Take That Chevron: There's A First Amendment After All

Chevron took a severe punch yesterday in its home state of California when a judge there ruled to ditch the oil giant's subpoena against an environmental group that has been highly critical of the company concerning its massive contamination of the Ecuadorian rainforest. See Reuters story below.

"I must err on the side of protecting the First Amendment activity," wrote California Magistrate Judge Nathanael Cousins.

The subpoena request results from a Chevron lawsuit in a New York court, where the company is arguing that Amazon Watch and others, including Chevron's own shareholders, are part of a grand conspiracy to "extort" money from it by applying public pressure through protests, advocacy in front of elected officials and negative media coverage.

An Ecuador court issued an $19 billion damage award against Chevron in February 2011 and an appeals court upheld the verdict, but Chevron has refused to pay, leading the Ecuadorians to file lawsuits to seize company assets in Argentina, Canada, Brazil and the little that's left in Ecuador.

Memo to Chevron: The First Amendment is in the Bill of Rights.

Judge rejects Chevron subpoena of advocacy group in Ecuador case

SAN FRANCISCO | Wed Apr 3, 2013 7:57pm EDT
By Braden Reddall

(Reuters) - A U.S. judge has rejected efforts byChevron Corp to secure documents from a California environmental advocacy group in a fraud case related to a $19 billion award for rainforest pollution in Ecuador.

Magistrate Judge Nathanael Cousins on Wednesday quashed Chevron's subpoena for a deposition and documents from Amazon Watch, which the group's own lawyer described as the U.S. oil company's "sharpest critic."

The subpoena was related to a case scheduled to go to trial on October 15 in which Chevron accuses Ecuadorean residents, their lawyers and advisers of fraud in obtaining a multi-billion dollar judgment from a local court.

Cousins said he had to weigh the free speech rights of Amazon Watch under the U.S. Constitution's First Amendment against the possibility of Chevron uncovering evidence for its case.

"I must err on the side of protecting the First Amendment activity," he said in his ruling in San Francisco federal court, although he left open the possibility that Chevron could seek documents under a narrower scope.

The parties are racing to gather evidence ahead of a May 31 deadline for discovery, Chevron lawyer Ethan Dettmer said.

The start of the trial in October will come almost exactly two decades after Ecuadoreans first filed their case in New York against Texaco, which was bought by Chevron in 2001. Texaco spent years pushing for the case to be moved to Ecuador, which eventually happened a decade ago.

Texaco was accused of contaminating the jungle around Lago Agrio, Ecuador, from 1964 to 1992. Chevron says Texaco cleaned up all the waste pits for which it was responsible before turning the sites over to state-owned Petroecuador, which still operates there. The Ecuadorean court in Lago Agrio issued its judgment against Chevron in February 2011.

Chevron then sued the Ecuadoreans and their long-time legal adviser, Steven Donziger, in Manhattan federal court. Chevron accuses them of illegally pressuring the Ecuadorean court to render a judgment in their favor, making fraud and racketeering conspiracy claims under the U.S. Racketeer Influenced and Corrupt Organizations Act. Donziger and the Ecuadoreans deny they acted improperly.

On Wednesday, Dettmer argued for Chevron that Amazon Watch became part of the fraud by publicizing the Ecuadorean plaintiffs' arguments in an effort to put enough public pressure on Chevron to force the company to settle the case.

But Richard Herz, a lawyer for Amazon Watch, said Chevron had already amassed ample evidence with more than 100 subpoenas, 20 more depositions scheduled, on top of 16 days of deposition from Donziger himself along with his entire computer hard drive. "They have every scrap of paper that he's ever written," Herz said.

The fraud case is Chevron Corp v. Steven Donziger et al, U.S. District Court for the Southern District of New York, No. 11-0691. The related case over the Amazon Watch subpoena was in the Northern District of California, No. 13-mc-80038-CRB.

(Reporting by Braden Reddall in San Francisco. Editing by Andre Grenon)

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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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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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California Legislators Plan To Travel To Ecuador To See Chevron’s Contamination

After meeting with members of the California State Legislature, tribal leader Emergildo Criollo and officials with the Rainforest Action Network and Amazon Watch report that several state legislators said they would travel to see the oil contamination in Ecuador’s rainforest, left by Texaco which Chevron purchased in 2001. One of the state legislators, State Senator Loni Hancock, represents the district where Chevron is headquartered. Below is RAN’s blog about the meeting.

CA Lawmakers want to help make Chevron clean up Ecuador

posted by Brianna in RAN General on March 4th, 2010


Last night, Emergildo Criollo, the Indigenous leader from Ecuador, met with California legislators and asked for their support in the 16+ year campaign to demand Chevron remediate massive oil contamination affecting over 30,000 people. Along with supporters from Amazon Watch and Rainforest Action Network, Emergildo spoke with lawmakers about the impact of California’s largest company in Ecuador, and what they can do to support his community’s call for environmental cleanup and action to prevent such tragedies in the future.

Senator Fran Pavley and Assemblymember Jared Huffman hosted the reception in Sacramento entitled, “From Ecuador to California: California’s largest corporation, one of the world’s worst oil related disasters, and what California’s legislators can do.”



Despite the pouring rain, the reception was packed with Senators, Assemblymembers, and their staff. Lawmakers in attendance included Senator Fran Pavley, Senator Loni Hancock, Assemblyman Manny Perez, Assemblyman Paul Fong, Assemblyman Ira Ruskin, and Assemblyman Jared Huffman. These key leaders from both the Environmental and Latino Caucuses not only listened to Emergildo’s story, but spoke of their desire to support the people of Ecuador who are suffering and dying because of Chevron’s operations.

Assemblymember Jared Huffmand spoke of the need “to remedy a very serious environmental and human tragedy.”

At the reception, Emergildo shared his story. He told the lawmakers about how he was only 6 years old when Chevron (then Texaco) began oil drilling in his community. He spoke of how his family was forced to relocate because of the contamination. About he had to part centimeters of oil off of the river to drink the water. About how he has lost two sons and nursed a wife through uterine cancer because of the contamination. His family drank, bathed, and fished in water that was poisoned by oil dumping.

After telling his story, Emergilod asked all of the Assemblymembers and Senators for their help and invited them to visit his home and see for themselves the devastation Chevron’s behavior has caused.

Senator Loni Hancock, from the Contra Costa district where Chevron is headquartered, said she “would like to come and visit. This is an international issue and an issue here as well.”

Assemblymember Manny Perez had a heartfelt exchange with Emergildo in Spanish and lawmaker after lawmaker stood up and said they wanted to learn more and to see what action they could take.

We are excited about the possibilities moving forward and look forward to working closely with California’s legislators to make sure California’s largest corporation is held responsible for cleaning up one of the largest environmental disasters of all time.

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Chevron Facing Potential Shareholder Revolt Over Ecuador

This press release was online today about Chevron's liability and how pissed some shareholders are about it. Take a look:

Chevron Management Dealt Major Blow with CalPERS Announcement on Ecuador

California Pension Fund Voting for Resolution Stemming from Chevron's $27 Billion Ecuador Liability in Rainforest

Pressure Grows as Funds from Connecticut, Philadelphia, Detroit Defy Recommendation of Chevron Management

SAN FRANCISCO--(BUSINESS WIRE)--Chevron is facing a shareholder rebuke at its annual meeting next week over the company's $27 billion Ecuador liability with the announcement that the nation's largest public pension fund in California is defying the recommendation of company management and voting for a resolution on the issue.

CalPERS, which owns an estimated $600 million of Chevron stock and controls $170 billion in assets, announced on its website today that it will vote for a resolution calling on Chevron to examine whether it complies with host country laws and environmental regulations. Chevron has been heavily criticized for violating such laws in Ecuador, leading to a humanitarian crisis among indigenous and farmer communities in an area of rainforest where Texaco admitted to dumping billions of gallons of toxic waste from the mid-1960s to the early 1990s.

New York State Attorney General Andrew Cuomo has also opened an investigation of Chevron to determine if it is misleading shareholders about the financial risks the company faces in Ecuador.

"The CalPERS vote is a significant announcement that puts enormous pressure on Chevron's management in the investor community," said Dan Orlow, a private American investor who is advising the Amazonian communities. "It demonstrates that important pension funds are now lining up against Chevron on Ecuador."

CalPERS and the two New York funds – the state's Common Retirement Fund and the Employees Retirement System of New York City -- are three of the largest public pension funds in the U.S. and together control more than $1 billion of Chevron stock. Other public pension funds that have announced their support of the resolution include those of Connecticut, Pennsylvania, Maryland, and the pension funds of firefighters and police in Detroit and other large cities.

Funds from three large unions -- the AFL-CIO, Teamsters, and AFSCME -- have announced their support of the resolution along with several smaller private funds, such as Trillium Asset Management in Boston.

The Ecuador liability, featured earlier this month on 60 Minutes in an unflattering report for Chevron, stems from the dumping by Texaco (now Chevron) of billions of gallons of toxic waste in the rainforest when it operated an oil concession from 1964 to 1990. Thousands of rainforest residents have been fighting a legal battle against the company for clean-up since 1993.

The case is in Ecuador at Chevron's request after it was initially filed by the communities in U.S. federal court. The company agreed to be subject to jurisdiction and be bound by any ruling in Ecuador as a condition of the case being transferred out of U.S. court, which makes the enforceability of a judgment out of Ecuador likely despite what the company is saying to shareholders, said Steven R. Donziger, an American legal advisor to the Amazonian communities.

The liability appears to be the largest ever faced by an oil company for environmental damage, and almost surpasses the $31 billion price tag paid by Chevron to purchase Texaco in 2001. Chevron's management has announced it expects an adverse judgment in the case but has said it would appeal, while the plaintiffs have announced they plan to ask the court to hold the amount of any judgment in escrow pending appeals – a move that could severely hinder the company's cash position in a time of relatively low oil prices, according to analysts.

Previously, the Securities and Exchange Commission denied an attempt by Chevron management to prevent the Ecuador resolution from coming to a vote.

The announcement by CalPERS comes the same week that Chevron's management filed with the SEC an open letter to shareholders urging them to vote against the Ecuador resolution. That letter – signed by Chevron Corporate Secretary Lydia I. Beebe – contains incorrect and misleading information and appeared to backfire, said Donziger.

"Each assertion in the Beebe letter is either false, materially misleading, or incomplete except for the part where the company admits it might lose the legal case," said Donziger.

"Our team is being contacted repeatedly by shareholders and analysts who are concerned that Chevron management is not fully and honestly disclosing the company's exposure in Ecuador," said Orlow. "There is a real concern that Chevron is not playing it straight and that it might have overpaid for Texaco."

The Cuomo investigation is being brought under New York's Martin Act, which allows for both civil and criminal liability for fraud. Several New York-based shareholders, including Amnesty International, had requested the probe to determine if the company's public disclosures complied with securities regulations.

The annual meeting is scheduled for May 27 at Chevron headquarters in San Ramon, CA. Indigenous leaders from Ecuador's Amazon are expected to attend and confront Chevron's management about Ecuador.

In past annual meetings, Chevron CEO David O'Reilly occasionally has treated the Ecuadorian visitors with a discourteous tone and shut down the microphone when they attempted to speak, said Donziger.

About the Amazon Defense Coalition

The Amazon Defense Coalition represents dozens of rainforest communities and five indigenous groups that inhabit Ecuador's Northern Amazon region. The mission of the Coalition is to protect the environment and secure social justice through grass roots organizing, political advocacy, and litigation.

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