Chevron Malfeasance In Ecuador and California: New Criminal Investigation Over Toxic Gas Flaring

More evidence of the cultural rot deep within Chevron’s management structure has surfaced with a devastating new report in the San Francisco Chronicle that the company is now under a criminal investigation for lying to authorities over toxic gas flaring at its Bay Area refinery.  For Chevron CEO John Watson and General Counsel R. Hewitt Pate the news could not have come at a worse time.

We already have reported that under Watson and Pate's leadership Chevron faces a hair-raising $19 billion liability in Ecuador for the dumping of billions of gallons of toxic waste into Amazon waterways, and then undertaking a fraudulent remediation to cover it up. Chevron also recently paid a huge fine to the Justice Department for violating the Foreign Corrupt Practices Act in Iraq and has been sanctioned by various courts in Ecuador and the U.S. for engaging in unethical litigation practices.  

The Chronicle reported in Sunday’s editions that the U.S. Environmental Protection Agency is conducting a criminal investigation of Chevron after learning the company has installed pipes to re-route toxic pollutants around monitoring equipment at its Richmond refinery before burning them off into the atmosphere, where they pose a risk of cancer and respiratory ailments.

According to the Chronicle:  “Air quality officials say Chevron fashioned a pipe inside its refinery that routed hydrocarbon gases around monitoring equipment and allowed them to be burned off without officials knowing about it.”

A local county supervisor, John Gioia, had the guts to be quoted on the record about what Chevron did:  “That’s a criminal act, intentionally bypassing the monitoring,” Gioia said.

The criminal investigation started when two inspectors noticed that Chevron’s pollution-monitoring equipment wasn’t recording anything and became suspicious.

A fire at the Richmond refinery on Aug. 6, which forced thousands to area hospitals for treatment, is also under investigation and has led to a class action lawsuit against the company. See this Huffington Post piece for more details.

“Chevron's pattern of legal and environmental management failure reveals an executive team out of its depth and out of control.  The board's lack of effective oversight of top management risks driving the company and its shareholders into the ground,” said Simon Billenness, an independent analyst who has followed the company's growing environmental liabilities.

Billenness also said a new analysis by the London-based group Fair Pension has revealed how Chevron’s approach to the Ecuador disaster threatens shareholder value.

Our advice to the investigators:  look at Chevron's corporate suites for the source of the problem, not just the line workers at the refinery who creatively figured out a way to save the company money at the expense of the health of local residents.  

Workers cheat because of the existence of a corporate culture that encourages cheating, the effects of which the world has seen in Ecuador time and again. If you want to see what kind of corporate citizen really Chevron is, look at this video about its gross human rights violations in Ecuador.

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How Chevron Lies to U.S. Courts

Gibson Dunn’s Randy Mastro Continues His Mobster Approach to Ecuador Litigation

Chevron’s lead outside lawyer on the Ecuador environmental litigation, Randy Mastro of Gibson Dunn & Crutcher, always plays fast and loose with the facts.  His goal is to try to distract attention from Chevron’s human rights violations and fraudulent misconduct in Ecuador to cover-up the company’s leading role in creating the world’s worst oil-related environmental disaster.  Now he has been caught in another outright deception, with U.S. courts as the victim.

Mastro likes to fashion himself as a former “mob prosecutor”.  But that reality is far from the truth, given that he “served” in the civil division of the U.S. Attorney’s Office in the 1980s and therefore never prosecuted anybody.  In fact, Mastro was considered a “weak link” in the office, according to a former colleague who spoke to the Chevron Pit.

Lies by Mastro and other Gibson Dunn lawyers such as Andrea Neuman and Kristin Hendricks about the Ecuadorians are notorious for causing ethical problems for Chevron as it desperately tries to avoid paying the $19 billion judgment imposed in Ecuador after an eight-year trial that produced more than 220,000 pages of record evidence documenting the company’s wrongdoing.  See here and here.

Mastro is the mastermind behind a long list of dirty tricks being played against the Ecuadorians after Chevron was found guilty for the dumping of billions of gallons of toxic waste into the water supply of the rainforest. See here and here.

Mastro’s intent is clear: to use any means necessary to help Chevron stop enforcement of the Ecuador judgment by creating a fake narrative that the rainforest indigenous communities and their lawyers are greedy, corrupt and even violent.

Mastro and his minions at Gibson Dunn (including more than 60 lawyers working on the case and well over $100 million in annual billings) have waded through 600 hours of video outtakes from a documentary about the environmental disaster in Ecuador, called Crude. Mastro reduced the 600 hours to a few minutes of heavily edited and manipulated comments -- all as part of his effort to derail the historic lawsuit and, in the process, destroy the reputation of Steven Donziger, a lawyer who for almost two decades has fought in virtual anonymity on behalf of the rainforest communities victimized by Chevron.

This corporate defense tactic executed by Mastro is pretty simple – when your client commits massive crimes and fraud, you attack the lawyers and try to focus attention on anything but the merits of the case. Unlike Mastro, most lawyers who engage in this tawdry tactic are smart enough not to get entangled in their own lies.

Read how “mob prosecutor” Mastro has completely distorted the meaning of Donziger’s comments in the video outtakes before multiple U.S. courts (chronicled in greater detail on pages 137 to 143 of this document):

 **In his typical preposterous way, Mastro in court papers accused Donziger of establishing an “armed army” to literally attack the Ecuador court with weapons.  In fact, Donziger was trying to organize a lawful rally of his clients to press the court to resist Chevron’s corrupt strategy to delay the trial by drowning the court in papers and threatening judges with jail time.  This illegal tactics had paralyzed the proceedings.  In the full transcript – not the one Mastro submitted to U.S. courts – it is clear Donziger was engaging in completely lawful and appropriate behavior no different than any lawyer would do (or should do) if his clients were being corruptly denied a fair trial by an adversary.

 Mastro accused Donziger of saying that only politics and the press coverage mattered during the trial; that the trial itself was of no consequence. Donziger, however, was actually making a much different point: that the court had all the evidence it needed to convict Chevron, and that fact needed to be conveyed to political and press contacts. (Of course, the hypocrisy is astounding.  Chevron is one of the largest political donors in this country and spends hundreds of millions every year hiring advertising and public relations firms to manage its tattered image here and abroad.)

The exact conversation on the video clearly shows Chevron and its General Counsel R. Hewitt Pate are paying Mastro to lie to U.S. judges.  Mastro simply uses his willingness to cross the ethical line as an advantage in the highly competitive legal marketplace.  Most companies would never buy this approach, but Chevron – a company just as arrogant as Mastro – feels entirely comfortable with the strategy.

Mastro badly needs to restore his reputation after an astounding defeat in favor of the Ecuadorians in front of the U.S. Second Circuit Court of Appeals.  In that case, Mastro was humiliated when he could not answer basic questions from the panel and was laughed at by the spectators and the judges on the bench.

Meanwhile, Donziger – a sole practitioner who works out of his apartment -- is fighting back against Chevron’s intimidation tactics.  He has filed claims against Chevron for lying to U.S. courts and engaging in extortion and fraud to cover up its crimes in Ecuador. See here and here.

In typical fashion, Chevron (led by Mastro) has desperately opposed Donziger’s claims, which completely destroy the company’s fake narrative. Mastro and Chevron CEO John Watson are obviously scared of the truth coming out.  If it did, one would see that the company’s callous approach to Ecuador has resulted in numerous deaths and the wholesale destruction of indigenous communities.
It remains to be seen if the notoriously opinionated Judge Lewis A. Kaplan – who already has been reversed once by the Second Circuit Court of Appeals -- continues to buy into Mastro’s charade or lets Donziger’s claims proceed.

Randy Mastro 

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Lawyer for Ecuadorians Turns the Tables On Chevron and Sues Oil Giant

Chevron: can you handle the truth about your crimes in Ecuador?

New York lawyer Steven Donziger is going after Chevron, its CEO John Watson, and its General Counsel R. Hewitt Pate for orchestrating a campaign by the oil giant to evade paying a $19 billion judgment in Ecuador by targeting and defaming Donziger and other members of the legal team. Donziger, a litigator who has dedicated most of his professional work to the field of human rights advocacy, battled for almost two decades to help indigenous and farmer groups in Ecuador’s rainforest hold Chevron accountable for the deliberate dumping of billions of gallons of toxic waste onto their ancestral lands, leading to the decimation of traditional cultures and an outbreak of cancer that has killed or threatens to kill thousands of people.  See this article in Courthousenews.com.

(For background on Chevron's human rights violations in Ecuador and fraudulent cover-up, see this devastating video. For a written summary of the overwhelming evidence against Chevron relied on by the Ecuador court in finding the company guilty, see here.)

Donziger, represented by John Keker of San Francisco’s Keker & Van Nest, quietly filed a 158-page compendium of claims against the oil giant last week in New York federal court.  The lawsuit can be read here starting on p. 92.  Donziger, who lives in a small apartment in New York City with his wife and son, had previously been sued (along with his clients) for $57 billion by Chevron as part of an outrageous and trumped-up civil racketeering claim.  Chevron claimed that the entire Ecuador case – which includes 64,000 chemical sampling results proving toxic contamination at the company’s hundreds of well sites in the Amazon -- was an attempt by Donziger and his clients to extort money from the company.

Donziger said that the racketeering case was a thinly-veiled attempt by Chevron and its high-billing law firm, Gibson Dunn & Crutcher, to cover up evidence of Chevron’s crimes and to intimidate the plaintiffs into abandoning the 19-year-old environmental case, which was filed in New York in 1993 but was shifted to Ecuador at Chevron's request after the oil giant filed numerous affidavits praising the country’s court system.  In February 2011, Donziger and his clients won the judgment after an eight-year trial in Ecuador marred by Chevron’s attempts to intimidate judges, offer bribes to Ecuador's government, fabricate scientific evidence, and sabotage the proceedings by filing dozens of frivolous motions and drowning the court in paper.  See here.

Chevron's legal team at Gibson Dunn openly markets a “template” to corporate defendants like Chevron facing large liabilities for environmental and human rights abuses.  The template, which the firm calls a “rescue operation” for clients in trouble, assumes that the wholesale intimidation of lawyers will allow clients to win via subterfuge what they can’t win on the merits. The Gibson Dunn “rescue” team – led by New York attorney Randy Mastro, Ted Boutrous, Andrea Neumann, Scott Edelman, and William Thomson – has used over 60 lawyers and billed Chevron hundreds of millions of dollars.  All their hard work has brought a fair amount of disrepute to their law firm as Chevron has suffered multiple courtroom setbacks around the world, dramatically increasing its liability and creating a shareholder rebellion against CEO Watson.  See here.

Mark our words – it is just a matter of time before Gibson Dunn itself gets sued for creating evidence and engaging in intimidation tactics to justify its high-priced fraud “template” that it sells to clients.

In 2009, the same Gibson Dunn “rescue” team leveled fabricated fraud charges in California against another American attorney who once worked with Donziger on the Ecuador case, and it blew up in their collective faces.  That attorney, Cristobal Bonifaz, won a judgment against Chevron after a court found the company tried to use the fraud lawsuit to suppress his First Amendment rights and harass him, violating California’s anti-SLAPP statute. Chevron was ordered to pay a large fine in that case and separately has been sanctioned by federal courts and accused of multiple ethical violations for doing Chevron’s dirty work.  See here and here.

Any lawyer who cares about fairness should read the chilling facts documented in Donziger’s lawsuit.  It is indisputable that he has been the target of an unrelenting campaign of defamation, harassment, and intimidation because he dared to stand up to the goons at Chevron who are trying to hide the company’s outrageous misconduct in Ecuador. For this, he probably has suffered a level of harassment unprecedented in the annals of American jurisprudence.

The harassment included 15 days of sworn deposition testimony where he faced off against up to 20 Chevron lawyers and staffers, overseen by a federal judge (the normally well-regarded Lewis A. Kaplan) who bought into Chevron’s hysteria and rushed to judgment and in the process sparked a worldwide reaction in the legal community to his excesses. See here and here. See petition asking for Kaplan’s dismissal here.

Donziger also faced 24/7 surveillance in Manhattan and Ecuador and a campaign of defamation by Chevron’s press flaks and lawyers that is outlined in the legal document he filed in court.

Donziger’s lawsuit lays out the gory facts of Chevron's criminality and corruption in Ecuador, dating back to the mid-1990s when it engaged in a sham remediation to try to weasel out of the original lawsuit.

The Donziger suit explains that once Chevron realized it would lose the Ecuador trial based on the scientific evidence, the company turned to Gibson Dunn to try to render the Amazonian communities defenseless.

New York judge Kaplan -- who from the bench has made insulting comments about the indigenous groups victimized by Chevron -- will now have to decide whether to let Donziger's claims go forward as part of the existing Chevron racketeering case. Chevron steered its original case to Kaplan knowing full well his feelings toward Donziger, a fellow Harvard Law School graduate who he seems to treat as some sort of wayward son. At one early hearing, Kaplan – who has a corporate law background -- sneered that "Mr. Donziger is trying to become the next big thing in fixing the balance of payments deficit" between the U.S. and the rest of the world by going after U.S. companies, which he lamented as "a sad pass" and "a giant game." See here.  Kaplan on numerous occasions described the Ecuadorian indigenous groups as “the so-called” plaintiffs, as if he was trying to deny their very existence.

Kaplan, who once tried to impose an illegal worldwide injunction blocking enforcement of the Ecuador judgment, already has been reversed by the federal court of appeals on the case; whether he lets Donziger's counterclaims move forward so the full truth about Chevron’s misconduct can come out in his courtroom will be interesting to watch given his obvious biases, to say the least.

Here is a quick summary of Donziger's counterclaims against Chevron:

• Chevron has made numerous false statements by claiming Donziger committed misconduct by pressing forward with the pollution lawsuit after the company “remediated” the Ecuador oil fields, when it knows the remediation was a sham;
• Chevron has lied about the overwhelming scientific evidence against it – evidence that includes thousands of chemical sampling results that show the presence of harmful toxins and carcinogens at the company’s well sites -- to try to make it appear Donziger had to fabricate evidence to secure a favorable verdict;
• Chevron used deceptive and manipulative editing tactics to misrepresent video outtakes from the documentary film Crude to take Donziger’s statements out of context, and to portray him in a negative light;
• Chevron used its own longtime contractor, Diego Borja, to plan and execute an illegal video entrapment scheme against a sitting judge in Ecuador in an attempt to derail the trial, and then lied about hush money it paid to Borja so he would keep silent about it; and
• In a final act of desperation, Chevron falsely claimed the “all-powerful” Donziger secretly wrote the 188-page trial judgment from his apartment in New York without providing a shred of such evidence.

Let's see if Chevron and its high-flying CEO Watson and General Counsel Pate -- who recently received a 75% pay raise for his work on the Ecuador case after losing the largest environmental judgment in history -- have the guts to let a jury hear all the evidence of the company’s corrupt activities in Ecuador coordinated from company headquarters in San Ramon, California.

We predict that like most bullies, Watson and Pate will cower in fear and order their “rescue team” at Gibson Dunn to do all they can to convince Judge Kaplan to keep the truth contained in Donziger’s counterclaims from coming to light.

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Chevron Puts Workers’ Lives In Danger at Richmond Refinery

Allows Plant to Run As Leak Fixed, Workers Barely Escape Ignited Vapor Cloud

Investigators are asking why Chevron allowed its Richmond, California refinery to continue to operate as its employees worked on a pipe leak that resulted in a fire, sending over 1,000 local citizens to the hospital.

According to this San Francisco Chronicle story, the workers – repairing the leak -- barely escaped a vapor cloud that ignited.

They also are asking why an 8-inch carbon steel pipe that failed wasn’t replaced in November during a round of maintenance.

Why? Because Chevron cares only about the bottom line, and if not replacing a pipe saves the company money, then why replace the pipe?

As in Nigeria and Ecuador, the only people who could be harmed in Richmond are mostly poor people of color.

In Nigeria, Chevron refused to evacuate workers from an oil rig that exploded and killed two workers. Chevron had no boats to rescue the workers who jumped into the water. Local fisherman had to do that.  See here.

In Ecuador, Chevron refuses to pay a $19 billion judgment for massive oil contamination of the rainforest, even though the company agreed to abide by the findings of an Ecuador court, when a U.S. judge sent the case to the South American country at Chevron’s request in 2002.

The damage award would be used to clean up its pollution that continues to leech into underground drinking water. It also would provide health care facilities and clean drinking water for the indigenous groups and other people living near the contamination.

And, then there’s this:  In its last earnings statement, Chevron reported $21 billion in surplus cash. 

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From Ecuador to Richmond to Nigeria, Greedy Chevron Lacks Respect for Communities Where It Operates

Flouts Safety in Backyard, Imagine What It Does in Places Where Few Are Watching

Want to understand the backstory for Chevron's latest environmental disaster in Richmond, California?  

See this video about Chevron’s devastating human rights violations and fraudulent cover-up in Ecuador and read this article about how Chevron essentially forced 154 of its Nigerian workers to jump from a smoking oil rig minutes before it exploded into the ocean after the company refused to evacuate them.

It has been clear for some time that a deep cultural rot has taken hold in Chevron's management team. The company is riddled by an outdated corporate governance structure designed to maintain a weak-kneed Board of Directors incapable of policing managers who don’t care to address fundamental operational and safety problems. (See this press release and this article about Chevron’s being named a company with some of the worst business practices in the U.S.)

For Chevron, it's about pure greed and lies.  Its marketing mantra – we respect the communities where we operate – is an advertising industry joke. The mantra should say:  Chevron promises it will always act as if it is above the law in the communities where it operates.

When will the SEC stand up and hold Chevron to account for its lies to shareholders about the Ecuador case, as documented in this devastating report? In fact, a U.S. Congresswoman recently called on the SEC to probe Chevron's management.

Chevron CEO John Watson and General R. Hewitt Pate – a disciple of Karl Rove -- both of whom are hopelessly conflicted on these issues are being paid huge amounts of money to make sure Chevron continues to pad its pockets at the expense of the communities where it operates. See here.

On recent conference calls with analysts who provide information to shareholders, Watson has lied repeatedly about the $19 billion damage award in Ecuador.  He has called the case a fraud and the Ecuadorians "criminals"– basically blaming the victims, the usual tactic of Chevron’s top brass.

The disaster at Chevron’s refinery in Richmond – where 900 people were sent to the hospital because of toxic fumes --  is another case in point. As Richmond community leader Andres Soto said on Democracy Now, Chevron never hesitates to lie:

“Realistically, what we have seen is nothing but spin out of the refinery. On the one hand they apologized to the community (that’s) how they always lead their statements off. But, realistically, they came out and they were blaming the same community and the environmentalists for them not being able to modernize and upgrade their operations there at the Richmond refinery when in fact, we know that this unit, the crude unit that actually caught on fire and blew up, it was never part of that upgrade program.

They could have ensured the safety of this thing in general. But it is that mendacity, the misrepresentation of the truth that Chevron is engaging in that makes it very difficult to deal with them. They refuse to negotiate in good faith with the committee over a wide range of issues, whether it is fair taxation or whether it’s environmental safety and environmental justice.”

Children in Richmond living in poverty and in the shadow of Chevron’s antiquated refinery already are hospitalized for asthma at almost twice the rate of children in the rest of Contra Costa County.

In Ecuador, the eight-year trial produced overwhelming scientific evidence that Chevron deliberately dumped more than 16 billions of gallons of toxic waste into Amazon waterways and abandoned more than 900 toxic waste pits that have pipes to funnel oil sludge into streams and rivers used by indigenous groups for their drinking water.  Thousands of died of cancer, or are at risk of dying. 

In most countries, those responsible would be prosecuted for homicide. But in Ecuador, Chevron stripped its assets from the country and simply refuses to pay the judgment – essentially challenging the Ecuadorians to chase it around the world to seize various assets. (The Ecuadorians have launched legal actions to seize Chevron assets in Canada and Brazil already.)

But that’s not all.  The rot in Chevron is so extreme that the same pattern of polluting local communities and then lying about it has appeared in numerous other places: See this report for details.

**In Brazil, Chevron faces a $22 billion liability and possible criminal penalties for an offshore spill and related cover-up last November in the Frade field, a $3.6 billion deep water oil project that is one of Chevron's biggest capital investments in the world. 

**In Angola, the impacts of oil activity in the Sea of Cabinda are so disastrous that most of the sand on the shores is polluted and black in color, and most of the beaches cannot be used. 

**In Salt Lake City, a rupture of a Chevron pipeline dumped over 33,000 gallons of oil into Red Butte Creek, exposing residents to oil fumes with horrific health impacts. A second rupture occurred just five months later, dumping an additional 21,000 gallons of oil.

**In Canada, Chevron is undertaking a major expansion of its tar sands projects.  Increasing evidence demonstrates that Chevron’s development is contaminating the environment with toxins and severely impacting the health, livelihood and cultural preservation of indigenous communities living downstream.

**In Kazakhstan, Chevron’s development of the giant Tengiz Field emitted such high levels of toxins that the country’s government fined the operation nearly $64 million. 

**In Indonesia, a Chevron pipeline explosion covered part of a village in hot crude oil, leaving two children suffering burn wounds and a community devastated. 

These debacles happen on the watch of CEO Watson and General Counsel Pate.  How rotten is Chevron?  Pate just received a 75% raise (to $7.8 million per year) for getting the company to act like a fugitive for justice from the Ecuador case.  Watson’s compensation last year was on the order of $25 million. See here.

Countries around the world should simply cease doing further business with Chevron until it respects the communities where it operates and begins to obey local laws and court judgments.  By any measure, the Richmond disaster is only the latest illustration of why this company has lost its social license to operate.

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Gibson Dunn Associates Begin to Flee as Firm’s Ethical Problems In Chevron’s Ecuador Case Deepen

Ethical problems in the “transnational litigation practice group” at Chevron’s lead outside law firm, Gibson Dunn and Crutcher (GDC), are mounting fast with word that top-ranking associate Kristin Hendricks –recently sanctioned by a U.S. federal court -- has abandoned her job. The departure of Hendricks appears to be part of a broader trend by young GDC lawyers disgusted with the firm’s tawdry tactics on the high-profile Ecuador environmental case, which has produced a series of devastating legal setbacks for Chevron and all sorts of problems for GDC over the last twelve months.

Hendricks, a 2006 graduate of NYU Law School, had been sanctioned in 2011 by U.S. Magistrate Judge Thomas M. Coffin in Oregon (see here) for “harassing” the executive director of a small environmental non-profit that had been helping the Ecuador rainforest communities that recently won an $18 billion judgment against Chevron. A detailed affidavit documenting GDC’s many unethical practices in the Oregon action (which included Hendricks, partner Randy Mastro, and associates Alexandra Southwell, and Gregory Shill) and on which Judge Coffin based his decision, can be found here.

The larger issue is that many young lawyers probably don’t want to represent a client who committed gross human rights abuses and then lied to cover up thousands of deaths, while the partners who orchestrate the litigation reap millions of dollars in fees. A video about the horrific human rights violations committed by Chevron in Ecuador can be found here and a summary of the overwhelming evidence against the company can be found here.

The background on how Hendricks found herself sanctioned by a federal court at the outset of her legal career – and how she was left hung out to dry by Gibson Dunn partner Mastro– can be found here. For broader context on GDC’s many ethical problems in the Ecuador case, including multiple sanctions imposed on the firm by courts in the U.S. and Ecuador, see this blog published in the Huffington Post.

With almost comical fanfare, Gibson Dunn in 2010 announced a new “Transnational Litigation and Foreign Judgments” practice group of 27 lawyers specializing in “defending multinational corporations against tort and related claims emanating from abroad.” Headed by Ted Boutrous, Scott Edelman, Andrea Neuman, and William Thomson – and using Mastro on the Chevron matter - the group has got off to stuttering start to say the least.As far as we can tell, the only client the group has signed up is Chevron.

GDC brags in its marketing materials that it is a bastion of "innovative thinking" whose lawyers conduct "rescue operations" for clients in trouble. While GDC’s marketing prowess no doubt has generated millions of dollars in fees from Chevron management for the firm’s partners, its courtroom performance has been nothing less than a disaster for Chevron shareholders.

Consider just some of the setbacks Chevron has suffered since General Counsel R. Hewitt Pate – himself a central beneficiary of this suspect operation who has his own conflicts of interest (see here) -- hired GDC’s vaunted “rescue operation” in 2009:

• Only 18 months after GDC began its representation, Chevron was found liable in Ecuador for $18.2 billion in damages – the largest environmental judgment in history. A summary of the evidence can be seen here.
• A three-judge panel on Ecuador’s appellate court affirmed the Ecuador trial court judgment in its entirety and blasted Chevron’s counsel for engaging in malfeasance and attempting to intimidate judges. In the process, it upheld a $9 billion punitive damages award.
• In May and June, the Ecuadorians filed enforcement actions in Canada and Brazil, encumbering and potentially seizing billions of dollars worth of Chevron assets. A Chevron comptroller, in a sworn affidavit, had said the lawsuits would cause “irreparable harm” to the company.
• Earlier this year, a U.S. federal appeals court in New York blew up GDC’s primary defense for Chevron. A three-judge panel vacated an illegal injunction purportedly blocking the Ecuadorians from enforcing their judgment. Mastro, who argued for Chevron, was literally laughed at by the panel when he tried to dodge simple questions. See here.
• GDC’s “fraud” allegations against the Ecuadorian rainforest communities and their counsel have now been rejected outright or not adopted by the Ecuadorian trial court, the Ecuadorian appellate court, 15 U.S. federal trial courts, and four U.S. appellate courts.
• Chevron CEO John Watson is facing a growing shareholder rebellion over his (and GDC’s) mishandling of the Ecuador litigation. Several shareholders excoriated him publicly at the company’s annual meeting in May. See here and here.
• Under GDC’s watch, Chevron is also facing an investigation for lying to shareholders to cover up its Ecuador risk. In May, U.S. Rep. Jan Schakowsky petitioned the Securities and Exchange Commission to determine whether Chevron is misleading shareholders. The letter was based on a devastating report by securities lawyer Graham Erion.
• In 2009, Chevron was ordered to pay all attorney fees associated with the defense of a civil lawsuit brought by GDC against Cristobal Bonifaz, a former lawyer for the Ecuadorians. A state judge in California found that the lawsuit was designed to harass Bonifaz and suppress his First Amendment rights.
• Finally, the same GDC practice group used by Chevron in the Ecuador case recently was hit with sanctions from a second 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.
• GDC’s representation of Chevron also coincided with the use of an illegal corporate espionage and intimidation campaign against the lawyers for the Ecuadorians. In Manhattan, New York lawyer Steven Donziger was followed on a 24/7 basis for several weeks by six “investigators” believed to have ties to GDC. Lawyers fighting GDC in Ecuador have been subject to acts of spying and intimidation and have sought protection from the Inter-American Commission On Human Rights.

With problems like these growing, no wonder GDC is no longer considered a desired destination for young lawyers.

As Hendricks departs, we received word from three different sources that resumes are flying around New York as GDC associates try to bolt work on the Ecuador case, which is now considered a big loser of a career move. Stay tuned as details emerge.


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