Chevron Knows No Bounds In Ecuador Case, New York Times Article Shows

In a blog on The Huffington Post, the former U.S. spokesperson for the Ecuadorians who won a $19 billion judgment against Chevron for oil contamination argues a recent  New York Times article clearly shows that Chevron knows no bounds in its legal attacks to avoid being held accountable for the destruction it caused in the Ecuadorian rainforest.

Read the blog, written by Karen Hinton, here.

The New York Times article, written by energy reporter Cliff Krauss, is a balanced look at the 20-year-old lawsuit, but neglects to point out some key facts about the case:

1 -- Most importantly, it incorrectly states that the Ecuadorians filed their lawsuit against Texaco, now owned by Chevron, after Texaco entered into a remediation agreement with the Government of Ecuador. They filed their lawsuit in 1993 in a U.S. court. Not long after, Texaco appealed, lobbied, and probably bribed Ecuador's government to get the lawsuit dismissed. It would not and that led to the 1995 remediation agreement, which the U.S. court ignored. Equally important is the fact that the agreement carved out the Ecuadorians' lawsuit, stating that the third-party complaints were not covered by the agreement.

2 -- Chevron has never denied that it has spied and possibly continues to spy on one of the Ecuadorians' attorneys, Steven Donziger, a human rights lawyer whose reputation Chevron is clearly trying to destroy, if not his entire ability to make a living to support his family.

3 -- Chevron charges that the Ecuadorians' lawyers "ghostwrote" an Ecuador court report and two judgments, but have any reporters taken a close look at U.S. Judge Lewis Kaplan's recent rulings on Chevron's fraud countersuit? Kaplan's rulings are only slight re-writes of legal briefs filed by Chevron lawyers. U.S. judges often take arguments written in briefs, submitted by one side or the other, and use them in their briefs. In Ecuador, it's no different.

4 -- Krauss quotes Chevron saying that Donziger's "confidents" have turned against him, but everyone involved in the case knows that the individuals in question have been threatened and pressured by Chevron. For more than four years, Chevron pressured clients of Stratus Consulting, the environmental engineering firm for the Ecuadorians, to dump the firm. On the verge of bankruptcy resulting from the Chevron litigation against it, Stratus succumbed to the pressure with an affidavit disavowing the process for writing one of the court reports on contamination at the Chevron oil sites. Chevron dropped its lawsuit against Stratus; however, Stratus continues to stand by its findings of contamination. See here and here.

5 -- Another of Stratus' environmentalists is quoted from a video, saying that the contamination had not spread beyond the oil sites. Had Chevron allowed the reporter to see the entire video, he would have seen that she was concerned about the number of tests taken so far and was arguing for more testing to determine the impact of the contamination beyond the pits. Donziger was arguing that the Ecuadorians only had so much money to spend on tests; that contamination was evident at the oil sites, and that was enough to prove Chevron's guilt. Regardless, there is contamination at the well sites; people live near them; they should be cleaned.

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Chevron's Lies In Ecuador Case Evident in NBC News Report

NBC Nightly News Ann Curry recently returned from Ecuador with this account of how impoverished indigenous groups in the Amazon rainforest are preparing to fight -- literally and metaphorically -- their government's efforts to explore for oil on their native, pristine lands.

Meanwhile, some of these same groups are fighting in a U.S. courtroom 3,000 miles away 2,000 Chevron lawyers and a U.S. federal judge who believe a $19 billion judgment the Ecuadorians won in an Ecuador court is a fraud. Needless to say, The Chevron Pit strongly disagrees, while Chevron refuses to pay the judgment.

Curry's cameras document the beauty and the uniqueness of the Ecuadorian jungle in the Yasuni Park, reminding viewers that this was what another part of the rainforest once looked like before Texaco, now owned by Chevron, explored for oil five decades ago, using substandard drilling practices to maximize its profits. See this video to understand how Texaco, now Chevron, ruined the rainforest and destroyed a way of life for at least five indigenous groups.

Curry features an interesting proposal by Ecuador President Rafael Correa, who is asking developed countries driven by huge oil consumption to pay Ecuador NOT to explore for oil in the Yasuni Park, given that its thick and heavy vegetation helps keep the world's air supply cleaner by soaking up carbon dioxide.

By not developing the area, the rainforest is saved and the global environment improved but potential revenues from oil sales are not realized, depriving poor people of an education, safe housing and job opportunities. Correa believes Ecuador is, so to speak, scratching the developed world's back, but not getting any scratch in return.

On the other hand, Chevron would rather pay law firms like Gibson Dunn, Jones Day and King & Spalding hundreds of millions of dollars to fight the Ecuadorians in court, rather than spend even close to a similar amount on cleaning the soil and drinking water that Texaco contaminated. Chevron calculates that tactic is preferable than setting a precedent of actually helping people.

Though it's unlikely we've forgotten, the Nightly News segment reminds us that money -- the ability to make it and not lose it -- makes the world go around.  Watch the segment:

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More Chevron Spies & Lies

This Huffington Post blog is the stuff of spy novels and would be hard to believe if it all hadn't been so well-documented.

In the blog, Karen Hinton offers up a compilation of some of the dirty tricks played by Chevron's private investigative firms that have been hired to discredit the $19 billion judgment against the company for oil contamination.

A short excerpt reads:

The Chevron Corporation has spied and -- perhaps is still spying -- on the Republic of Ecuador, fueling a fierce battle between the oil giant and President Rafael Correa, who is calling on other South American countries to hold Chevron accountable for the world's largest oil-related disaster in the Ecuadorian rainforest. 

Fearing the loss of an historic, long-running environmental lawsuit in the Ecuadorian rainforest in 2009, Chevron secretly videotaped the judge hearing the case - with a spy pen and spy watch - in an effort to derail the trial by entrapping him, government officials and indigenous community leaders in a faked bribery scandal. 

It goes without saying that if Chevron had been caught trying to secretly videotape a U.S. judge, it would be facing criminal charges.

Read the entire blog here.

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Chevron Boxes Itself In With SEC Move

Chevron's decision to ask the SEC to allow it to dropkick shareholder resolutions calling for the duties of Chairman and CEO to be split -- essentially demoting current Chair and CEO John Watson -- has boxed the oil giant into a public relations defeat.

It's a  lose-lose proposition for the multi-national corporation.

The shareholders are concerned about the way Watson and other Chevron executives have handled the $19 billion judgment against the company for massive oil contamination in the Ecuadorian rainforest. Watson and his 2,000 lawyers and legal assistants are spending hundreds of millions of dollars working on a legal attack to stop enforcement of the judgment.

The contamination is obvious. Everyone agrees Chevron's predecessor Texaco put it there. The people suffering are impoverished indigenous tribes and farmers who brought the original lawsuit 20 years ago. As the years have passed, Chevron has suffered from negative publicity casting it as an oil company concerned only about profits.

A growing number of shareholders are saying enough is enough.

Instead of finding a way out of the environmental nightmare, Chevron digs itself deeper into a hole with its SEC request to trounce on its shareholders, by nixing their resolutions and even subpoenaing them in its legal battles.

David Baker in today's San Francisco Chronicle describes the situation, and it's clear from his article that if the SEC rules in Chevron's favor, it will make the company look like the corporate thug that it is. Plus, it won't stop the shareholders from protesting at their annual meeting.

And, if the SEC doesn't, then the shareholders can once again introduce their resolutions and, likely, increase their vote tally, as they have done year after year.

Smart move, Chevron.

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What Happens When Big Oil Freaks Out

Chevron Spending $400 Million A Year On Ecuador Case, Subsidized By U.S Government?

Since 2011, when an Ecuadorian court found Chevron guilty of widespread contamination of the Amazon rain forest and ordered the oil giant to pay $19 billion in damages, Chevron has been spending around $400 million annually on 2,000 legal experts from 60 law firms to evade paying the judgment, according to a recent court filing.

But, for all the money and all the lawyers, Chevron is facing enforcement actions in four countries -- Ecuador, Canada, Argentina, and Brazil – where the Ecuadorians could seize their billions from Chevron’s assets. And, Chevron continues to lose in U.S. courts on the merits. See here.

Meanwhile, the New York Times reports today that Chevron has received $2.6 billion in federal tax-free bonds to expand a refinery in Mississippi. The New York Times said Chevron has received more than any U.S.-based corporation and described it as "sweetheart rates for corporations."

What this means is the U.S. federal government is subsidizing Chevron's legal bills as a result of its misconduct in Ecuador, not to mention litigation and accusations Chevron has been defending in Brazil, California, Angola, Nigeria and other places across the globe. See here. 

In a desperate attempt to stop enforcement of the $19 billion judgment, Chevron has accused the Ecuadorian villagers and their lawyers for “fraud” and sued them in about 20 different U.S. court jurisdictions, filing hundreds of legal motions and millions of pages of discovery documents and taking over 40 depositions from experts and consultants -- all designed to distract from the 16 billion gallons of toxic production water it dumped into the Ecuadorian rainforest and the 900 unlined pits Chevron built to store permanently pure crude oil. 

For more details, read this press release.

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Not Chump Change: $2 Billion In Chevron Assets Likely Frozen In Argentina Soon

The Ecuadorians, who recently won a $19 billion judgment against Chevron for oil contamination in the Amazon rainforest, have filed a lawsuit in Argentina, asking a court to freeze $2 billion in Chevron's Argentina assets as partial payment for the judgment. Chevron has refused to pay, even though the Ecuadorian courts have ordered the company to do so, and U.S. courts have said the judgment can be enforced. Chevron has few assets in Ecuador.

The chances of the Ecuadorians' collecting are good because Argentina and Ecuador have an agreement that they treat each other's court decisions as their own. Chevron's shareholders should be concerned because $2 billion ain't chump change.

Read more here:

Ecuador Villagers Seek $2 Billion of Chevron Assets In Argentina

Buenos Aires, Argentina – Indigenous groups and villagers from Ecuador are filing suit today to freeze an estimated $2 billion of Chevron assets in Argentina to help pay for a remediation of the extensive toxic pollution left by the oil giant on their ancestral lands in the Amazon rainforest, representatives of the communities announced.

The move is the fourth legal action filed to enforce a $19 billion judgment in Ecuador against Chevron for creating what experts believe is the world's worst oil-related contamination, dubbed the "Rainforest Chernobyl" by local communities. Earlier legal actions were filed this year against Chevron assets in Canada, Brazil, and Ecuador.

Brought by the prominent lawyer Enrique Bruchou, the action in Argentina differs from the earlier seizure actions in that it derives its authority in part from an international treaty in Latin America called the Inter-American Convention on the Execution of Preventive Measures. The treaty, which dates from the late 1970s, allows for the automatic freezing of assets of a defendant that fails to abide by the law and refuses to pay a final foreign judgment.

The Preventive Measures treaty has been ratified by Argentina, Ecuador, Colombia, Peru, Paraguay, Guatemala, and Uruguay. Venezuela and Chile have signed the treaty, but have not ratified it.

Chevron maintains oil operations and bank accounts in Argentina worth about $2 billion, said Bruchou and Pablo Fajardo, the lawyer representing dozens of indigenous and farmer communities in Ecuador. Chevron's operations in Argentina produce about 26,000 barrels of crude and 4 million cubic feet of natural gas daily.

In all, the amount of Chevron assets in the four countries are worth at least an estimated $8 billion, said Fajardo. Because the judgment in Ecuador against Chevron is for $19.04 billion, seizure actions will continue to be filed against Chevron assets in more countries to make sure the full amount of the judgment is collected, he added.

Bruchou, a native of Buenos Aries, founded his firm in 1990 after working for several years at the U.S. law firm Shearman & Sterling. International Financial Law Review named his law firm, Bruchou Fernandez Madero & Lombardi the best in Argentina for five consecutive years. Bruchou himself was named "Law Firm Leader of the Year" in 2011 by the prestigious Latin Lawyer magazine.

In a press conference in Buenos Aires on Wednesday, Bruchou said that enforcement of the Ecuador judgment in Argentina and other Latin American countries will signal to foreign investors that they should apply the same environmental standards they use at home to areas where vulnerable indigenous and farmer communities are located. "We ask for no more than that and no less than that," he said. "We call it responsible foreign investment."

Just recently, a court in Ecuador ordered the seizure of an estimated $200 million in Chevron's assets in that country, which include bank accounts and a $96.3 million debt owed the oil giant by Ecuador's government. Any further investments that Chevron tries to make in the four countries would be subject to seizure and auction, said Fajardo.

The case originally was filed in the U.S. in 1993, but shifted to Ecuador in 2002 at Chevron's request after the oil company praised the courts there as fair and transparent.

After an eight-year trial, the court in Ecuador found in 2011 that Chevron admitted to deliberately dumping billions of gallons of toxic waste into Amazon waterways, decimating indigenous groups and creating an epidemic of cancer that has killed or threatens to kill thousands of people. A video on the case can be seen here; a written summary of the evidence can be read here; and a segment from the U.S. news show 60 Minutes on the case can be viewed here.

The area affected by Chevron's toxic dumping was once one of the most bio-diverse ecosystems on the planet.

Luis Yanza, a representative of the dozens of rainforest communities that brought the lawsuit, praised the filing of the action in Argentina. "The time has come to use the force of law to obligate Chevron to correct its atrocious behavior in our country," Yanza said.

"We have fought now for almost two decades to correct the injustice created by Chevron in Ecuador," said Fajardo, who grew up in Ecuador's oil fields and is the recipient of a CNN Hero Award. "While Chevron might think it can ignore court orders in Ecuador, it will be impossible for Chevron to ignore court orders in countries where it maintains substantial assets," he added.

The action in Argentina comes just weeks after the U.S. Supreme Court denied Chevron's attempt to block enforcement of the judgment, while numerous other U.S. courts have flatly rejected the oil giant's claim that the judgment was the product of "fraud". In May, Chevron CEO John Watson suffered a stunning reprimand when investors holding 38% of the company's shares voted for a resolution that found he mishandled the Ecuador case.

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As Bad As Chevron Behaved Last Year, This Year It's Worse

Rebecca Tarbotton got it exactly right in her blog yesterday, titled Chevron's Worst Year Ever.

 As bad as oil companies behave -- both here at home and abroad -- Chevron takes the cake, especially this year. In a series of blogs, Tarbotton is posting about the oil giant's massive legal losses in Ecuador, its offshore disasters in Brazil and Nigeria, the indisputable contamination it is causing today in Kazakhstan, as well as the tragic deaths of the company's own employees in several locations, including in its home state of California.

Tarbotton is amplifying the voices of people who live in these countries and are fighting Chevron's efforts to hide behind its feel-good public face of expensive advertising designed to misled people, especially here in the United States.

She quotes from a letter to Chevron, written by Sergey Solyanik of Crude Accountability about the village of Berezovka in Kazakhstan:

"For nine years the residents of the village of Berezovka, which is located a mere five kilometers from the Karachaganak Oil and Gas Condensate Field, have been fighting for relocation to an environmentally clean and safe location. When exploitation of the field first began, the health of the 1300 residents of Berezovka radically worsened. The population is now suffering regularly from headaches and memory loss, muscular-skeletal problems, vision loss, cardio-vascular difficulties, serious gastroenterological problems, upper respiratory illness, and skin ailments. According to independent data, approximately half of the villagers suffer from chronic illness. The residents feel the impacts of hydrogen sulfide and other toxic chemicals that are connected with oil extraction and refining." 

Solyanik was one of about 30 people who Chevron threw out of a shareholder meeting two years ago, even though he had a legitimate proxie and had traveled all the way from Kazakhstan just to attend. While Solyanik will not be able to attend Chevron's shareholder meeting next week on May 30th, Luz Trinidad Andrea Cusangua of Ecuador will.

Here are the words of Cusangua, a farmer whose source of water has been contaminated by Chevron's oil.  She wrote to Chevron:

"We have won the lawsuit against Chevron, but still the company doesn’t want to accept responsibility for what they have done. They have no shame. They remain arrogant. They call us liars. But I have lived through the contamination that they left here. They can’t contradict me! The river close to my house was our source of life, and when Texaco drilled the wells Sacha 89, 90, 91 and even Sacha 5 and 13, the river became filled with oil. My children suffered because of the contamination. Their feet rotted, they had warts and rashes on their skin. And my mother got cancer on her nose. Do you think that there would be so much cancer in a virgin forest? I remember the nights when my feet would burn, and I would cry from pain, and slowly my feet would start to rot, and the skin would fall off piece by piece. All of this sickness was caused by the contamination that Chevron left here in the Amazon."

Luz Trinidad Andrea Cusangua

Tarbotton will be featuring the opinions of other people from across the globe in future blogs.

Chevron will dismiss these people and say that they are lying; that others are to blame; that there is a grand worldwide conspiracy to extort money from the company.

But it cannot be that so many people from so many countries are so wrong, and Chevron is so right.

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Chevron's Grand Shareholder Deception

Hew Pate, Chevron's $7.8 Million Lawyer, “Celebrates" Another Legal Defeat At the Hands of Ecuador's Rainforest Communities

The rulings this week by U.S. federal judge Lewis A. Kaplan denying Chevron's motion for attachment in the Ecuador case was by any reasonable measure a setback for the oil giant in its campaign to evade paying the $18 billion court judgment.  In fact, it is the latest of string of stunning losses for Chevron in courts in the U.S. and Ecuador over the last several months -- losses that can be laid at the doorstep of R. Hewitt Pate, Chevron's General Counsel and the mastermind behind the company's increasingly confused legal strategy in the Ecuador matter. See here.

These losses include a unanimous reversal in January by a U.S. federal appeals court of an injunction purportedly barring enforcement of the Ecuador judgment and an affirmance earlier this year by the Ecuador appellate court of the overwhelming evidence that the company committed crimes and fraud in Ecuador. See here and here.

Chevron's contamination in Ecuador also has been confirmed by numerous independent journalists and is simply indisputable -- see this 60 Minutes segment and this video prepared by the plaintiffs.  In addition, Chevron's lead outside law firm in the case -- Gibson Dunn & Crutcher -- has been sanctioned repeatedly for committing ethical violations even as it bills the company hundreds of millions of dollars as part of a "rescue operation". See here.

One would never know from Pate that the legal prospects of Chevron are dimming or that the company is being taken for a ride by Gibson Dunn.  In a press release that can only be described as the ultimate in chutzpah, Pate celebrated Chevron's latest legal defeat yesterday by claiming "victory" because the judge tossed out only a few of the fraud claims the company filed against lawyers for the plaintiffs as opposed to all of the claims.  In keeping with his spin, Pate failed to mention in his press release that Kaplan expressly found that Chevron is unlikely to prevail on the remaining fraud claims.

We have said it before:  Pate and the higher-ups in Chevron management are leading Chevron and its shareholders down a dangerous path over the Ecuador liability, and possibly over a cliff.  The spin is getting increasingly desperate as the walls begin to close in on the company's plan to evade paying the judgment.

Whether spinning bad news into fake news is a deliberate strategy or a function of internal self-delusion can be sorted out by others -- including SEC regulators who have been called on to determine whether the company is producing materially false and misleading information about the Ecuador liability. See here.

These are our takeaways on the Kaplan decisions this week:

1) Pate's latest press release shows the company continues to mislead shareholders over the Ecuador liability, as documented in stunning detail by Canadian securities lawyer Graham Erion in this report released in April. Pate's press release was designed to sugarcoat an adverse legal decision, exactly the kind of gamesmanship that regulators frown upon.  Expect a new report soon from the plaintiffs on how Pate's press releases on the Ecuador case are designed to hide risks from shareholders and the markets.

2) Judge Kaplan, who used to consistently favor Chevron in his decisions, has started to lose his appetite for the case after getting sternly rebuked in January by the U.S. court of appeals in New York.  Not only did Kaplan deny a Chevron motion to attach the assets of the Ecuadorians for the second time, he also dismissed two fraud claims and cast serious doubt on Chevron's remaining RICO claims against American lawyer Steven Donziger. (The Ecuadorians maintains that Chevron's claims are baseless and are a ruse to distract attention from its own criminal misconduct in Ecuador.)

3) It is increasingly clear that Chevron's RICO case is a dog reluctant to hunt.  Worse for Chevron, if the case hunts -- as in, actually survives various motions to dismiss and gets to a jury -- it can bite Chevron far more harshly than it can bite Donziger or his Ecuadorian clients.   Chevron will be on the defensive because of counterclaims about its attempts to corrupt the Ecuadorian judicial system.  A jury will be able to hear evidence about Chevron's sham remediation, its efforts to bribe Ecuador's government, its attempts to doctor evidence through its "dirty tricks" operative Diego Borja, and its threats to judges.  All of this has been detailed in a sworn affidavit from Juan Pablo Saenz, an Ecuadorian lawyer.

4) Pate is going to have a whale of a time explaining the Ecuador problem at the company's upcoming annual meeting on May 30.  How he explains why several prominent law firms around the world have rallied to the cause of the Ecuadorians when the case is supposedly an "extortionate scheme" will be interesting to watch. Further, a large group of Chevron shareholders is pressuring the SEC to investigate Chevron based on the Erion report, which exposes out of control risk-taking and an apparent cover-up.  Expect several pension funds to speak out with a more forceful voice.

Multiple lawsuits against Chevron assets in various jurisdictions are now looming over the company.  Once these actions are filed and start progressing through the courts, Chevron will have a hard time entering into partnerships or making further investments in countries that could be strategically important to the company's growth.

In the meantime, Chevron's feckless Board of Directors awarded Pate a 75% pay increase (to $7.8 million) for losing the Ecuador case. See here. Because of Pate's bungling of the Ecuador matter, billions of dollars of Chevron assets are now at risk of being attached, seized, and auctioned off at fire sale prices because the company refuses to comply with its legal obligations.  In the double-dealing inside world of Chevron-land, this merits an extraordinary pay raise.

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