Wednesday, August 22, 2012

Lawyer for Ecuadorians Turns the Tables On Chevron and Sues Oil Giant

Chevron: can you handle the truth about your crimes in Ecuador?

New York lawyer Steven Donziger is going after Chevron, its CEO John Watson, and its General Counsel R. Hewitt Pate for orchestrating a campaign by the oil giant to evade paying a $19 billion judgment in Ecuador by targeting and defaming Donziger and other members of the legal team. Donziger, a litigator who has dedicated most of his professional work to the field of human rights advocacy, battled for almost two decades to help indigenous and farmer groups in Ecuador’s rainforest hold Chevron accountable for the deliberate dumping of billions of gallons of toxic waste onto their ancestral lands, leading to the decimation of traditional cultures and an outbreak of cancer that has killed or threatens to kill thousands of people.  See this article in

(For background on Chevron's human rights violations in Ecuador and fraudulent cover-up, see this devastating video. For a written summary of the overwhelming evidence against Chevron relied on by the Ecuador court in finding the company guilty, see here.)

Donziger, represented by John Keker of San Francisco’s Keker & Van Nest, quietly filed a 158-page compendium of claims against the oil giant last week in New York federal court.  The lawsuit can be read here starting on p. 92.  Donziger, who lives in a small apartment in New York City with his wife and son, had previously been sued (along with his clients) for $57 billion by Chevron as part of an outrageous and trumped-up civil racketeering claim.  Chevron claimed that the entire Ecuador case – which includes 64,000 chemical sampling results proving toxic contamination at the company’s hundreds of well sites in the Amazon -- was an attempt by Donziger and his clients to extort money from the company.

Donziger said that the racketeering case was a thinly-veiled attempt by Chevron and its high-billing law firm, Gibson Dunn & Crutcher, to cover up evidence of Chevron’s crimes and to intimidate the plaintiffs into abandoning the 19-year-old environmental case, which was filed in New York in 1993 but was shifted to Ecuador at Chevron's request after the oil giant filed numerous affidavits praising the country’s court system.  In February 2011, Donziger and his clients won the judgment after an eight-year trial in Ecuador marred by Chevron’s attempts to intimidate judges, offer bribes to Ecuador's government, fabricate scientific evidence, and sabotage the proceedings by filing dozens of frivolous motions and drowning the court in paper.  See here.

Chevron's legal team at Gibson Dunn openly markets a “template” to corporate defendants like Chevron facing large liabilities for environmental and human rights abuses.  The template, which the firm calls a “rescue operation” for clients in trouble, assumes that the wholesale intimidation of lawyers will allow clients to win via subterfuge what they can’t win on the merits. The Gibson Dunn “rescue” team – led by New York attorney Randy Mastro, Ted Boutrous, Andrea Neumann, Scott Edelman, and William Thomson – has used over 60 lawyers and billed Chevron hundreds of millions of dollars.  All their hard work has brought a fair amount of disrepute to their law firm as Chevron has suffered multiple courtroom setbacks around the world, dramatically increasing its liability and creating a shareholder rebellion against CEO Watson.  See here.

Mark our words – it is just a matter of time before Gibson Dunn itself gets sued for creating evidence and engaging in intimidation tactics to justify its high-priced fraud “template” that it sells to clients.

In 2009, the same Gibson Dunn “rescue” team leveled fabricated fraud charges in California against another American attorney who once worked with Donziger on the Ecuador case, and it blew up in their collective faces.  That attorney, Cristobal Bonifaz, won a judgment against Chevron after a court found the company tried to use the fraud lawsuit to suppress his First Amendment rights and harass him, violating California’s anti-SLAPP statute. Chevron was ordered to pay a large fine in that case and separately has been sanctioned by federal courts and accused of multiple ethical violations for doing Chevron’s dirty work.  See here and here.

Any lawyer who cares about fairness should read the chilling facts documented in Donziger’s lawsuit.  It is indisputable that he has been the target of an unrelenting campaign of defamation, harassment, and intimidation because he dared to stand up to the goons at Chevron who are trying to hide the company’s outrageous misconduct in Ecuador. For this, he probably has suffered a level of harassment unprecedented in the annals of American jurisprudence.

The harassment included 15 days of sworn deposition testimony where he faced off against up to 20 Chevron lawyers and staffers, overseen by a federal judge (the normally well-regarded Lewis A. Kaplan) who bought into Chevron’s hysteria and rushed to judgment and in the process sparked a worldwide reaction in the legal community to his excesses. See here and here. See petition asking for Kaplan’s dismissal here.

Donziger also faced 24/7 surveillance in Manhattan and Ecuador and a campaign of defamation by Chevron’s press flaks and lawyers that is outlined in the legal document he filed in court.

Donziger’s lawsuit lays out the gory facts of Chevron's criminality and corruption in Ecuador, dating back to the mid-1990s when it engaged in a sham remediation to try to weasel out of the original lawsuit.

The Donziger suit explains that once Chevron realized it would lose the Ecuador trial based on the scientific evidence, the company turned to Gibson Dunn to try to render the Amazonian communities defenseless.

New York judge Kaplan -- who from the bench has made insulting comments about the indigenous groups victimized by Chevron -- will now have to decide whether to let Donziger's claims go forward as part of the existing Chevron racketeering case. Chevron steered its original case to Kaplan knowing full well his feelings toward Donziger, a fellow Harvard Law School graduate who he seems to treat as some sort of wayward son. At one early hearing, Kaplan – who has a corporate law background -- sneered that "Mr. Donziger is trying to become the next big thing in fixing the balance of payments deficit" between the U.S. and the rest of the world by going after U.S. companies, which he lamented as "a sad pass" and "a giant game." See here.  Kaplan on numerous occasions described the Ecuadorian indigenous groups as “the so-called” plaintiffs, as if he was trying to deny their very existence.

Kaplan, who once tried to impose an illegal worldwide injunction blocking enforcement of the Ecuador judgment, already has been reversed by the federal court of appeals on the case; whether he lets Donziger's counterclaims move forward so the full truth about Chevron’s misconduct can come out in his courtroom will be interesting to watch given his obvious biases, to say the least.

Here is a quick summary of Donziger's counterclaims against Chevron:
  • Chevron has made numerous false statements by claiming Donziger committed misconduct by pressing forward with the pollution lawsuit after the company “remediated” the Ecuador oil fields, when it knows the remediation was a sham;
  • Chevron has lied about the overwhelming scientific evidence against it – evidence that includes thousands of chemical sampling results that show the presence of harmful toxins and carcinogens at the company’s well sites -- to try to make it appear Donziger had to fabricate evidence to secure a favorable verdict;
  • Chevron used deceptive and manipulative editing tactics to misrepresent video outtakes from the documentary film Crude to take Donziger’s statements out of context, and to portray him in a negative light;
  • Chevron used its own longtime contractor, Diego Borja, to plan and execute an illegal video entrapment scheme against a sitting judge in Ecuador in an attempt to derail the trial, and then lied about hush money it paid to Borja so he would keep silent about it; and
  • In a final act of desperation, Chevron falsely claimed the “all-powerful” Donziger secretly wrote the 188-page trial judgment from his apartment in New York without providing a shred of such evidence.
Let's see if Chevron and its high-flying CEO Watson and General Counsel Pate -- who recently received a 75% pay raise for his work on the Ecuador case after losing the largest environmental judgment in history -- have the guts to let a jury hear all the evidence of the company’s corrupt activities in Ecuador coordinated from company headquarters in San Ramon, California.

We predict that like most bullies, Watson and Pate will cower in fear and order their “rescue team” at Gibson Dunn to do all they can to convince Judge Kaplan to keep the truth contained in Donziger’s counterclaims from coming to light.

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Sunday, August 12, 2012

Chevron Puts Workers’ Lives In Danger at Richmond Refinery

Allows Plant to Run As Leak Fixed, Workers Barely Escape Ignited Vapor Cloud

Investigators are asking why Chevron allowed its Richmond, California refinery to continue to operate as its employees worked on a pipe leak that resulted in a fire, sending over 1,000 local citizens to the hospital.

According to this San Francisco Chronicle story, the workers – repairing the leak -- barely escaped a vapor cloud that ignited.

They also are asking why an 8-inch carbon steel pipe that failed wasn’t replaced in November during a round of maintenance.

Why? Because Chevron cares only about the bottom line, and if not replacing a pipe saves the company money, then why replace the pipe?

As in Nigeria and Ecuador, the only people who could be harmed in Richmond are mostly poor people of color.

In Nigeria, Chevron refused to evacuate workers from an oil rig that exploded and killed two workers. Chevron had no boats to rescue the workers who jumped into the water. Local fisherman had to do that.  See here.

In Ecuador, Chevron refuses to pay a $19 billion judgment for massive oil contamination of the rainforest, even though the company agreed to abide by the findings of an Ecuador court, when a U.S. judge sent the case to the South American country at Chevron’s request in 2002.

The damage award would be used to clean up its pollution that continues to leech into underground drinking water. It also would provide health care facilities and clean drinking water for the indigenous groups and other people living near the contamination.

And, then there’s this:  In its last earnings statement, Chevron reported $21 billion in surplus cash. 

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Thursday, August 9, 2012

From Ecuador to Richmond to Nigeria, Greedy Chevron Lacks Respect for Communities Where It Operates

Flouts Safety in Backyard, Imagine What It Does in Places Where Few Are Watching
Want to understand the backstory for Chevron's latest environmental disaster in Richmond, California?  
See this video about Chevron’s devastating human rights violations and fraudulent cover-up in Ecuador and read this article about how Chevron essentially forced 154 of its Nigerian workers to jump from a smoking oil rig minutes before it exploded into the ocean after the company refused to evacuate them.
It has been clear for some time that a deep cultural rot has taken hold in Chevron's management team. The company is riddled by an outdated corporate governance structure designed to maintain a weak-kneed Board of Directors incapable of policing managers who don’t care to address fundamental operational and safety problems. (See this press release and this article about Chevron’s being named a company with some of the worst business practices in the U.S.)
For Chevron, it's about pure greed and lies.  Its marketing mantra – we respect the communities where we operate – is an advertising industry joke. The mantra should say:  Chevron promises it will always act as if it is above the law in the communities where it operates.
When will the SEC stand up and hold Chevron to account for its lies to shareholders about the Ecuador case, as documented in this devastating report? In fact, a U.S. Congresswoman recently called on the SEC to probe Chevron's management.
Chevron CEO John Watson and General R. Hewitt Pate – a disciple of Karl Rove -- both of whom are hopelessly conflicted on these issues are being paid huge amounts of money to make sure Chevron continues to pad its pockets at the expense of the communities where it operates. See here.
On recent conference calls with analysts who provide information to shareholders, Watson has lied repeatedly about the $19 billion damage award in Ecuador.  He has called the case a fraud and the Ecuadorians "criminals"– basically blaming the victims, the usual tactic of Chevron’s top brass.
The disaster at Chevron’s refinery in Richmond – where 900 people were sent to the hospital because of toxic fumes --  is another case in point. As Richmond community leader Andres Soto said on Democracy Now, Chevron never hesitates to lie:
Realistically, what we have seen is nothing but spin out of the refinery. On the one hand they apologized to the community (that’s) how they always lead their statements off. But, realistically, they came out and they were blaming the same community and the environmentalists for them not being able to modernize and upgrade their operations there at the Richmond refinery when in fact, we know that this unit, the crude unit that actually caught on fire and blew up, it was never part of that upgrade program.
They could have ensured the safety of this thing in general. But it is that mendacity, the misrepresentation of the truth that Chevron is engaging in that makes it very difficult to deal with them. They refuse to negotiate in good faith with the committee over a wide range of issues, whether it is fair taxation or whether it’s environmental safety and environmental justice.”
Children in Richmond living in poverty and in the shadow of Chevron’s antiquated refinery already are hospitalized for asthma at almost twice the rate of children in the rest of Contra Costa County.
In Ecuador, the eight-year trial produced overwhelming scientific evidence that Chevron deliberately dumped more than 16 billions of gallons of toxic waste into Amazon waterways and abandoned more than 900 toxic waste pits that have pipes to funnel oil sludge into streams and rivers used by indigenous groups for their drinking water.  Thousands of died of cancer, or are at risk of dying. 
In most countries, those responsible would be prosecuted for homicide. But in Ecuador, Chevron stripped its assets from the country and simply refuses to pay the judgment – essentially challenging the Ecuadorians to chase it around the world to seize various assets. (The Ecuadorians have launched legal actions to seize Chevron assets in Canada and Brazil already.)
But that’s not all.  The rot in Chevron is so extreme that the same pattern of polluting local communities and then lying about it has appeared in numerous other places: See this report for details.
**In Brazil, Chevron faces a $22 billion liability and possible criminal penalties for an offshore spill and related cover-up last November in the Frade field, a $3.6 billion deep water oil project that is one of Chevron's biggest capital investments in the world. 
**In Angola, the impacts of oil activity in the Sea of Cabinda are so disastrous that most of the sand on the shores is polluted and black in color, and most of the beaches cannot be used. 
**In Salt Lake City, a rupture of a Chevron pipeline dumped over 33,000 gallons of oil into Red Butte Creek, exposing residents to oil fumes with horrific health impacts. A second rupture occurred just five months later, dumping an additional 21,000 gallons of oil.
**In Canada, Chevron is undertaking a major expansion of its tar sands projects.  Increasing evidence demonstrates that Chevron’s development is contaminating the environment with toxins and severely impacting the health, livelihood and cultural preservation of indigenous communities living downstream.
**In Kazakhstan, Chevron’s development of the giant Tengiz Field emitted such high levels of toxins that the country’s government fined the operation nearly $64 million. 
**In Indonesia, a Chevron pipeline explosion covered part of a village in hot crude oil, leaving two children suffering burn wounds and a community devastated. 
These debacles happen on the watch of CEO Watson and General Counsel Pate.  How rotten is Chevron?  Pate just received a 75% raise (to $7.8 million per year) for getting the company to act like a fugitive for justice from the Ecuador case.  Watson’s compensation last year was on the order of $25 million. See here.
Countries around the world should simply cease doing further business with Chevron until it respects the communities where it operates and begins to obey local laws and court judgments.  By any measure, the Richmond disaster is only the latest illustration of why this company has lost its social license to operate.
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