Wednesday, October 22, 2014

A Hard Look at NOW's Support for Chevron In Ecuador Case Raises Ethical Concerns

NOW’s Elaine Wood Questioned About Failure to Tell Appellate Court About Her Business Ties to Chevron 

The relationship between the National Organization for Women ("NOW") and Chevron in the Ecuador pollution case is getting even more interesting. (For background, see this press release where Ecuadorian women criticized NOW and this blog for context.)

Figuring out why NOW's legal arm (called “Legal Momentum”) weighed in before a federal appellate court on behalf of Chevron’s targeting of indigenous villagers and their lawyers in Ecuador is the question. We think we are getting close to the answer.  

We have verified that Elaine Wood, the Board Chairperson of NOW’s Legal Momentum, is a managing director for a private corporate consulting firm that counts none other than Chevron as a client. At least three principals at the firm, called Alvarez & Marsal, list Chevron as a client on the company's website.

That information comes on top of our disclosure last week that Chevron made a sudden and very major contribution to NOW’S legal group in 2013 when it became apparent the case would end up before the New York appellate court. The donation came at a time when Ms. Woods was a member of the organization’s Board of Directors. She became Chairperson of that board earlier this year.

Alvarez & Marsal claims on its website that Ms. Wood “conducts due diligence and fraud investigations and advises on corporate compliance” for the company. The bio of Ms. Woods, available here, also indicates she worked for 15 years as a top-level executive at Kroll. Kroll is the private investigations firm that has spied on and harassed U.S. lawyer Steven Donziger and his colleagues in exchange for millions of dollars of fees paid by Chevron.

Ms. Wood might consider using her "corporate compliance" skills to figure out how to comply with federal disclosure rules.

It is a requirement under the federal rules that any ties to a party in a litigation be disclosed in the first footnote of an amicus brief by a supposedly independent entity. At a minimum, Ms. Wood should immediately pull back NOW’s brief and re-file it with a proper disclosure so the court can have the information it needs to assess the organization’s credibility on the issue being considered.

That said, this incident can be enlightening for those who want to understand how Chevron uses its deep pockets to engage in “soft corruption” of governments and non-profit organizations. That is far more interesting than the technical legal issue involved.

The legal position being advocated by Chevron and NOW – that private parties should be able to use the civil racketeering law to target their political and litigation adversaries -- is highly dubious and likely to lose in court. For more on the flaws in the Chevron/NOWapproach, read how Chevron's own lawyers opposed the idea in another case. (That other case involved the same issue before the same New York appellate court, but Legal Momentum did not file a "friend of the court" brief in that matter.)

The overwhelming weight of legal authority in our federal courts is lined up against Chevron on the issue. Also against Chevron is the U.S. Department of Justice and the U.S. Chamber of Commerce (which does not want racketeering laws to be used to target corporations).  Long time pro-business stalwart Ted Olson, who will argue Chevron’s appeal in the Ecuador case, also opposed Chevron’s position when he was Solicitor General in the last Bush Administration.

Even with the limitations of NOW’s legal argument, the organization has a right to be heard. But to do so in this fashion -- in apparent exchange for a donation from a company that has spent huge sums to undermine the valid legal claims of impoverished women suffering in distant lands -- reflects poorly on the organization and its members. To do it without the required court disclosure makes it even more troubling.

Indigenous women in Ecuador for two decades have been part of an extraordinary community-based effort to hold Chevron accountable for deliberately dumping billions of gallons of toxic waste into the Amazon and creating an ecological calamity of shocking proportions. This dumping is visible for the world to see and has been verified by hundreds of journalists and visitors to the region as well as three layers of courts in Ecuador.

The question for NOW: why would it sacrifice its credibility for what appears to be temporary support from a big oil company? Even in Ms. Wood’s “friend of the court” brief, there is no mitigating language distancing NOW from Chevron’s atrocities in Ecuador. It reads as if it was designed, if not actually written by, a Chevron lawyer.

The easy answer is because NOW wants to use U.S. racketeering laws against anti-abortion protestors.  But that’s a superficial and in our view unsatisfactory explanation.  NOW can blast away at anti-abortion protestors to its heart's content without having to give cover to Chevron’s completely abusive litigation tactics in an entirely different case.

The more plausible explanation involves the skillful way in which Chevron uses its money to gin up influence. This behavior is consistent with the company’s misconduct throughout the two decades of the Ecuador litigation, as documented in stunning fashion in this sworn affidavit by Juan Pablo Saenz and in this article by Rolling Stone magazine.

At one point, Chevron apparently floated an illegal $1 billion bribe offer to Ecuador’s government (again, disguised in the form of a “donation”) in exchange for extinguishing the legal claims of the indigenous villagers. At another, it offered Ecuador’s government $700 million in "debt relief" for the same purpose. Wiki-leaks cables also show close collaboration between Chevron executives and U.S. diplomats in Quito to undermine the claims of the villagers. All of this is "soft corruption" in action.

Let’s sum up what we know about Elaine Wood’s and NOW’s relationship to Chevron:

**In 2012, just as the Ecuador case in the U.S. was heating up, Chevron suddenly gave its first donation to NOW’s legal arm. Chevron’s main outside law firm in the Ecuador matter also gave a large donation.

**Shortly thereafter, NOW's legal arm submitted a legal brief for Chevron without disclosing its ties to the company.

**The person who signed the brief, Elaine Wood, works for a consulting company that counts Chevron as a client. She is also not a practicing lawyer and is not on the staff of NOW's legal group.

**Ms. Wood formerly worked in the same division of the U.S. attorney's office in Manhattan where Randy Mastro worked. Mastro is Chevron's lead outside lawyer on the Ecuador matter.

**NOW's legal arm has refused to verify that it has disclosed all of the donations it received from Chevron or any of its related entities, including Mastro's law firm.

**Ms. Wood should also disclose whether the work Alvarez & Marsal has performed for Chevron involves the company's campaign to evade its Ecuador liability.

Ms. Wood also should explain why she – the person at NOW with ties to Chevron -- signed the legal brief alone. We are not familiar with the practice of a Board Chair writing a legal brief for her own non-profit organization when that organization has a staff of lawyers assigned to do that work.

Chevron has a long history of trying to “donate” to organizations so it can garner support that it would never receive organically. An attempt by the company to use one of its law firms in Canada to submit a "friend of the court brief" on a so-called "pro bono" basis recently backfired.  See here for background.

The last time we looked, helping an oil major attack impoverished women in developing countries was not part of NOW’s mission. Nor is failing to disclose conflicts of interest to federal courts.

Legal Momentum and its Board Chair have some explaining to do. NOW is a good organization. It deserves better from its leadership.