Wednesday, January 27, 2010

Chevron’s Lobbying Effort Blasted in Politico

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."

Monday, January 18, 2010

Chevron Using “Every Trick In The Book” To Evade Justice in Ecuador

Chevron's attempt to continually play its games to evade any semblance of justice in Ecuador is blasted in this post ("Ecuador Class Action Plaintiffs Strike Back at Chevron's Cynical Game of Musical Jurisdictions") from the International Business Law Advisor. Read on for Santiago Cueto's take on Chevron's activities:

The seventeen-year war between Ecuador's 30,000 class plaintiffs against oil giant Chevron continues its global odyssey, as the oil giant pulls out every trick in the book to avoid an impending $27 Billion judgment against it in Ecuador for contaminating an immense portion of rainforest and devastating the local population.

Chevron first fought successfully to force plaintiffs to try their lawsuit in Ecuador rather than U.S. courts. Then it sought (unsuccessfully) to win indemnification in U.S. courts from a possible judgment in Ecuador. And now it's filed for arbitration seven thousand miles across the Atlantic in Holland.

Chevron's latest tactical attempt to escape justice in Ecuador is consistent with its October 2007 press release, in which it promised the plaintiffs "a lifetime" of appellate and collateral litigation if they persisted in pursuing their claims.

Unfortunately for Chevron, it grossly underestimated the resolve of the class plaintiffs. As reported in The Wall Street Journal article, Chevron Plaintiffs Ask U.S. Court for Action, the People of Ecuador just filed a Petition to Stay Arbitration in United States District Court (S.D.N.Y) to enjoin Chevron from proceeding on the baseless international arbitration claim it recently filed in Holland. In December the Government of Ecuador filed its own Petition to Stay Arbitration.

As a litigator, I'm mindful that an attorney's obligation to zealously advocate his clients' interest may involve forum shopping as part of the procedural calculus, however, the obligation must be tempered with a keen understanding of what becomes abusive litigation.

Chevron's global quest for a favorable forum is a text book example of abusive litigation. To litigate a lawsuit across three continents is a cynical game of musical jurisdictions and takes corporate arrogance and the civil justice system to a new low. Isn't it time for Chevron to take a seat when the music stops in Ecuador?

What do you think?

This is the third in a series of posts discussing this extremely important case. Be sure to read Chevron Files International Arbitration Claim Against Ecuador: Forum Shopping in the Hague? and Chevron's Missteps: How Not to Handle Foreign Litigation.

Friday, January 15, 2010

Chevron Kicks Out “Runners for Human Rights” in Houston

Apparently Chevron is so hysterical about its impending legal disaster in Ecuador it has taken to infringing on free speech here in the United States. Take a look at this post from Han over at

Chevron pulls strings, kicks 'Runners for Human Rights' out of pre-Chevron Houston Marathan expo

Our friends at Rainforest Action Network (RAN) have recently joined the effort to demand justice for the people of the Ecuadorian Amazon suffering from Chevron's massive contamination of their rainforest communities. In true RAN style, their first big public initiative is smart and engaging– a handful of RAN activists are "running for human rights" in the Chevron Houston Marathon, taking place this Sunday. As part of the Chevron-sponsored (and thoroughly branded) marathon, the organizers present a big public Expo, at which the RAN runners paid for a table to distribute info about why they're running.

But at 10am this morning, before the Expo even opened, the RAN team – registered and credentialed – was threatened with arrest and kicked out of the Expo building by police. According to the RAN team, Chevron Marathon Managing Director Steven Karpas told them that "higher ups at Chevron are freaking out." And apparently, the Chevron big-wigs' "freak-out" was enough to deny the RAN team of their right to free speech and get them ejected from a building owned and operated by the city of Houston.

This is another pathetic example of Chevron throwing its weight around and resorting to dirty tactics in attempt to hide the truth from the public. Let's hope that Chevron won't be able to stop the registered runners from taking part in the marathon. And regardless, we know they'll do a great job raising awareness in Houston, with plans to unveil banners along the race route, and host a screening of the explosive documentary CRUDE in Houston. Read the full RAN press release after the jump.

RAN's press release:

For Immediate Release January 15, 2010

Contact: Brianna Cayo Cotter, Rainforest Action Network, (415) 305-1943 (in Houston)

Houston Chevron Marathon Marred by Denial of Runners' Free Speech

Runners for human rights barred from Chevron Houston Marathon Expo, threatened with arrest

Houston, TX – A team that is running for human rights in Ecuador at this Sunday's Chevron Houston Marathon was just kicked out of the marathon's Expo by Chevron Marathon Managing Director Steven Karpas. The runners had paid for a table to distribute "I'm Running for Human Rights" stickers and information about Chevron's refusal to clean up over 18 billion tons of toxic oil sludge they are responsible for in the Ecuadorean rainforest.

At approximately 10 a.m. this morning, Managing Director Steven Karpas told the Rainforest Action Network team, "higher ups at Chevron are freaking out" and threatened to arrest the peaceful runners. Police then ejected the runners from the city-owned and operated building for exercising their right to free speech.

"We are outraged that Chevron would deny marathon participants the right to run for what they believe, in our case, human rights in Ecuador," said Rainforest Action Network runner Maria Ramos. "It is sad that the Chevron Houston Marathon - which raises awareness and money for many important causes - would deny the rights of participants to appease a corporate sponsor that is clearly ashamed of its human rights record."

When asked for a reason for their ejection, Steven Karpas told the runners they were being removed for "protest activities." The Rainforest Action Network team's objective at the Expo was not to protest, disrupt the Expo or dampen other runners experience at this important race. The runners merely wanted to sit at their table and invite other runners to run with them for human rights.

While in Houston, Rainforest Action Network advocates will run in the race, unveil "Energy Shouldn't Cost Lives" banners along the race route, distribute "I'm Running for Human Rights" stickers to other runners, and host a free screening of Crude – the critically acclaimed documentary about the crisis in Ecuador – for Chevron employees and the Houston community.

Chevron is currently facing a $27.3 billion pollution judgment against the company in an Ecuadorean court over Chevron's toxic legacy in the Amazon rainforest. Just yesterday, representatives of Amazonian indigenous groups in Ecuador went to U.S. federal court in New York today to enjoin Chevron from initiating a closed-door international arbitration against Ecuador's government designed to eliminate the company's potential $27 billion liability for contaminating a huge swath of rainforest and devastating the local population.

– Han

Born and raised in Baltimore, Han Shan is a human rights and environmental justice campaigner living in New York City. He is currently serving as an organizer with the Clean Up Ecuador campaign for Amazon Watch.