NY Times highlights “Crude” at Human Rights Watch; Film Premiering Tomorrow

"Crude" – the documentary which exposes Chevron's toxic legacy in Ecuador – is premiering tomorrow at the Human Rights Watch International Film Festival, at the Lincoln Center theatre. And in advance of the screening, the New York Times published a glowing review of the film today: http://www.nytimes.com/2009/06/12/movies/12rights.html. You can read below:

Film

From Ecuador to Rwanda: Portraits of Global Threats and Struggles

By STEPHEN HOLDEN

Lessons in how the world works and portraits of the never-ending struggles in places around the globe where power is challenged by populist resistance: such matters are a concern of the Human Rights Watch International Film Festival, which this year celebrates its 20th anniversary.

Rarely have such conflicts been examined with the depth and power of Joe Berlinger's documentary "Crude." Three years in the making, the film looks at all sides of the so-called Amazon Chernobyl case, a multibillion-dollar lawsuit that pits 30,000 Ecuadorean rainforest dwellers against Chevron.

In the film, which has its New York premiere on Saturday, the plaintiffs allege that three decades of pollution from petrochemical sludge dumped by Texaco, which merged with Chevron in 2001, have created a dead zone the size of Rhode Island and resulted in skyrocketing rates of birth defects and cancer, especially leukemia. Chevron has fought the lawsuit, claiming the case was cooked up by greedy "environmental con men" and blames the state-owned Petroecuador, which took over the country's oil production in 1990.

As much as "Crude" sympathizes with the plaintiffs (the film's hero, Pablo Fajardo, their lead lawyer, once worked in the oil fields), it isn't a starkly black-and-white David and Goliath story. We hear from scientists, lawyers for both sides, Ecuadorean judges, celebrity activists (Trudie Styler and Sting) and President Rafael Correa of Ecuador, who has sided with the plaintiffs in a case that may drag on for decades. These real characters and events play out on the screen like a sprawling legal thriller.

This film is timely – in the past few weeks Chevron's problem in Ecuador has become a huge issue for the company. Chevron has been faced with concerns from shareholders, activists, and the general public, as CEO David O'Reilly has been faced with constant questions about Chevron's human rights policies: more than $37 billion worth of Chevron stock defied O'Reilly and voted for a resolution calling for a comprehensive human rights, NY Attorney General Andrew Cuomo opened an investigation into potential violations of securities laws, a slate of media stories exposing the company's deep exposure to the potential Ecuador liability, and a rising tide of concerns about a lack of independent oversight from the Chevron Board of Directors.

With this level of interest in Chevron's problems, we expect that Crude will open to a ton of interest from people clamoring to get an inside view of what is really happening with Chevron's Ecuadorian legacy.

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Carie Ellis: What Chevron has to learn from "Leave it to Beaver"

Very interesting blog from Carrie Ellis over at Chem.Info. Take a look at: Amazon Chernobyl

or below, where we've copied the blog:

Chevron Digging Its Own Waste Pit

by Carrie Ellis, Editor, Chem.Info

Only something catastrophic could come from a corporation with a moniker that can be easily manipulated into such URLs as www.texacotoxico.org and www.chevrontoxico.com as intimated by the Amazon Defense Coalition and Amazon Watch.

I don’t know how many of you have been following what some environmentalists are calling Amazon Chernobyl, but one word keeps reverberating in my head — ridiculous. Maybe even unbelievable. Actually, I could probably go as far as audacious.

Ditching more than 18 billion gallons of toxic waste into rainforest water reserves. Walking out on more than 900 waste pits. An estimated excess of 1,401 cancer deaths. Escalating childhood leukemia. An abnormal number of miscarriages. Increasing instances of birth defects amongst mothers exposed to contaminated water. Perhaps even killing off entire indigenous groups.

These environmental atrocities are coming to fruition at a time when companies are being lauded for going green, yet this oil giant still insists on playing the Ecuadorian bully — with a past that continues to prove it’s pockmarked with oil waste dumping and other major environmental transgressions.

If you find yourself lacking (or me a bit over-the-top), however, in the wealth of resources recording this landmark case, please visit the following links for more information on the noxious storm gathering over not only the Amazon, but Chevron, too:

• Chevron Corp.
• Amazon Crude On “60 Minutes” – Read; Watch.
• Chevron Board Member Armacost Tied To Conflict Of Interest Over Cancer Study In Ecuador’s Amazon .
• Chevron Annual Meeting Heats Up Over Ecuador Suit .
• Chevron Falls Short On Disclosure Obligations Relating To $27 Billion.
• Amazon Watch Warned That Board of Directors Is Shirking Its Fiduciary Duties On Ecuador.
• Chevron Management Dealt Major Blow With CalPERS Announcement On Ecuador .
• When Chevron Hires Ex-Reporter To Investigate Pollution, Chevron Looks Good.
• The True Cost Of Chevron.
• Chevron Lawyer Stumbles In “60 Minutes” Interview Over Ecuador Oil Contamination.

What I find more gruesome than Chevron’s lack of self-responsibility is that it has smeared this already ugly, historically expensive environmental case with Eddie Haskell-like PR and marketing schemes, including a junk documentary to thwart bad press from “60 Minutes” and other thinly veiled ploys, designed to foil shareholders and drum up public support.

"I have makeup on, and there's naturally occurring oil on my face. Doesn't mean that I'm going to get sick from it," Chevron in-house lawyer and spokesperson Sylvia Garrigo said defensively during her “60 Minutes” interview.

OK, forget gruesome. It’s too leading and perhaps pejorative. Let’s go with strategically confused … Maybe even sadistically delusional. I feel like this industry giant is injuring a reputation more than anything. (Well, I guess not as much as its dignity.) Didn’t “Leave It To Beaver” always teach us that you may as well own up to your mistakes rather than try to chicken-scratch ‘em like Haskell? To be a standup guy and admit wrongdoing when you’re inevitably caught? Must we return to the teacup episode?

Chevron is elbows-deep in the most expensive — around $27 billion — environmental lawsuit this world has ever known. Yet it seems like the more negative attention that is brought on the company, the dirtier it plays and the more conniving its schemes. The company is even under public investigation for fraud. Then repeat.

One of the more recent faux pas was when Chevron enlisted Samuel Armacost — a board of directors member with $3.1 million invested — to disprove the incriminating data amassed by court-appointed scientists in Ecuador. The company financed a so-called independent study of cancer rates in the affected areas to discredit these scientists.

Turns out, the study fudged numbers by taking into account only those cancer victims who had death certificates. With an admittedly limited knowledge of information sharing amongst rainforest inhabitants, I never pictured indigenous groups to be big on paper trails, especially considering most have never had the opportunity to see a doctor. The simple fact that Chevron appointed Armacost further undermines its integrity, while reducing our willingness to believe its other claims.

It’s not that I don’t know most of the articles I referenced also come from parties with a vested interest in the case at hand. It’s not that I want things to be the way they are either. It’s just that these environmental groups back up their argument, while big business continues to flounder. If I were accused of false reporting or grammatical murder, I’d take a moment to reflect. Then, upon not being able to validate my ineptitude, I’d print a retraction or devise how to otherwise make amends.

Mind you, I realize much more is at stake for Chevron than its name (namely, a lot of money), but where does the oil giant envision itself if it even were to sidestep this well-documented historical case? The company would inevitably remain tainted with a loss of both social and environmental credibility. Or maybe just respect.

My words of advice: Play nice and take responsibility for your actions before you alienate everyone. While your biggest proponents may initially grimace, your biggest opponents must admit that at least you’re doing your part to fix any oversights. With this upfront approach, you may be able to not only avoid incurring lawsuits in the first place, but also a bad name and a fraudulent reputation.

Posted by MZiemba at 6/9/2009 10:47 AM

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Chevron CEO a sociopath?

Mike Papantonio, an extremely accomplished attorney who is not, to our knowledge, involved in any of the lawsuits against Chevron, published an interesting view of Chevron's response to the "True Cost of Chevron" on the Huffington Post. Take a look below or at: http://www.huffingtonpost.com/mike-papantonio/chevron-shareholders-igno_b_213091.html.

Chevron Shareholders Ignore Company's Abuses

A textbook sociopath is difficult to pick out of a crowd unless you have special training as a shrink. So just imagine how difficult it becomes when that sociopath is a corporation that spends billions of dollars on ad campaigns that hide their most malignant qualities. Money spent in the right way can easily mask that corporation's reduced ability to feel empathy for other people. It can hide irresponsible behavior and lack of remorse. It can disguise the patterns of deceitfulness that help define a sociopath's personality disorder.

Chevron had profits in 2008 of $24 billion. They have enough money to create slick commercials where they overwhelm us with images of blue skies over pristine looking waterways. Children are usually playing at the edge of that waterway with a family that stepped right out of Disney casting. The gentle voice in the background tells us that Chevron cares immensely about our health and our planet. That voice tells us that Chevron is frantically looking for solar, wind, and hydrogen alternatives to fossil fuel. But here is the reality check. Two weeks ago a coalition of the most prestigious human rights activists in the world handed Chevron a chilling report entitled, "The True Cost of Chevron." Reuters reported that the CEO at Chevron said the report was insulting and should be thrown in the trash. I agree that it was insulting for any corporation that does not want to be characterized as a brutal global thug. But David O'Reilly, Chevron's C.E.O., should not be too quick to throw this document in the trash.

It is a report that tells stories about human rights abuses in places like Nigeria and Burma, where Chevron has been accused of promoting military violence that involves beatings and kidnappings of community activists. Those activists object to oil extraction systems that destroy waterways, ecosystems, and breathable air. As you read this column, court hearings in Ecuador are taking place where Chevron stands potentially responsible for $25 billion in damages to Ecuador's waterways and aquifers.

Before Mr. O'Reilly throws this report into a trashcan, he should tell shareholders why Chevron was accused of providing influence gifts to U.S. Department of Interior employees last year. That is the scandal where government staff accepted thousands of dollars in influence gifts, and engaged in sex and used cocaine with oil industry representatives. That was the very agency that was supposed to police Chevron's conduct on U.S. soil. But there's more. While Chevron is selling their green alternative image in multi-million dollar ads, the truth is that they are spending less than 3% of their almost limitless capital on developing green alternative energy. But why worry about alternative energy when they run an oligopoly that has swallowed up independent refineries and retail stations to the point that Chevron controls how much oil gets refined and how much fuel gets to pumps? Price manipulation is always just one fuel crisis away.

Prognosis for sociopaths is never good because they are too quick to deny that they have a serious problem. But I'm sure any well-trained shrink would at least advise Chevron to take a first step. That begins with reading the report.

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Alternate Annual Report on Chevron’s Human Rights Problem Around the World

Apparently we're not the only ones paying attention to Chevron's human rights problems. An "alternate annual report" has been posted about the impact of Chevron's operations on communities worldwide. We linked to it in an earlier post, but wanted to make it more easily availabe to you. Take a look after the jump: True Cost of Chevron.

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Democracy NOW! Interviews Antonia Juhasz on the "True Cost of Chevron"

Watch this very informative (if somewhat long) interview on the True Cost of Chevron report prepared by concerned NGOs about the report:

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Thin Green Line: “What’s Not In Chevron’s Annual Report”

Great blog by Cameron Scott looking at another way to look at Chevron's annual report today at the "Thin Green Line" blog on SF Gate today: http://www.sfgate.com/cgi-bin/blogs/green/detail?&entry_id=40674

Reprinting here:

What's not in Chevron's annual report

People with strong ideological perspectives are often outraged by media coverage of their pet issues. When both sides are mad, you know you're doing something right. But how often do you hear corporations furious about they way they are covered in the business section? The section seems to lend itself to favor-currying and soft-shoeing.

In the lead-up to Chevron's annual shareholders meeting tomorrow in San Ramon, the company landed a puff piece on KGO focusing on its efforts to decrease its water usage. No mention of the Amazon controversy, and no mention of outside pressure on Chevron, EBMUD's largest water user.

I'm disappointed to say that a Chronicle
interview with the company's top lawyer also softballs the issues, while giving Chevron the opportunity to present its side of the story with no opportunity for response from the company's many critics. [Update: Chron editors tell me there will be more coverage of Chevron later in the week.]

Well, Chevron's opponents, including San Francisco's Amazon Watch, have taken matters into their own hands, releasing an alternate annual report that presents the externalities not listed in the company's balance sheet, which shows a record profit of $24 billion, making the company the second most profitable in the United States.

Did you know that Chevron's Richmond refinery was built in 1902 and emitted 100,000 pounds of toxic waste in 2007, consisting of no less than 38 toxic substances? The EPA ranks it as one of the worst refineries in the nation. With 17,000 people living within 3 miles from the plant, you'd think the San Ramon-based company would take local heat from more than just a couple dozen activists.

Chevron has sought to brand itself an "energy" company, one eagerly pursuing alternatives to petroleum. Its aggressive "Will You Join Us?" ad campaign asked regular folks to reduce their energy consumption, suggesting that Chevron was doing the same. In actuality, the company spent less than 3 percent of its whopping capital and exploratory expenditures on alternative energy. And it has refused to offer better reporting on its greenhouse gas emissions, despite strong shareholder support for it. (The aggressive, and misleading, ad campaign seems to have ired the report's researchers as well: The report is decorated by numerous parodies, and some have been wheat-pasted around town.)

It's a very well researched report, written by the scholar Antonia Juhasz, clearly divided into regional issues, and it's a much needed counterbalance to the friendly coverage Chevron is otherwise getting. (Juhasz was interviewed on Democracy Now this morning.)

For information on protesting the shareholder meeting early tomorrow morning, click here.

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“Chevron Botching Ecuador Case”

The Amazon Defense Coalition put out a press release today calling attention to an oil industry publication reporting about Chevron's Ecuador problem. Take a look:

Chevron Botching Ecuador Case, Says Influential Report

$27 Billion Liability in Ecuador "Poorly Handled" By Chevron's Top Management, Analyst Tells Leading Trade Publication

New York, NY (May 27, 2009) – Platt's Oilgram News, the leading trade publication for the oil industry, is reporting that "momentum seems to be growing against Chevron" in the long-running environmental case brought by Amazon communities in Ecuador that could lead to a $27 billion judgment later this year.

The article, published on Tuesday under the headline "Concerns Grow in Chevron-Ecuador Suit", quotes a leading oil industry analyst, Fadel Gheit, as saying the Ecuador case "is a mess in the ground and in public opinion" and has been "very poorly handled" by Chevron. The $27 billion liability is expected to be a major topic today at Chevron's annual meeting, with attention focused on how Chevron's Board of Directors had not independently vetted management's handling of the matter.

The lawsuit, being held in Ecuador at Chevron's request, will determine if Chevron will be forced to pay for a clean-up of the more than 18 billion gallons of toxic waste dumped by Texaco (now Chevron) when it operated an oil concession in the Amazon from 1964 to 1990. A team of court-appointed experts has assessed damages at up to $27.3 billion and a decision is expected later this year.

Several scientific experts consider the disaster to be the worst oil-related contamination on the planet. A team of U.S.-based reviewers found that the damages number is consistent with the cost of other large environmental clean-ups around the world.

Gheit, who works for Oppenheimer, was quoted in reference to Chevron's Ecuador liability as saying: "I think the longer it lingers the more it will cost. I would settle and cut my losses. Time is not on their side. The sooner they resolve it the better off shareholders are. I don't think it will cost $27 billion, but [it] will certainly cost a hell of a lot more than $1.8 billion" that Chevron has set aside for liabilities.


The article also quoted Barclay's Capital analyst Paul Cheng as saying, in reference to the Chevron liability, that "we would expect that any negative ruling [in Ecuador] would be damaging to the stock's near-term performance, and we would be an aggressive buyer to take advantage of any weakness."

Platts Oilgram News is widely recognized as the standard publication chronicling the oil and gas energy sector and its published rates are used as a benchmark within the industry. The article reported on concerns about Chevron being raised by the New York attorney general and public and private funds.

The article quotes a letter sent to Chevron by New York Attorney General Andrew Cuomo saying "this office has broad authority to investigate and pursue allegations of financial fraud and material misstatements in connection with publicly traded companies." Cuomo said he was looking into "Chevron's characterization of available legal defenses" and asked Chevron to estimate "possible damages if found liable … [and] what if any reserves have been established in contemplation of such damages being assessed against Chevron."

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 shareholders had requested the probe to determine if Chevron is complying with securities laws.

Leaders from Ecuador's Amazon region are expected to attend the shareholder's meeting today and confront Chevron CEO David O'Reilly over the company's allegedly misleading assertions about Ecuador.

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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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Hatchet job for Chevron in this week’s Economist…

An article in the Economist this week totally misses the mark about Chevron's liability in Ecuador. Not only did the reporter fail Journalism 101 by failing to talk to ANYONE from the plaintiffs, he or she (Economist articles have no byline) repeated word for word Chevrons story. This is the response by one of the lawyers working on the case – it gives some perspective on what was missing from the Economist fable:

This article buys into almost all of Chevron's misleading talking points and does your readers a huge disservice. Further, the article has numerous factual inaccuracies that hide the fact Chevron believes no court, government, or law has a right to hold it accountable for creating a humanitarian crisis in the rainforest. Perhaps the most important fact is the obvious one – the article repeats Chevron talking points, while a Chevron advertisement intermittently sits above the article on the Economist website.

This is some of what you got wrong or was taken out of context, from the perspective of a lawyer working on the case:

It is indisputable that Texaco used the Amazon as a trash bin for the 26 years that it operated a large oil field in Ecuador. The company admits to dumping more than 16 billion gallons of toxic "water of formation" into Amazon waterways and leaving over 900 toxic waste pits that leach toxins into soils and groundwater to this day. Several independent, peer-reviewed studies (as opposed to Chevron's financed studies) show a strong elevation in cancer rates in the oil-producing region that are correlated to hydrocarbon contamination. There is indisputable evidence that the practices Texaco used in Ecuador had been outlawed for decades in the U.S. Texaco's practices violated Ecuadorian law, U.S. law, industry custom, the company's contract with Ecuador's government, and basic human decency. More than 1,400 people have died of cancer, according to empirical data based on a court survey. Several indigenous groups have had their cultures decimated. The lawsuit, filed in U.S. court in 1993, is about seeking compensation from the company for these damages.

You totally missed Chevron's bad faith in the litigation. Chevron fought for nine years to move the trial to Ecuador from U.S. courts. It submitted 14 expert affidavits praising Ecuador's courts as fair and adequate. It agreed to submit to jurisdiction in Ecuador and be bound by any ruling there as a condition of the case being transferred. Only when the trial evidence in Ecuador began to point to Chevrons' culpability did those same courts suddenly become unfit for Chevron. The company tries to delay, attack, and distract because the evidence shows 100% of the former Texaco sites are highly contaminated with cancer-causing carcinogens. Chevron also has launched lobbying campaigns in Washington and Quito to help it accomplish in the political arena what it cannot accomplish under the rule of law – namely, engineer a victory via political pressure. What bothers Chevron about Ecuador's President is that he won't do its bidding, he won't interfere in the litigation, and he won't cut a side deal with the company unlike other Presidents from years past that allowed Texaco to run roughshod over the country's citizens.

Chevron's remediation, the basis of its "defense" at trial, was a total sham. At 100% of the so-called "remediated" sites inspected during the trial, high levels of toxins in soil and water have been confirmed by independent laboratories. Chevron created bogus laboratory results to "certify" the pits as cleaned, leading to a criminal indictment of two former Texaco lawyers. The "release" received by Chevron for the so-called remediation excludes the private claims of the type being litigated in the lawsuit. Chevron is lying to shareholders and journalists when it claims it was "released" – no court in the world has ever accepted Chevron's argument on this point, despite being presented countless times over the last 13 years.

Finally, the court-appointed expert maligned in your article is one of the most respected environmental consultants in Ecuador. He is so good that Chevron paid him as its expert in an earlier phase of the case. He worked with a team of 14 independent scientists to come up with a damages assessment. More than 25 scientists have reviewed the assessment and found its conclusions reasonable and the damages figure consistent with other large environmental clean-ups. Your claim that Texaco made less than $500 million profit is preposterous and illustrates your shoddy research. That amount was made by Texpet, Texaco's fourth-tier subsidiary in Ecuador. Texaco itself made an estimated $25 to $30 billion in profit in Ecuador.

Let's be clear – the Economist approached this story with a bias, and never contacted a representative of the communities. Chevron is a leading advertiser for the Economist. You owe your readers an explanation.

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Chevron caught manipulating media…

By the New York Times no less…the paper today picked up how Chevron has tried to manipulate the media: When Chevron Hires Ex-Reporter to Investigate Pollution, Chevron Looks Good.

But the times missed the real story and lets Chevron off the hook about how the company totally and completely fails to disclose that they paid for the piece in any aspect of the "report" put out by local Chevron pet reporter Gene Randall. Take a look at this press release describing the real story here:

Chevron Produces Phony Online News Coverage to Spread Misinformation about Ecuador Disaster

Oil Giant Fails to Disclose That It Paid for "News" Video Narrated by Former CNN Correspondent Gene Randall

Amazon Defense Coalition
3 May 2009 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at 703-798-3109 or karen [at] hintoncommunications.com

To obtain additional background about Chevron's oil contamination in Ecuador, click here to download a press kit

Washington, D.C. (May 3, 2009) –To promote a misinformation campaign about its role in the oil contamination of a pristine area of the rainforest in Ecuador, Chevron recently produced a video that copies the format and style of television news shows and portrays Texaco, now owned by Chevron, as completely blameless in the dumping of billions of gallons of toxic waste into the Amazon jungle.

Chevron has bought online advertising on Google to promote the 13-minute video ahead of the airing tonight of a 60 Minutes segment, reported by Scott Pelley, that is expected to expose the company's complicity in what is considered the world's worst oil-related contamination. Chevron never reveals it paid for the video, which is designed to look like an "objective" CNN news report and is narrated by former CNN correspondent and current corporate consultant Gene Randall.

Two environmental groups are blasting Chevron and Randall for engaging in the deceptive practice of producing a corporate news video that looks like a news broadcast. They called on Chevron to stop airing the video until the company makes a full disclosure.

"Chevron is using false information in this deceptive video to mislead the public, its own shareholders, and Chevron employees about its responsibility for an environmental disaster of epic proportions," Mitch Anderson, Corporate Accountability Campaigner at Amazon Watch, an environmental advocacy group in San Francisco.

"Randall should be ashamed to lend his credibility built up over years as a legitimate journalist to an oil company trying evade accountability for a disaster that is literally killing off indigenous groups and destroying the rainforest," added Anderson.

"If I were CNN, I would be furious because Randall essentially is getting paid by Chevron to use and dilute CNN's brand without permission."

Click here to view the video.

Chevron faces a potential civil liability of up to $27 billion for the Ecuador contamination in an epic 15-year trial in Ecuador's courts brought by dozens of indigenous groups and farmer communities. The damages assessment was produced by a team of 15 experts and is contained in a 4,000 page court report that analyzed the evidence in the case and places blame squarely on Chevron for the problems.

A final decision on the case is expected later this year.

The trial is taking place in Ecuador at Chevron's request after it was transferred from U.S. federal court in 2002. At the time, Chevron submitted numerous sworn affidavits praising the fairness of Ecuador's courts, although with a decision in the case imminent the company now claims those same courts are treating it unfairly.

The Chevron corporate video uses paid Chevron consultants and employees who cite discredited information consistent with the company's talking points on the case, said Karen Hinton, a U.S.-based spokesperson for the rainforest communities. Randall advertises himself as a producer and narrator of corporate videos with a "news flavor". (For more information about Randall, click here)

The Ecuadorian man who has led the communities in the battle against Chevron said the company should either pull the ad or inform viewers it produced it.

"Telling the truth isn't easy for Chevron because the company has put out much misinformation about the harm Texaco did to my country and its people," said Luis Yanza, President of the Amazon Defense Coalition, an Ecuadorian group that represents the plaintiffs in the lawsuit.

The hiring of Randall is not the first time Chevron has tried to use the veneer of the news media to promote its misinformation campaign. Chevron paid a little-known San Francisco-based online newspaper publisher, Pat Murphy, to write positive news article about Chevron in Ecuador without revealing Murphy was paid. Collaborating with Murphy has been the online blogger Zennie Abraham, known as Zennie 62, who parrots Chevron's talking points in his blogs. (For more information regarding Chevron's use of Pat Murphy and Zennie Abraham as proxies to dissiminate the company's propaganda, click here and here

Chevron has not denied charges that it funnels money to seemingly independent journalists, including Murphy and Abraham, to post what appears to be editorial content that is actually paid advertising.

The Chevron video misleads viewers on several important elements of the lawsuit, as demonstrated by evidence in the 4,000-page report prepared by a team of court experts, said Anderson. Some of the misleading facts are as follows:

• The video quotes Pedro Alvarez, a Chevron consultant, as saying the contamination in Ecuador poses no risk to public health. In fact, several parties – including Chevron – have found dangerous contaminants and carcinogens such as Chromium VI at levels thousands of times higher than allowed by law in Ecuador.
  
• The video falsely claims Texaco earned $490 million in profits from Ecuador. In reality, Texaco earned between $25 billion and $30 billion; Texaco's fourth-tier subsidiary, Texpet, earned $490 million.
  
• The video falsely claims the case was brought under law passed in 1999, after Texaco left Ecuador. In fact, it was brought under a provision of Ecuador's civil code dating to 1861 – a fact Chevron has admitted in court.
  
• The video claims Ecuador's courts are "unfair" but fails to reveal that the charge was made only after the evidence at trial started to point to Chevron's culpability. It also fails to disclose that Chevron argued as recently as 2007 in another case that Ecuador's courts are an adequate forum.
  
• The video claims that Ecuadorian lawyer Pablo Fajardo, who has won a CNN "Hero" Award for his work on the case, tried to stop Ecuador's state-owned oil company from cleaning Texaco's contaminated sites. In fact, Fajardo tried to get that company to clean the sites properly rather than just cover them with dirt.
  
• Chevron tries to claim the health impacts such as cancers are caused by fecal matter in the water. There is no scientific evidence to support the claim that fecal matter causes cancer.
  
• The video lies when it claims that the billions of gallons of water of formation dumped by Texaco were "treated" before discharge. In fact, Chevron's own environmental audits, in evidence in the case, show the water contained carcinogens and was not treated.
  

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And probably worth mentioning…

That Chevron's actions in Ecuador were highlighted in a piece on 60 Minutes Sunday night:

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Interesting Story on NPR

http://www.npr.org/templates/story/story.php?storyId=103233560

While Juan Forero does a nice job of recounting the horrific environmental contamination in Ecuador's Amazon, his reporting of President Rafeal Correa's comments on the humanitarian crisis afflicting the region wrongly imply that President Correa has somehow influenced the trial in Ecuador. This is an inaccurate and misleading construction of Correa's comments, which were taken out of context, and buys directly into Chevron's propaganda about the case.

Politicians comment about trials all the time in countries around the world for a variety of political reasons. It doesn't mean they are "interfering" with the trial which takes in the judicial branch, independent of the executive branch. President George W. Bush's administration commented frequently about ongoing trials, from issuing statements on the lawsuits against insurance companies in the aftermath of the Katrina disaster to commenting on the urgency of intervention in the Terry Schiavo "right to life" cases. President Obama comments all the time about the behavior of banks and insurance companies in the economic crisis, while many of those institutions are targets of litigation. No serious person alleges that public comments of either of these Presidents somehow has biased those legal actions and made the judiciary incompetent. Any suggestion from Chevron that Correa's comments make the courts in Ecuador partial underlies a certain colonial-tinged racism regarding the competence of the Ecuadorian judiciary, despite the fact that U.S. courts have frequently found Ecuadorian courts to be perfectly competent courts to hear these cases. In fact, the exact case against Chevron started in a U.S. court and was only transferred to Ecuador at Chevron's request, over the objection of the plaintiffs, after the U.S. judge found Ecuador's courts to be a competent venue for hearing the case.

Beyond offering a few statements by Correa that express sympathy for the victims of this environmental crime, and outrage at the perpetrators of it, neither Forrero nor Chevron can point to a single instance of executive interference with the court hearing the case. In fact, every piece of evidence points to the opposite: Correa has personally, on several occasions denied any interference in the Aguinda trial, and has continually reasserted that the Ecuadorian courts are free from interference by the Executive or Legislative branches. The Attorney General of Ecuador has repeatedly and publicly defended the independence of the judiciary in Ecuador against attempts to interfere in the lawsuit against Chevron by – surprise – Chevron itself, which has lobbied government officials in Quito and Washington to quash the case via political pressure. Evidence has emerged that the very first day of the trial in Ecuador – October 21, 2003 – Chevron pressured Ecuador's then Attorney General to request that the trial judge illegally dismiss the case. Perhaps most telling, Chevron itself, as recently as 2006 (after Correa came to power) has asked U.S. courts to transfer other, unrelated cases about the health impact of oil contamination to the very same courts in Ecuador that they claim are so biased against them.

A comment by a President expressing sympathy for a group of his constituents suffering from a humanitarian crisis of epic proportions is entirely appropriate. These expressions of support have are entirely appropriate, and have nothing to do with an ongoing litigation that deals with complex factual and legal matters. Don't be fooled by Chevron's propaganda – the company is getting the fair trial they said they would when they argued to have the case transferred out of U.S. federal court and into Ecuador.

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Mickey Kantor Has an Ethics Problem

Mickey Kantor, normally an impressive individual, has a major ethics problem.

Kantor, as Peter Stone reports in The National Journal is taking money from Chevron to defend an American oil company responsible for what is probably the worst human rights problem in the world related to environmental degradation –the deliberate dumping of 18 billion gallons of toxic waste into the Amazon by Texaco (now Chevron) from 1964 to 1992 in Ecuador, all to keep production costs to the bare minimum. This dumping – and the separate abandonment of 916 unlined waste pits that for decades have been leaching toxins into soils and groundwater – has over the last four decades caused cancer rates to skyrocket, decimated indigenous cultures, and despoiled an area of the rainforest the size of Rhode Island. The entire catastrophe is at least 30 times larger than the Exxon Valdez spill, and thousands of people in this part of Ecuador are living in and around the contamination with no access to clean water or adequate health care. Chevron would never have done this type of thing in the U.S. where it would be called to account; it was done in an isolated part of the rainforest because the company calculated it could get away with it. To understand the issue, take a look at this short memorandum and this Q&A. And to understand how Chevron has treated this crisis, take a look at this document about Chevron's Top 10 Lies about Ecuador.

So Kantor is now trying to rescue Chevron from what is fast becoming a public relations and financial crisis of epic proportions. (Chevron, perhaps not coincidentally, has other human rights problems – it employs one of the six "torture lawyers" subject to possible investigation and prosecution. His name is William Haynes, the former general counsel for the Pentagon under Donald Rumsfeld.) Kantor is taking Chevron's money to help lobby the executive branch agency he used to head, the office of the United States Trade Representative. His objective is to persuade the USTR to "punish" Ecuador for letting indigenous tribes and farmer communities in the Amazon bring a lawsuit over this mess in Ecuador's courts. With this single representation, Kantor is violating both the spirit of the new ethics rules put forth by the Obama Administration and providing cover for a company involved in what the lawsuit claims is a massive human rights violation affecting tens of thousands of people. There is no evidence that Kantor or any of Chevron's other A-list lobbyists have even visited the affected region, read the studies about increased cancer rates, or talked to any of the thousands of victims. Yet they ply their trade with no moral sensibility about the consequences of their actions.

Chevron should be paying Kantor at least ten times his normal rate to take this on. The company spent $6.8 million on lobbying in the first quarter of this year (about $27 million on an annualized basis), not including the 20 or so people on the company's permanent government relations staff in Washington. Some significant portion of this spending relates to the Ecuador lawsuit, where the company faces a possible judgment of $27 billion for clean-up. Separately, two Chevron lawyers and seven former government officials are under indictment for lying about the results of an earlier clean-up that was appears to have been a fraud.

In a nutshell, Kantor has been hired by Chevron to undermine the legal rights of thousands of people to sue the company and hold it accountable. Rather than letting the trial finish, he is trying to shut the trial down. His job is to pressure Ecuador's President to violate his country's Constitution, interfere with his country's independent judiciary, and extinguish the legal claims held by thousands of his own citizens who are trying against all odds to address a life-threatening situation. What audacity these indigenous groups have. Last year, a Chevron lobbyist was quoted anonymously in a Newsweek story written by Michael Isikoff as saying, in reference to the Ecuador case: "We can't little countries screw around with big companies like this – companies that have made big investments around the world."

This quote reflects Chevron's attitude about the rule of law. The "little" people should not be allowed to sue big American companies. But big American companies should be allowed to sue, harass, and violate the rights of the "little" people if it's necessary to protect their bottom line.

Kantor wants Ecuador's government to behave like a "Banana Republic" and corrupt the legal process of its own country. This is a shameless attack on the rule of law. It is also dishonest. In 2002 Chevron consented to jurisdiction in Ecuador before a U.S. federal judge as a condition of the case being transferred out of U.S. federal court where it had originally been filed. At the time, Chevron submitted 14 expert affidavits praising the courts there as fair and adequate.

Kantor wants the USTR to decide the issue based on what is good for Chevron. In that vein, he claims in The National Journal story that the potential $27 billion in damages has "no logic", as if he is in a position to know. There is a 4,000-page report explaining those damages, based on 200,000 pages of trial evidence and more than 62,000 chemical sampling results that show contamination at 100% of Texaco's former production sites in Ecuador. I doubt Kantor has even seen the front page of this report, much less the executive summary or annexes. (This report has been reviewed by 25 respected scientists in the U.S., Ecuador, and Spain who have found its conclusions reasonable and the damages figure roughly in keeping with the cost of clean-up of other large environmental disasters.)

Kantor should recuse himself from the issue by virtue of his former work as the USTR ambassador, if nothing else. I also assume he has made enough money in his years as a lobbyist that he doesn't have to serve as a hired gun for Chevron defending a massive human rights violation that besmirches the image of the U.S. in Ecuador and the rest of Latin America.

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Chickens. Home. Roost.

It appears that William Haynes is probably getting familiar with those words – since it was announced today that the National Lawyers Guild San Francisco Bay Chapter (NLGSF) filed a complaint with the California State Bar against former Department of Defense General Counsel William Haynes. The complaint against Haynes, who now works for the Chevron Corporation in San Ramon, states that he "breached his duty as a lawyer and advocated for harsh tactics amounting to torture in violation of U.S. and international law … advocacy that directly lead to detainee abuses at the Guantanamo Bay and Abu Ghraib facilities." The complaint seeks to have Haynes held accountable for advising his clients (the Department of Defense) to take unlawful actions by engaging in torture by having his status as a "Registered In House Counsel" revoked – costing him his job as Chevron's deputy in-house counsel. And this is just the first wave – there is a real chance that Haynes will be called before Senator Patrick Leahy's burgeoning "Truth Commission," which could be America's very own Nuremberg trial to deal with the aftermath of the Bush wars.

This is hugely embarrassing for everyone at Chevron – but particularly for Charles James, Haynes' Bush-administration buddy who is Chevron's general counsel. James was the guy who hired Haynes when Haynes was radioactive after leaving the DoD under a cloud because of his torture connections. James made (another!) horrible judgment call in hiring Haynes, a potential war criminal, just as Chevron was facing a rising tide of human rights problems (Nigeria, Ecuador, Burma, now Cambodia) around the world. And like so many of James' other recent calls, this one is leaving him with egg on his face. It's pretty easy to imagine that the P.R. department over at Chevron is pretty pissed at James right about now for dragging their company into the same sentence as "torture" and "war criminal."

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Lay Down With Dogs and You Get Fleas

As the saying goes, good help is hard to find – so Chevron has found some bad help, and that help may be causing the company some problems in the days to come. We've already written about the controversial and ill-conceived hiring of William Haynes by Chevron (who was just described in a NY Times article as radioactive- the paper described him as searching for a job for more than a year before Chevron agreed to take him in). The Amazon Defense Coalition named a high-level public relations gun-for-hire, James Craig, who has been hired by Chevron to manipulate, delay, and obstruct the trial in Ecuador, calling Craig a "hit man" working for the corporation. According to the organization's press release:

James Craig, an American public relations official with Chevron affiliated with the J. Walter Thompson advertising agency, for undermining a long-running environmental trial in Ecuador where the oil giant faces a $27 billion liability for dumping toxic waste into the rainforest.

"Chevron is using James Craig as a hit man to sabotage a trial in Ecuador because it expects to lose and be on the hook for billions of dollars," said Luis Yanza, a representative for the dozens of communities and indigenous groups that brought the lawsuit.

"James Craig's behavior is unethical and shows a profound disregard for the law," added Yanza, a recent winner of the Goldman Environmental Award, considered the "Nobel" prize of the environmental movement.

The interesting thing is that Mr. Craig is apparently no stranger to working for reckless and controversial companies – a quick Google search found that Craig's last position as a p.r. mercenary was with the infamous Refco, a financial trading company that collapsed in October 2005 costing investors hundreds of millions of dollars, long before imploding financial institutions was chic. James Craig helmed the public relations ship throughout Refco's collapse, working to hide the truth from investors and leading to the massive losses.

When you add in the Darth Vader-esque hiring of William Haynes, you've got an interesting human resources strategy - apparently Chevron tries to hire the most controversial guys around, hoping that their wealth of knowledge of the seedy underside of the world will help Chevron intervene in the trial.

But is hiring these mercenaries worth it? The Amazon Defense Coalition has indicated that complaints are being filed against Craig for interfering in Ecuador's judicial process. Haynes' "War On Terror" excesses inside of the Department of Defense may have him drawn up before Senator Leahy's burgeoning "Truth Commission" committee, and have him branded as a war criminal at home and abroad (better cancel that European vacation, Mr. Haynes…). And all of this gets imputed onto Chevron, damaging their public image, forcing the company to defend these employees, and making it harder for the company to work moving forward – these rogue operators may be causing more problems than they're solving.

I guess Chevron is probably used to having to deal with the fallout of hiring the radioactive and controversial – after all, as the saying goes, if you lay with dogs, you get fleas.

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