Shareholders can
now reasonably question whether Chevron CEO John Watson is fit to lead
America’s second-largest energy company. Increasingly, Watson is acting
like a palace dictator surrounded by yes men who only deliver good news as the
streets rage in protest.
It is
well-documented that Chevron’s
share price recently has taken a hit due to the $19 billion Ecuador
liability and other litigation problems around the world, including a potential
$22 billion liability in Brazil. Wall
Street has begun to take notice, with the company’s share
price down 10% since October.
Recently, Watson
ventured out of corporate headquarters and entered what he thought would be a
friendly setting at the prestigious Council On Foreign Relations in New York
City.
Even there, he was
confronted by the Ecuador reality.
After his remarks,
the first question that hit Watson was from a Wall Street Journal editor who
asked about the Ecuador liability that he said was “dogging” the company.
Watson had this to say in response:
"We are
largely winning in the court of public opinion. You see much less written
because anyone who has done their homework knows it’s a fraud and so we’re
winning in the court of the public opinion, we’re making great progress in the
courts but yes we do have to fight and we’ll fight it till we win."
This is a man not
in touch with reality.
If Watson thinks
the case is a fraud, how does he explain how Chevron’s fraud allegations have
been examined and rejected by two courts in Ecuador, the U.S.
Supreme Court, multiple U.S.
appellate courts, and did not bother an enforcement court in Argentina that
recently froze
$2 billion of Chevron assets in that country?
Chevron now faces
asset seizure actions targeting $15 billon in company assets around the world,
including massive oil fields in Brazil and Canada critical to the company’s
long-term strategic growth. In the meantime, Watson’s lead U.S. law
firm fighting the litigation – Gibson Dunn & Crutcher -- has been slammed
for committing ethical
violations on behalf of Chevron.
The Ecuador case is not only costing Chevron massive sums in legal fees, but is putting Chevron at a competitive disadvantage worldwide. The company already is being forced to suspend planned investments in places where it faces asset seizure actions.
Watson believes much less is being written about the case? Click on the links below and see just how out of touch Watson has become.
Small Sampling
of Recent News Coverage of Ecuador Case
12/9/12
New York Times: Chevron
Aims At An Activist Shareholder
11/30/12
11/28/12
Al Jazeera: Holding
Chevron Accountable
11/7/12
Financial Times: Argentine
Judge Freezes Chevron's Assets
10/31/12
10/23/12
Courthouse News: Privacy
Groups Enters Chevron's Amazon Fray
10/9/12
10/7/12
Guardian: Chevron
Dealt New Blow In Ecuador Case
6/28/12
6/1/12