Chevron’s Lobbying Effort Blasted in Politico

http://www.politico.com/news/stories/1109/29560.html

Chevron's lobby campaign backfires

By: Kenneth P. Vogel November 16, 2009 04:58 AM EST

Facing the possibility of a $27 billion pollution judgment against it in an Ecuadorean court, Chevron launched an aggressive lobbying and public relations campaign to try to prevent the judgment as well as reverse a deeply damaging story line. Chevron's tactics — ranging from quietly trying to wield U.S. trade policy to compel Ecuador's government to squelch the case, to producing a pseudo-news report casting the company as the victim of a corrupt Ecuadorean political system — were designed to win powerful allies in Congress and the Obama administration as well as to shape public opinion and calm shareholders. But many of the company's moves have backfired, drawing fire from environmentalists, media ethicists, state pension funds, New York's attorney general, members of Congress and even Barack Obama when he was a senator. "Their lobbying and PR efforts are really clumsy and very heavy handed, and I think that that's why they're experiencing a degree of backlash," said Rep. Linda Sanchez (D-Calif.), who is circulating the first of what she promises will be three letters to colleagues blasting what she calls the company's "misguided approach" to dealing with the case. The case stems from a class action suit brought by well-connected U.S. trial lawyers on behalf of 30,000 Ecuadoreans alleging that from 1964 to 1990, Texaco — which was purchased by Chevron in 2001 — dumped billions of gallons of toxic waste into Ecuador's Amazon rain forest, leaving behind an unprecedented environmental and public health disaster including a wave of cancers, birth defects and miscarriages. Chevron has been pushing the U.S. government to revise Ecuador's trade preferences since soon after the lawsuit was filed in Ecuador in 2003 (it originally had been in U.S. federal court in 1993). But with a years-long trial in a tiny courtroom in the Ecuadorean rain forest expected to culminate in a ruling early next year, Chevron has turned up the heat, arguing that it can't get a fair trial in Ecuador, an assertion that Sanchez and other Chevron critics point out seems to conflict with the company's previous efforts to move the trial from U.S. courts to Ecuador. In part, Chevron wants the office of U.S. Trade Representative Ron Kirk, as well as Congress, to revoke the preferential treatment Ecuador gets for its oil exports under the 1991 Andean Trade Preferences Act, unless the country enforces an agreement it entered into with Texaco in the mid-1990s, under which the company paid for a three-year, $40 million cleanup and was relieved of liability. The plaintiffs contend that Chevron botched the cleanup, but if the court were to recognize the agreement, it could essentially end the suit. "When a government is in violation of its contractual obligations to a company, there are only a few avenues a company has to seek resolution," Chevron spokesman Kent Robertson said in explaining his firm's lobbying over the trade preferences. "If we were able to call a timeout and make the lawsuit disappear, then this entire issue disappears," he added. Chevron says its lobbying campaign — which has included more than $1.6 million in fees this year to a bipartisan roster of Washington heavyweights including Democrats Mickey Kantor, a former U.S. trade representative; Mack McLarty, a former White House chief of staff; and former Sen. John Breaux (D-La.); as well as big-time GOP bundler Wayne Berman — is not at all unusual. Advocates for the plaintiffs, whose suit is financed by a Philadelphia law firm, have rallied their own impressive response in Washington. Led by Steven Donziger, a New York-based lawyer who was a Harvard Law School classmate of Obama, it includes Democratic fundraiser and lobbyist Ben Barnes; Tom Downey, a former Democratic congressman who is married to Obama climate czar Carol Browner and who recently registered to lobby Congress for Donziger; and public relations consultant Karen Hinton. The team has helped persuade a number of influential members of Congress to sign on to letters urging Kirk to reject Chevron's efforts.

In 2006, after multiple visits from Donziger, then-Sen. Obama joined with Sen. Patrick Leahy (D-Vt.) in signing a letter to then-U.S. Trade Representative Rob Portman, asking him "not to interfere in the Chevron case" and asserting that the Ecuadoreans "deserve their day in court." Robertson rejected the suggestion that the company's lobbying had backfired, pointing to a report Obama transmitted to Congress this summer that allowed the preferences to continue but referenced Chevron's concerns about the trial, including the company's allegations of interference by Ecuadorean officials up to and including President Rafael Correa. In an interview, Sanchez, who will testify Tuesday at a hearing her House Ways and Means subcommittee is scheduled to hold on free trade agreements, said Chevron is "trying to leverage our trade policy in order to get a lawsuit dismissed that is currently pending before the Ecuadorean court. It is a way of trying to undermine the rule of law, and I just find that completely abhorrent. It's shocking." This summer, Chevron thought it had made major progress toward proving its point that it could not receive a fair trial in Ecuador, when it revealed that it had obtained videos — purportedly taped secretly by a pair of whistleblowers using recorders implanted in watches and pens — that the company said exposed a bribery scheme in the case involving Ecuadorean officials and possibly the judge in the case. The company turned the recordings over to authorities in the U.S. and Ecuador and circulated excerpts of the recordings on Capitol Hill. The judge recused himself. But late last month, Hinton — who is paid by the Philadelphia law firm financing the suit to advocate on behalf of a nonprofit called the Amazon Defense Coalition — released a report revealing that the American who helped make the recordings was a convicted drug trafficker, while his Ecuadorean partner was a Chevron contractor. Robertson called the report "character assignation" and said it "doesn't change what was caught on film. We have a judge who is corrupt. … We're not measuring the release of the videos as success or failure." He did count as a success, though, the fact that Chevron shareholders in May, after a letter-writing campaign by the company, voted down a resolution citing the lawsuit and calling on the company to examine whether it complies with host country laws and environmental regulations. Nonetheless, state pension funds that hold a combined $1 billion in Chevron shares have expressed concern about how the company plans to handle a potentially huge adverse judgment in the case. And in a May letter demanding more information from Chevron, New York Attorney General Andrew Cuomo said he had recently "received complaints regarding Chevron's disclosures of the potential litigation risks and Chevron's characterization of available legal defenses." Chevron also got dinged for a curious PR effort back in April, when — after catching wind that CBS's "60 Minutes" was preparing a damaging report about its handling of the Ecuador case — it released a video it paid for featuring former CNN reporter Gene Randall delivering what looked like a news report giving Chevron's side of the story.

Posted on YouTube and the company's website and bearing the logo "Gene Randall reporting," the report was produced with help from the conservative Beltway consulting firm CRC Public Relations. It cast Ecuador's politicians as out to get Chevron and blamed the pollution on Ecuador's state-owned oil company, which took over Texaco's operations. Columbia Journalism Review assailed the report as "deceptive" and posited that it "might be unprecedented for how it blurred the line between public relations and journalism." Chevron's Robertson said Hinton and the lawyers in the case are "trying to take Chevron's reputation hostage and to ransom it back to us" for a settlement. "So getting our side of the story out there is important." Robertson also said Hinton and her allies are in a bit of a "glass houses situation" when it comes to alleging sneaky techniques. He pointed out that Hinton's group paid a private investigator to expose the background of the video maker, that a group linked to Hinton's issued press releases insinuating that the murder of a brother of one of the plaintiff's lawyers may be linked to the case (though the lawyer initially told the police otherwise) and that Hinton's own husband, Howard Glaser, a financial services industry analyst, late last month posted an item bashing Chevron on The Huffington Post — to which he is a contributor — without noting their marriage. Hinton asserted her side's tactics have been above board, adding that, though "no one knows who murdered [the lawyer's] brother," the killing came at a time when the lawyer "and other members of the plaintiffs' legal team had received a number of anonymous death threats connected to the work on the case." Meanwhile, even the addendum Hinton's husband posted at the request of Chevron noting his wife's relationship to the case somehow seemed to ricochet against Chevron. "My spouse works with the indigenous people of Ecuador who are the plaintiffs in the lawsuit against Chevron for the massive pollution the company left behind in the rain forest," he wrote. "While Chevron conducts a multimillion-dollar media spin campaign to paint themselves as the environmental 'good guys,' said spouse working out of her house with her two cats and cell phone appears to have gotten under Chevron's corporate skin."

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Twenty-Six Members of Congress Ask USTR to Reject Chevron Interference in Landmark Ecuador Legal Case

House Members Express "Concern" About Oil Giant's Effort to Use Trade Policy to Deny Due Process in Environmental Lawsuit

WASHINGTON--(BUSINESS WIRE)--Chevron has been dealt a major setback in the Congress as more than two dozen representatives, led by Rep. Linda Sanchez and including powerful senior members, have signed a letter urging that the United States Trade Representative reject efforts by the oil giant to cancel Ecuador's trade preferences. Chevron has pressured the USTR and Congress for years to revoke or curtail Ecuador's preferences in retaliation for a lawsuit brought by 30,000 Ecuadorian citizens alleging that Chevron dumped billions of gallons of toxic waste into the rainforest over a period of more than 20 years.

Separately, a one-year extension of the trade preferences for Ecuador were approved in the House on Dec. 14 on a voice vote – the fourth consecutive year Chevron's lobbying effort against Ecuador appears to have failed. The Senate is expected to formally approve the measure by the end of the year.

The letter to the USTR, sent December 15, expresses concern about Chevron's efforts to influence a private litigation which originally was filed in 1993 in U.S. federal court by several Ecuadorian indigenous tribes and farmer communities, but was sent to Ecuador at Chevron's request in 2002.

"We urge you to reject Chevron's request and reaffirm that U.S. trade agreements will not be used as leverage to interfere in private claims progressing through Ecuador's legal process," the representatives wrote in the letter.

Among the 26 Members taking this strong stand with Rep. Sanchez were: the Chief Democratic Deputy Whip and Vice-Chair of the Energy and Commerce Committee's Trade Subcommittee, Rep. Jan Schakowsky (D-IL); the Chairman of the Human Rights Subcommittee of the Foreign Affairs Committee, Rep. William Delahunt (D-MA); eight Members of the Ways & Means Committee, including the chairman of its Oversight Subcommittee, Rep. John Lewis (D-GA); and eight members of the Appropriations Committee, three of whom also oversee State Department matters and Foreign Operations. Judiciary and Rules Committee Members also were among those lending their support.

Other members signing the letter were Reps.: Lloyd Doggett (D-TX), James McGovern (D-MA), Marcy Kaptur (D-OH), Earl Blumenauer (D-OR), Danny Davis (D-IL), Sam Farr (D-CA), Steve Israel (D-NY), Raul Grijalva (D-AZ), Brian Higgins (D-NY), Phil Hare (D-IL), Hank Johnson (D-GA), Barbara Lee (D-CA), Betty McCollum (D-MN), Michael Michaud (D-ME), Jim McDermott (D-WA), James Moran (D-VA), Eleanor Holmes Norton (D-DC), Mike Quigley (D-IL), John Olver (D-MA), Lucille Roybal-Allard (D-CA), Betty Sutton (D-OH), and Fortney "Pete" Stark (D-CA).

Chevron is charged in the lawsuit with dumping more than 18 billion gallons of toxic waste into Amazon waterways and abandoning more than 900 unlined waste pits when it operated a large oil concession in Ecuador's Amazon from 1964 to 1990. A team of independent, court-appointed experts has estimated that at least 1,401 individuals have died from cancer related to exposure to the contamination and determined that damages could reach as high as $27.3 billion, according to a 4,000-page report turned over to the court last year.

The members of Congress write: "We do not prejudge the outcome of the case, nor do we take a position on the litigation. We do believe, however, that tens of thousands of indigenous residents of Ecuador who have brought this case deserve their day in court. We further believe that the USTR should not interfere in an ongoing judicial matter, particularly when this case involves environmental, health, and human rights issues that have a regional, and even global, importance."

Even though Chevron filed 14 expert affidavits in U.S. federal court praising Ecuador's court system to get the case transferred, once the evidence in the Ecuador trial pointed to the company's culpability it began a lobbying campaign in Washington to have Ecuador's preferences canceled. Chevron's lobbyists have made misleading assertions to the Congress that the company was granted a release from claims after a limited environmental clean-up in the mid-1990s, even though the release does not apply to the private claims in the lawsuit and the clean-up itself was fraudulent, according to the plaintiffs.

The ultimate goal of Chevron's Washington lobbying campaign was to pressure Ecuador's President, Rafael Correa, to interfere in his country's judiciary and quash the case as a way to maintain more than 300,000 jobs in Ecuador that are dependent on the preferences, according to Steven Donziger, an American legal advisor to the plaintiffs in the legal case.

"Chevron was trying to pressure Ecuador's President to violate his own Constitution and interfere in a private litigation to benefit the company in its battle with indigenous groups decimated by Chevron's pollution," said Donziger.

Chevron's lobbying campaign has sparked strong reactions across Capitol Hill and in the media.

On November 17, in testimony before the trade subcommittee of the Ways and Means Committee, Rep. Sanchez called Chevron's lobbying "extortion" and said, "Apparently, if it can't get the outcome it wants from the Ecuadorian court system, Chevron will use the US government to deny trade benefits until Ecuador cries uncle."

A recent editorial in the Los Angeles Times editorial blasted Chevron, noting that "If ... Chevron has its way, Congress will instead punish Ecuador because its government refuses to halt a private lawsuit against the oil giant.... to force a favorable outcome in a private claim would justly generate international outrage."

In 2006, then-Senator Barack Obama and Sen. Patrick Leahy wrote a similar letter to the USTR asking it to reject Chevron's petition, which it did.

Experts believe the Ecuador contamination – which covers an area the size of Rhode Island -- is the worst oil-related disaster on earth and would take at least two decades to properly clean. A final judgment in the case is expected next year.

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Chevron’s Lobbying Effort Blasted in Politico Monday

http://www.politico.com/news/stories/1109/29560.html

Chevron's lobby campaign backfires
By: Kenneth P. Vogel
November 16, 2009 04:58 AM EST

Facing the possibility of a $27 billion pollution judgment against it in an Ecuadorean court, Chevron launched an aggressive lobbying and public relations campaign to try to prevent the judgment as well as reverse a deeply damaging story line.

Chevron's tactics — ranging from quietly trying to wield U.S. trade policy to compel Ecuador's government to squelch the case, to producing a pseudo-news report casting the company as the victim of a corrupt Ecuadorean political system — were designed to win powerful allies in Congress and the Obama administration as well as to shape public opinion and calm shareholders.

But many of the company's moves have backfired, drawing fire from environmentalists, media ethicists, state pension funds, New York's attorney general, members of Congress and even Barack Obama when he was a senator.

"Their lobbying and PR efforts are really clumsy and very heavy handed, and I think that that's why they're experiencing a degree of backlash," said Rep. Linda Sanchez (D-Calif.), who is circulating the first of what she promises will be three letters to colleagues blasting what she calls the company's "misguided approach" to dealing with the case.

The case stems from a class action suit brought by well-connected U.S. trial lawyers on behalf of 30,000 Ecuadoreans alleging that from 1964 to 1990, Texaco — which was purchased by Chevron in 2001 — dumped billions of gallons of toxic waste into Ecuador's Amazon rain forest, leaving behind an unprecedented environmental and public health disaster including a wave of cancers, birth defects and miscarriages.

Chevron has been pushing the U.S. government to revise Ecuador's trade preferences since soon after the lawsuit was filed in Ecuador in 2003 (it originally had been in U.S. federal court in 1993). But with a years-long trial in a tiny courtroom in the Ecuadorean rain forest expected to culminate in a ruling early next year, Chevron has turned up the heat, arguing that it can't get a fair trial in Ecuador, an assertion that Sanchez and other Chevron critics point out seems to conflict with the company's previous efforts to move the trial from U.S. courts to Ecuador.

In part, Chevron wants the office of U.S. Trade Representative Ron Kirk, as well as Congress, to revoke the preferential treatment Ecuador gets for its oil exports under the 1991 Andean Trade Preferences Act, unless the country enforces an agreement it entered into with Texaco in the mid-1990s, under which the company paid for a three-year, $40 million cleanup and was relieved of liability. The plaintiffs contend that Chevron botched the cleanup, but if the court were to recognize the agreement, it could essentially end the suit.

"When a government is in violation of its contractual obligations to a company, there are only a few avenues a company has to seek resolution," Chevron spokesman Kent Robertson said in explaining his firm's lobbying over the trade preferences. "If we were able to call a timeout and make the lawsuit disappear, then this entire issue disappears," he added.

Chevron says its lobbying campaign — which has included more than $1.6 million in fees this year to a bipartisan roster of Washington heavyweights including Democrats Mickey Kantor, a former U.S. trade representative; Mack McLarty, a former White House chief of staff; and former Sen. John Breaux (D-La.); as well as big-time GOP bundler Wayne Berman — is not at all unusual.

Advocates for the plaintiffs, whose suit is financed by a Philadelphia law firm, have rallied their own impressive response in Washington. Led by Steven Donziger, a New York-based lawyer who was a Harvard Law School classmate of Obama, it includes Democratic fundraiser and lobbyist Ben Barnes; Tom Downey, a former Democratic congressman who is married to Obama climate czar Carol Browner and who recently registered to lobby Congress for Donziger; and public relations consultant Karen Hinton. The team has helped persuade a number of influential members of Congress to sign on to letters urging Kirk to reject Chevron's efforts.

In 2006, after multiple visits from Donziger, then-Sen. Obama joined with Sen. Patrick Leahy (D-Vt.) in signing a letter to then-U.S. Trade Representative Rob Portman, asking him "not to interfere in the Chevron case" and asserting that the Ecuadoreans "deserve their day in court."

Robertson rejected the suggestion that the company's lobbying had backfired, pointing to a report Obama transmitted to Congress this summer that allowed the preferences to continue but referenced Chevron's concerns about the trial, including the company's allegations of interference by Ecuadorean officials up to and including President Rafael Correa.

In an interview, Sanchez, who will testify Tuesday at a hearing her House Ways and Means subcommittee is scheduled to hold on free trade agreements, said Chevron is "trying to leverage our trade policy in order to get a lawsuit dismissed that is currently pending before the Ecuadorean court. It is a way of trying to undermine the rule of law, and I just find that completely abhorrent. It's shocking."

This summer, Chevron thought it had made major progress toward proving its point that it could not receive a fair trial in Ecuador, when it revealed that it had obtained videos — purportedly taped secretly by a pair of whistleblowers using recorders implanted in watches and pens — that the company said exposed a bribery scheme in the case involving Ecuadorean officials and possibly the judge in the case. The company turned the recordings over to authorities in the U.S. and Ecuador and circulated excerpts of the recordings on Capitol Hill. The judge recused himself.

But late last month, Hinton — who is paid by the Philadelphia law firm financing the suit to advocate on behalf of a nonprofit called the Amazon Defense Coalition — released a report revealing that the American who helped make the recordings was a convicted drug trafficker, while his Ecuadorean partner was a Chevron contractor.

Robertson called the report "character assignation" and said it "doesn't change what was caught on film. We have a judge who is corrupt. … We're not measuring the release of the videos as success or failure."

He did count as a success, though, the fact that Chevron shareholders in May, after a letter-writing campaign by the company, voted down a resolution citing the lawsuit and calling on the company to examine whether it complies with host country laws and environmental regulations.

Nonetheless, state pension funds that hold a combined $1 billion in Chevron shares have expressed concern about how the company plans to handle a potentially huge adverse judgment in the case. And in a May letter demanding more information from Chevron, New York Attorney General Andrew Cuomo said he had recently "received complaints regarding Chevron's disclosures of the potential litigation risks and Chevron's characterization of available legal defenses."

Chevron also got dinged for a curious PR effort back in April, when — after catching wind that CBS's "60 Minutes" was preparing a damaging report about its handling of the Ecuador case — it released a video it paid for featuring former CNN reporter Gene Randall delivering what looked like a news report giving Chevron's side of the story.

Posted on YouTube and the company's website and bearing the logo "Gene Randall reporting," the report was produced with help from the conservative Beltway consulting firm CRC Public Relations. It cast Ecuador's politicians as out to get Chevron and blamed the pollution on Ecuador's state-owned oil company, which took over Texaco's operations.

Columbia Journalism Review assailed the report as "deceptive" and posited that it "might be unprecedented for how it blurred the line between public relations and journalism."

Chevron's Robertson said Hinton and the lawyers in the case are "trying to take Chevron's reputation hostage and to ransom it back to us" for a settlement. "So getting our side of the story out there is important."

Robertson also said Hinton and her allies are in a bit of a "glass houses situation" when it comes to alleging sneaky techniques. He pointed out that Hinton's group paid a private investigator to expose the background of the video maker, that a group linked to Hinton's issued press releases insinuating that the murder of a brother of one of the plaintiff's lawyers may be linked to the case (though the lawyer initially told the police otherwise) and that Hinton's own husband, Howard Glaser, a financial services industry analyst, late last month posted an item bashing Chevron on The Huffington Post — to which he is a contributor — without noting their marriage.

Hinton asserted her side's tactics have been above board, adding that, though "no one knows who murdered [the lawyer's] brother," the killing came at a time when the lawyer "and other members of the plaintiffs' legal team had received a number of anonymous death threats connected to the work on the case."

Meanwhile, even the addendum Hinton's husband posted at the request of Chevron noting his wife's relationship to the case somehow seemed to ricochet against Chevron.

"My spouse works with the indigenous people of Ecuador who are the plaintiffs in the lawsuit against Chevron for the massive pollution the company left behind in the rain forest," he wrote. "While Chevron conducts a multimillion-dollar media spin campaign to paint themselves as the environmental 'good guys,' said spouse working out of her house with her two cats and cell phone appears to have gotten under Chevron's corporate skin."

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