Chevron Defeated For Third Time In US Courts!

Ecuadorians One Step Closer To Justice

The 2nd Circuit Court of Appeals has refused Chevron again, denying its motion to block enforcement of the $18 billion judgment in Ecuador. This is the third consecutive legal setback for Chevron. Here's the statement from the Ecuadorians, who against all odds have defeated the oil giant and its 39 law firms and 500 lawyers fighting five impoverished indigenous tribes in the Amazon rainforest.

"The Ecuadorian communities affected by Chevron's contamination are one step closer to justice as a result of today's ruling. For almost two decades, Chevron has stood in the way of a comprehensive cleanup of billions of gallons of crude oil and toxic waste water it deliberately dumped into the pristine rainforest. Thousands of people have died or suffered as the oil giant and its legions of lawyers have fought to distract attention from the overwhelming evidence against the company.

"Now a U.S. appellate court has refused to grant Chevron relief from blocking the $18 billion judgment of an Ecuadorian court that it should pay for a clean-up.  With its promise to fight the Ecuadorians until hell freezes over, Chevron reveals its callous disregard for the rule of law and the humanity of indigenous groups.

"Chevron's legal options to evade the Ecuador judgment continue to narrow.  Chevron's shareholders must now understand that the company's management team is putting their interests at great risk due to the company's bungling of the Ecuador litigation."

In September, a federal appellate panel blocked Chevron's attempt to seek an unprecedented worldwide injunction blocking enforcement.  A federal district recently denied Chevron's illegal attempt to freeze the assets of the plaintiffs.  Chevron's latest attempt to lift an injunction blocking enforcement also has been denied. These defeats follow a January 3rd appellate court ruling in Ecuador confirming the validity of the trial court judgment.

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Chevron Tells Another Whopper To U.S. Appellate Court

For the past two years Chevron has been trying to get U.S. judges to dictate to Ecuadorian judges all that is wrong with Ecuador's judiciary. In the process, Chevron has told so many lies it's impossible to keep up with them.

But, here's one that screams for attention.

On September 16th, 2011, Chevron lawyer Randy Mastro of Gibson Dunn responded to a question posed by the U.S. Second Circuit Court of Appeals about the company's previous efforts to convince an arbitration tribunal at The Hague to stop enforcement of the Ecuador court's $18 billion judgment against it (a much longer story). Here's what he said:

"I want to—I do want to be super clear about this. We have not attempted, and we will not attempt, to ask the ... tribunal to stop entry of a judgment. We do intend to fight enforcement, but we—and we do intend to fight in Lago Agrio against entry of a judgment, but we have not and we will not, if I left any doubt about it, ask the ... tribunal to stop entry of a judgment in Lago Agrio."

On January 3rd, 2012, the day the Ecuador appellate court upheld the $18 billion judgment, Chevron lawyer R. Doak Bishop of King & Spalding wrote to the arbitration tribunal, once again requesting help in stopping enforcement:

"Time is now of the essence to ensure that the Republic takes measures to prevent enforcement of the fraudulent Judgment... (Chevron) request(s) that the Republic of Ecuador inform the Tribunal...of the steps that it intends to take to ... prevent the Lago Agrio Judgment from becoming enforceable."

One assumes Mastro thinks that asking the tribunal to ask the Republic of Ecuador to stop the enforcement gives him a passing grade on the lie detector test.

We anticipate Mastro will be in front of the Second Circuit again very soon, explaining the distinction and arguing why three U.S. appellate court judges have jurisdiction over an Ecuadorian court -- in a super clear way.

Maybe then he can find the doubt he left behind.

Chevron lawyer Randy Mastro

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Kerry Kennedy Speaks Out Against Chevron's Desperate Attacks

Ecuadorians Call Kennedy Fierce Activist & Good Friend

Our most recent post about Chevron's turning victims into enemies was prescient. This weekend Chevron planted a story in a tabloid to disparage one of the Ecuadorians' most effective supporters, human rights activist Kerry Kennedy. It was a lie. Pure and simple.

Ms. Kennedy did not hesitate to fight back. In a Huffington Post piece, she did as other human rights activists have done in past struggles: She spoke truth to power.

She described what she and her three daughters saw when they visited the area in the Ecuadorian rainforest where Chevron explored for oil:

"We looked at pools of oily muck abandoned in the early 1970s that still drain toxic soup into nearby streams used for drinking water, fishing, and washing. We visited the home of an elderly woman who told us about the skin lesions that covered the bodies of her son, daughter, and grandson. She had built the family home on a field Texaco claimed to have cleaned. In fact, the oil giant had merely covered up the poisonous pond with four feet of dirt and a thin layer of grass. We smelled the fumes emanating from water Chevron claims is now clean. All this is part of the massive environmental damage and accompanying cancer clusters, lung disease, skin lesions and other injuries left behind by a U.S. multinational corporation."

"Chevron's irresponsible operational practices are now responsible for a catastrophe that has cost untold lives and destroyed an area of pristine rainforest the size of Rhode Island. Chevron lost the legal case in Ecuador, and a U.S. appellate court recently blocked efforts by the company to prevent enforcement of the judgment. The company is on its last legs after battling to deny the claims of indigenous groups for almost two decades since the case was filed in 1993.

"This helps explain why Chevron is now turning to personal attacks."

Pablo Fajardo, the Ecuadorian lawyer who has lead the successful litigation against Chevron, responded as well:

"Kerry Kennedy is a fierce human rights advocate and friend of thousands of Ecuadorians who have been victimized by Chevron's horrific contamination. She has stood behind the indigenous and farmer communities of the rainforest as they struggle to properly remediate one of the world's worst environmental catastrophes.

"The newspaper article is inaccurate. Such an accusation only proves Chevron's desperation. The oil giant has run out of legal options, with multiple defeats in both Ecuador and U.S. courts. Chevron's legal team now has turned to personal attacks against those like Kerry who speak out to defend the victims of the company's deliberate contamination of the soil and water in the Amazon rainforest."

"The best way to divert attention from your own crimes is to turn your victims into your enemy. Chevron hasn't hesitated. Company lawyers have hired spies to find out if people who are dying actually have cancer. They have called the people suffering in the rainforest liars, con men and frauds. It should come as no surprise that Chevron would resort to leaking misleading court documents to tabloid newspapers about our supporters."

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Chevron Tries To Make Its Victims The Enemy

"This is how it's done. When people are sittin' on shit that you want, you make 'em your enemy. Then you're justified in taking it."

Jack Sully in the James Cameron movie Avatar, the U.S. Marine who works for an energy company but later sides with the indigenous peoples living on top of precious minerals company officials are willing to kill for.

Avatar's Jack Sully

"In thirty years of practice and as a former prosecutor, I've never seen a record so shocking of illegal and improper conduct .... (The Ecuadorians want) to try and shake down a settlement .... By their own words they intend to extort, to coerce ... to cause the maximum harm to Chevron."

Randy Mastro, the Chevron lawyer whose law firm is being paid hundreds of millions of dollars to take from Ecuadorian indigenous tribes an $18 billion judgment against the oil giant for the world's largest oil-related environmental disaster.

Chevron's Randy Mastro

For more information about Chevron's deliberate contamination of the Ecuadorian rainforest, see here and here.

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Crafty Craig, Chevron's Man In Ecuador, Up to No Good Again

We reported not long ago that James Craig, Chevron's man in Ecuador, refused to deny to a Miami Herald reporter that his employer had offered the government of Ecuador a bribe to pressure the courts to dismiss the lawsuit against the oil giant.


Today we have an update on the latest crafty Craig move:

Craig escorted a New Yorker reporter to some of the contaminated oil pits in the rainforest. After accusing Ecuadorian indigenous people of "spiking" the water with fresh oil to give the appearance of contamination, he downplayed the thick, oily surface on top of the pits by explaining it was only a few inches thick. Later the reporter wrote:

"A few miles outside Lago Agrio, we stood on the lip of a waste pit, and Craig told me that the vile-looking residue on its surface was only a few inches thick. To illustrate this point, he picked up a rock and lobbed it into the pit. It landed, with a sickly thud, on the surface. “If we had a bigger rock . . .” he said, and threw a much larger one. It, too, failed to sink."

What also has failed to sink into Craig's head is that he sounds absolutely like the shrill he is when he declares: "Chevron has never identified a positive reading for hydrocarbon contamination" in the rainforest.

The New Yorker reporter also spent time viewing the pits with Ecuadorians. Here is what he had to say:

"During the plaintiffs’ portion of the tour, a local man named Donald Moncayo showed me around. Wearing white surgical gloves, he dug up a fistful of black mud and held it so that the sunlight caught the telltale blue-orange tint of petroleum. At one fetid pit in a jungle glade, he stepped gingerly onto the surface of the pool, where the solid matter in the produced water had congealed into a tarlike crust that was sturdy enough to support him. Smiling a little, Moncayo shifted his weight from one foot to the other, until the whole surface began to undulate beneath him. He looked like a kid on a waterbed. According to the plaintiffs, there are nearly a thousand of these pits in the Oriente, scattered across an area the size of Rhode Island.

Watching Moncayo, I had a sense of déjà vu. He is the regular master of ceremonies on the toxic tour; I had read accounts of his routine, and had seen it enacted, in nearly identical fashion, in “Crude,” the Berlinger documentary. But, if Moncayo’s cadences were rote, there was nothing feigned about his indignation. He led me down a steep ravine to a creek. In the gauzy light filtering through the canopy, the water, which was only a foot deep, looked crystalline. Moncayo drove a stick into the creek bed and churned the mud until the water grew clouded by sediment. At his encouragement, I skimmed my hand across the surface of the creek. My palm was coated in an acrid film."

If only Craig had had a bigger rock ...

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Ecuador’s Appellate Court Upholds $18 Billion Judgment Against Chevron

Leading Oil Industry Analyst Says Chevron Should Settle
Other Analyst Says Chevron Is Hiding Its Liabilities In Ecuador & Elsewhere

Based on an overwhelming amount of scientific evidence, Ecuador’s appellate court last week upheld the $18 billion judgment against Chevron for oil contamination in the country’s rainforest.

Immediately following the ruling, the oil industry’s leading analyst, Fadel Gheit, told the Financial Times the lawsuit isn’t going away and the oil giant should settle.

In a January 5th article in the Financial Times, Gheit, an analyst at Oppenheimer in New York, said Chevron should end its misery and pay $2 to $3 billion in a settlement.

He said, “When the dog keeps on barking and barking, eventually you have to throw it a bone.”

We assume Gheit meant no insult by referring to the Ecuadorian plaintiffs as a “dog.” Whether or not a $2 to $3 billion settlement would be enough remains to be seen.

Here and here is more information about the evidence against Chevron and the appellate court’s ruling.

Meanwhile, Chevron continues to withhold the extent of its financial liability not only in Ecuador but also in other parts of the world.

Socialfunds.com, a socially responsible investing web site, reports that Chevron refuses to deal with its terrible corporate governance history and human-rights problems.

Importantly, Chevron also isn’t coming clean to shareholders about its potential liability in pollution lawsuits against it.

Consider an incident in Burma, says Larry Dohrs of Newground Social Investment, a socially responsible money manager. Just before Chevron acquired Unocal in 2005, 13 Burmese plaintiffs won an out-of-court settlement against Unocal that was reputed to be $2.5 million per plaintiff.

And, there may be 5,000 more Burmese plaintiffs out there, Dohrs says. Were they to bring a class-action suit, damages could run into the billions of dollars.

However, Dohrs writes, “even the potential amount of that claim pales,” compared to Chevron's liability in Ecuador, with the $18 billion judgment staring it in the face. Chevron dumped billions of gallons of waste byproduct and oil into the water and soil and burned hundreds of millions of cubic feet of gas and waste oil into the atmosphere.

Chevron, socialfunds.com reports, tells investors it will ultimately prevail and there’s nothing to worry about. 



That doesn’t add up for the critics. “To continue to say there is no merit and we're not going to end up paying anything is a completely unrealistic approach for management," Dohrs said. "But that continues to be the story they tell shareholders. We're very worried that that's not accurate." 



As evidence, Dohrs cites Chevron Deputy Comptroller Rex Mitchell, who said in a court affidavit if plaintiffs seized company assets to pay damages, it “would disrupt Chevron's supply chain and operations” and “damage Chevron's business reputation as a reliable supplier.” 



Mitchell's statement was revealed last year in a report by Simon Billenness and Sandford Lewis.

As a result, Trillium Asset Management, a $1 billion asset management firm, asked the U.S. Securities and Exchange Commission in May to review "whether Chevron has appropriately disclosed to shareholders the scope and magnitude of financial and operational risk from a recent adverse legal judgment in Ecuador." 


Now Chevron faces fines and lawsuits from a November spill off the coast of Brazil that could run to additional billions of dollars and criminal prosecutions.

When is Chevron going to come clean environmentally? And when is it going to come clean with its shareholders?

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Gibson Dunn: Fewer Options But Bigger Bills for Chevron in Ecuador Case

Paul Paz y Mino of Amazon Watch writes an excellent blog on Huffington Post, called How Lawyer Arrogance Imperils Chevron Shareholders in Ecuador.

He details the “monumental mistakes” made in the Ecuador contamination case by Gibson Dunn, the Chevron law firm that pushed out the company’s other law firm Jones Day from being the lead on the lawsuit about two years ago. Paz y Mino argues the firm’s mistakes – specifically those of lead partner Randy Mastro – have “increasingly imperiled” Chevron shareholders.

This week the Ecuador appellate court upheld the trial court’s $18 billion judgment. If Chevron does not post a bond in its final appeal, the Ecuadorians can begin to enforce by asking courts in other countries to seize Chevron’s assets. (Chevron has none in Ecuador and has refused to pay the judgment.)

Gibson Dunn is quickly running out of legal options, but it is a master at invoicing for the 60 or so lawyers working on the case. In all, Chevron is paying for close to 500 lawyers and legal assistants fighting five indigenous groups in some of the poorest regions of the world.

We ask the same question one of the U.S. 2nd Circuit Court of Appeals judges asked before throwing out Gibson Dunn’s efforts to block enforcement: Do Chevron’s shareholders understand how much money is being spent on this lawsuit?

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Chevron's Silence Screams Guilt

Again Oil Giant Fails to Defend Misconduct in Ecuador Case

Once again, Chevron's silence tells us more about the company's fraudulent misconduct in Ecuador than do its whitewashed

public statements.

After refusing to answer questions about offering what amounts to a $1 billion bribe to the government of Ecuador to help the company kill the $18 billion lawsuit, Chevron's lawyers refused to address allegations of doctoring a "Judicial Inspection Playbook" to hide its fraudulent testing practices at contaminated well sites during the trial. See this press release for details about the playbook, which Chevron used to instruct its testers how to collect soil and water samples.

In a court brief filed with the Southern District Court of New York in a related matter, Chevron refused to address the Ecuadorians' charges that its environmental consulting firm, GSI Environmental, sanitized the playbook document before giving it to two academic experts who later wrote a report lauding the oil giant's sampling protocol. The two experts are Dr. Pedro J. Alvarez currently the chair of the Department of Civil and Environmental Engineering at Rice University, and Dr. Douglas Mackay, an adjunct professor at the University of California, Davis.

GSI removed all directives ordering the testers to collect only "clean" samples from spots identified during "pre-inspections" that took place before the official judicial inspections. They also removed comments about the local residents drinking, cooking and bathing with water from the nearby streams and rivers. See this document that compares the original playbook with the altered one.

Not surprisingly, Chevron regularly found no contamination at sites that looked like this.

If there's an explanation for this whitewash, we're betting the two academic experts would like to know to ensure their integrity doesn't come into question.

But Chevron is suddenly very quiet.

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Crafty Craig Doesn’t Deny Chevron’s Bribe Offer to Ecuador to Make Lawsuit Disappear

Yesterday a Miami Herald reporter asked James Craig, Chevron’s man in Ecuador, about reports that the oil giant has, in essence, offered a $1 billion bribe to Ecuador’s government to kill the $18 billion lawsuit brought by indigenous tribes.

Instead of immediately denying the bribe, Craig demurred and changed the subject – a classic PR move when you have something to hide.

The Miami Herald reported: “Chevron Spokesman James Craig would not address the issue directly, but said the company ‘takes no pleasure in litigation and has tried to resolve this case in the past. However, it is difficult to negotiate with perpetrators of fraud.’”

Craig must have forgotten that Chevron has accused everybody in Ecuador of fraud, including President Correa and some of the government officials Chevron met with to “negotiate” a $500 million “donation” to the Yasuni environmental project and another $500 million “donation” for contamination cleanup.

Read the entire story HERE

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Chevron Tries To Buy A Way Out Of $18 Billion Liability In Ecuador

Blog About Cozy Relationship Between Chevron and Government Appointee Creates Stir in Ecuador

Looks like Chevron is trying to buy its way out of the $18 billion liability it faces in Ecuador. Mitch Anderson of Amazon Watch writes in Huffington Post about Chevron's latest scam to escape justice. Below is his blog, Crude Politics: Is Chevron Involved in a Billion Dollar Bait-and-Switch in Ecuador. Anderson writes that Chevron is trying to work its connections with certain rogue officials in Ecuador's government as a way to escape its $18 billion liability for polluting the country's rainforest. We are investigating the information in the blog and will report any findings in the coming days.

Crude Politics: Is Chevron Involved in a Billion Dollar Bait-and-Switch in Ecuador?

As the Yasuni-ITT Initiative deadline approaches, did its chief negotiator make a deal with the devil?

With Chevron running out of legal options in its attempt to avoid its $18 billion liability in Ecuador over egregious environmental crimes and rights abuses, the company may have turned to its longtime government insider Ivonne Baki to help it out of a multibillion dollar jam, taking corporate malfeasance and greenwashing to a whole new level.

Baki is the head of Ecuador's Yasuni-ITT Initiative, the pioneer proposal that has captured the world's imagination by seeking to keep close to one billion barrels of crude permanently underground in exchange for payment. The ITT fields (Ishpingo, Tambococha, Tiputini) sit underneath the Yasuni National Park, a UNESCO World Biosphere Reserve widely considered to be one of the most bio-diverse places on the planet. The Park is also home to two nomadic indigenous groups living in voluntary isolation.

President Rafael Correa set Dec. 31, 2011 as the deadline to obtain $100 million -- a down payment that would give the government more time to raise the $3.6 billion ($350 million annually over 10 years) it needs to offset forgone revenues for leaving the oil untouched. If the money isn't raised, drilling would ensue.

But there hasn't exactly been a stampede of donors knocking down Ecuador's door. The government has fought an uphill battle since the proposal's inception in 2007. In a recent interview with Al Jazeera, Baki admitted that the world financial crisis has taken a toll on donor government enthusiasm. Additional challenges to Yasuni fundraising have included lingering concerns about Ecuador's history of political instability, the proposal's initial lack of political and financial guarantees, and a reluctance from industrialized countries to donate to forest protection without receiving carbon offset credits.

With the clock ticking -- and both the proposal's and Baki's future on the line -- Baki told the Financial Times in a Nov. 28 article that the Initiative donation total was $70 million, the bulk of which was a $35 million debt cancellation deal with Italy. She went on to declare that, "I think in the next month we are going to have more than $100 million."

However, the Yasuni Trust Fund administered by UNDP shows a mere $2 million in actual funds. Unfazed, Baki affirmed to the Miami Herald and several Spanish language newspapers on Dec. 5 that the $100 million mark had been met, saying an "appeal for private sector donations, has been paying off." Another article describes the unnamed private donations as "flooding in." Correa has yet to make an official announcement on the fate of the proposal and whether the fundraising goal has indeed been met.

If one takes Ms. Baki at her word that $70 million is at least pledged (though not physically in the bank), the question is: where did the additional $30 million come from in a week's time?

Sources close to the project have confirmed that meetings between Baki and Chevron regarding a possible "donation" to the Yasuni-ITT initiative have occurred, according to environmental organization Amazon Watch, who has been working for over a decade to hold Chevron accountable for a massive environmental disaster in Ecuador. Word on the street is that Chevron authorized Baki to propose the idea of a $500 million "donation" to the initiative in exchange for quashing the case. Though a very handsome quid pro quo, it's a drop in the bucket if this subterfuge helps the company thwart the $18 billion legal case.

Sound far-fetched? This April 2008 cable courtesy of Wikileaks between the U.S. Ambassador in Quito and the State Department shows that Chevron has been plotting something similar for years:

"Meanwhile, Chevron had begun to quietly explore with senior GOE officials whether it could implement a series of social projects in the concession area in exchange for GOE support for ending the case, but now that the expert has released a huge estimate for alleged damage, it might be hard for the GOE to go that route, even if it has the ability to bring the case to a close."

"Given Chevron's toxic legacy and the debt it owes the people and rainforests of Ecuador, the fact that this 'bribe' is even on the table is an aberration of justice," said Kevin Koenig, Ecuador program coordinator for Amazon Watch. "This is a multi-billion dollar bait and switch, it's illegal, and can't be allowed. We're calling on Ms. Baki to disclose any meetings held between herself and Chevron, the terms and conditions of any offer from the company, and full disclosure of all private sector donations."

A look back at Baki's history reveals a long list of favors for Chevron while she held official roles within the Ecuadorian government:

• In 1998, as Ecuador's Ambassador to the United States under the rightist government of Jamil Mahuad, she signed an official letter to a U.S. federal judge in New York seeking dismissal of the environmental lawsuit against Chevron.
• Throughout 2004, Baki, then serving as Ecuador's Trade Minister, helped organize and participated in several meetings between Chevron and high level Ecuadorian officials -- including the Attorney General -- which sought strategies to end the case, according to discovery documents produced recently in the United States. During one of those meetings, rainforest residents staged a sit-in in her offices and demanded she stop efforts to undermine the legal case against the company.
• In 2008, Baki, then serving as president of the Andean Parliament, organized and participated in a meeting with Chevron and Gustavo Larrea, Coordinating Minister for Internal and External Security who at the time was an influential member of Correa's Cabinet. The contact led to several other meetings between Chevron and Larrea in Ecuador and Washington, DC.
• Baki also has been active in Chevron's lobbying efforts in the United States to cancel U.S. trade preferences for the country in retaliation for the lawsuit. A cancellation of the preferences would cost Ecuador upwards of 300,000 jobs, according to Ecuador's government.


"We are not about to give Chevron a get-out-of-jail-free card by 'donating' to the Yasuni," said Esperanza Martinez, a founder of Accion Ecologica, a leading Ecuador environmental organization and key backer of the project. "Not only would such a donation violate the rights of thousands of Ecuadorians who are victims of Chevron's misconduct, it would also violate the very spirit of the initiative."

"In short, we are not interested in Chevron's blood money," she added.

Chevron itself has been accused of numerous acts of corruption in its attempt to sabotage the case. These include: lying about the results of a fraudulent remediation in the 1990s to secure a government release; fabricating evidence during the trial to minimize evidence of contamination; using a hidden video recorder to try to entrap a judge who Chevron thought would rule against it; threatening judges with jail time if they failed to grant Chevron's motions to delay the trial; and permitting the lawyers for the plaintiffs to be victimized by death threats and mysterious robberies of their offices.

The case is currently on appeal in Ecuador after a judge ruled against the company on Feb. 14, 2011 for up to $18 billion. Because Chevron has refused to respect the judgment, the rainforest communities are being forced to prepare legal actions against Chevron's assets in the dozens of countries around the world where the oil giant does business.

For years, Chevron has publicly lambasted the Ecuadorian government with false accusations of siding with the plaintiffs in the case. In actuality, it appears that Chevron, once again with Baki's help, is behind the scenes secretly pressuring government officials to intervene on its behalf to kill the lawsuit.

Given Ms. Baki's long standing ties to Chevron and her previous efforts to help the company quash the Aguinda v. Chevron litigation or end run it entirely, it appears she again could be using her position to help Chevron evade its liability in Ecuador -- at the expense of justice, her own people, and the potentially historic Yasuni proposal.

Follow Mitch Anderson on Twitter: www.twitter.com/kukoosh

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Chevron’s Gibson Dunn Nailed for Unethical Litigation Tactics In Oregon

Yesterday we reported that a U.S. federal judge in Oregon sanctioned Chevron's law firm Gibson Dunn & Crutcher for harassment of a witness in its campaign to help Chevron evade an $18 billion judgment in Ecuador for massive oil contamination. See here, here and here.

The affidavit, submitted by Oregon lawyer Charles M. Tebbutt outlining these abusive and harassing tactics by a team of Gibson Dunn lawyers, is vivid and disturbing. The level of arrogance of the oil giant's lawyers is just astounding.

Gibson Dunn of course is famous for marketing itself as a master of the dark art of conducting "rescue operations" for clients in trouble. Their lawyers openly state that if the law is in the way, they will try to change it or work around it. In the Chevron case and others, that can mean crossing the ethical line.

Buyer beware: Gibson Dunn's litigation tactics often create more problems for its clients than they solve. Gibson Dunn came into the Ecuador case in 2009; since then, Chevron has been hit with an $18 billion judgment for environmental contamination, been sanctioned by various courts, and now faces even more problems in the coming months as the Ecuadorian plaintiffs position themselves to lawfully seize company assets around the world. On Gibson Dunn's advice, Chevron has gone rogue in Ecuador.

What government is going to want to do business with an oil company that creates open conflict with the governments of oil-producing nations?

A recent argument before the Second Circuit Court of Appeals in New York by Gibson Dunn lawyer Randy Mastro is a case in point in how the Gibson Dunn tactics are backfiring. Mastro took a beating from the panel of judges as they chuckled about his theory that a New York court has jurisdiction to block enforcement of an Ecuadorian judgment in other countries.

Mastro argued the case on a Friday; the next Monday, Chevron's attempt to seek a worldwide injunction blocking enforcement was stayed. It probably didn't help that Mastro interrupted the presiding judge repeatedly, forcing another member of the panel to suggest he sit down.

In 2010, a federal court in Colorado found that Gibson Dunn lawyer Andrew Neumann asked several harassing questions of a technical expert for the plaintiffs in the Ecuador case.

In 2009, Chevron was again fined by a California judge for filing a frivolous lawsuit against Cristobal Bonifaz, a former lawyer for the Ecuadorian plaintiffs. That lawsuit was dismissed with prejudice.

The same Gibson Dunn practice group used by Chevron in the Ecuador case also was hit recently with sanctions from a California judge for filing a frivolous lawsuit to suppress the free speech rights of a filmmaker who made a documentary about how pesticides used by Dole in Central America have poisoned banana workers. Dole is a Gibson Dunn client.

In 2003, the firm was fined a shocking $20 million in Montana for harassing an art expert for failing to raise the appraisal value of a forged painting owned by a firm client. The Montana Supreme Court said Gibson Dunn used "legal thuggery" and acted with "actual malice" in the case.

In legal trouble and partial to thuggery and malice? Do like Chevron and call Gibson Dunn.

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U.S. Embassy Finally Lifts A Finger to Help Fix Rainforest Destroyed by American Oil Company Chevron

In a surprising turn of events given the U.S. Embassy long and sordid history in Ecuador, our nation’s ambassador there has decided to support a joint effort by Ecuadorians and The Nature Conservancy to preserve the rainforest where the Cofan indigenous group lives. It's about time. See the Embassy’s press statement here.

In 1993, a year after Chevron abandoned its operations in Ecuador, a group of Ecuadorian indigenous groups and farmer communities sued the company for damages in U.S. federal court. Chevron was granted its request that the trial be held in Ecuador. Earlier this year, that move backfired when the Ecuadorians won a historic $18 billion judgment. See here.

Among the groups suing Chevron was the Cofan, who have seen their population drop from 15,000 to a few hundred brave souls due to the devastating effects of Chevron's pollution. But rather than help the Cofan, the U.S. Embassy historically has tried to do all it could to help Chevron avoid accountability for its devastating abuses.

Chevron has fought the Cofan and other indigenous groups every step of the way and promises to never pay the Ecuador court judgment even though Chevron promised to abide by any judgment out of that country's courts as a condition of the dismissal of the case from U.S. federal court.

Earlier this year, Wikileaks disclosed U.S. Embassy cables that suggest Chevron conspired with U.S. Embassy officials in Ecuador to obstruct the lawsuit brought by the Cofan and their allies. See this Mother Jones article for the eye-opening details of the cozy relationship Chevron had with embassy and former embassy officials.

A quick recap of the Wikileaks cables (see here, here, here and here) shows that Chevron left no stone unturned in its efforts to undermine the trial:

• One of the cables, written by U.S. Ambassador Linda Jewell in April of 2008, revealed that Chevron convinced Jewell to go to bat for two Chevron lawyers who faced a criminal investigation for signing off in 1998 on a sham remediation of oil sites in exchange for a government release from liability. Jewell wrote the embassy "will consider how it can help Chevron resolve" the case, and that she contacted a former Supreme Court President of Ecuador as part of that strategy.


Linda Jewell
U.S. Ambassador to Ecuador

• Chevron tipped off U.S. embassy officials that during the ongoing trial it had offered to set up "social projects" in the Amazon in exchange for GOE [Government of Ecuador] support for ending the case.

• In August 2009, Chevron lawyer Ricardo Reis Veiga called the then-U.S. ambassador to provide a "heads up" that the company was releasing secret videotapes taken by Chevron contractor Diego Borja that the company claimed implicated the judge in a bribery scandal. The move backfired after Borja later admitted Chevron paid him for his work in trying to entrap the judge, and that the tapes did not actually show a bribe.


• Ambassador Jewell appeared to unabashedly adopt Chevron's worldview of the hotly disputed legal case. She wrote that Chevron was not liable for the contamination due to a government release when that very issue was being litigated before the Ecuador court. Eventually, Chevron lost that argument.


• Another cable from March of 2006, written by Charge d'Affairs Jefferson Brown, said that Chevron executive Jamie Varela told embassy officials that "Chevron had not had any real complaints about the judge" or the "administration of the case" in Lago Agrio. Chevron later argued before various U.S. courts that Ecuador's judicial system was unfair at that time, contradicting these private statements to the embassy.


• Varela also tipped off Brown that Chevron was planning to file an international arbitration case against the Government of Ecuador in a move to gain leverage over the Lago Agrio case, according to the cables. Varela also indicated that Chevron would not publicly disclose the filing for fear the plaintiffs would use it against the company.



Jefferson Brown


• Brown also wrote that U.S. embassy officials were "surprised" that Varela did not ask for U.S. government "intervention in the case" to help Chevron, as had other Chevron officials. Nevertheless, Brown wrote that the embassy "will continue to raise the [Chevron] matter with [Ecuador's government] when we discuss other commercial disputes" but he also concluded that Chevron's complaints were "being fairly and adequately addressed in the courts or in arbitration and require no direct [U.S. government] action at this time."

The U.S. embassy in Ecuador might want to explain why it was working to undermine the rule of law in Ecuador to help an American company that was committing human rights abuses.

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At Chevron’s Tiger Woods World Challenge, Environmental Groups Scold CEO Watson From On High

Banner Blares From Circling Airplane:

Clean Up Toxic Mess In Ecuador

Two leading U.S.-based environmental groups are taking their fight over Chevron's oil catastrophe in Ecuador directly to CEO John S. Watson by sending an airplane to fly over the weekend rounds of the Tiger Woods-hosted Chevron World Challenge golf tournament in California.

A banner trailing the plane said: "Chevron CEO Watson: Clean Up Your Toxic Mess In Ecuador". The environmental groups Rainforest Action Network (RAN) and Amazon Watch sponsored the banner.

"Chevron has spent the last 18 years waging unprecedented public relations and legal campaigns to avoid dealing with the environmental and public health catastrophe it left in the Amazon rainforest," said Ginger Cassady, a RAN campaign official.

"Today we're challenging Chevron to clean more than its public image and repair the toxic legacy it left in Ecuador."

An Ecuador court earlier this year found Chevron liable for dumping billions of toxic waste into the Amazon rainforest, decimating indigenous groups and causing an outbreak of cancer and other oil-related diseases in an area roughly the size of Rhode Island.

Chevron operated in Ecuador from 1964 to 1992 under the Texaco brand.

"We want Mr. Watson and his golfing friends to know that we hold him accountable for the refusal of the company to take responsibility for the world's worst oil-related disaster," said Karen Hinton, the U.S. spokesperson for dozens of rainforest communities suing Chevron in Ecuador.

The public scolding of Watson by RAN and Amazon Watch comes on the heels of damning statements from another group of Latin Americans -- government officials in Brazil, home to one of the most highly-prized offshore oil fields in the world. After Chevron spilled an estimated 110,000 gallons of pure crude into the Atlantic Ocean offshore the state of Rio, Brazilian officials were outraged by Chevron executives there who initially lied about the origin of the spill, low-balled the number of barrels released into the ocean and told regulators the damage was contained when it wasn’t. See here.

The Brazilians are threatening to fine Chevron for up to $145 million and imprison some of its executives over their efforts to cover up the extent of the spill.

To make matters even worse for Watson, his company was named last week the “most toxic” energy company of 2011 by AlterNet, a prestigious U.S.-based online magazine that closely tracks environmental issues. See here and here.

Chevron's enormous Ecuador liability is of special concern to Watson because he is the person ultimately responsible for the failure of Chevron to abide by an Ecuador court order that the company pay for a clean-up. He also has faced accusations the he suffers from a conflict of interest for failing to properly vet Texaco for the Ecuador liability when Chevron bought its rival in 2001.

If the judgment in Ecuador is upheld on appeal, the Ecuadorians will lawfully attempt to seize Chevron's assets in countries around the world where it operates. Chevron sold off its assets in Ecuador several years ago in an effort to evade its legal responsibilities in the South American nation, said Hinton.

Aside from Woods, those playing in the invitation-only golf tournament include luminaries such as former Masters champion Zach Johnson and Matt Kuchar, the leading money winner on the PGA tour in 2010.

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Chevron Blogger Dumped by San Francisco Chronicle for Ethics Lapse

Zennie Among Several Paid By Chevron To Fake Positive News Coverage

The San Francisco Chronicle has finally thrown blogger Zennie Abraham off of its website City Brights after his ties to a Chevron operative were disclosed.

Recently, The Chevron Pit, exposed Zennie and his connections to Sam Singer, a Chevron media consultant based in San Francisco. Singer clearly pays Zennie to write positively about many of his clients, including Chevron. See this post here. Yet, Zennie never disclosed that he was paid to shill for Singer's clients.

The Chronicle’s decision to take a more ethical look and ultimately terminate Zennie should be applauded. Considering that Chevron often uses underhanded methods to buy positive media, the hometown newspaper of the San Ramon-based company is no longer being used as an unwitting instrument of the oil giant.

Chevron has a long and sordid history with writers like Zennie who pretend to be something they are not, so Chevron can circulate its deceptions about the company’s intentional contamination of the Ecuadorian rainforest.

Given the oil giant’s horrific record of contamination in both Ecuador and the U.S, paying for good news is about the only way for Chevron to get any. This year an Ecuador court awarded a group of indigenous tribes $18 billion for damages related to oil contamination left by Chevron in the rainforest. Several months later, a U.S. court denied efforts by Chevron to avoid paying the judgment.

Chevron, though, sees itself above the law of the land and doesn’t hesitate to resort to such tactics as:

Allowing the spouse of a Chevron employee to fake being an independent journalist so he could attack the legal case of the Ecuadorians.

Pro-Chevron blogger, Alex Thorne, tried to pass himself off as a legitimate journalist by emailing questions to environmental groups about their funding of the San Francisco-based Amazon Watch, a supporter of the Ecuadorians. Thorne claimed to be working on an “article” for a publication that he refused to specify. He also did not use his last name in the email, signing it only as “Alex.” The e-mails then asked the funders “if it is time” to “reevaluate” their support for Amazon Watch in light of Chevron’s phony charges of fraud in the lawsuit.

But Thorne failed to acknowledge two major points in his emails to the environmental groups. First, he is married to Kristen Thorne, Chevron’s senior policy advisor on environment and energy issues. Second, he has operated a pro-Chevron website critical of the leaders of the Ecuador lawsuit against Chevron.

After these facts came to light, Thorne closed down his blog.

Trying to pay a journalist to spy on the Ecuadorians.

In 2010, Chevron tried to pay a real journalist $20,000 to spy on sick Ecuadorians to determine if they really had illnesses. Chevron wanted the reporter, Mary Cuddehe, to lie to the Ecuadorians saying she wanted an “interview” about their medical condition when really she would be reporting back to Chevron. Recruited by Kroll – a private investigative firm hired by Chevron – Cuddehe considered the offer. Her conscious got the best of her, though. She turned Chevron down and then wrote about the whole thing, exposing Chevron’s deception.

Faking a television newscast sympathetic to the company.

In 2009 when Chevron learned that a potentially damaging report about the company’s oil contamination in the Amazon rain forest was being prepared by 60 Minutes Chevron executives hired former CNN correspondent, Gene Randall, to produce a misleading report espousing solely Chevron’s point of view but appearing to be objective.

In the video produced by Chevron, Randall, interviewed Chevron’s managers and consultants but completely ignored the arguments of the plaintiffs. The fake news report ends with the deceptive voiceover “Gene Randall reporting.”

The “news cast” remains on Chevron’s web site and appears in Google searches.

As for Zennie, we can only hope that one day he’ll get a real job.

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Chevron Faces Another Conflict With Key Latin American Country

Brazil Oil Spill Raises Questions About Company’s Respect For Local Laws

Chevron faces yet another conflict with a key Latin American country where it has a sizable investment – Brazil Chevron is currently embroiled in a huge conflict in the largest country in South America related to a huge oil spill off the coast near Rio de Janeiro. If Chevron’s flouting of local laws in Brazil is as flagrant as it has been in Ecuador, then it could lead to open warfare between Chevron and two Latin American countries.

What's happening in Brazil sounds very similar to what happened in Ecuador, where the company is attempting to evade an $18 billion judgment for massive oil contamination in the rainforest that has cost thousands of lives and devastated an area roughly the size of the U.S. state of Rhode Island.

In Brazil, the Federal Police is investigating Chevron’s statements about the amount of oil spilled, the cause of the spill and the containment. Other government officials and environmentalists are questioning Chevron’s estimates. Also, it appears the spill has not been contained, even though Chevron said it had been. In other words, many Brazilians believe Chevron is lying to them.

Fabio Scliar of the Brazilian Federal Police said the information provided by Chevron did not match the visual evidence at the site. "Initially, the reports do not correspond to reality," said Scliar. "I want to understand what's happening."

Brazil’s Energy Minister Edison Lobao said: “If Chevron is not doing what it should (to contain the spill) it will be severely punished.”

In Ecuador, Chevron’s U.S. executives have declared political warfare on Ecuador's government as part of a strategy to discredit the $18 billion judgment for the cleanup of massive oil contamination left behind two decades ago -- one that experts believe dwarfs the size of BP's Deepwater Horizon spill in the Gulf of Mexico.

The oil giant is paying several U.S. corporate law firms, lobbyists and public relations gurus hundreds of millions of dollars to foment open conflict with Ecuador's government as part of a global strategy to escape justice. It has created the unusual specter of a major American oil company deliberately provoking a diplomatic row with an oil-producing Latin American country that is a key U.S. trading partner.

The stepped-up political strategy comes at a time when Chevron's legal prospects in the case, which is being heard in the Amazon town of Lago Agrio, have considerably weakened. Ecuadorian citizens originally filed the claims in 1993 in New York but a U.S. judge shifted the case to Ecuador in 2002 at Chevron's request. At the time, Chevron heaped lavish praise on Ecuador's court system. When evidence began to show the extent of the contamination, Chevron declared it would never pay a damage award.

In September, a U.S. appeals court blocked Chevron from using an injunction from a U.S. trial judge to enjoin enforcement of the Ecuadorian judgment in any of the dozens of countries where the oil giant operates. Separately, the Ecuador court in February found Chevron liable and imposed $18 billion in damages, which the plaintiffs are appealing as too low.

In any event, the message from Ecuador is simple -- when it comes to Chevron, Brazil should beware.

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