Chevron General Counsel Hewitt Pate Stumbles as Ecuador Problem Balloons Out of Control

Hewitt Pate

As we blogged earlier, Chevron's continuing desperation to do anything it can to derail the potential $27.3 billion liability it faces for destroying part of Ecuador's rainforest has backfired yet again –this week the company again was caught misrepresenting key facts about the court-appointed expert who conducted a damages assessment not to the company's liking. On Tuesday, Chevron announced it had "newly discovered" evidence that the expert who conducted the damages assessment, Dr. Richard Cabrera, owns a remediation company in Ecuador that stands to benefit from a clean-up should the plaintiffs win the case.

Like so many other breathless announcements by Chevron, the company's newest "discovery" ("new" despite the fact that Chevron has filed 28 prior motions to attack Cabrera, none of which has been successful) has turned out to be worth less than the paper that its press releases were printed on.

It turns out that far from a conflict of interest, Dr. Cabrera explicitly disclosed to the court that he was involved in remediation in Ecuador – a qualification that was properly cited by the court as one of the reasons why he was accepted as the independent expert in the first place. Obviously, Dr. Cabrera would never be able to benefit from a clean-up related to a case he worked on given basic conflict of interest rules in Ecuador. But since Chevron cannot attack the technically sound evidence in the Cabrera report, which calls the company out for creating pollution that led to more than 1,400 excess cancer deaths, it tried to fabricate a distracting sideshow. For more details about Chevron's misrepresentations regarding Cabrera, see this response: http://chevrontoxico.com/assets/docs/2010-02-09-cabrera-response.pdf

The factual deficiencies of Chevron's allegations didn't stop the company from its ill-advised decision to "man up" and deploy Chevron Vice-President and General Counsel Hewitt Pate as its lead spokesman on the issue. Pate was featured prominently in Chevron's press materials and was put squarely in the middle of what should have been a low-level food fight between the long-warring parties. The fact that Pate, who is the general counsel of America's third largest company, is expending his political capital to bolster unsubstantiated allegations demonstrates how frantic the company has become about Ecuador. It also raises serious questions about the judgment of Chevron's legal department, where it seems to be a job requirement to prove your "machismo" through frontline interviews. Any other company would use a consultant or public relations firm to execute this type of messy media hit job.

So what's behind this? The answer is politics. Making up a press "event" out of facts that you misrepresent is a classic maneuver popularized by the Karl Rove School of politics. It turns out that Pate and his colleagues running the Chevron legal department all played central roles in the last Bush Administration. This is not a coincidence, as all of these individuals looked like they picked up a trick or two from Rove during their years of government service.

Chevron has a major distinction among the world's super-major oil companies: while most hire their general counsels from within their own legal department after years of service, or from prestigious outside law firms populated by lawyers experienced in the ways of the energy industry, Chevron stands alone in hiring political lawyers out of Republican Administrations. The last two general counsels for the company (Charles James and Pate) have been hand-plucked from the Bush administration's Justice Department, where they worked closely with former Attorney General John Ashcroft. James, who worked closely with Pate in Washington and hired him for Chevron, has a reputation from Washington to San Francisco as being a hard-right political ideologue.

James made the decision to hire as Chevron's deputy general counsel Jim Haynes, one of the Bush Administration "torture lawyers" under potential indictment in Spain and now unable to travel abroad for fear of arrest. While Chevron keeps Haynes swept under the rug for public image purposes, speculation on the street is that he is running the day to day in Chevron's in-house legal department. He clearly learned a lot about Chevron's conception of human rights by providing the legal justification for torture to a Rumsfeld-led Pentagon, where he served as General Counsel before being blocked by the Senate for a federal judgeship because of his infamous memo justifying waterboarding.

With these personnel moves, Chevron has elected to build a general counsel's office that is filled with right-wing lawyers who have relatively little experience in complex litigation matters. It turns out that since Chevron's legal team is led by political ideologues, the company is trying to find a political solution to a legal problem. It hires outside law firms who, to obtain Chevron's lucrative business, fall all over themselves to enable this distorted and ineffective conception of politics-as-litigation. That's why Chevron keeps stubbing its toes over Ecuador. That's why it has lost five straight times before U.S. federal courts, including before the U.S. Supreme Court, in its increasingly futile effort to get any judge anywhere to grant the company some sort of relief. That's also why Chevron's latest gambit to take the entire Ecuador matter to an international arbitration panel, without the presence of the Amazon communities, now risks getting torpedoed in U.S. federal court. The ham-fisted approach championed by James and now Pate is one reason why the Ecuador liability has ballooned out of control for Chevron and threatens about 20% of the company's market value.

Chevron must realize that the old days of using political influence to quash legal cases in far-flung countries is winding down. In Ecuador, those days are clearly over. In the United States, the method doesn't work. The fact Chevron uses its new general counsel's limited credibility to distort basic facts shows how "quaint" Chevron is compared to its industry peers, most of whom (perhaps not coincidentally) reported far better financial results last quarter. "Quaint" is how former Bush Administration lawyers such as Chevron's Haynes and Alberto Gonzales – folks who never served in the armed forces themselves -- used to describe the Geneva Conventions when justifying those "harsh interrogation tactics" that the world considered torture. Most Americans would consider such talk profoundly unpatriotic, but in Chevron's legal department that's probably what passes for typical chatter around the water cooler. That, and the excitement generated by the Sarah Palin sighting at the latest Tea Party convention.

Since lost lives don't seem to have much impact on the thinking at Chevron, how many billions of dollars will have to be garnished before Chevron's Board wakes up to this internal hazard?

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Chickens. Home. Roost.

It appears that William Haynes is probably getting familiar with those words – since it was announced today that the National Lawyers Guild San Francisco Bay Chapter (NLGSF) filed a complaint with the California State Bar against former Department of Defense General Counsel William Haynes. The complaint against Haynes, who now works for the Chevron Corporation in San Ramon, states that he "breached his duty as a lawyer and advocated for harsh tactics amounting to torture in violation of U.S. and international law … advocacy that directly lead to detainee abuses at the Guantanamo Bay and Abu Ghraib facilities." The complaint seeks to have Haynes held accountable for advising his clients (the Department of Defense) to take unlawful actions by engaging in torture by having his status as a "Registered In House Counsel" revoked – costing him his job as Chevron's deputy in-house counsel. And this is just the first wave – there is a real chance that Haynes will be called before Senator Patrick Leahy's burgeoning "Truth Commission," which could be America's very own Nuremberg trial to deal with the aftermath of the Bush wars.

This is hugely embarrassing for everyone at Chevron – but particularly for Charles James, Haynes' Bush-administration buddy who is Chevron's general counsel. James was the guy who hired Haynes when Haynes was radioactive after leaving the DoD under a cloud because of his torture connections. James made (another!) horrible judgment call in hiring Haynes, a potential war criminal, just as Chevron was facing a rising tide of human rights problems (Nigeria, Ecuador, Burma, now Cambodia) around the world. And like so many of James' other recent calls, this one is leaving him with egg on his face. It's pretty easy to imagine that the P.R. department over at Chevron is pretty pissed at James right about now for dragging their company into the same sentence as "torture" and "war criminal."

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Lay Down With Dogs and You Get Fleas

As the saying goes, good help is hard to find – so Chevron has found some bad help, and that help may be causing the company some problems in the days to come. We've already written about the controversial and ill-conceived hiring of William Haynes by Chevron (who was just described in a NY Times article as radioactive- the paper described him as searching for a job for more than a year before Chevron agreed to take him in). The Amazon Defense Coalition named a high-level public relations gun-for-hire, James Craig, who has been hired by Chevron to manipulate, delay, and obstruct the trial in Ecuador, calling Craig a "hit man" working for the corporation. According to the organization's press release:

James Craig, an American public relations official with Chevron affiliated with the J. Walter Thompson advertising agency, for undermining a long-running environmental trial in Ecuador where the oil giant faces a $27 billion liability for dumping toxic waste into the rainforest.

"Chevron is using James Craig as a hit man to sabotage a trial in Ecuador because it expects to lose and be on the hook for billions of dollars," said Luis Yanza, a representative for the dozens of communities and indigenous groups that brought the lawsuit.

"James Craig's behavior is unethical and shows a profound disregard for the law," added Yanza, a recent winner of the Goldman Environmental Award, considered the "Nobel" prize of the environmental movement.

The interesting thing is that Mr. Craig is apparently no stranger to working for reckless and controversial companies – a quick Google search found that Craig's last position as a p.r. mercenary was with the infamous Refco, a financial trading company that collapsed in October 2005 costing investors hundreds of millions of dollars, long before imploding financial institutions was chic. James Craig helmed the public relations ship throughout Refco's collapse, working to hide the truth from investors and leading to the massive losses.

When you add in the Darth Vader-esque hiring of William Haynes, you've got an interesting human resources strategy - apparently Chevron tries to hire the most controversial guys around, hoping that their wealth of knowledge of the seedy underside of the world will help Chevron intervene in the trial.

But is hiring these mercenaries worth it? The Amazon Defense Coalition has indicated that complaints are being filed against Craig for interfering in Ecuador's judicial process. Haynes' "War On Terror" excesses inside of the Department of Defense may have him drawn up before Senator Leahy's burgeoning "Truth Commission" committee, and have him branded as a war criminal at home and abroad (better cancel that European vacation, Mr. Haynes…). And all of this gets imputed onto Chevron, damaging their public image, forcing the company to defend these employees, and making it harder for the company to work moving forward – these rogue operators may be causing more problems than they're solving.

I guess Chevron is probably used to having to deal with the fallout of hiring the radioactive and controversial – after all, as the saying goes, if you lay with dogs, you get fleas.

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WTF is going on? Is Chevron just evil?

News out of San Francisco today: Chevron, which posted a record profit of $23.8 billion in 2008 is suing a group of Nigerian villagers for almost $500,000 in legal costs resulting from a embarrassing legal case (Bowoto v. Chevron) that Chevron narrowly survived this past November. This was the legal case in which a group of unarmed Nigerian villagers were shot and killed during the oil-derrick version of a sit-in protest. The villagers sought to hold Chevron responsible since it paid for, housed, fed, and directed the Nigerian military forces who shot the protestors. While Chevron prevailed during the trial, the entire episode was seen as a public relations disaster as a high-profile human rights trial took place just miles from Chevron's San Ramon, CA headquarters, further tarnishing Chevron's already shoddy image. Take a look at Dan Firger's blog on the Huffington Post - Landmark Human Rights Trial Bowoto v. Chevron Set To Begin October 27 for a short recap.

Well, now Chevron has added insult to injury, seeking $500,000 from the villagers who sued the company. So, people on Chevron's payroll literally shot the villagers, and now Chevron wants the villagers to pay the corporation for daring to take the company to trial over the shootings. Now, I don't have a ton of experience in this area, but I was always of the mindset that if you shoot someone its bad form to ask them to pay for the bullet. I mean damn, is Dick Cheney running Chevron now? Who shoots someone and then tries to make them pay for the fact that you shot them? And even Cheney only made his friend apologize for getting shot...I mean, this just reeks of heartless evil. According to the L.A. Times:

Laura Livoti, founder of Bay Area-based Justice in Nigeria Now, said the $485,000 sought by Chevron, California's largest company, would constitute a fortune for the Nigerians. That sum would be enough to sustain at least four villages in the Niger Delta for a year, she said.

"Chevron's attempt to squeeze nearly half a million dollars out of poor villagers who don't even have access to clean drinking water and who had wanted jobs with the company is a dramatic illustration of Chevron's heartlessness," she said.

In its claim, Chevron is seeking reimbursement from 19 plaintiffs and 30 former plaintiffs who dropped out of the case before it went to trial. At least a dozen of those named are children, Livoti said.

So this is perfect: Chevron is now suing children for enough money to support their entire village (and their neighbors!) for an entire year. Suing children? What, were all the puppies and kittens already claimed by Halliburton? I mean, this is getting almost comic book supervillain-y - with the lawsuits against children after Chevron shot their parents - did Lex Luthor take over this company?

And it's not like Chevron needs the money. Chevron made $23.8 billion profit last year. That means Chevron was making $65.2 million per day, $2.7 million per hour, and $45,251.56 per minute. At that rate it would take Chevron all of 10.72 minutes to make the $485,000 they're suing the villagers for. And these numbers are based on Chevron's profits, not their revenues, even though the $485,000 Chevron is seeking would all be tax-deductible business expenses anyway, meaning it would probably take the company about 5 minutes to generate that revenue. But Chevron isn't one to pass up an opportunity to sue children and the downtrodden, so here we are.

Even if you buy Chevron's argument that they're just trying to dissuade future lawsuits like the Bowoto case, the whole idea of suing Nigerian villagers and children is just horrible. Don't they have a single public relations professional in San Ramon? I have to imagine that a company posting $23.8b profits can afford to hire someone who is savvy enough to say "um guys, maybe we shouldn't shoot unarmed and impoverished villagers. And if we do, let's just sort of pretend it didn't happen, say we're sorry and we didn't mean to and hope the bad p.r. goes away – let's not go sue the people we shot for more money than any of them will ever make in their lifetimes. Ok guys? Because it looks really bad when a company making billions and billions of dollars is suing poor people because they stood up to us. Ok? And, by the way, can someone open a window? It's beginning to smell like sulfur in here again…"

But I guess no one in Chevron cares. Or maybe they just can't see the folly of their actions through all the smoke from the fire and brimstone filling up their big offices.

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William J. Haynes: What Was Chevron Thinking?

John Geluardi - author of The Snitch blog over at SF Weekly - put out a post last week about William Haynes, calling him "Chevron's Prince of Darkness". Apparently Haynes – who was recently hired by Chevron to serve as their chief corporate counsel - was just called out in a Senate Arms Services Committee (SASC) bipartisan investigation that found Haynes' actions while working for the Pentagon reviewing and approving of torture "deeply disturbing". Geluardi describes the hiring:

The Chevron Corporation has exposed its pestilent underbelly by hiring William J. Haynes II, a Department of Defense attorney who compiled lists of violent interrogation techniques for shadowy U.S. detention centers… In 2002 Haynes recommended a menu of 15 dehumanizing interrogation techniques to Secretary of Defense Donald Rumsfeld that included stress positions, removal of clothing, light deprivation and exploitation of phobias such as the "Arab fear of dogs." Rumsfeld eagerly signed off on Haynes' recommendations and dispatched a memo to Guantanamo Bay and other detention centers so they could be used on "enemy combatants," according to the senate investigative report.

The brass of nearly every branch of the U.S. Military vigorously opposed Haynes' ghoulish techniques. The opposition was so great, the list in part spurred Bush Administration lawyers to justify certain techniques by redefining the definition of torture so the CIA would be free to use nasty little methods such as waterboarding, a technique that simulates drowning. The method was invented by the syphilitic fiends who conceived the Spanish Inquisition (waterboarding was not on Haynes' list).

(More after the jump)

And it's not just Geluardi. Andrew S. Ross of the San Francisco Chronicle covered the story, in an article entitled "Report rips ex-Defense counsel, now at Chevron". Ross noted that the bipartisan report was signed by prominent Senators from both parties (including John McCain) and that when asked, Haynes defended his recommendations regarding torture. Editorials were run by the New York Times and the Miami Herald calling Haynes' advocacy of torture "deeply harmful" to the U.S.' image and urging that Haynes and the others who authorized the torture to be held accountable.

And all of this leads to the inevitable question: given all of Chevron's human rights problems around the world, why in the world would they hire William Haynes when he was so radioactive? For a company embarking in a multi-million dollar "human energy" public relations campaign, you would think they would have more sense than to hire one of the only lawyers in America who is under potential threat of facing charges as a war criminal.

But maybe they just don't care – or maybe they even see Haynes' willingness to advocate torturing prisoners as a plus. As Dugan over at Oil Watchdog stated, "with Chevron embroiled in human-rights lawsuits over oilfield pollution in Ecuador, and facing possible appeal of its exoneration in a Nigerian shooting case, Haynes (who walked straight into Chevron after leaving government in February), seems suited to the job."

Still, it seems unbelievable that Chevron really went out and paid big money to hire a guy under investigation by the Senate for human rights violations. After all, there had to be hundreds of highly competent corporate counsels around who wouldn't be putting "advocated and designed torture" as their "previous experience".

So what was Chevron thinking? Was it just that Darth Vader was unavailable?

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