Tuesday, May 24, 2016

Chevron CEO To His Board: Our Ecuador Problem Just Won’t Go Away

Reposted from Eye on the Amazon

Chevron CEO John Watson

[Of course, we don't have access to Chevron's internal communications. But if we did, this "memo" is what we imagine we might see. It's hard to peek into the mind of someone who is responsible for massive environmental destruction and human rights violations, but based on John Watson's actions as Chevron CEO this should be about right.]

Chevron Toxico

Dear Chevron Board of Directors and Senior Management:

This Wednesday will mark my sixth Annual Shareholder Meeting as your Chair and Chief Executive Officer. I want to thank you for the complete trust and lack of oversight you have given to me and our legal team headed up by Hew Pate in handling the ongoing Ecuador matter. Regretfully, I must inform you that we will once again have to deal with representatives of the indigenous and farmer communities of the Ecuadorian Amazon and their many misguided allies at the meeting on Wednesday.

As you know, our primary strategy since Chevron merged with Texaco (thanks in great part to my work as chief architect of the merger) is to spare no expense in dragging out legal proceedings as long as possible (and given our hefty bank accounts, that could last longer than all the remaining oil reserves, am I right?). We will continue that approach in Canada and anywhere else, or as our PR team so aptly put it: "until hell freezes over."

However, there are a number of developments since the meeting last year. I have anticipated some of your questions and will endeavor to respond to them below:

Yes, the Canadian Supreme Court sided unanimously with the Ecuadorians to allow their enforcement proceeding to begin there this Fall. Not to worry, we have hired multiple firms in Canada and we fully expect to be able to drag that trial out for many more years in hopes our opponents finally run out of funding to continue the fight.

No, we have not reported this $11 billion liability to the SEC for this case. Of course, we will stand by our claims that Chevron-Canada can never be held liable for Chevron's actions. (Don't worry, we still get to list all the assets of Chevron-Canada as ours in our annual report). Sure, someone at the SEC or Department of Justice might figure out that we're trying to have it both ways. But I'm pretty sure our bylaws allow for having our cake and eating it too.

Yes, there's risk we will have to 'clean up' and ‘pay up' as the activists say. And this whole Canada thing could affect our existing operations and new upstream development plans. But, no matter what happens, I look forward to receiving a generous bonus and I promise to give you a few weeks notice before I "float away on my golden parachute."

Yes, we are still awaiting the decision of the Second Circuit of Appeals on that RICO case that Judge Kaplan so graciously advised us to file. It is true that if we win it doesn't prevent the communities from continuing their enforcement actions, but we're happy to have paid Gibson Dunn so much money that the firm opened a new international litigation spin-off to help companies like us get off the hook for paying for things like environmental remediation and rights abuses.

No, even though Judge Wesley suggested it, we will not be forced to try the original case all over again in front of the Second Circuit in New York. Ted Olson has assured me that they can't actually force us do that. Quite a relief, what with the pollution, cancers, and stuff.

No, our case is not dead just because our star witness Judge Alberto Guerra admitted to lying on the stand and forensic evidence shows that the Ecuador judgment was indeed written by the presiding judge. I mean, sure, it's not great, but to quote my buddy Don Rumsfeld, ‘you go to war with the army you have, not the army you might want'. Probably shouldn't have given him a backpack full of cash, though. I'm going to add a note to self here that we've got to be more creative when bribing people.

Yes, in the "bribery" column of your report you will see that we will continue to pay the housing costs and "stipend" for Judge Guerra for at least another year. If we failed to continue this support it might look like we were only paying him to testify in our favor, so his admission of lying under oath in the RICO case actually demonstrates that the $2 million he has received from Chevron can in no way be seen as a bribe. Good news! And of course, we don't want him to turn on us and further, so consider it well invested hush money.

Yes, it is true that our legal team verified the leaked inspection videos from 2005 released by Amazon Watch. (No bonuses for those involved!) Those videos show our technicians finding toxic waste at sites we defended as clean in the Ecuadorian trial. Fortunately, we have successfully kept them off mainstream media in the US with some well written letters from our lawyers and the protection of Judge Kaplan's verdict. As such, they have only been viewed a few million times on the internet.

If you are confronted by any Ecuadorian "natives" at the meeting, I recommend you take my posture of simply dismissing them as naive people who have been manipulated by "greedy New York lawyers". If they have water with them, DO NOT DRINK IT.

Once again, just as we expect this divestment movement to fade away, we estimate that eventually the Ecuadorians and their lawyers will run out of support and be forced to abandon their case. I promise you that day is coming... they can't live forever after all, especially given that water they have to drink.

Let's just get through this meeting on Wednesday and engage as little as possible with people from Ecuador, Richmond, Canada, Nigeria, Argentina, Brazil, Australia, Romania... and anywhere else our operations generate "protest".

Remember what I said last year, "the path to prosperity is through fossil fuels." For most of the world it may be an oil soaked path through a desert world, but just look at how good it has been to all of us!

Sincerely,

John Watson
Chief Executive Officer AND Chairman of the Board
(It's good to be your own boss!)

With Assets Under Threat, Chevron CEO Faces Judgment Day Over Ecuador At Annual Meeting

Reposted from The Chevron Pit

Chevron CEO John Watson is getting roughed up in the days leading up to the company's annual shareholder meeting this week as risk related to his historic $11 billion environmental liability in Ecuador continues to increase. The judgment has now been confirmed unanimously by Ecuador's Supreme Court while Canada's Supreme Court has ruled the affected communities can try to seize some of the company's $15 billion worth of assets to pay for a clean-up.

(For background, see this press release put out by the environmental group Amazon Watch.)

In all, 18 consecutive appellate judges in Ecuador and Canada have rejected Chevron's arguments and ruled in favor of indigenous and farmer villagers from the Amazon who first brought suit in 1993. Chevron's global game of forum shopping is running out of steam -- the company is facing a true litigation catastrophe in Canada -- and Watson no doubt will be called out by shareholders at the meeting for his abhorrent and irresponsible mistreatment of indigenous groups in the Amazon.

The annual meeting, at company headquarters in San Ramon, will be highlighted by a face-to-face showdown between Watson and renowned Ecuadorian indigenous leader Humberto Piaguaje. Piaguaje, a Secoya elder, has traveled from his jungle home to attend the meeting. He is being hosted by Amazon Watch, an environmental group that is organizing a major protest outside during the meeting.

Watson and Chevron's Board will be on the hot seat over a number of issues:

**The company's Ecuador liability -- originally $9.5 billion -- is getting worse by the day as statutory interest in Canada (where the villagers are trying to enforce their judgment against Chevron's assets) has pushed up the amount to roughly $11 billion. Just last week, two top Chevron executives were forced to answer questions under oath in a deposition in Canada; a critical court hearing is scheduled for September that has the chance of knocking out all of the oil giant's defenses.

**Under Watson's leadership, Chevron is flailing not only over the Ecuador issue but over its core business. The company recently reported its first quarterly loss in 13 years; revenue is down 75%; and climate change threatens to leave shareholders with billions of dollars of "stranded assets" as the world moves away from fossil fuels.

**A major Chevron shareholder, Newground Social Investment, has filed a resolution that asserts that Watson's management team "has mishandled a number of issues in ways that significantly increase both risks and costs to shareholders. The most pressing of these issues is the ongoing legal effort by communities in Ecuador to enforce a $9.5 billion Ecuadorian judgment for oil pollution." The resolution follows a complaint to the SEC by a U.S. Congresswoman that suggests the company is trying to downplay its Ecuador liability to shareholders.

**It is increasingly clear that Chevron is responsible for one of the world's most dire humanitarian catastrophes in Ecuador. Numerous independent studies confirm that cancer rates in the region where Chevron operated have skyrocketed; thousands of indigenous peoples and farmers have died of cancer and other oil-related diseases. Yet at great cost, Watson continues to pay 2,000 lawyers from 60 law firms to fight some of the most vulnerable people on the planet.

In the press release put out by Amazon Watch, Piaguaje said
Our leaders plan to confront Mr. Watson with judgments from multiple courts mandating that the company pay its pollution bill to the people of Ecuador.  Mr. Watson needs to accept responsibility for Chevron's environmental crimes in Ecuador, apologize to the company's victims, and abide by court orders that compensation be paid. Until he abides by the rule of law, Mr. Watson and Chevron's Board members will be considered by us to fugitives from justice subject to arrest for crimes against humanity under principles of universal jurisdiction.
Well said, Humberto. Perhaps you should consider making a citizen's arrest of Watson at the meeting.

In previous shareholder meetings, Watson has suffered a series of biting rebukes over the Ecuador liability. One resolution critical of Watson's mishandling of the case received a whopping 38% support from shareholders.

In addition, in 2011 several of Chevron's institutional shareholders with more than $580 billion in assets under management sent Watson a letter urging settlement of the Ecuador case. Amazon Watch also sent a letter to Chevron signed by 43 corporate accountability and human rights groups blasting the company for trying to silence its critics.

Chevron's shareholders should use the annual meeting to re-assess whether the conflicted Watson -- who made $22 million in compensation last year from a Board that he controls -- has the vision to fully grasp what it means to serve shareholder interests.

Tuesday, April 5, 2016

Chevron Reeling? Oil Giant Abandons Key Claim In Ecuador Pollution Case

Reposted from The Chevron Pit

Chevron is reeling again in the Ecuador pollution case. The company's plan to evade paying for a court-ordered clean-up of the billions of gallons of toxic waste it dumped in the Amazon rainforest -- decimating indigenous groups -- seems to be faltering like never before.

After suffering defeats before 18 separate appellate judges, Chevron quietly abandoned its last major claim in Ecuador to challenge the $10 billion environmental liability imposed on the company by Ecuador's Supreme Court in 2013.

Chevron's decision to sit on its hands at such a critical juncture severely damages its prospects in Canada, where the affected communities are targeting company assets to pay for a clean up of their ancestral lands. (Here is background on Chevron's increasing legal difficulties in Canada; here is an explanation of the company's jurisdictional shell game.)

Chevron abandoned its "fraud" allegations in Ecuador by letting the statute of limitation lapse on a key claim under the country's Collusion Prosecution Act (CPA). The move is a flagrant illustration of how the company's evidence has collapsed in recent months. Ignoring the CPA claim all but nullifies Chevron's international arbitration action against Ecuador's government, where the company cynically has been trying to stick taxpayers in Ecuador with its enormous clean-up tab.

Chevron's decision follows a series of devastating courtroom setbacks.

The company's star witness, Alberto Guerra, recently admitted to accepting bribes and then lying under oath after being paid $2 million (see here and here) by the company. Some of the Chevron funds were handed over to Guerra as cash out of suitcase by company lawyers Andres Rivero and Yohi Ackerman.

The company's forensic evidence regarding the supposed "ghostwriting" of the trial court decision also has fallen apart; a new report proved the judge wrote the judgment by saving it 484 times on his office computer. Chevron is also facing negative fallout from a whistleblower video showing its scientists plotting to hide pollution evidence from the Ecuador court.

Caught committing fraud, Chevron paid an estimated $2 billion to dozens of law firms to try to turn the tables on the very people it poisoned by manufacturing false evidence using paid stooges like Guerra. Chevron's strategy is designed to shroud the company's crimes and wrongdoing in a fog so thick that the financial risk can be hidden from shareholders, artificially propping up the company's stock price. In the meantime, Chevron's notoriously passive Board of Directors (with CEO John Watson as Chairman) sits on its hands while villagers suffer and die.

This disastrous corporate strategy, designed and funded by Watson and Chevron General Counsel R. Hewitt Pate, is now in full backfire mode.

The mind-blowing story behind Chevron's latest retreat is in this press release issued by the Amazon Defense Coalition. The ADC represents the 80 impoverished indigenous and farmer communities in Ecuador who obtained the court judgment. Another press release explains how Chevron is facing a potential "litigation catastrophe" in the Ecuador case.

Three layers of courts in Chevron's preferred forum of Ecuador found that the oil giant deliberately dumped billions of gallons of toxic waste into the rainforest, causing an outbreak of cancer that has killed or threatens to kill thousands. (For a summary of the overwhelming evidence against Chevron, see here.)

In another sign of its bad faith, Chevron stripped its assets from Ecuador in 2007 after insisting that the trial take place in the South American nation. Once Ecuador's Supreme Court in 2013 affirmed the final judgment, there was no way to force Chevron to pay up without targeting company assets in other countries, which the villagers are doing in Canada and Brazil.

Chevron's latest decision to give up the CPA claim "is an example of the company bailing out of any court where it knows its incredibly weak evidence will not carry the day," said Luis Yanza, a leader of the affected communities and a Goldman Prize winner.

Thursday, March 24, 2016

Alec Baldwin Helps Expose Chevron's $10 Billion Ecuador Pollution Disaster

Reposted from The Chevron Pit

Actor and journalist Alec Baldwin has used his popular podcast "Here's The Thing" to interview human rights attorney Steven Donziger about Chevron's pollution disaster in Ecuador's rainforest.

The interview, broadcast on National Public Radio's outlet in New York, is here.

Donziger, who for two decades has helped Ecuador indigenous and farmer communities win a historic $10 billion environmental judgment against Chevron, used the interview to explain the ongoing environmental devastation, high cancer rates, and public health crisis caused by the oil major's decision to discharge billions of gallons of toxic waste into the Amazon rainforest. Chevron operated in Ecuador under the Texaco brand from 1964 to 1992.

Three layers of courts in Ecuador -- the country where Chevron insisted the trial be held -- have found the company guilty. Chevron admitted that it abandoned an estimated 1,000 unlined toxic waste pits in the Amazon that continue to contaminate soils, groundwater, and rivers. Ecuador's Supreme Court unanimously confirmed the judgment against Chevron in 2013.

The affected communities are trying seize Chevron assets in Canada and other countries to force the company to comply with the judgment. Chevron stripped its assets from Ecuador in 2007 in anticipation of losing the case. The Canadian Supreme Court last year unanimously denied Chevron's attempt to block the asset collection action, leading to major new difficulties for the company.

Just recently, Amazon Watch exposed a devastating whistleblower video showing Chevron technicians trying to hide the company's pollution from Ecuador's court. Here is a summary of the overwhelming evidence against Chevron; a summary of the independent media coverage documenting Chevron's wrongdoing; and a 60 Minutes segment on the case.

Baldwin's podcast is enormously popular and often reaches millions of listeners. In recent months, he has interviewed people as diverse as actors Sarah Jessica Parker and Dustin Hoffman, Comedian Amy Schumer, Doctors Without Borders President Joanne Lui, and environmental activist Antonia Juhasz.


Tuesday, February 2, 2016

Chevron At War With Canada Supreme Court; Company Also Faces Accusations of Terrorism and Tax Evasion

Reposted from The Chevron Pit

As Chevron faces a potential litigation catastrophe over its $10 billion pollution liability in Ecuador, we have decided to publish a news summary from the front lines of the historic battle by indigenous communities to hold the company accountable for its "Amazon Chernobyl" disaster.

The summary will chronicle examples of Chevron's illicit behavior and sub-standard business practices in Ecuador and elsewhere -- including, most recently, the shocking news that the company is being sued for making payments to Saddam Hussein's private slush fund.

We understand that we might have a space problem given the ample material related to Chevron's unethical litigation practices, payments to witnesses, and other fraudulent shenanigans taking place under the regime of current CEO John Watson (annual compensation: $25 million) and his sidekick, Chevron General Counsel R. Hewitt Pate. But we will try.

Here is our first installment of The Chevron Chronicles:

Chevron violating Canada Supreme Court decision: Chevron's arrogance and the moral bankruptcy of its "perpetual litigation" strategy under Watson's leadership is now on full display in Canada. The villagers last week demonstrated in a new legal filing that Chevron yet again is defying a Canada Supreme Court order granting them jurisdiction to try to seize company assets to pay for their $10 billion judgment. Despite the Supreme Court order, Chevron for the fourth time has filed legal papers to nullify jurisdiction.  The company now faces the nullification of its defenses given that it already litigated them (and lost) in Ecuador, where it insisted the trial be held. For background, see here; for the Canada Supreme Court decision against Chevron, see here.

Chevron is now 0-18 among appellate judges in Canada and Ecuador: As further proof that Chevron views courts as little more than pawns in a larger strategy to win by might what it can't win by merit, the company has now lost before all 18 appellate judges in Canada and Ecuador who have heard the case. Using some of the 60 law firms and 2,000 lawyers Chevron has retained to fight the villagers, the company is still trying to re-litigate many of the same issues (including jurisdiction) already decided by the 18 appellate judges. As Alan Lenczner, the Canadian lawyer for the villagers, said in his latest filing: "Deep pockets against the resources of indigenous people in the Ecuadorian Amazon and repeated, interminable delay until 'hell freezes over' are Chevron's weapons." Chevron's desperation in Canada is so palpable that the company enlisted the notorious convicted felon Conrad Black to serve as a spokesman for its cause.

Chevron charged with providing material support to terrorists: Chevron's propensity to put profits in front of people in Ecuador -- which ended up causing numerous deaths from cancer -- are just the tip of the iceberg. Several victims of terrorism sued Chevron in California last October for financing a Saddam Hussein slush fund that was used by the Iraqi government to reward the families of suicide bombers targeting Israeli civilians. Chevron already paid a $30 million fine to the U.S. government for violating the Foreign Corrupt Practices Act in Iraq. The latest civil lawsuit alleges: "Due, in part, to Chevron's substantial assistance, Saddam Hussein had the means to finance and direct over twenty separate acts of violent terrorist attacks inflicting death, disfigurement, and lasting psychological trauma and pain upon plaintiffs, eighteen U.S. nationals and over 300 foreign nationals then living in Israel."

Chevron's fraud in Ecuador proven by whistleblower video: The explosive Chevron whistleblower video that shows company scientists trying to defraud Ecuador's courts continues to gain traction.  The video has now been viewed more than 2 million times on the Internet and does more than anything to illustrate how the devious company uses obfuscation to hide the truth about its toxic legacy.  Combined with the stunning admission by the company's star witness that he lied in open court, Chevron now faces a major uphill battle in Canada even under the best of circumstances.

Chevron faces allegations of tax evasion in Australia and fraud in Tennessee: In Australia-- where Chevron is the largest foreign investor -- a stunning new report details how how the company has become a tax cheat extraordinaire.  Chevron has been ripping off the Australian government by stashing its earnings in a subsidiary in Delaware and using other paper financial transactions to drain profits out of the country to reduce its tax payments. As business columnist Michael West wrote, "Secretive oil major Chevron Corp has taken the art of tax avoidance to its ultimate form thanks to a scheme so aggressive that it goes beyond merely reducing exposure to income tax, but rather, has been designed to make a profit from the Australian Tax Office."

Separately, the Attorney General of Tennessee sued Chevron for fraudulently siphoning $250 million from a state environmental clean-up fund. A 2009 report from award-winning journalist Antonia Juhasz documented Chevron's environmental problems in dozens of countries around the world

Of course, an oil company like Chevron does not run into trouble with the law so frequently unless it is management's policy to see what it can get away with. As it is doing in Canada to evade paying the Ecuador pollution judgment, Chevron is playing a cynical game with courts and regulators. If this was a fair world, Chevron's executives would face prison for their horrific acts.

Instead, for being the Dick Cheney-esque mastermind behind this subterfuge, Chevron's General Counsel Pate reaps millions of dollars per year in compensation while the company's victims around the world suffer illness and death. Most of Chevron's Board puts up with Watson and Pate by turning a blind eye to these repeated acts of wrongdoing.

Judges and regulators need to connect the dots and take notice of the full range of Chevron's wrongdoing around the world. Only then will they not fall prey to the company's cynical and manipulative jurisdictional shell game.

Courts also must reprimand Chevron like any other abusive litigant trying to use its superior resources to evade its moral and legal responsibilities to those it has harmed.