Wednesday, May 30, 2012

Ecuadorians Shake Up Chevron Shareholder Meeting

Activists and representatives from affected communities protesting outside Chevron's AGM

Reposted from Eye on the Amazon

At its Annual General Meeting in San Ramon on Wednesday, Chevron executives gave a good show – and a chillingly hard line. CEO John Watson told the assembled shareholders and activists from around the world that all was well, the company was raking in money and there was nothing to worry from those pesky multi-billion-dollar legal judgments and threatened fines against the company.

Watson showed a series of slick videos about Chevron's global business, including one purporting to show how the $18 billion Ecuador judgment against Chevron was a "fraud." For an in-depth and truthful expose on their disaster see

Pressed by shareholders and large institutional investors who urged Watson to settle the case, Watson dug in his heels and took the hardest line he has yet taken publicly in the 18-year-old case.

"We are resisting until Hell freezes over," Watson said. "We don't intend to pay criminals who seek to defraud your company."

Although the Ecuadorian rainforest communities who won the lawsuit are now preparing to seek court orders internationally to seize Chevron's assets, Watson said "no country that observes the rule of law" would do so.

He emphasized the company's Hail Mary legal strategy, in which it has asked an international arbitration tribunal to force the Ecuadorian government to pay the $18 billion. Although the tribunal has not yet granted Chevron's request, Watson said flatly – and falsely – that it had: "The tribunal has said the Ecuadorian government is liable for the judgment."

He confirmed previous reports that the company was trying to do an end run around the lawsuit by cutting a side deal with Ecuadorian President Rafael Correa.

"We are seeking a dialogue with the government of Ecuador, but so far that has not moved forward."

Chevron's board of directors gave Watson frequent applause. One of those in the audience who was not so easily wowed by Watson's fancy videos was Luz Cusangua, a 60-year-old grandmother from eastern Ecuador.

"It's not so easy to wash your hands of this. I saw what you did in the 1970's. Mother Earth has been contaminated."

She continued, looking straight at Watson:

"This video is an insult to us. Chevron needs to pull up its pants and act like grown-ups, and accept responsibility for its mess in Ecuador."

– Paul Paz y Miño

Tuesday, May 29, 2012

Taking it to Chevron's Doorstep

Chevron designed their oil extraction systems to pollute the rainforest in order to save a few dollars per barrel

Reposted from Eye on the Amazon

Tomorrow, May 30, Chevron will be practicing the elaborate rite of corporate public relations known as the Annual General Meeting for shareholders. At the company's headquarters in San Ramon, California, there will be plenty of image-buffing and apple-polishing for top executives and the board of directors, plus praise for the company's obscene profits.

Of course, denial of reality also will be part of the show. Chevron executives are likely to make only passing mention of their dire legal situation internationally, from Ecuador to Brazil to Nigeria, where the company faces tens of billions of dollars in fines for environmental crimes.

That's where Amazon Watch comes in. As in previous years, we will be accompanying indigenous leaders from northeastern Ecuador to speak truth to power.

Here are their stories:

Luz Cusangua

Luz Cusangua

Luz Cusangua, 60, is a farmer from area of the Sacha oil field, which was developed by Texaco (now Chevron) in the 1970s and 1980s. After she moved with her family to the Ecuadorian Amazon from the highlands region of Ibarra in 1975, she witnessed firsthand the destruction of the tropical paradise as oil operations expanded around her. The river Wilya, which her family used for bathing, washing clothes, fishing and drinking, became a source of poisons. Her children suffered from various illnesses including skin diseases. Her mother was diagnosed with skin cancer, which was attributed by health professionals in the area to oil contamination.

The nearest well is a scant 100 meters from her home. To this day, the river Wilya remains contaminated.

Luz is the mother of five children and seven grandchildren. Her husband is deceased. Despite the contamination, she has managed to create a sustainable ecological farm, including coconuts, cacao, coffee, heliconia, orchids, medicinal plants and Amazonian fruit trees.

Robinson Yumbo

Robinson Yumbo

Robinson Yumbo, 39, is the president of the National Indigenous Federation of the Cofan People (FEINCE). Born in Lago Agrio, the oil town founded by Texaco, Robinson has lived his entire life in the community of Cofan Dureno along the shores of the AguaRico river. As a child, he witnessed firsthand the environmental devastation caused by Texaco's (now Chevron's) operations in the ancestral territory of the Cofan people. What was once the Cofan people's ancestral territory was transformed by Texaco (Chevron) into a massive oil field, characterized by continuous spills, the deliberate dumping of toxic wastewater into rivers and streams, and 24-hour flaring of natural gas.

Robinson witnessed the onset of a public health crisis within the Cofan community, including spontaneous miscarriages, birth defects and cancer. Texaco's oil operations also opened up the Cofan territory to uncontrolled migration, in the form of homesteading colonists, a phenomenon that led to large-scale deforestation (illegal mining and logging operations), the reduction of ancestral territory, the loss of game, and severe cultural threats.


Luz and Robinson will be joining other grass-roots leaders from California, Kazakhstan, Nigeria, Australia and the Philippines who will participate in a public teach-in Tuesday night on the True Cost of Chevron. The event, at the David Brower Center in downtown Berkeley, is from 6:00-8:00 pm.

The next morning, they will be face to face with Chevron executives inside the shareholder meeting. Also speaking truth to power at the meeting will be a coalition of 40 institutional investors from the United States, Canada and Europe, with a combined total of $580 billion in assets under management. The coalition, which includes New York State Comptroller Thomas DiNapoli, sent Chevron a letter calling for it to settle its lawsuit in Ecuador, which has resulted in an $18 billion judgment against the company.

DiNapoli, is trustee of the New York State Common Retirement Fund, which owns 7.24 million shares worth an estimated $713 million in Chevron, issued a statement last week slamming the company: "The company's attempt to undo the court's verdict only keeps the case in the public eye and further damages Chevron's reputation. Chevron's actions are hurting shareholders as well as the indigenous people of the rainforest. I urge the company's leadership to settle the case and put this issue to rest."

– Paul Paz y Miño

Thursday, May 17, 2012

Chevron's Grand Shareholder Deception

Hew Pate, Chevron's $7.8 Million Lawyer, "Celebrates" Another Legal Defeat At the Hands of Ecuador's Rainforest Communities

Reposted from The Chevron Pit

The rulings this week by U.S. federal judge Lewis A. Kaplan denying Chevron's motion for attachment in the Ecuador case was by any reasonable measure a setback for the oil giant in its campaign to evade paying the $18 billion court judgment.  In fact, it is the latest of string of stunning losses for Chevron in courts in the U.S. and Ecuador over the last several months – losses that can be laid at the doorstep of R. Hewitt Pate, Chevron's General Counsel and the mastermind behind the company's increasingly confused legal strategy in the Ecuador matter. See here.

These losses include a unanimous reversal in January by a U.S. federal appeals court of an injunction purportedly barring enforcement of the Ecuador judgment and an affirmance earlier this year by the Ecuador appellate court of the overwhelming evidence that the company committed crimes and fraud in Ecuador. See here and here.

Chevron's contamination in Ecuador also has been confirmed by numerous independent journalists and is simply indisputable – see this 60 Minutes segment and this video prepared by the plaintiffs.  In addition, Chevron's lead outside law firm in the case – Gibson Dunn & Crutcher – has been sanctioned repeatedly for committing ethical violations even as it bills the company hundreds of millions of dollars as part of a "rescue operation". See here.

One would never know from Pate that the legal prospects of Chevron are dimming or that the company is being taken for a ride by Gibson Dunn.  In a press release that can only be described as the ultimate in chutzpah, Pate celebrated Chevron's latest legal defeat yesterday by claiming "victory" because the judge tossed out only a few of the fraud claims the company filed against lawyers for the plaintiffs as opposed to all of the claims.  In keeping with his spin, Pate failed to mention in his press release that Kaplan expressly found that Chevron is unlikely to prevail on the remaining fraud claims.

We have said it before:  Pate and the higher-ups in Chevron management are leading Chevron and its shareholders down a dangerous path over the Ecuador liability, and possibly over a cliff.  The spin is getting increasingly desperate as the walls begin to close in on the company's plan to evade paying the judgment.

Whether spinning bad news into fake news is a deliberate strategy or a function of internal self-delusion can be sorted out by others – including SEC regulators who have been called on to determine whether the company is producing materially false and misleading information about the Ecuador liability. See here.

These are our takeaways on the Kaplan decisions this week:

  1. Pate's latest press release shows the company continues to mislead shareholders over the Ecuador liability, as documented in stunning detail by Canadian securities lawyer Graham Erion in this report released in April. Pate's press release was designed to sugarcoat an adverse legal decision, exactly the kind of gamesmanship that regulators frown upon.  Expect a new report soon from the plaintiffs on how Pate's press releases on the Ecuador case are designed to hide risks from shareholders and the markets.
  2. Judge Kaplan, who used to consistently favor Chevron in his decisions, has started to lose his appetite for the case after getting sternly rebuked in January by the U.S. court of appeals in New York.  Not only did Kaplan deny a Chevron motion to attach the assets of the Ecuadorians for the second time, he also dismissed two fraud claims and cast serious doubt on Chevron's remaining RICO claims against American lawyer Steven Donziger. (The Ecuadorians maintains that Chevron's claims are baseless and are a ruse to distract attention from its own criminal misconduct in Ecuador.)
  3. It is increasingly clear that Chevron's RICO case is a dog reluctant to hunt.  Worse for Chevron, if the case hunts – as in, actually survives various motions to dismiss and gets to a jury – it can bite Chevron far more harshly than it can bite Donziger or his Ecuadorian clients.   Chevron will be on the defensive because of counterclaims about its attempts to corrupt the Ecuadorian judicial system.  A jury will be able to hear evidence about Chevron's sham remediation, its efforts to bribe Ecuador's government, its attempts to doctor evidence through its "dirty tricks" operative Diego Borja, and its threats to judges.  All of this has been detailed in a sworn affidavit from Juan Pablo Saenz, an Ecuadorian lawyer.
  4. Pate is going to have a whale of a time explaining the Ecuador problem at the company's upcoming annual meeting on May 30.  How he explains why several prominent law firms around the world have rallied to the cause of the Ecuadorians when the case is supposedly an "extortionate scheme" will be interesting to watch. Further, a large group of Chevron shareholders is pressuring the SEC to investigate Chevron based on the Erion report, which exposes out of control risk-taking and an apparent cover-up.  Expect several pension funds to speak out with a more forceful voice.

Multiple lawsuits against Chevron assets in various jurisdictions are now looming over the company.  Once these actions are filed and start progressing through the courts, Chevron will have a hard time entering into partnerships or making further investments in countries that could be strategically important to the company's growth.

In the meantime, Chevron's feckless Board of Directors awarded Pate a 75% pay increase (to $7.8 million) for losing the Ecuador case. See here. Because of Pate's bungling of the Ecuador matter, billions of dollars of Chevron assets are now at risk of being attached, seized, and auctioned off at fire sale prices because the company refuses to comply with its legal obligations.  In the double-dealing inside world of Chevron-land, this merits an extraordinary pay raise.

Thursday, May 10, 2012

Epic Greenwashing From Chevron

Epic Greenwashing From Chevron

Reposted from Eye on the Amazon

Apparently believing that no outright whopper can't be repeated again and again, Chevron has issued a report bragging about the company's "commitment to respecting global human rights." The 2011 Corporate Responsibility Report, issued May 10th, is a glossy, 50-page masterpiece of corporate greenwashing. Here are some of its claims:

  • In Nigeria, Chevron "has delivered more than 200 projects in 425 communities, villages and chiefdoms benefiting some 850,000 people. Chevron launched the Niger Delta Partnership Initiative and announced a five-year, $50 million endowment, including a partnership with USAID, to build capacity and promote long-term economic sustainability."
  • In Angola, Chevron has "committed $4 million over four years to support the Angola Sickle Cell Initiative, the country’s first comprehensive sickle cell treatment program."
  • In Kazakhstan, "Chevron signed a partnership agreement with Nazarbayev University in the country’s capital city, Astana, to provide funds to the Center for Energy Research for studies in energy, the environment and sustainable development, and to provide the Social Development Fund to support young researchers."

What the report doesn't tell you is the underside of these nice projects. For example:

  • Nigeria – Chevron has a long track record of pollution and collusion with government human-rights abuses. Chevron is accused of involvement in the shootings of Nigerian villagers who occupied an offshore barge in 1998 to protest the company's hiring and environmental policies. In January 2012, an explosion and fire at an offshore natural gas well killed two people. As of mid-May, the fire is still burning on the ocean surface as the gas escapes uncontrollably.
  • Angola – Oil leaks and spills from Chevron's facilities continue unabated after many years. Fishing communities along the coast continue to complain that fish stocks have decreased significantly because of the spills and seismic activities, and the compensation process is dysfunctional.
  • Kazakhstan – Residents near Chevron's Karachaganak Field have demanded for compensation and relocation to a safe and environmentally-clean location of its choosing because of years of pollution, causing widespread chronic illnesses.

Not to mention, of course, Chevron's abominable track record in Ecuador, which has made the company a global pariah. Lots more background information on the company's global record is available at our True Cost of Chevron report.

Now, we don't doubt that amid its global depredations, Chevron probably has done a few good things, much like dictatorial governments often have a carefully-buffed kind side. Nor do we assume that everyone working for Chevron has poor intentions. Chevron's more than 60,000 employees around the world surely include many decent, idealistic people. Given the company's immense financial, technical and human resources, the company has the capacity to do a lot of good.

Which is why it's such a shame that Chevron's top management has instead chosen the path of pollution, abuse, bluster and shameless propaganda.

– Paul Paz y Miño

Wednesday, May 9, 2012

Wall Street Journal Editorial Page Preparing Fourth Hit Job On $18 Billion Ecuador Judgment

Reposted from The Chevron Pit

We are flattered to report that the Wall Street Journal editorial page is once again trying to carry water for Chevron's public relations flaks over the company's $18 billion judgment for creating the world's worst oil disaster in Ecuador. Chevron has hired six public relations firms and almost 500 lawyers to undermine the communities that sued the company.

The irrepressible Mary Anastasia O'Grady – who purports to comment on events in Latin American as a columnist – called Karen Hinton, the spokesperson for the Ecuadorians, and, in a hurried interview yesterday, asked a series of questions reflecting Chevron's misleading talking points about the Ecuador trial. O'Grady said she is preparing a column on Chevron's claim that an expert report submitted to the court was "secretly" authored by the plaintiffs. This is one of Chevron's urban myths that has been fully debunked by the plaintiffs and rejected by Ecuador's appellate courts.

Let's test O'Grady's integrity. Hinton sent her the following email responding to her questions in writing. Read it and judge for yourself how much of these facts make it into O'Grady's upcoming column, should she indeed publish it:


I want to reinforce and expand upon my answers to some of the questions you raised today in our phone call about the Chevron case in Ecuador. I am hoping you will strongly consider all of my comments as you write your column and not gloss over them.

It is clear your questions are based on Chevron's misleading talking points. One of my colleagues informs me that you interviewed him by phone in 2007 and that you subsequently canceled a meeting where he was prepared to present information refuting Chevron's arguments as lies. Even though you did not write then on this issue, the editorial page of your newspaper has subsequently staged three separate attacks against the case based on Chevron's misinformation and extrajudicial strategy to undermine the proceedings to evade accountability for creating what is likely the world's worst oil-related disaster. We wrote letters to the editor in response to each of those articles correcting various inaccuracies. We hope that process does not repeat itself with your column.

We also have confirmed that the WSJ editorial page never disclosed that at least one of the two unsigned editorials attacking the Ecuador case was written by Bret Stephens, a columnist and now deputy editorial page editor who previously had written a signed column on the same issue with the same viewpoint.

Here is some additional perspective on some of the issues you raised:

On whether Richard Cabrera met with the plaintiffs before he was appointed the global expert, and whether he and the plaintiffs planned what the global report would say:

Chevron has presented thousands of pages of papers and videos to the Ecuador court on this issue, and that court rejected the material as irrelevant and disregarded the results of the Cabrera report in making its decision finding Chevron liable. Instead, it based its decision on 104 other technical reports – the majority submitted by court experts named by Chevron, paid by Chevron, and whose reports were written by Chevron lawyers – in deciding that Chevron dumped billions of gallons of toxic waste into the Amazon, abandoned hundreds of toxic waste pits, flared poisonous gas into the air, and therefore should pay for a clean-up of what experts consider to be the world's worst oil-related disaster.

That said, there is nothing wrong with the Cabrera report. The contents of that report – which relied heavily on Chevron's own technical reports submitted as evidence that proved contamination – is valid from a technical and empirical standpoint. Some of the information and conclusions were presented to Cabrera by top-level technical experts, consistent with court rules. The fact Cabrera adopted these findings and relied on his own independent soil and water sampling reflected his judgment that they were valid and reflected the evidence. This is no different than what judges do all the time in the U.S. when presented with findings of fact and conclusions of law by the parties in a disputed litigation. The fact Cabrera was paid exclusively by the plaintiffs was required by the Ecuador court; other court-named experts were paid exclusively by Chevron, also consistent with court rules that require the party asking for a report to pay for it. Again, this is no different than a party in the U.S. paying for the costs of an expert witness.

Chevron boycotted the Cabrera report process because it did not want to legitimate any aspect of the proceeding that it knew it would lose based on the scientific evidence. Thousands of soil and water samples had already been taken by both parties that showed extensive contamination at 100% of Chevron's former well sites. Chevron knew Cabrera had access to this data, and this fact terrified the company's lawyers. So Chevron now reaps what it sowed with its unilateral boycott: a report that does not reflect its point of view in any way, shape, or form. But it did succeed in getting the report knocked out of evidence by waging an unrelenting, entirely improper pressure campaign against the judges presiding over the trial.

When Chevron says the plaintiffs met secretly with Cabrera, that is a complete misrepresentation of the process. The plaintiffs met with Cabrera (and with other experts appointed by the court) consistent with court rules, as did Chevron's lawyers. We remind you that to the extent these rules seem different than those in the U.S., it does not mean they reflect an inferior system. In fact, these procedures are consistent with the rules in most civil law countries and have been confirmed as valid by multiple legal experts in Ecuador and elsewhere. Chevron has been unable to cite one statute or court rule justifying its position on the Cabrera report.

Chevron also has tried to market two additional lies about Cabrera – that he was paid with a "secret" bank account, and that he was "bribed". Both of these accusations collapse when viewed in light of the evidence. There was no secret bank account. Cabrera was always paid for work performed consistent with court rules and the contractual obligation of the parties to pay for experts who produced reports they requested.

On whether attorneys for the plaintiffs will be paid $5.7 billion in fees. The judgment categorizes how $9 billion will be spent on cleanup, water and health. Where does the rest of the money go?

If you are relying on documents Chevron obtained through discovery from U.S. counsel to opine on this issue, we are putting you on notice that those documents have been interpreted inaccurately by Chevron lawyers and in any event have been superseded by other documents.

The vast majority of the judgment will be used to remediate Chevron's horrific and deliberate contamination of the rainforest – a contamination so great in magnitude that it dwarfs the size of the BP disaster in the Gulf of Mexico where liability has been estimated to be a minimum of $40 billion. By comparison, Chevron is getting off easy in Ecuador because the court rejected several claims for damages made by the rainforest communities. The money will be used to remediate contaminated soils and groundwater, provide clean drinking water to dozens of communities, create a health care infrastructure to deal with high cancer rates in the region, and to restore indigenous lands. The attorneys will be paid a modest contingency fee per private contract with the affected communities – a fee that is low compared the two decades of work spent preparing and litigating the lawsuit, and the risk undertaken by lawyers in advancing their own funds and time in the pursuit of a fair result for their clients.

On Chevron's contention that the Cabrera report and the court judgment contain identical language from documents written by the plaintiffs.

As in the U.S. court system, a court expert or judge often adopts language offered to the court by one of the parties. What happened in Ecuador was no different. Cabrera accepted some of the documents we submitted because his own testing proved their accuracy.

Chevron's assertions about the "ghostwriting" of the judgment is a complete lie and reflects the company's desperation. The documents in question have been submitted to the court in various forms, either as direct submissions from the plaintiffs or Chevron, or via expert reports. In fact, none of Chevron's so-called "experts" on this issue has even reviewed the entire trial record. And some of their conclusions simply do not withstand serious inquiry.

This is nothing more than last-minute hysteria by a desperate litigant. Chevron stalled the case for ten years in U.S. courts, thinking it would disappear once a U.S. federal judge moved it to Ecuador. When the evidence of contamination began to pour in, Chevron began to cry foul as part of a concerted strategy to undermine the very court system it repeatedly had praised. The only way out was to either be held accountable or concoct accusations of fraud. Now that the communities have won a landmark victory and are preparing to enforce their judgment, Chevron is appealing once more to journalists with one-sided presentations of facts that have no relationship to the body of evidence that overwhelmingly proved Chevron's guilt.

Finally, we have extensively documented Chevron's violations of anti-bribery statutes in the U.S. and Ecuador in various sworn affidavits. Most recently, Chevron offered a $1 billion bribe to Ecuador's government to extricate itself illegally from the lawsuit. More information on this and other examples of Chevron's malfeasance and criminality can be found on the website


We hope and indeed expect our version of the facts will be reflected in your analysis and that you will not allow your column to become a de facto public relations tool for Chevron's unethical attempt to evade justice.


Karen Hinton