Interesting Reads: BP Owes $192 Billion On Gulf Coast & Chevron's Secret Deal With Ivonne Baki

Interesting reading on The Huffington Post and The Business Insider. See below.

BP Owes $192 Billion for Gulf Oil Disaster, Not $15 Billion Settlement It's Seeking

On Friday, the Financial Times reported that BP is hoping to reach an agreement with U.S. authorities which would require it to pay under $15 billion to settle all criminal and civil penalties arising from the 2010 Gulf oil disaster. The Department of Justice is reportedly seeking $20 to $25 billion. Negotiations between the DOJ and BP are accelerating and "an agreement could be reached before the Democratic party's convention in September," the FT reported.

While $15 billion sounds like a lot of money -- and it is -- it is a far cry from what BP owes for the many costs associated with the largest offshore oil spill in history. To date, a full accounting of exactly what BP should owe for its crimes in the Gulf has not been made public. Such an accounting is vital if we are to ensure that justice and restoration are delivered to the Gulf Coast and that such a catastrophe never occurs again.

A straightforward application of just the most pertinent U.S. laws yields a fine of $192 billion. (For simplicity sake, I only address BP's fines.)

Sound high? Here's why it's not. (read more)

Why Chevron Fired Ogilvy


Chevron knew full well that an executive at its PR agency, Ogilvy PR, had ties to the Andean parliamentary president in Ecuador, Ivonne Baki, and fired the shop because the agency failed to bend the Ecuadoreans to its will, not because it was a conflict of interest: That, in a nutshell, is the conspiracy theory alleged by The Chevron Pit, a blog maintained by rain forest activists who successfully sued Chevron for its pollution of the Latin American jungle.

Chevron ostensibly fired Ogilvy after it discovered that one of its executives, Felipe Benitez, had given advice to both the Ecuadorean government and environmental groups hoping to preserve the Amazon. We pointed out that the move seemed weird because Benitez's LinkedIn profile listed the fact that he had those clients dating back to 2008, so this shouldn't have come as a surprise.

Chevron Pit now alleges that Chevron knew about Benitez all along and was hoping that he could sway the government to not enforce an $18 billion judgment environmental activists won against the company for polluting the forest:

There is simply no way Chevron could not have known that the firm of its lead lobbyist on the Ecuador matter was also representing Ecuador's government. In fact, we suspect that was all part of the "value" Ogilvy was offering Chevron for its fee of $600,000 per year.

(read more)

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Visit and watch a video on ChevronToxico.com to find out more.

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Rattled Chevron Fires P.R Giant Ogilvy, But Questions Remain

The pressure on Chevron over its $18 billion Ecuador environmental judgment appears to be rattling company management. We already reported how 40 institutional investors hammered Chevron in recent days over its bungling of the litigation, asking that the long-running case be settled before the oil giant suffers further damage to its reputation.

Now we have the bizarre saga of Chevron firing its longtime lobbyist in Washington, the highly-respected and influential Wayne Berman, over something related to the Ecuador matter. The question is what is that something.

Last week it was reported Chevron fired Berman's firm Ogilvy because one of the agency's low-level employees offered advice on environmental public relations at an event organized by Amazon Watch. Amazon Watch is that pesky group of environmental activists who have driven Chevron crazy for years over its failure to clean up its mess in Ecuador. (Note that the young PR executive who spoke at the Amazon Watch event did not even mention Chevron and Ecuador.)

This week Advertising Age reported that Ecuador's celebrated Yasuni environmental project also  "halted its relationship with" Ogilvy. The Yasuni is an area of oil-rich rainforest inhabited by two non-contacted indigenous groups. Ecuador's government is trying to raise money from governments in exchange for a promise never to let oil companies exploit the territory.

We were surprised to learn that Ogilivy was representing Chevron -- a sworn enemy of Ecuador's government given their battles over who should clean up the oil pollution in the country -- and Ecuador's government at the same time.

Is there a connection between the two?

We think so. There is simply no way Chevron could not have known that the firm of its lead lobbyist on the Ecuador matter was also representing Ecuador's government. In fact, we suspect that was all part of the "value" Ogilvy was offering Chevron for its fee of $600,000 per year.

Chevron Pit readers may remember postings from several months ago (here and here) about Chevron offering a bribe to Ecuador's government in exchange for killing or stopping enforcement of the $18 billion judgment against it for massive oil contamination.

The bribe included a $500 million contribution to -- you guessed it -- the Yasuni project coupled with an effort to recruit corporations and governments around the world to raise more money.

But the plot thickens. The person heading up the fundraising effort for Ecuador is Ivonne Baki, who has close ties to Chevron and has tried to intercede on Chevron's behalf before to kill the lawsuit. See this press release and this Miami Herald story. Baki was also reported to be floating Chevron's bribe offer to kill the case from her perch inside Ecuador's government.

How is it that Oglivy and Berman, who have represented Chevron since 2004, acquired Yasuni as a client around the same time Chevron tried to bribe Ecuador through its Yasuni payment?

Was Chevron subsidizing the Yasuni PR effort through its own payments to Oglivy as a way to curry favor with Ecuador's government to kill the lawsuit?

Did Chevron use a young PR exec as a scapegoat to fire Oglivy because the Yasuni bribery plot turned south, possibly exposing company officials to liability under the Foreign Corrupt Practices Act?

Stay tuned.

Ivonne Baki -- Yasuni

Ogilvy- PR Firm 

John Watson -- Chevron

Become a follower of The Chevron Pit.

Also follow us on Twitter at @ChevronPit and like us on Facebook.

Visit and watch a video on ChevronToxico.com to find out more.

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Chevron Fires Big Shot Lobbyist Wayne Berman After He Hires Young PR Environmentalist

Chevron may be huge, but it's full of people with small minds.

The gigantic public relations firm, Ogilvy, hired a young man who has been involved in environmental causes, and Chevron went ballistic, firing the firm and along with it, Wayne Berman, a powerful and influential lobbyist in Washington, DC. Berman is an Ogilvy partner and has worked for Chevron since 2004.

We hear Berman is not happy. Maybe more to follow?

We know all about Chevron's revenge tactics. If you mess with them, you pay a price.

See Bloomberg story below.

Chevron Fires Ogilvy As Lobbyist Over Ecuadorean Dispute

By Jim Snyder - May 31, 2012 8:00 PM ET

Chevron Corp. (CVX) fired Ogilvy Government Relations as its U.S. lobbyist after a person affiliated with the firm spoke to a group advocating for residents of the Ecuadorean rainforest in a multibillion legal fight with the oil company, a person familiar with the matter said.

On May 9, Felipe Benitez of Ogilvy’s public relations branch gave a presentation to San Francisco-based Amazon Watch on “strategic communications for environmental defense and protection on human rights,” according to that group’s website. Lloyd Avram, a spokesman for Chevron, which was Ogilvy’s third-largest lobbying client last year, said the company discovered a serious conflict recently. He declined to comment about the nature of the issue or the date Chevron ended its relationship with Ogilvy.

Another person, speaking on the condition of anonymity due to the sensitivity of the matter, said the conflict concerned Benitez and his talk to Amazon Watch, which advocates on behalf of indigenous tribes in the Amazon basin and has called damage from oil drilling in Ecuador “Chevron’s Chernobyl.”

“Chevron discovered a material conflict of interest with Ogilvy,” Avram said in an e-mailed statement. “It could not be resolved and made our relationship with them untenable. Under the terms of our agreement, we terminated the relationship.”


Ogilvy Revenue

Ogilvy received $600,000 from Chevron in 2011 to lobby on energy, environmental, tax and financial policies in the U.S., according to federal lobbying records, making the oil company its third-biggest client by revenues, according to the Center for Responsive Politics, which tracks political and lobbying spending.

Ogilvy, the sixth-largest U.S. lobbying firm by revenue, according to the center, had represented Chevron since at least 2004, public records show. Ogilvy’s various units are owned by WPP Plc (WPP), a communications company based in Dublin. Avram declined to comment on Chevron’s plans to replace Ogilvy.

While Chevron, based in San Ramon, California, doesn’t operate in Ecuador, it has become embroiled in a lengthy legal fight over the alleged disposal of toxic wastewater from drilling operations by Texaco Inc., which used to operate in the country and was acquired by Chevron in 2001.

Previous Work

Previously, Benitez worked for Fenton Communications, and had helped Ecuador improve its global image, according to his page on Linked In, a social networking website.

“Chevron informed Ogilvy & Mather of its decision to end its relationship with Ogilvy Government Relations because of a perceived conflict with Ogilvy PR,” Rachel Ufer, a spokeswoman for Ogilvy public relations, said in an e-mailed statement, referring to the parent company. “As this is primarily a personnel matter, we are unable to provide further detail.” Amazon Watch didn’t return a phone call seeking comment.

Chevron is fighting an $18 billion judgment from an Ecuadorean court finding the company was responsible for damage. The company argues that Texaco performed all the environmental remediation under the terms of its contract with Ecuador. It has accused the plaintiffs’ lawyers and Ecuadorean officials of fraud and misconduct in the case.

Ecuadoreans filed a lawsuit yesterday in the Superior Court in Ontario targeting Chevron assets in Canada as a way to begin collecting on the judgment, because the oil company has few assets in Ecuador.

In Washington, Chevron spent more than $9.5 million on lobbying last year and keeps a team of outside firms to lobby on a variety of issues.

More than 70 companies and trade groups paid Ogilvy Government Relations more than $20 million to lobby on their behalf in 2011, according to the Center for Responsive Politics, which is based in Washington.

Become a follower of The Chevron Pit.
Also follow us on Twitter at @ChevronPit and like us on Facebook.
Visit and watch a video on ChevronToxico.com to find out more.
Support Amazon Watch and Rainforest Action Network.

Read More