Wednesday, April 25, 2012

Chevron Lawyer Hew Pate Earned $7.8 Million for Losing $18 Billion Ecuador Case

Chevron's Board of Directors recently awarded its General Counsel R. Hewitt Pate a 75% raise -- bringing his 2011 salary to a whopping $7.8 million -- for losing the landmark $18 billion environmental lawsuit in Ecuador, according to a recent public filing of the company.

In reaching the $18 billion judgment -- the largest ever in an environmental case (see here and here)  -- the Ecuador trial court used Chevron's own admission that it deliberately dumped billions of gallons of toxic oil waste into Amazon waterways from 1964 to 1992, when the company operated in Ecuador under the Texaco brand.  The dumping decimated indigenous groups and caused an outbreak of cancer and numerous deaths, according to several peer-reviewed studies.

“Only in America could a major oil company give a 75% raise to a lawyer who lost an $18 billion case to a legal team with a fraction of the resources,” said Karen Hinton, the U.S. spokesperson for the dozens of rainforest communities who sued the oil giant.

Chevron’s 2012 proxy statement reported that Pate’s salary jumped “in part because of his 'outstanding management of Ecuador (lawsuit).'" See pages 28 and 43.

Pate's 75% salary increase also is out of line with the 16.6% increase in Chevron's 2011 year-end stock valuation - a key metric for investors in deciding to support annual 'say-on-pay' votes. Chevron CEO John Watson received an even more ludicrous 65% raise to $24.7 million in 2011 compensation.

"Chevron's enormous executive pay raises are way out of step with shareholder returns and the company's dismal handling of its liability in Ecuador," said Graham Erion, a securities lawyer advising the rainforest communities.

In the latest of a series of legal setbacks on the Ecuador matter, a panel of appellate judges in affirmed the $18 billion judgment in January.  The same month, a U.S. federal appeals court sharply rebuked Chevron for trying to use an illegal injunction to block the Ecuadorians from enforcing their judgment.

A new report published last week also found that under Pate's leadership Chevron has continually misled its own shareholders about the Ecuador liability.  Some shareholders have criticized company management for mishandling the Ecuador litigation while others have asked for an investigation by the Securities and Exchange Commission.

Pate recently reported that Chevron has used 483 lawyers and legal assistants on the Ecuador case from at least 39 different law firms.  The rainforest communities are led by Pablo Fajardo, a 40-year-old Ecuadorian man who grew up in poverty and recently was award a CNN "Hero" prize. See this CNN piece and Vanity Fair article.

A former Bush Administration antitrust lawyer with little experience in the oil industry, Pate took over Chevron's legal department in 2009.  Since that time, the oil giant has suffered multiple legal setbacks in Ecuador and elsewhere: 

  • Last September, jurists from across the world blasted Pate's strategy for trying to illegally use a U.S. trial court to block the international enforcement of the Ecuador judgment.  Chevron's lead attorney on that case, Randy Mastro of Gibson Dunn & Crutcher, was harshly criticized by the appellate panel. See page 19 of this transcript.

  • Under Pate’s leadership, reports recently surfaced that Chevron floated a $1 billion bribe offer to Ecuador's government to kill the legal case, made via an official in charge of an environmental project; that Chevron lied to its own expert witnesses so they would defend the use of deceptive sampling practices during the trial; and that the company used a secret lab to hide evidence of contamination from the court.

During Pate's tenure, Chevron faces a $22 billion lawsuit in Brazil after it appeared to mislead investigators about the impacts of an offshore spill; paid a $600,000 penalty for environmental violations at approximately 100 storage tanks in Puerto Rico; paid $24.5 million to California for violations of laws governing the disposal of hazardous materials; and suffered a horrific pipeline spill in Utah which resulted in a $4.5 million fine and ongoing lawsuits. The company, as part of an oil consortium, also faces a $64 million fine in Kazakhstan for releasing airborne toxins.

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Thursday, April 19, 2012

European Investors Concerned About Chevron’s Amazon Disaster

Ecuadorian indigenous leaders meet Church of England's Investment Department

Read this great blog by Mitch Anderson of Amazon Watch, focusing on concerns by European investors about Chevron’s environmental crimes in the Ecuadorian rainforest.

"London, England – Ecuadorian indigenous leaders Humberto Piaguaje and Guillermo Grefa began a one week European tour today, where they will be educating major institutional investors in Chevron Corporation, including prestigious funds such as the Church of England Investment Fund and the Central Finance Board of the Methodist Church, about the oil giant’s grim environmental and human rights legacy in the Amazon. The fact that European investors are concerned about the American oil major’s growing multi-billion liability over its Amazon disaster comes as no surprise."

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Wednesday, April 18, 2012

Another Bad Day In Court For Chevron

Chevron had another bad day yesterday in one of the most powerful courts in the United States, proving again that when the Ecuadorians' attorneys are allowed to present their case, the oil giant's arguments quickly deflate.

See this Greenwire article below about how the Ecuadorians’ lawyer Jim Tyrrell of Patton Boggs dominated the oral arguments against top Chevron lawyer Ted Boutrous of Gibson Dunn before the D.C. Circuit Court of Appeals.

Randy Mastro Benched By Chevron

Gibson Dunn lawyer Randy Mastro usually argues for Chevron, but Tyrrell threw him deadly punches before the 2nd Circuit Court of Appeals that later threw out a lower court decision purporting to stop enforcement of an $18 billion judgment against Chevron. See here.

Mastro also recently stumbled over his words and struggled to answer questions, even before Chevron’s favorite judge, Lewis Kaplan, about the oil giant’s latest and most preposterous scheme to attach its own assets to block the Ecuadorians from obtaining funds to cleanup its mess in the rainforest.

Yes, that’s right, attach its own assets. Even the pro-Chevron Kaplan was scratching his head. If you dare, read it about it here.

Yesterday, though, Chevron benched Mastro, and Boutrous took charge but apparently to no avail.

Court considers Chevron's request for documents in Ecuador litigation

Lawrence Hurley, E&E reporter

Published: Tuesday, April 17, 2012

A federal appeals court today seemed inclined to rule that a lower court judge acted too hastily in allowing Chevron Corp. access to documents prepared by a consulting firm working for Ecuadorean plaintiffs in a high-profile case that has dragged on for almost 20 years.

The oil giant wants documents from the Weinberg Group, a scientific consulting firm that the plaintiffs had hired to prepare a report on the alleged environmental damages in the eastern part of Ecuador.

Last year, a judge in Ecuador ruled that Chevron was liable for up to $18 billion for contamination caused by Texaco Petroleum Corp. Chevron acquired Texaco in 2001.

Chevron believes the Weinberg documents could help it in a racketeering case it has filed against the plaintiffs and their American lawyers.

But a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit appeared unconvinced that U.S. Magistrate Judge John Facciola correctly ruled that Chevron could get access to about 1,000 documents. The judges seemed to agree with the plaintiffs that Facciola did not correctly follow precedent in determining whether Weinberg should hand over the material.

The judges strongly indicated they would remand the case to Facciola but would likely not dismiss it altogether, as the plaintiffs hope.

Today's argument was a sideshow to a legal battle that is playing out in various venues around the world.

In an effort to undermine the Ecuadorean court's judgment, Chevron has alleged that the plaintiffs committed fraud, going as far as to file the racketeering suit in New York.

As part of that strategy, Chevron has sought to question as many people as possible, including Steven Donziger, the American lawyer who masterminded the effort to sue the oil company in Ecuador.

The Weinberg Group is another target. It claims that it should not have to hand over documents because it is covered by the attorney-client privilege.

But Chevron maintains, as did Facciola, that the privilege is trumped by what is known as the "crime-fraud exception" that forces production of documents if there is evidence that a crime or fraud took place.

Weinberg was hired by the plaintiffs after Chevron attacked the credibility of the Ecuadorean court-appointed scientific expert, Richard Cabrera. The consulting group's job was to bolster the plaintiffs' case by rounding up new experts to weigh in on the evidence of environmental damage.

Among Weinberg's arguments is the claim that Facciola inappropriately deferred to the findings of the judge in the Southern District of New York, Lewis Kaplan, who is overseeing the racketeering case and consistently ruled in favor of Chevron.

In March 2011, Kaplan issued an extensive opinion in which he granted Chevron's request for an injunction that would have prevented the plaintiffs from enforcing the Ecuadorean judgment in U.S. courts. On appeal, the 2nd U.S. Circuit Court of Appeals lifted the injunction, saying it had been imposed prematurely.

James Tyrrell, the Patton Boggs attorney representing Weinberg in court today, seized on the 2nd Circuit's decision, noting that Facciola made no independent findings of fact on which to base his decision.

Chevron's attorney, Theodore Boutrous of Gibson Dunn & Crutcher, faced a uniformly skeptical panel.

Chief Judge David Sentelle noted that all of Facciola's findings were "intertwined" with the recitation of facts in Kaplan's opinion.

He also said that most judges would have taken a look at the documents to gauge their relevance.

"Wouldn't that have been a nice thing for the judge to have looked at?" he said.

Likewise, Judge Brett Kavanaugh asked whether it would be "prudent" to remand the case because Facciola's findings were "heavily, if not completely, influenced" by Kaplan's opinion.

Questioning Facciola's approach, Judge David Tatel pointed out that under court precedent, the magistrate judge was required to make a finding that the Weinberg documents were created "in furtherance of a fraud," which he failed to do.

"Our cases are very clear about that," Tatel said.

The ongoing tussle in the racketeering case is just one strand of a tangled web of litigation over the $18 billion judgment.

Chevron's final appeal in Ecuador is currently before that nation's highest court while, separately, an international arbitration panel is considering a 2009 claim brought by Chevron against Ecuador in which the oil company claims the Andean nation violated a bilateral trade agreement between it and the United States (E&ENews PM, Feb. 28).

The case is infamous in part because of the now notoriously frosty relationship between the opposing parties, which Sentelle referenced when asking them to focus on the legal issues.

"We have heard the vitriol that both sides want to spill on each other," he said.

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Monday, April 16, 2012

Ecuadorians & Environmental Groups Provide Clean Water To Rainforest Residents Chevron Ignores

Ecuadorian indigenous groups and international environmental groups are doing what Chevron has refused to do in Ecuador’s oil-ravaged rainforest – provide clear, clean drinking water to people living near contaminated soil and water left behind by the oil giant almost 20 years ago.

The new effort, called ClearWater expands upon other initiatives to ensure rainforest residents have safe, unpolluted water.

Chevron has turned its back on the rainforest and its people. The ClearWater project is not the complete solution, but it is part of one, and we praise the indigenous and environmental groups for doing what Chevron should be doing.

From 1964 to 1992, Chevron, operating under the Texaco brand, explored for oil in the Ecuador rainforest. To maximize profits, the company used substandard practices and, as a result, intentionally dumped over 16 billion gallons of toxic water into waterways, used by local people to drink, cook, and bathe.

Chevron also built over 900 huge, unlined pits to store permanently pure crude oil. The pits remain there today and continue to leech into and contaminate the underground water and soil.

In 1993, Ecuadorian indigenous groups sued Chevron for the oil contamination, but the company has fought them at every turn. Eighteen years later, an Ecuador court finally awarded the groups $18 billion in damages. An Ecuadorian appellate court upheld the judgment, allowing the Ecuadorians to enforce it.

Because Chevron has no assets in Ecuador and has refused to pay, they are preparing to enforce in other countries’ courts, where Chevron has assets.

See this video for more information about the devastation caused by Chevron’s deliberate acts.

Supported by organizations such as like Saving an Angel, Groundwork Opportunities, Rainforest Action Network, Amazon Watch and the Amazon Defense Coalition, the ClearWater project will provide sustainable clean water to more than 2,000 indigenous and farmer families across 20 villages in the oil-ravaged areas of the northeastern Ecuadorian rainforest.

Emergildo Criollo, one of the plaintiffs in the lawsuit against Chevron and supporter of the CleanWater project, said despite the ongoing legal battle, “the rivers are still poisoned, and the water tests of oil and salt. This must change. Water is the source of life. Without clean water we cannot survive.” Two of Criollo’s children died as a result of the contamination.

In early October, 2011, the ClearWater pilot project broke ground in the community of Cofan Dureno with the community-led installation of 52 rainwater catchment systems, benefitting over 300 Cofan people.

According to the ClearWater web site these systems are relatively easy to install in villages and rural town homes, and if maintained properly, can last up to 50 years. Specially designed filtered catchment units will enable families, health clinics and schools to have clean water.

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Friday, April 13, 2012

Chevron to Ecuadorians: Drop Dead

Huffington Post Publishes Photos of People Who Have Died or Are Sick From Contamination

A lead Chevron lawyer has told an arbitration panel that the 30,000 Ecuadorian victims of the oil giant's contamination are "irrelevant" to the court case that led to an $18 billion judgment against the company.

Doak Bishop

Doak Bishop, a Chevron lawyer from the American firm King & Spalding, said the following before a panel of international investment arbitrators on February 15th: “The plaintiffs are really irrelevant. They always were irrelevant. There were never any real parties in interest in this case. The plaintiff's lawyers have no clients... There will be no prejudice to [the rainforest communities] or any individual by holding up enforcement of the judgment."

Meanwhile, the Huffington Post today published over a dozen photos of Ecuadorians who have died or have severe medical problems resulting from Chevron's contamination. See here for photos, taken by Lou Dematteis.

By arguing that no Ecuadorians had been harmed or were in danger of being harmed, Bishop was trying to convince the panel of arbitrators that they should block the Ecuadorians from enforcing their judgment against Chevron in other countries, a strategy which has failed for multiple reasons. See here.

Bishop has come under harsh criticism for his conflicts of interest with the arbitration panel.

Chevron has a long history of trying to dehumanize the Ecuadorians by denying their very existence, said Pablo Fajardo, the lead lawyer for the communities.

In 2010, Chevron tried to claim that the signatures of 20 of the 48 named plaintiffs in the lawsuit had been forged by their attorneys. The charge was quickly rebutted after the plaintiffs appeared before a public notary to affirm their signatures were legitimate. See here.

The existence and relevance of the Ecuadorians has been affirmed by multiple independent journalists, including 60 Minutes, The Sunday Night Show in Australia and multiple media outlets such as the New York Times and The Washington Post.

The $18 billion damage award, levied by an Ecuador court, will be used to clean up Chevron’s deliberate contamination of the rainforest and provide clean drinking water and health care to the residents of the company’s former concession area. The damage decimated indigenous groups and caused an outbreak of cancer, according to evidence relied on by the court in issuing the judgment. See this video for more information.

Chevron, under the Texaco brand, operated in Ecuador from 1964 to 1992. Chevron admitted dumping 16 billion gallons of toxic drilling fluids directly into waterways and streams relied on by local residents for their drinking water

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Thursday, April 5, 2012

Chevron Says These People Don't Matter

These moving photos were taken by Lou Dematteis, a photographer and writer who documented the lives of many Ecuadorian indigenous people who have died, lost family members or are sick from diseases as a result of Chevron's intentional contamination of the Ecuadorian rainforest. A Chevron lawyer recently said these people are “really irrelevant.”

Luz Maria Marin holds the head of her husband Angel Toala one day before he died of stomach cancer in his home in Shushufindi.

Chevron says the people in these photos don’t matter.

The oil giant’s lawyer Doak Bishop of King & Spalding recently said:
“The plaintiffs are really irrelevant. They always were irrelevant. There were never any real parties in interest in this case. The plaintiff's lawyers have no clients... There will be no prejudice to [the rainforest communities] or any individual by holding up enforcement of the judgment."

Bishop is speaking of the Ecuadorian indigenous people who won an $18 billion judgment against Chevron for massive oil contamination in the rainforest – a judgment Chevron has refused to pay.

Chevron even went so far as to try and hire a journalist to spy on the Ecuadorians to see if they were telling the truth about being sick. Read this article about it.

Here are just a few of them, photographed and interviewed by Lou Dematteis. You can purchase his book at Lou Dematteis Photography.

At her home in Andina, Amanda Armijos stands in front of a photo of herself and husband Saul Apolo who died of stomach cancer at age 49.

Nine-year-old Jairo Yumbo shows his birth-deformed hand on the road in front of his home in Rumipamba.

Juana Apolo walks out of a cemetery in La Andina where her father, brother and sister are buried, all of whom died of cancer.

Uterine cancer victim Rosana Sisalima with her granddaughter at their home in San Carlos on November 24, 2004. Rosana succumbed to cancer in 2006.

Fifteen-year-old Myra Chicaiza sits with her mother Rosa Mercedes on the floor of their home in Dureno. Myra suffers from sever birth defects due to her mother's exposure to toxic hydrocarbon contamination when she was pregnant with Myra.

Maria Villasis shows the scars from four operations on her liver and gallbladder at her farm near Guanta oil well #8.

Miguel Mashumar and his wife Maria Claudia Antuash sit with a portrait of two of their two daughters who both died as a result of exposure to toxic hydrocarbon contamination.

Carmen Guaman with her fourteen-year-old daughter Veronica at their home in La Primavera. Veronica suffers from a neurological birth defect.

Her leg amputated because of a cancerous tumor, Modesta Briones sits in her house near Parahuaco oil well #2 in the Ecuadoran Amazon.

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Wednesday, April 4, 2012

High Court Has Dismissed Key Chevron Arguments Against Ecuadorians

See excerpts below from two separate U.S. Second Circuit Court of Appeals rulings concerning the Ecuadorians' lawsuit against Chevron. They counter Chevron's arguments that the $18 billion judgment should not be enforced and that its arbitration claim is binding upon the Ecuadorians.

On enforcement:
"The LAPs hold a judgment from an Ecuadorian court. They may seek to enforce that judgment in any country in the world where Chevron has assets."

Cite: United States Court of Appeals for the Second Circuit in Chevron Corporation v. Naranjo, Docket Nos. 11-1150-cv (L) 11-1264 (Con), (2d Cir. January 26, 2012), at 27. (emphasis added).

On Chevron's international arbitration claim:
“[Ecuadorian] Plaintiffs are not parties to the [Bilateral Investment Treaty], and that treaty has no application to their claims, their dispute with Chevron therefore cannot be settled through [Bilateral Investment Treaty] arbitration.

Cite: United States Court of Appeals for the Second Circuit in Republic of Ecuador v. Chevron Corporation, Docket Nos. 10-1020-cv (L) 10-1026 (Con), (2d Cir. March 17, 2011), at 21. (emphasis added).

On Chevron's liability of Texaco's misconduct:

"Chevron Corporation claims, without citation to relevant case law, that it is not bound by the promises made by its predecessors in interest Texaco and ChevronTexaco, Inc. However, in seeking affirmance of the district court’s forum non conveniens dismissal, lawyers from ChevronTexaco appeared in this Court and reaffirmed the concessions that Texaco had made in order to secure dismissal of Plaintiffs’ complaint. In so doing, ChevronTexaco bound itself to those concessions. In 2005, ChevronTexaco dropped the name “Texaco” and reverted to its original name, Chevron Corporation. There is no indication in the record before us that shortening its name had any effect on ChevronTexaco’s legal obligations. Chevron Corporation therefore remains accountable for the promises upon which we and the district court relied in dismissing Plaintiffs’ action. Throughout this Opinion, we use the various corporate names that Chevron Corporation has employed during the course of this litigation only for purposes of clarity. In so doing, we do not attribute any legal significance to the nomenclature used. While the district court did not include Texaco’s promise to satisfy any Ecuadorian judgment in its stipulation and order, an express adoption of the prior inconsistent position is not required. The court need only adopt the position “in some manner, such as by rendering a favorable judgment.” Mitchell v. Washingtonville Cent. Sch. Dist., 190 F.3d 1. (2d Cir. 1999) (internal citation omitted); see also Maharaj v. Bankamerica Corp., 128 F.3d 2 94, 98 (2d Cir. 1997).

"Here, Texaco had been trying to convince the district court that Ecuador would serve as an adequate alternative forum for resolution of its dispute with Plaintiffs. As part of those efforts, Texaco assured the district court that it would recognize the binding nature of any judgment issued in Ecuador. Doing so displayed Texaco’s well-founded belief that such a promise would make the district court more likely to grant its motion to dismiss. Had Texaco taken a different approach and agreed to participate in the Ecuadorian litigation, but announced an intention to disregard any judgment the Ecuadorian courts might issue, dismissal would have been (to say the least) less likely. We therefore conclude that the district court adopted Texaco’s promise to satisfy any judgment issued by the Ecuadorian courts, subject to its rights under New York’s Recognition of Foreign Country Money Judgments Act, in awarding Texaco the relief it sought in its motion to dismiss. As a result, that promise, along with Texaco’s more general promises to submit to Ecuadorian jurisdiction, is enforceable against Chevron in this action and any future proceedings between the parties, including enforcement actions, contempt proceedings, and attempts to confirm arbitral awards.

"Chevron’s contention that the Lago Agrio litigation is not the refiled Aguinda action is without merit. The Lago Agrio plaintiffs are substantially the same as those who brought suit in the Southern District of New York, and the claims now being asserted in Lago Agrio are the Ecuadorian equivalent of those dismissed on forum non conveniens grounds."

Cite: United States Court of Appeals for the Second Circuit in Republic of Ecuador v. Chevron Corporation, Docket Nos. 10-1020-cv (L) 10-1026 (Con), (2d Cir. March 17, 2011), at footnotes 3,4 and 5. (emphasis added).

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Monday, April 2, 2012

Maria Aguinda: The Grandmother Who Beat Chevron

Below are two photos of Maria Aguinda, the indigenous woman who has achieved global fame as the grandmother who beat Chevron in the $18 billion environmental lawsuit in Ecuador.

The first photo shows Maria Aguinda in 1993, walking on an oil-slicked road near her community of Rumipamba in the Ecuadorian Amazon. At the time, she was a young mother. The historic lawsuit bearing her name was filed later the same year in New York federal court.

The second photo, taken last week, shows Maria Aguinda almost 19 years later on the steps of Ecuador's National Court of Justice in Quito, the court that is hearing Chevron's final appeal in the case.

According to Chevron, people like Maria Aguinda and thousands of other Ecuadorians who were harmed by the oil giant don't really exist. Chevron lawyer Doak Bishop said the following before an investor arbitration on February 15th: "The plaintiffs are really irrelevant. They always were irrelevant. There were never any real parties in interest in this case. The plaintiff's lawyers have no clients... There will be no prejudice to [the rainforest communities] or any individual by holding up enforcement of the judgment."

Here is a link to a Yahoo story about Maria Aguinda published in 2011, at the time Chevron was found liable for causing an ecological catastrophe and ordered to pay $18 billion in damages. Here is a background memo on the overwhelming evidence undergirding the trial court decision.

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