervisor, John Gioia, had the guts to be quoted on the record about what Chevron did: “That’s a criminal act, intentionally bypassing the monitoring,” Gioia said.
The criminal investigation started when two inspectors noticed that Chevron’s pollution-monitoring equipment wasn’t recording anything and became suspicious.
A fire at the Richmond refinery on Aug. 6, which forced thousands to area hospitals for treatment, is also under investigation and has led to a class action lawsuit against the company. See this Huffington Post piece for more details.
“Chevron's pattern of legal and environmental management failure reveals an executive team out of its depth and out of control. The board's lack of effective oversight of top management risks driving the company and its shareholders into the ground,” said Simon Billenness, an independent analyst who has followed the company's growing environmental liabilities.
Billenness also said a new analysis by the London-based group Fair Pension has revealed how Chevron’s approach to the Ecuador disaster threatens shareholder value.
Our advice to the investigators: look at Chevron's corporate suites for the source of the problem, not just the line workers at the refinery who creatively figured out a way to save the company money at the expense of the health of local residents.
Workers cheat because of the existence of a corporate culture that encourages cheating, the effects of which the world has seen in Ecuador time and again. If you want to see what kind of corporate citizen really Chevron is, look at this video about its gross human rights violations in Ecuador.
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