Friday, December 30, 2011

Chevron's Silence Screams Guilt

Again Oil Giant Fails to Defend Misconduct in Ecuador Case

Once again, Chevron's silence tells us more about the company's fraudulent misconduct in Ecuador than do its whitewashed
public statements.

After refusing to answer questions about offering what amounts to a $1 billion bribe to the government of Ecuador to help the company kill the $18 billion lawsuit, Chevron's lawyers refused to address allegations of doctoring a "Judicial Inspection Playbook" to hide its fraudulent testing practices at contaminated well sites during the trial. See this press release for details about the playbook, which Chevron used to instruct its testers how to collect soil and water samples.

In a court brief filed with the Southern District Court of New York in a related matter, Chevron refused to address the Ecuadorians' charges that its environmental consulting firm, GSI Environmental, sanitized the playbook document before giving it to two academic experts who later wrote a report lauding the oil giant's sampling protocol. The two experts are Dr. Pedro J. Alvarez currently the chair of the Department of Civil and Environmental Engineering at Rice University, and Dr. Douglas Mackay, an adjunct professor at the University of California, Davis.

GSI removed all directives ordering the testers to collect only "clean" samples from spots identified during "pre-inspections" that took place before the official judicial inspections. They also removed comments about the local residents drinking, cooking and bathing with water from the nearby streams and rivers. See this document that compares the original playbook with the altered one.

Not surprisingly, Chevron regularly found no contamination at sites that looked like this.

If there's an explanation for this whitewash, we're betting the two academic experts would like to know to ensure their integrity doesn't come into question.

But Chevron is suddenly very quiet.

Friday, December 23, 2011

Crafty Craig Doesn’t Deny Chevron’s Bribe Offer to Ecuador to Make Lawsuit Disappear

Yesterday a Miami Herald reporter asked James Craig, Chevron’s man in Ecuador, about reports that the oil giant has, in essence, offered a $1 billion bribe to Ecuador’s government to kill the $18 billion lawsuit brought by indigenous tribes.

Instead of immediately denying the bribe, Craig demurred and changed the subject – a classic PR move when you have something to hide.

The Miami Herald reported: “Chevron Spokesman James Craig would not address the issue directly, but said the company ‘takes no pleasure in litigation and has tried to resolve this case in the past. However, it is difficult to negotiate with perpetrators of fraud.’”

Craig must have forgotten that Chevron has accused everybody in Ecuador of fraud, including President Correa and some of the government officials Chevron met with to “negotiate” a $500 million “donation” to the Yasuni environmental project and another $500 million “donation” for contamination cleanup.

Read the entire story HERE

Thursday, December 22, 2011

Chevron Tries To Buy A Way Out Of $18 Billion Liability In Ecuador

Blog About Cozy Relationship Between Chevron and Government Appointee Creates Stir in Ecuador

Looks like Chevron is trying to buy its way out of the $18 billion liability it faces in Ecuador. Mitch Anderson of Amazon Watch writes in Huffington Post about Chevron's latest scam to escape justice. Below is his blog, Crude Politics: Is Chevron Involved in a Billion Dollar Bait-and-Switch in Ecuador. Anderson writes that Chevron is trying to work its connections with certain rogue officials in Ecuador's government as a way to escape its $18 billion liability for polluting the country's rainforest. We are investigating the information in the blog and will report any findings in the coming days.

Crude Politics: Is Chevron Involved in a Billion Dollar Bait-and-Switch in Ecuador?

As the Yasuni-ITT Initiative deadline approaches, did its chief negotiator make a deal with the devil?

With Chevron running out of legal options in its attempt to avoid its $18 billion liability in Ecuador over egregious environmental crimes and rights abuses, the company may have turned to its longtime government insider Ivonne Baki to help it out of a multibillion dollar jam, taking corporate malfeasance and greenwashing to a whole new level.

Baki is the head of Ecuador's Yasuni-ITT Initiative, the pioneer proposal that has captured the world's imagination by seeking to keep close to one billion barrels of crude permanently underground in exchange for payment. The ITT fields (Ishpingo, Tambococha, Tiputini) sit underneath the Yasuni National Park, a UNESCO World Biosphere Reserve widely considered to be one of the most bio-diverse places on the planet. The Park is also home to two nomadic indigenous groups living in voluntary isolation.

President Rafael Correa set Dec. 31, 2011 as the deadline to obtain $100 million -- a down payment that would give the government more time to raise the $3.6 billion ($350 million annually over 10 years) it needs to offset forgone revenues for leaving the oil untouched. If the money isn't raised, drilling would ensue.

But there hasn't exactly been a stampede of donors knocking down Ecuador's door. The government has fought an uphill battle since the proposal's inception in 2007. In a recent interview with Al Jazeera, Baki admitted that the world financial crisis has taken a toll on donor government enthusiasm. Additional challenges to Yasuni fundraising have included lingering concerns about Ecuador's history of political instability, the proposal's initial lack of political and financial guarantees, and a reluctance from industrialized countries to donate to forest protection without receiving carbon offset credits.

With the clock ticking -- and both the proposal's and Baki's future on the line -- Baki told the Financial Times in a Nov. 28 article that the Initiative donation total was $70 million, the bulk of which was a $35 million debt cancellation deal with Italy. She went on to declare that, "I think in the next month we are going to have more than $100 million."

However, the Yasuni Trust Fund administered by UNDP shows a mere $2 million in actual funds. Unfazed, Baki affirmed to the Miami Herald and several Spanish language newspapers on Dec. 5 that the $100 million mark had been met, saying an "appeal for private sector donations, has been paying off." Another article describes the unnamed private donations as "flooding in." Correa has yet to make an official announcement on the fate of the proposal and whether the fundraising goal has indeed been met.

If one takes Ms. Baki at her word that $70 million is at least pledged (though not physically in the bank), the question is: where did the additional $30 million come from in a week's time?

Sources close to the project have confirmed that meetings between Baki and Chevron regarding a possible "donation" to the Yasuni-ITT initiative have occurred, according to environmental organization Amazon Watch, who has been working for over a decade to hold Chevron accountable for a massive environmental disaster in Ecuador. Word on the street is that Chevron authorized Baki to propose the idea of a $500 million "donation" to the initiative in exchange for quashing the case. Though a very handsome quid pro quo, it's a drop in the bucket if this subterfuge helps the company thwart the $18 billion legal case.

Sound far-fetched? This April 2008 cable courtesy of Wikileaks between the U.S. Ambassador in Quito and the State Department shows that Chevron has been plotting something similar for years:

"Meanwhile, Chevron had begun to quietly explore with senior GOE officials whether it could implement a series of social projects in the concession area in exchange for GOE support for ending the case, but now that the expert has released a huge estimate for alleged damage, it might be hard for the GOE to go that route, even if it has the ability to bring the case to a close."

"Given Chevron's toxic legacy and the debt it owes the people and rainforests of Ecuador, the fact that this 'bribe' is even on the table is an aberration of justice," said Kevin Koenig, Ecuador program coordinator for Amazon Watch. "This is a multi-billion dollar bait and switch, it's illegal, and can't be allowed. We're calling on Ms. Baki to disclose any meetings held between herself and Chevron, the terms and conditions of any offer from the company, and full disclosure of all private sector donations."

A look back at Baki's history reveals a long list of favors for Chevron while she held official roles within the Ecuadorian government:

• In 1998, as Ecuador's Ambassador to the United States under the rightist government of Jamil Mahuad, she signed an official letter to a U.S. federal judge in New York seeking dismissal of the environmental lawsuit against Chevron.
• Throughout 2004, Baki, then serving as Ecuador's Trade Minister, helped organize and participated in several meetings between Chevron and high level Ecuadorian officials -- including the Attorney General -- which sought strategies to end the case, according to discovery documents produced recently in the United States. During one of those meetings, rainforest residents staged a sit-in in her offices and demanded she stop efforts to undermine the legal case against the company.
• In 2008, Baki, then serving as president of the Andean Parliament, organized and participated in a meeting with Chevron and Gustavo Larrea, Coordinating Minister for Internal and External Security who at the time was an influential member of Correa's Cabinet. The contact led to several other meetings between Chevron and Larrea in Ecuador and Washington, DC.
• Baki also has been active in Chevron's lobbying efforts in the United States to cancel U.S. trade preferences for the country in retaliation for the lawsuit. A cancellation of the preferences would cost Ecuador upwards of 300,000 jobs, according to Ecuador's government.

"We are not about to give Chevron a get-out-of-jail-free card by 'donating' to the Yasuni," said Esperanza Martinez, a founder of Accion Ecologica, a leading Ecuador environmental organization and key backer of the project. "Not only would such a donation violate the rights of thousands of Ecuadorians who are victims of Chevron's misconduct, it would also violate the very spirit of the initiative."

"In short, we are not interested in Chevron's blood money," she added.

Chevron itself has been accused of numerous acts of corruption in its attempt to sabotage the case. These include: lying about the results of a fraudulent remediation in the 1990s to secure a government release; fabricating evidence during the trial to minimize evidence of contamination; using a hidden video recorder to try to entrap a judge who Chevron thought would rule against it; threatening judges with jail time if they failed to grant Chevron's motions to delay the trial; and permitting the lawyers for the plaintiffs to be victimized by death threats and mysterious robberies of their offices.

The case is currently on appeal in Ecuador after a judge ruled against the company on Feb. 14, 2011 for up to $18 billion. Because Chevron has refused to respect the judgment, the rainforest communities are being forced to prepare legal actions against Chevron's assets in the dozens of countries around the world where the oil giant does business.

For years, Chevron has publicly lambasted the Ecuadorian government with false accusations of siding with the plaintiffs in the case. In actuality, it appears that Chevron, once again with Baki's help, is behind the scenes secretly pressuring government officials to intervene on its behalf to kill the lawsuit.

Given Ms. Baki's long standing ties to Chevron and her previous efforts to help the company quash the Aguinda v. Chevron litigation or end run it entirely, it appears she again could be using her position to help Chevron evade its liability in Ecuador -- at the expense of justice, her own people, and the potentially historic Yasuni proposal.

Follow Mitch Anderson on Twitter:

Thursday, December 8, 2011

Chevron’s Gibson Dunn Nailed for Unethical Litigation Tactics In Oregon

Yesterday we reported that a U.S. federal judge in Oregon sanctioned Chevron's law firm Gibson Dunn & Crutcher for harassment of a witness in its campaign to help Chevron evade an $18 billion judgment in Ecuador for massive oil contamination. See here, here and here.

The affidavit, submitted by Oregon lawyer Charles M. Tebbutt outlining these abusive and harassing tactics by a team of Gibson Dunn lawyers, is vivid and disturbing. The level of arrogance of the oil giant's lawyers is just astounding.

Gibson Dunn of course is famous for marketing itself as a master of the dark art of conducting "rescue operations" for clients in trouble. Their lawyers openly state that if the law is in the way, they will try to change it or work around it. In the Chevron case and others, that can mean crossing the ethical line.

Buyer beware: Gibson Dunn's litigation tactics often create more problems for its clients than they solve. Gibson Dunn came into the Ecuador case in 2009; since then, Chevron has been hit with an $18 billion judgment for environmental contamination, been sanctioned by various courts, and now faces even more problems in the coming months as the Ecuadorian plaintiffs position themselves to lawfully seize company assets around the world. On Gibson Dunn's advice, Chevron has gone rogue in Ecuador.

What government is going to want to do business with an oil company that creates open conflict with the governments of oil-producing nations?

A recent argument before the Second Circuit Court of Appeals in New York by Gibson Dunn lawyer Randy Mastro is a case in point in how the Gibson Dunn tactics are backfiring. Mastro took a beating from the panel of judges as they chuckled about his theory that a New York court has jurisdiction to block enforcement of an Ecuadorian judgment in other countries.

Mastro argued the case on a Friday; the next Monday, Chevron's attempt to seek a worldwide injunction blocking enforcement was stayed. It probably didn't help that Mastro interrupted the presiding judge repeatedly, forcing another member of the panel to suggest he sit down.

In 2010, a federal court in Colorado found that Gibson Dunn lawyer Andrew Neumann asked several harassing questions of a technical expert for the plaintiffs in the Ecuador case.

In 2009, Chevron was again fined by a California judge for filing a frivolous lawsuit against Cristobal Bonifaz, a former lawyer for the Ecuadorian plaintiffs. That lawsuit was dismissed with prejudice.

The same Gibson Dunn practice group used by Chevron in the Ecuador case also was hit recently with sanctions from a California judge for filing a frivolous lawsuit to suppress the free speech rights of a filmmaker who made a documentary about how pesticides used by Dole in Central America have poisoned banana workers. Dole is a Gibson Dunn client.

In 2003, the firm was fined a shocking $20 million in Montana for harassing an art expert for failing to raise the appraisal value of a forged painting owned by a firm client. The Montana Supreme Court said Gibson Dunn used "legal thuggery" and acted with "actual malice" in the case.

In legal trouble and partial to thuggery and malice? Do like Chevron and call Gibson Dunn.

Monday, December 5, 2011

U.S. Embassy Finally Lifts A Finger to Help Fix Rainforest Destroyed by American Oil Company Chevron

In a surprising turn of events given the U.S. Embassy long and sordid history in Ecuador, our nation’s ambassador there has decided to support a joint effort by Ecuadorians and The Nature Conservancy to preserve the rainforest where the Cofan indigenous group lives. It's about time. See the Embassy’s press statement here.

In 1993, a year after Chevron abandoned its operations in Ecuador, a group of Ecuadorian indigenous groups and farmer communities sued the company for damages in U.S. federal court. Chevron was granted its request that the trial be held in Ecuador. Earlier this year, that move backfired when the Ecuadorians won a historic $18 billion judgment. See here.

Among the groups suing Chevron was the Cofan, who have seen their population drop from 15,000 to a few hundred brave souls due to the devastating effects of Chevron's pollution. But rather than help the Cofan, the U.S. Embassy historically has tried to do all it could to help Chevron avoid accountability for its devastating abuses.

Chevron has fought the Cofan and other indigenous groups every step of the way and promises to never pay the Ecuador court judgment even though Chevron promised to abide by any judgment out of that country's courts as a condition of the dismissal of the case from U.S. federal court.

Earlier this year, Wikileaks disclosed U.S. Embassy cables that suggest Chevron conspired with U.S. Embassy officials in Ecuador to obstruct the lawsuit brought by the Cofan and their allies. See this Mother Jones article for the eye-opening details of the cozy relationship Chevron had with embassy and former embassy officials.

A quick recap of the Wikileaks cables (see here, here, here and here) shows that Chevron left no stone unturned in its efforts to undermine the trial:
  • One of the cables, written by U.S. Ambassador Linda Jewell in April of 2008, revealed that Chevron convinced Jewell to go to bat for two Chevron lawyers who faced a criminal investigation for signing off in 1998 on a sham remediation of oil sites in exchange for a government release from liability. Jewell wrote the embassy "will consider how it can help Chevron resolve" the case, and that she contacted a former Supreme Court President of Ecuador as part of that strategy.

  • Linda Jewell
    U.S. Ambassador to Ecuador

  • Chevron tipped off U.S. embassy officials that during the ongoing trial it had offered to set up "social projects" in the Amazon in exchange for GOE [Government of Ecuador] support for ending the case.

  • In August 2009, Chevron lawyer Ricardo Reis Veiga called the then-U.S. ambassador to provide a "heads up" that the company was releasing secret videotapes taken by Chevron contractor Diego Borja that the company claimed implicated the judge in a bribery scandal. The move backfired after Borja later admitted Chevron paid him for his work in trying to entrap the judge, and that the tapes did not actually show a bribe.

  • Ambassador Jewell appeared to unabashedly adopt Chevron's worldview of the hotly disputed legal case. She wrote that Chevron was not liable for the contamination due to a government release when that very issue was being litigated before the Ecuador court. Eventually, Chevron lost that argument.

  • Another cable from March of 2006, written by Charge d'Affairs Jefferson Brown, said that Chevron executive Jamie Varela told embassy officials that "Chevron had not had any real complaints about the judge" or the "administration of the case" in Lago Agrio. Chevron later argued before various U.S. courts that Ecuador's judicial system was unfair at that time, contradicting these private statements to the embassy.

  • Varela also tipped off Brown that Chevron was planning to file an international arbitration case against the Government of Ecuador in a move to gain leverage over the Lago Agrio case, according to the cables. Varela also indicated that Chevron would not publicly disclose the filing for fear the plaintiffs would use it against the company.

  • Jefferson Brown

  • Brown also wrote that U.S. embassy officials were "surprised" that Varela did not ask for U.S. government "intervention in the case" to help Chevron, as had other Chevron officials. Nevertheless, Brown wrote that the embassy "will continue to raise the [Chevron] matter with [Ecuador's government] when we discuss other commercial disputes" but he also concluded that Chevron's complaints were "being fairly and adequately addressed in the courts or in arbitration and require no direct [U.S. government] action at this time."

The U.S. embassy in Ecuador might want to explain why it was working to undermine the rule of law in Ecuador to help an American company that was committing human rights abuses.

Saturday, December 3, 2011

At Chevron’s Tiger Woods World Challenge, Environmental Groups Scold CEO Watson From On High

Banner Blares From Circling Airplane:
Clean Up Toxic Mess In Ecuador

Two leading U.S.-based environmental groups are taking their fight over Chevron's oil catastrophe in Ecuador directly to CEO John S. Watson by sending an airplane to fly over the weekend rounds of the Tiger Woods-hosted Chevron World Challenge golf tournament in California.

A banner trailing the plane said: "Chevron CEO Watson: Clean Up Your Toxic Mess In Ecuador". The environmental groups Rainforest Action Network (RAN) and Amazon Watch sponsored the banner.

"Chevron has spent the last 18 years waging unprecedented public relations and legal campaigns to avoid dealing with the environmental and public health catastrophe it left in the Amazon rainforest," said Ginger Cassady, a RAN campaign official.
"Today we're challenging Chevron to clean more than its public image and repair the toxic legacy it left in Ecuador."

An Ecuador court earlier this year found Chevron liable for dumping billions of toxic waste into the Amazon rainforest, decimating indigenous groups and causing an outbreak of cancer and other oil-related diseases in an area roughly the size of Rhode Island.

Chevron operated in Ecuador from 1964 to 1992 under the Texaco brand.

"We want Mr. Watson and his golfing friends to know that we hold him accountable for the refusal of the company to take responsibility for the world's worst oil-related disaster," said Karen Hinton, the U.S. spokesperson for dozens of rainforest communities suing Chevron in Ecuador.

The public scolding of Watson by RAN and Amazon Watch comes on the heels of damning statements from another group of Latin Americans -- government officials in Brazil, home to one of the most highly-prized offshore oil fields in the world. After Chevron spilled an estimated 110,000 gallons of pure crude into the Atlantic Ocean offshore the state of Rio, Brazilian officials were outraged by Chevron executives there who initially lied about the origin of the spill, low-balled the number of barrels released into the ocean and told regulators the damage was contained when it wasn’t. See here.

The Brazilians are threatening to fine Chevron for up to $145 million and imprison some of its executives over their efforts to cover up the extent of the spill.

To make matters even worse for Watson, his company was named last week the “most toxic” energy company of 2011 by AlterNet, a prestigious U.S.-based online magazine that closely tracks environmental issues. See here and here.

Chevron's enormous Ecuador liability is of special concern to Watson because he is the person ultimately responsible for the failure of Chevron to abide by an Ecuador court order that the company pay for a clean-up. He also has faced accusations the he suffers from a conflict of interest for failing to properly vet Texaco for the Ecuador liability when Chevron bought its rival in 2001.

If the judgment in Ecuador is upheld on appeal, the Ecuadorians will lawfully attempt to seize Chevron's assets in countries around the world where it operates. Chevron sold off its assets in Ecuador several years ago in an effort to evade its legal responsibilities in the South American nation, said Hinton.

Aside from Woods, those playing in the invitation-only golf tournament include luminaries such as former Masters champion Zach Johnson and Matt Kuchar, the leading money winner on the PGA tour in 2010.