Thursday, December 18, 2014

Chevron's 12-Step Program to Obtain Impunity for Its Crimes and Abuses in Ecuador

Reposted from The Chevron Pit

Why has Chevron still not paid up for its destruction of Ecuador's ecosytem after 22 years of litigation?

And why has Chevron still not paid a dollar directly to those affected by its pollution in Ecuador when BP voluntarily put up $20 billion to compensate victims within weeks of its much less impactful Gulf oil spill in the United States?

It is undisputed that Chevron deliberately dumped billions of gallons of toxic waste into the Amazon rainforest when the company (under the Texaco brand) operated in Ecuador from 1964 to 1992. Three layers of courts in Ecuador have confirmed that the oil gaint used substandard practices that decimated indigenous groups and caused health problems that have killed, or threaten to kill, thousands.

(For a summary of the overwhelming evidence against Chevron, see here.)

After an arduous eight-year trial, in 2011 the villagers finally won a judgment in Ecuador ordering the company to pay $9.5 billion to restore the environment and to provide clean water and appropriate medical care. Ecuador is where Chevron insisted the trial held and where the company accepted jurisdiction. The amount of the final judgment is modest compared to BP's estimated liability in the U.S., which has now grown to an estimated $50 billion.

We have tried to understand how Chevron has been able to snub its nose at the court judgment with so few consequences.

It certainly has much to do with how Chevron uses its vast wealth to pay hordes of lawyers from 60 different firms to tie up the villagers in courts stretching across countries and continents. Chevron's annual revenues are four times greater than Ecuador's GDP. Chevron CEO John Watson obviously calculates that it is cheaper to use lawyers to delay justice than to remediate the disaster.

There is also the larger threat to Chevron's business model. Ecuador is hardly the only country where Chevron faces significant liability for causing environmental damage in the communities where it operates. The last thing Watson wants is for other indigenous and farmer communities to get the dangerous idea that they can pursue their own legal claims against the company.

More interesting is why judges around the world can't seem to put a stop to Chevron's abusive strategy. Maybe the world needs a new global court to resolve civil disputes so powerful companies can't play national court systems against each other, as Chevron has done so effectively.

Whatever the solution, the system obviously is not working when the claims of vulnerable human rights victims cannot be resolved after an eternity of effort and untold suffering.

Here's our description of Chevron's 12-step program for impunity stretching back to the launching of the case in 1993:

1) Ecuadorian villagers sue Texaco in New York federal court in 1993 seeking a clean-up of the remediation and compensation for personal injuries. Texaco claims it should not be held liable because it operated in Ecuador via a wholly-owned fourth-tier subsidiary called Texpet.

2) Texaco and then Chevron (which bought Texaco in 2001) plead with a U.S. judge for nine years to move the case to Ecuador. The company files 14 affidavits praising Ecuador's judicial system and expressly agrees to jurisdiction there. The case moves to Ecuador.

3) On the first day of trial in Ecuador in 2003, Chevron goes back on its promise and claims the Ecuador court has no jurisdiction. Again, the company argues that it cannot be held liable because it operated via a wholly-owned fourth-tier subsidiary. The court rejects Chevron's argument.

4) When the trial evidence against Chevron mounts, the company sells its service stations in Ecuador and strips its remaining assets from the country. It vows never to pay any judgment and begins to threaten judges with jail time if they do not rule in its favor.

5) Chevron openly mocks the rule of law in Ecuador. Company lawyer Sylvia Garrigo tells 60 Minutes: "We don't want to be in any court, period." A Chevron lobbyist tells Newsweek: "We can't let little countries screw around with big companies like this." The company promises the villagers "a lifetime of litigation" if they persist in pursuing their claims.

6) Faced with the prospect of being held accountable in Ecuador, Chevron retaliates by suing all of the villagers and their lawyers for "fraud" in the same New York court where the company had blocked the original lawsuit in 1993. Chevron convinces a controversial (and very biased) trial judge to block the villagers from enforcing their judgment in the U.S. That decision is under appeal.

7) Subsequent to the filing of the retaliatory New York lawsuit, two appellate courts in Ecuador (including the country's highest court) unanimously affirm the judgment against Chevron. No fewer than eight appellate judges in Ecuador reject Chevron's claims of fraud.

8) Left with few options in their own courts, the Ecuadorian villagers are forced to file new collection lawsuits to seize Chevron assets in Canada, Brazil and Argentina. Chevron tries to defend these actions by seeking to have them dismissed on various technical grounds.

9) To fight the Argentina collection action, Chevron resorts to blackmail. The company successfully conditions a multi-billion dollar investment on the dismissal of the lawsuit. Chevron CEO John Watson visits Argentina and meets with President Cristina Fernandez de Kirchner to finalize the deal.

10) In Canada, Chevron claims its assets should be off-limits to the villagers because they are held by a wholly-owned Canadian subsidiary, Chevron Canada. While that issue is being litigated, the villagers cannot access Chevron's funds. Almost three more years pass.

11) Separately, Chevron sues Ecuador's government before a private arbitration panel seeking a taxpayer-funded bailout (by Ecuadorian citizens) of its pollution liability. By rule, the villagers are not allowed to appear to defend themselves. That litigation has been ongoing for five years with no end in sight while the three private arbitrators are making millions of dollars each in fees.

12) Chevron tries to cut off funding for the litigation by suing two financial supporters of the villagers in Gibraltar. Chevron is asking the court to issue rulings on the very same factual issues that already have been litigated and resolved by three layers of courts in Ecuador. The company also sues five lawyers and dozens of supporters of the villagers in an attempt to try to drive them away from the case.

Let's summarize some of the results of Chevron's 12-step "lifetime of litigation" strategy.

In Ecuador, there's virtually no Chevron assets to collect because the company sold them off anticipating it would lose the lawsuit.

In Canada, where there are $15 billion in Chevron assets, the company claims it is immunized because those assets are held by a wholly-owned subsidiary that Chevron controls completely.

In the U.S., a trial judge who refused to even read the evidentiary record from the trial in Ecuador has ruled that Chevron's assets are completely off-limits to the villagers.

In Gibraltar, Chevron has effectively tied up the funders of the lawsuit in personal litigation to distract their attention from enforcing the judgment against Chevron's assets.

Despite these Chevron-made obstacles, the oil company still faces a substantial risk that it will be forced to pay the judgment in full. Chevron is feeling sufficient pressure such that its representatives recently floated the idea of a three-party settlement that would include the government. But is is unclear if at this late stage a settlement would even be desirable for the communities.

As we have explained, the U.S. judgment is likely to be reversed on appeal in the coming months. That would open up the U.S. to enforcement actions.

In Canada, justices on the country's high court seem ready to order Chevron to stand trial to determine the validity of the Ecuadorian judgment. If a Canadian court recognizes the judgment, the assets of Chevron's subsidiary in Canada and those in other countries will be in play for potential seizure.


Chevron also faces increased global business risk stemming from its failure to abide by the law in Ecuador. There is a huge political backlash developing against the company in Latin America. Some details are in this article by a U.S. legal advisor to the Ecuadorians, Steven Donziger.

Chevron's strategy is also enormously expensive and has provoked regular challenges of CEO Watson from influential company shareholders. To defend against the pollution claims, Chevron has used at least 60 law firms, 2,000 lawyers, six public relations firms, and ten private investigations firms.

We estimate Chevron has spent at least $2 billion to try to grind down the villagers and their supporters. The company has paid at least $15 million to Kroll, the world's largest private spook company. Kroll admitted to running an espionage and intimidation operation against the lawyers for the villagers. It also admitted that it prepared at least 20 reports on Donziger's private life for Chevron's consumption.

Bottom line: Chevron's litigation abuse needs to stop. Courts around the world need to stand up to Chevron's harassment model and prevent it from litigating the same issues again and again.

The stakes are far greater than the outcome of this particular case. Chevron's blocking plan has profoundly negative implications for human rights victims and rule of law advocates everywhere.

Tuesday, December 16, 2014

Canada's Supreme Court Poised to Force Chevron to Stand Trial Over $9.5 Billion Judgment

Chevron Lawyer Clark Hunter Poses Dare to Justices: "Fairness" Should Have Nothing to Do with It

Reposted from The Chevron Pit

Chevron's brazen plan to inflict a "lifetime of litigation" on the indigenous communities it poisoned in Ecuador's Amazon continues to grind its way through courts around the world. We are now in the third decade of litigation since the original lawsuit was filed in 1993 in New York against Chevron's predecessor company Texaco.

The latest stop in Chevron's global road show of evasion over the Amazon pollution in Ecuador occurred last week in Canada's Supreme Court. On a snowy day in Ottawa, Chevron's small army of Canadian lawyers put the dare to seven respected justices to stop the company's abusive "lifetime of litigation" strategy as it continues to block the villagers from having their claims resolved.

Chevron might have met its match in Canada. The country is known for having an outstanding judicial system that is more than capable of standing up to Chevron's game of musical courts that has spread across countries and continents.


The seven justices who heard almost three hours of argument seem ready to order Chevron into a trial that could determine whether it pays the entirety of the Ecuador judgment. Unlike in Ecuador – where Chevron stripped its assets in anticipation of losing the lawsuit – the company maintains substantial holdings in Canada via a wholly-owned subsidiary. These holdings could fully cover the company's obligations in Ecuador and result in a comprehensive clean-up of the ancestral lands of the indigenous groups.

The specific issue before the Supreme Court of Canada is whether the Ecuadorian villagers should be forced to overcome a new jurisdictional hurdle invented by Chevron that appears to have no precedent in the law. As far as we can tell, never have courts in either Canada or the U.S. (or in any other country) required the holder of a foreign judgment pursuing a scofflaw debtor like Chevron to prove jurisdiction for a second time after jurisdiction already was established where the underlying matter was heard. That's the new barrier Chevron is asking the justices to erect.

In fact, Chevron voluntarily accepted jurisdiction in Ecuador. It had eight years to defend itself in the country and it did so mightily. It often inundated the court with frivolous motions and threatened judges with jail if they failed to rule in the company's favor. It submitted dozens of evidentiary reports and hundreds of motions challenging court rulings. Chevron lost on the merits based on 105 expert evidentiary reports and 220,000 pages of trial evidence.

An intermediate Ecuadorian appellate court unanimously affirmed the judgment after a de novo review of the trial record. Ecuador's highest court, the National Court of Justice, unanimously affirmed the de novo decision. In all, eight different appellate judges in Ecuador rejected Chevron's complaints of an unfair trial and confirmed the validity of the overwhelming evidence against the oil company.

If Chevron's proposed jurisdictional rule is adopted, it could severely hamper if not quash the ability of the indigenous communities to enforce their judgment in Canada. As a general matter, Chevron appears to believe that judges should erect new barriers to justice whenever the existing ones don't seem to work well enough to immunize it from its rampant misconduct in Ecuador. (For detailed background on that misconduct, see this extraordinary affidavit by Ecuadorian lawyer Juan Pablo Saenz.)

(For more on Chevron's "lifetime of litigation" strategy as applied to Canada, see this press release and this background document.)

The Ecuador judgment was obtained only after Chevron tried to delay and sabotage the proceeding at almost every opportunity. The trial took place in Ecuador only because Chevron wanted it there. In fact, Chevron filed 14 affidavits before a U.S. judge in the 1990s praising the fairness of Ecuador's courts as part of its plan to block the case from being heard by a jury in New York.

When the trial started in Ecuador and the scientific evidence against Chevron began to mount, the company started to viciously attack Ecuador's courts and launched a lobbying campaign in the U.S. to eliminate bilateral trade preferences for the country. Chevron also issued a press release promising the villagers "a lifetime of collateral and appellate litigation" if they continued to pursue their claims.  "We don't want to be in any court, period," Chevron lawyer Sylvia Garrigo told the CBS news show 60 Minutes in 2009.

Chevron has roughly $15 billion of assets in Canada in a wholly-owned subsidiary, Chevron Canada. The assets include two offshore oil fields, a refinery in British Columbia, and a large tar sands project in Alberta. The parent company is said to collect between $2 billion and $4 billion annually in dividends from its Canadian operations.


So while Chevron and its shareholders benefit greatly from profits produced by the company's subsidiary Chevron Canada, in Chevron's view Chevron Canada should receive full immunity from any of Chevron's liabilities. That's Chevron's notion of corporate impunity in action.

There are also six wholly-owned Chevron subsidiaries between Chevron the parent and Chevron Canada. It is clear that none of these entities exist other than on paper. None of them have operations. Their sole useful function appears to be to shield Chevron from liability. Yet they are touted by Chevron as yet another reason the enforcement action of the villagers should be blocked.

We might add that the size of the Ecuador judgment is modest compared to the magnitude of the damage Chevron caused when operating in Ecuador under the Texaco brand from 1964 to 1992. Chevron abandoned roughly 1,000 toxic waste pits gouged out of the jungle floor. It also admitted to the systematic discharge of 15 billion gallons of oil-laced water into streams and rivers that indigenous groups relied on for their drinking water, bathing, and fishing. Cancer rates in the region predictably have skyrocketed.

BP's liability in the United States for the far smaller spill in the Gulf of Mexico now stands at $48 billion. That's about five times greater than Chevron's liability in Ecuador. Only four years after the Gulf spill, BP already has paid out an estimated $30 billion in damages. Almost five decades after Chevron began operating in Ecuador, the company has yet to pay even one dollar directly to the affected communities.

Chevron's theory that it owes no compensation to the villagers provides insight into how large multinational corporations try to evade accountability for human rights abuses. But judges are under no obligation to accept Chevron's theories of subsidiary immunity given the increasing evidence they run counter to international human rights law and evolving global standards of corporate accountability.

This was exactly the point made by several Canadian human rights groups – including the Human Rights Program at the University of Toronto Facuty of Law – that filed friend of the court briefs in Canada in support of the villagers. These insightful briefs explain how Chevron's approach will hurt the ability of human rights victims everywhere to receive legal redress. They can be read here and here.

It bears mention that roughly 80% of Chevron's revenues worldwide come from its wholly owned subsidiaries located outside the United States. Chevron makes almost no revenue except through the operations of its subsidiaries. Chevron does not even own its global headquarters building in California. Virtually the only way to recover Chevron's assets is to sue its subsidiaries.

Think for a moment about the degree of impunity to which Chevron feels it is entitled.

Under Chevron's scenario, the indigenous villagers cannot recover in Ecuador even though the company promised to accept jurisdiction there. That's because Chevron has no assets in the country.

The villagers also cannot recover in Chevron's home country of the U.S. That's where Chevron convinced a controversial trial judge from New York (after a farcical proceeding last year that is under appeal) to bar the villagers from seeking to collect their judgment in all 50 U.S. states. 


As for the rest of the world, that's off limits too under Chevron's absurd theory of subsidiary immunity. That's because the company claims that its assets in wholly-owned subsidiaries are not really owned by Chevron.

In other words, Chevron's promise of a "lifetime of litigation" is treading dangerously close to a new form of global immunity for a corporation that nobody disputes has caused massive environmental damage. That should be deeply disturbing to anybody who cares about corporate accountability and access to justice.

Chevron's able lawyers who appeared before the Supreme Court of Canada, Clark Hunter and Benjamin Zarnett, did what they are being paid to do. Their focus was on the technical. Neither spoke a word about the devastating life conditions caused by the company's dumping or referenced a single name of a Chevron victim. (Some of the personal stories of those affected have been captured vividly by photojournalist Lou Dematteis.)

Mr. Hunter went so far as to warn the justices of the "danger of paying too much attention to fairness" in their analysis. When asked if he was requesting that the court create a new jurisdictional barrier for the villagers that had never before existed in Canada, he evaded the question.

To Chevron, "fairness" never had any place in either its brutally messy operations in Ecuador or in its legal analyses in court. Hopefully, judges who hear these cases will reject Mr. Hunter's entreaties and use basic notions of fairness when interpreting the law. The affected villagers deserve to be able to seek to collect on what they have won after too many years of delay.

Absent some sort of extraordinary abuse not present here, enforcement actions against a company that refuses to pay a valid court judgment must be decided on the merits. To accept Chevron's theory and deny the villagers an enforcement trial would make little sense in our increasingly globalized world. It would also be a manifest injustice to those who have fought bravely for 22 years to obtain a resolution of their claims.

Friday, November 14, 2014

Chevron's Sham Remediation in Ecuador: Toxic Oil Pits Continue to Contaminate

Reposted from The Huffington Post

Chevron, Chevron Quite Contrary, How Does Your Garden Grow

With Polluted Soil & Toxic Water

And Wealthy Lawyers All In A Row

During the historic contamination trial against Chevron in Ecuador, the company often took journalists to its so-called "remediated" oil pits to prove that its predecessor Texaco cleaned its "share" of one of the world's worst environmental disasters, if not the worst.

Chevron's well-heeled lawyers would sometimes arrange for a nice picnic near the pits to show reporters how green its gardens had grown in the Amazon rainforest since Texaco signed a 1995 agreement with the Government of Ecuador to remediate toxic pits.

But lurking beneath the vegetation was and is pure crude mixed into the soil and underground drinking water and laced with carcinogens, such as benzene and cadmium.

Six different sets of tests have shown that Texaco only dumped dirt on top of the pits to hide the contamination, not clean it.

And, eight Ecuador judges and two U.S. judges who've heard evidence related to the 22-year-old lawsuit have either ignored the remediation agreement, thrown it out or stated it had no merit in Chevron's defense.

Ignoring the evidence, the oil giant continues to tout the agreement as its "get-out-of-jail-free" card, and U.S. reporters continue to use it in their stories as a legitimate response to the Ecuadorians' charges, while the "remediated" pits continue to leech dangerous toxins into the soil and water that indigenous peoples and rainforest villagers depend on for sustenance.

2014-11-12-photoSachaSurb.jpeg

The contamination of indigenous' ancestral homelands and the disease and death left behind is unlike anything you have ever seen. And, even though Ecuador's Supreme Court has upheld the $9.5 billion judgment against the oil giant, Chevron refuses to pay, arguing the agreement released it from any liability.

So, let's look a closer look at the agreement and the remediation itself:

Travel to any of the pits that Texaco agreed to clean and dig a few feet under the ground and you will find oil.

How does Chevron explain this? With classic Chevron chutzpah.

The company maintains that in the dead of night rainforest villagers "spike" the jungle floor with oil by digging holes at the pits, pouring fresh oil into them and covering them up with dirt and vegetation so they can return the next day with a visitor to prove Chevron is lying about the remediation.

With a straight face, Chevron spokesperson James Craig peddles this outrageous story to reporters, including this Miami Herald reporter:

"...Moncayo (an Ecuadorian) plunges his auger into the ground. Within a few inches the dirt gives off the pungent odor of petroleum. Within a few feet the dirt glistens with oil residue. When a few handfuls of the soil are dropped into a bucket of water, a thick oil-slick coats the surface.

"'This is their (Chevron's) remediation effort,' Moncayo says. 'They're no better than animals.'

"The (Ecuadorians) say it's proof that Chevron lied about the cleanup and then got compliant government officials to sign-off on its shoddy work.

"Chevron spokesman...James Craig, said it's not surprising to find degraded crude at the site. It might be naturally occurring, Moncayo might have dug outside the boundaries of the remediation area, or the plaintiffs might have spiked the ground with oil (emphasis added) to discredit Chevron, he said.

"'Even if you do find hydrocarbons in the ground, it doesn't mean that they're a risk to people's health or the environment,' Craig said."

(Read similar descriptions in The Telegraph, Associated Press, Bloomberg Markets, Washington Post, NY Times and Rolling Stone, among many others.)

Craig's explanation would be hilarious if the issue of remediation wasn't so pivotal to the outcome of the litigation battle, being fought now in countries where Chevron's assets can be seized as payment for the judgment. (Chevron has few assets in Ecuador.)

For the most part, Chevron doesn't dispute the contamination. One of its local lawyers, Rodrigo Perez Pallares, even admitted the company dumped 15 billion gallons of toxic waste into waterways.

In addition to intentionally dumping toxic water into streams, Texaco (Chevron bought Texaco in 2001) also built over 900 huge, unlined waste pits to permanently store pure crude oil and wastewater laced with carcinogens that are a byproduct of the drilling process.

Instead Chevron's army of lawyers argues that Texaco cut a deal with the Government of Ecuador to clean a small percentage (162 of 900 or so) of the oil pits in exchange for immunity from future lawsuits.

Yet even upon cursory examination, Chevron's so-called "release" is not even close to what the company claims.

The agreement, negotiated after the Ecuadorians filed their original lawsuit in the U.S. in 1993, released Texaco only against government claims of contamination. It expressly carved out any claims held by individuals, such as the Ecuadorians'. A Memorandum of Understanding between Texaco and Ecuador's government, signed in 1994, stated clearly that third-party private claims should not be "prejudiced" by the agreement.

From 1995 to 1998, Texaco conducted its fake cleanup – or cover-up, if you will. During the same time, Texaco's lawyers waved the remediation agreement in front of the U.S. federal court, hearing the contamination case in New York. But the American judge took no note of it, given that not even Texaco argued at the time that it trumped the claims of private citizens that were pending against the company in the lawsuit.

Later, another federal judge also caught onto Chevron's subterfuge, in a related arbitral proceeding that ended up in U.S. federal court.

U.S. Judge Leonard Sand analyzed the "release" agreement and, for all practical purposes, said it had nothing to do with the Ecuadorians' claims.

The learned Judge Sand concluded:

"...it would be extremely difficult for [Chevron] to establish that claims nominally brought by third parties in the Lago Agrio litigation were covered by the 1995 and 1998 Agreements between Texaco and Ecuador: it is highly unlikely that a settlement entered into while (the case) was pending would have neglected to mention the third-party claims being contemporaneously made ... if it had been intended to release those claims or to create an obligation to indemnify against them." (Republic of Ecuador v. ChevronTexaco Corp., 376 F. Supp. 2d 334, 374 (S.D.N.Y. 2005).

Fearful that Judge Sand would expose the release agreement for what it was, Chevron simply pulled its lawsuit back and ended the case.

While Chevron ran for the hills to avoid Judge Sand, it convinced federal Judge Jed Rakoff that the underlying claims case should be tried in Ecuador rather than in the U.S. To get the case transferred to Ecuador, the company filed no fewer than 14 sworn affidavits praising Ecuador's judicial system as "independent" and "fair". In 2003, per Chevron's request and Judge Rakoff's order, the villagers re-filed their lawsuit in Ecuador.

By 2013, after an arduous trial that produced 105 expert reports documenting Chevron's pollution, three layers of Ecuador's courts – trial, appellate, and Supreme Court – had ruled against the company. No fewer than eight appellate judges held Chevron responsible for the contamination and ruled that the 1995 remediation agreement did not apply to the private claims in the case and thus was without merit as a defense.

Even though Chevron had previously promised Judge Rakoff and three U.S. appellate judges that it would accept Ecuador's jurisdiction and abide by its court decisions in exchange for moving the case to Ecuador, Chevron has refused to pay and continues to argue in any court that will hear its complaints that the remediation agreement frees it from all responsibility for the damage it caused.

But, if that's really the case, why doesn't the remediation agreement have words to that effect? Or have the signatures of the villagers who brought the case? Even if a court ruled that the agreement released the claims (none has), the problem with the remediation itself remains. Why?

At best, it was terribly inadequate. At worst, it never happened. In either event, it was a sham.

Most likely, Texaco's contractor dumped dirt over the pits to cover up the oil and called it a day. Over time, some vegetation grew on top of the dirt and that's why Chevron began having picnics to show reporters how green its gardens grew.

Which brings us back to Chevron's James Craig and the band of merry Ecuadorians digging holes under full moons in the jungle to "sabotage" Texaco's so-called remediation.

Six different field tests taken by different parties, including those taken by Chevron, prove the remediation was a fraud. The so-called "cleaned" pits are just as contaminated as those not cleaned. See here for information about the field tests described below.

1) Chevron's own tests taken at Texaco's remediated well sites show illegal levels of total petroleum hydrocarbons (TPH). For example, Chevron found 13,000 parts per million (ppm) of TPH levels at the oil well site, known as Shushufindi 48. Ecuador requires the TPH level to be below 1,000 ppm; the average U.S. standard is even lower, at 100 ppm.

2) Chevron also took additional tests in March 2009, as the trial was coming to a close. Chevron's expert Marcelo Munoz tested eight purportedly "remediated" sites and found illegal levels of contamination at two. Chevron refused to pay Munoz for his report, even though the oil company requested that he conduct the tests.

3) In 2003, five years after the fake cleanup, Ecuador government auditors reported they had discovered pits oozing with oil and concluded the government had "erred in certifying" the cleanup. "Texaco has caused irreversible damage," stated a report by the General Controller, a government agency that audits public contracts. "The environmental remediation and repair agreement goes against the country's interest." The auditors' tests found that over 85% of pits tested had toxic levels higher than 1,000 ppm of TPH. They also found oil seeping out of 41 "remediated" Texaco waste pits and said 59 pits had been left uncovered.

4) In 2009, an Ecuador prosecutor ordered yet another series of tests. Of the 20 tests conducted at nine sites, 16 returned with toxic levels higher than the Ecuadorian standard of 1,000 ppm, and of those, 13 had levels higher than 5,000 ppm.

5) The Ecuadorians also did a series of tests at the "remediated" pits and found TPH levels higher than 30,000 ppm.

6) And, in 2013, a U.S. environmental engineering firm, The Louis Berger Group, did additional tests for the Government of Ecuador and found, once again, high levels of contamination. The American company also reviewed the work of Chevron's experts at the so-called remediated sites and found numerous flaws and incorrect conclusions. See pages 35 to 42.

All of this evidence adds up to one thing: Texaco committed fraud against the Ecuador government. And Chevron has done the same by lying about the remediation to Ecuador and U.S. courts.

Chevron is responsible for what Texaco did. It's also responsible for what Texaco never did – which was cleanup its toxic mess that is literally killing or threatening to kill thousands of people from cancer.

Thursday, October 30, 2014

Donny Rico Gives Credit Where Credit Is Due: Judge Kaplan

Reposted from Eye on the Amazon


Chevron's retaliatory RICO case against the Ecuadorians and their lawyers would not have come about were it not for the generous suggestion of U.S. Federal Judge Lewis Kaplan. Chevron spent millions upon millions filing cases against the Ecuadorians everywhere other than Ecuador once the company saw the verdict was about to come down, but when they met Kaplan, they hit pay dirt.

Chevron's strategy has always been to denounce and attempt to discredit any adverse decision from the Ecuadorian judicial system, but Kaplan gave them something they'd never dreamed of: a trial without the facts. An excellent breakdown of the weaknesses is laid out in a recent post on the Huffington Post.

In reality Chevron only cares about Kaplan's "facts." What they want most is to be able to tout that a US Federal Judge found that there was fraud – to the media, to their shareholders and to foreign courts, even if they have no legitimate legal remedy available to them. It's a SLAPP suit on steroids. Of course, you wouldn't know that if you read the business media's fawning reporting in Chevron's favor, each outlet trying to out scoop the other in repeating the company's talking points.

Donny Rico nails it, but to hit a few of Kaplan's finest moments:

  • Kaplan suggested the case be brought in the first place
  • Kaplan rejected normal procedure and assigned the case to his own court
  • Kaplan began by calling the Ecuadorians "so-called" plaintiffs
  • Kaplan issued a global injunction before even hearing the case (later slapped down)
  • Kaplan refused to let the evidence of Chevron's misdeeds be considered
  • Kaplan treated the Ecuadorians like second class citizens
  • Kaplan allowed Chevron to seize protected and privileged documents
  • Kaplan violated the First Amendment rights of journalists and others allowing Chevron to seize private emails and other protected documents
  • Kaplan refused to allow a jury in the case
  • Kaplan decided not to disclose that he owns Chevron stock through several mutual funds
  • Kaplan permitted double hearsay testimony from an admitted liar as the key witness for Chevron

Remember, these are just highlights. For a more complete breakdown check out the "Mockery of Justice" report.

Donny Rico is out there telling it like it is – a glowing example of corporate power abusing the legal system to trample people and planet. If allowed to stand, Kaplan's legacy could make Citizens United look like just the beginning.


Please vote for Chevron in the 2014 Corporate Hall of Shame today.

Wednesday, October 22, 2014

A Hard Look at NOW's Support for Chevron in Ecuador Case Raises Ethical Concerns

NOW’s Elaine Wood Questioned About Failure to Tell Appellate Court About Her Business Ties to Chevron

Reposted from The Chevron Pit

NOW's Elaine Wood Questioned About Failure to Tell Appellate Court About Her Business Ties to Chevron

The relationship between the National Organization for Women ("NOW") and Chevron in the Ecuador pollution case is getting even more interesting. (For background, see this press release where Ecuadorian women criticized NOW and this blog for context.)

Figuring out why NOW's legal arm (called "Legal Momentum") weighed in before a federal appellate court on behalf of Chevron's targeting of indigenous villagers and their lawyers in Ecuador is the question. We think we now are getting close to the answer.

We have verified that Elaine Wood, the Board Chairperson of NOW's Legal Momentum, is a managing director for a private corporate consulting firm that counts none other than Chevron as a client. At least three principals at the firm, called Alvarez & Masal, list Chevron as a client on the company's website.

That information comes on top of our disclosure last week that Chevron made a sudden and very major contribution to NOW'S legal group in 2013 when it became apparent the case would end up before the New York appellate court. The donation came at a time when Ms. Woods was a member of the organization's Board of Directors. She became Chairperson of that board earlier this year.

Alvarez & Marsal claims on its website that Ms. Wood "conducts due diligence and fraud investigations and advises on corporate compliance" for the company. The bio of Ms. Woods, available here, also indicates she worked for 15 years as a top-level executive at Kroll. Kroll is the private investigations firm that has spied on and harassed U.S. lawyer Steven Donziger and his colleagues in exchange for millions of dollars of fees paid by Chevron.

Ms. Wood might consider using her "corporate compliance" skills to figure out how to comply with federal disclosure rules.

It is a requirement under the federal rules that any ties to a party in a litigation be disclosed in the first footnote of an amicus brief by a supposedly independent entity. At a minimum, Ms. Wood should immediately pull back NOW's brief and re-file it with a proper disclosure so the court can have the information it needs to assess the organization's credibility on the issue being considered.

That said, this incident can be enlightening for those who want to understand how Chevron uses its deep pockets to engage in "soft corruption" of governments and non-profit organizations. That is far more interesting than the technical legal issue involved.

The legal position being advocated by Chevron and NOW – that private parties should be able to use the civil racketeering law to target their political and litigation adversaries – is highly dubious and likely to lose in court. For more on the flaws in the Chevron/NOWapproach, read how Chevron's own lawyers opposed the idea in another case. The overwhelming weight of legal authority in our federal courts is against Chevron on the issue. Also against Chevron is the U.S. Department of Justice and the U.S. Chamber of Commerce (which does not want racketeering laws to target corporations). Long time pro-business stalwart Ted Olson, who will argue Chevron's appeal in the Ecuador case, also opposed Chevron's position when he was Solicitor General in the last Bush Administration.

Even with the limitations of NOW's legal argument, the organization has a right to make itself heard. But to do so in this fashion – in apparent exchange for a donation from a company that has spent huge sums to undermine the valid legal claims of impoverished women suffering in distant lands – reflects poorly on the organization and its members. To do it without the required court disclosure makes it more troubling.

Indigenous women in Ecuador for two decades have been part of an extraordinary community-based effort to hold Chevron accountable for deliberately dumping billions of gallons of toxic waste into the Amazon and creating an ecological calamity of shocking proportions. This dumping is visible for the world to see and has been verified by hundreds of journalists and visitors to the region as well as three layers of courts in Ecuador.

The question for NOW: why would it sacrifice its credibility for what appears to be temporary support from a big oil company? Even in Ms. Wood's "friend of the court" brief, there is no mitigating language distancing NOW from Chevron's atrocities in Ecuador. It reads as if it was designed, if not actually written by, a Chevron lawyer.

The easy answer is because NOW wants to use U.S. racketeering laws against anti-abortion protestors. But that's a superficial and in our view unsatisfactory explanation. NOW can blast away at anti-abortion protestors without having to give cover to Chevron's completely abusive litigation tactics in an entirely different case.

The more plausible explanation involves the skillful way in which Chevron uses its money to gin up influence. This behavior is consistent with the company's misconduct throughout the two decades of the Ecuador litigation, as documented in stunning fashion in this sworn affidavit by Juan Pablo Saenz and in this article by Rolling Stone magazine.

At one point, Chevron apparently floated an illegal $1 billion bribe offer to Ecuador's government (again, disguised in the form of a "donation") in exchange for extinguishing the legal claims of the indigenous villagers. At another, it offered Ecuador's government $700 million in "debt relief" for the same purpose. Wiki-leaks cables also show close collaboration between Chevron executives and U.S. diplomats in Quito to undermine the claims of the villagers. All of this is "soft corruption" in action.

Let's sum up what we know about Elaine Wood's and NOW's relationship to Chevron:

  • In 2012, just as the Ecuador case in the U.S. was heating up, Chevron suddenly gave its first donation to NOW's legal arm. Chevron's main outside law firm in the Ecuador matter also gave a large donation.
  • Shortly thereafter, NOW's legal arm submitted a legal brief for Chevron without disclosing its ties to the company.
  • The person who signed the brief, Elaine Wood, works for a consulting company that counts Chevron as a client. She is also not a practicing lawyer and is not on the staff of NOW's legal group.
  • Ms. Wood formerly worked in the same division of the U.S. attorney's office in Manhattan where Randy Mastro worked. Mastro is Chevron's lead outside lawyer on the Ecuador matter.
  • NOW's legal arm has refused to verify that it has disclosed all of the donations it received from Chevron or any of its related entities, including Mastro's law firm.
  • Ms. Wood should also disclose whether the work Alvarez & Marsal has performed for Chevron involves the company's campaign to evade its Ecuador liability.

Ms. Wood also should explain why she – the person at NOW with ties to Chevron – signed the legal brief alone. We are not familiar with the practice of a Board Chair writing a legal brief for her own non-profit organization when that organization has a staff of lawyers assigned to do that work.

Chevron has a long history of trying to "donate" to organizations so it can garner support that it would never receive organically. An attempt by the company to use one of its law firms in Canada to submit a "friend of the court brief" on a so-called "pro bono" basis recently backfired. See here for background.

The last time we looked, helping an oil major attack impoverished women in developing countries was not part of NOW's mission. Nor is failing to disclose conflicts of interest to federal courts.

Legal Momentum and its Board Chair have some explaining to do. We hope they step up and fulfill their obligations. NOW is a good organization. It deserves better from its leadership.