Tuesday, September 30, 2014

Business Journalists Rush to Rescue Chevron from Its Ecuador Disaster

Reposted from Eye on the Amazon

Paul Barrett of Businessweek, Roger Parloff of Fortune Magazine and Michael Goldhaber of American Lawyer, all eager to tell Chevron's side in its Ecuador disaster.

On the run from a landmark $9.5 billion judgment in Ecuador, fighting enforcement actions in three countries that threaten strategic company assets, and gearing up for make-or-break appellate hearings does not bode well for the prospects of Chevron CEO John Watson and his management team.

No worries. Chevron got a little help from its friends in the corporate media last week. The resulting echo chamber is a startling reminder that, like the big banks, Chevron is considered by many to be too big to fail. It is clear that business journalists will come out of the woodwork to defend the company from attacks on their own kind, even if the truth about Chevron's human rights violations is sacrificed in the process.

The lawsuit brought by Ecuadorian rainforest communities against the oil giant is seen not only as a singular threat to Chevron's bottom line, but a historic symbol for corporate accountability. This is an unwelcome message to the oil-industrial complex which assumes that environmental damage and human rights abuses can be externalized and that justice can be so delayed that affected communities will never receive the redress or remediation they deserve. After all, Chevron has vowed to fight the Ecuadorians "until hell freezes over, and then we'll fight it out on the ice."

In a case like this with global implications for the environment, human rights, and corporate accountability, it's telling to see who Chevron's bedfellows are.

Over the 21 years of the Aguinda v. Chevron litigation, the list runs long. It includes people and institutions that have run to the company's defense, or outright done its dirty work – Ecuadorian government officials, military, judges, junk scientists, convicted felons, the U.S. Chamber of Commerce, and the U.S. Embassy in Ecuador, among others.

We can now add a trifecta of reporters to that list – two of whom have just published new books. These reporters have swallowed Chevron's narrative raw and whole. Sadly, this is not so surprising, coming as they do from Fortune Magazine, Businessweek, and American Lawyer (the latter considered the right wing litigation bible of corporate America) Roger Parloff, Paul Barrett, and Michael Goldhaber respectively, have been tripping over themselves to promote their books and articles, referencing, cross-referencing, citing, quoting, and linking to each other, to dizzying, albeit deceitful effect.

Let's focus on Paul Barrett of Businessweek, whose book "Law of the Jungle" (get it, there's no law in the jungle. Ha!), is a pro-Chevron tour de farce of the Aguinda v. Chevron litigation, as well as Chevron's countersuit using the RICO statute in New York Federal Court. He plays lip service to one of the indigenous leaders who lost two children due to oil contamination and builds up U.S. lawyer Steven Donziger, only to then take him and his clients down using Chevron's deceitful narrative. The majority of Barrett's book is written as if he spent extensive time on the ground in Ecuador, and was at many of the events described. However, he wasn't.

Barrett watched the documentary film, Crude, by Joe Berlinger. He then wrote as if he was standing right there in front of toxic waste pits, or in the judge's office, or at the hotel preparing Emergildo Criollo for the shareholders meeting. It's a deceitful tactic that purports to lend "jungle cred" to Barrett, as if his book is some kind of in-depth investigation from the sweaty Amazon court room or next to rusting Chevron pipelines that siphon off overflowing oil sludge into streams below, to be drunk later by unsuspecting villagers downriver.

Watching another journalist's film is no substitute for actual reporting. The reality is that Barrett spent precious little time in the Ecuadorian rainforest – two weeks at most. He did not speak to the lawyers for the communities, let alone Donziger, for the book. He never attended even a day of the trial. Barrett speaks no Spanish, so a thorough review of the 200,000 plus Ecuadorian trial record was out of the question. Ultimately, the book is mostly taken from Chevron's legal briefs.

A revealing example of Barrett's pro-Chevron bias occurs in Chapter Two. He begins by describing an entire scene from the film Crude as if he were there. As evidence of his simple acquiescence to Chevron's arguments, Barrett uses Chevron's deceptively edited outtakes from the film to paint a sinister scene of Donziger bullying and pressuring a judge. Barrett's citation is as follows:

We're going down to have a little chat with the judge. This is something that you would never do in the United States. But in Ecuador this is how the game is played, it's dirty. We have to – occasionally – use pressure tactics to neutralize their corruption. And today is one of those examples.

Except the actual transcription is as follows:

We're going to confront the judge who we believe is paid by Texaco. We believe he is corrupt, and we're gonna confront him, ah, with – with our suspicions about his corruption and let him know what time it is. And, ah, you know, this is something that you would never do in the United States. I mean, this is something you would, I mean, this is just out of bounds, both in terms of judicial behavior, and what – what lawyers would do. But Ecuador, you know, there's almost no rules here. And this is how the game is played, it's dirty. And, you know, they're playing dirty, we're honest, they're dirty. They play dirty, we have to occasionally use, um, pressure tactics to neutralize their corruption. And today is one of those examples.

Barrett left out the bolded text above, changing the context and intent of what was said into its opposite. That's not reporting; that's hit job journalism.

That is not the only instance where Barrett obfuscates the facts, turning what are decidedly black and white issues into murky grey – another Chevron tactic. One of the company's trademark products, beside crude, is doubt. Doubt has long been the go-to tool of big business litigators to turn the tables on their adversaries by flipping logic and reason of disciplines like epidemiology on its head. The intentional manipulation of facts creates just enough second guessing of the dangers of chemicals and toxins to allow said guilty company off the hook.

This tactic was used by Chevron in the Ecuador case. What about the causation between sick communities and the waste pits they live on top of? Well, hydrocarbons aren't necessarily toxic, claims Chevron. According to Chevron's Manager of Global Issues and Policy, Silvia Garrigo in an interview with 60 Minutes:

"I have makeup on, and there's naturally occurring oil on my face. Doesn't mean that I'm going to get sick from it."

Interesting though, that when you enter a gasoline station in California there's a sign disclosing that your mere presence at the pump could expose you to carcinogens. But in Ecuador's Amazon, you can live on top of a Chevron waste pit and any causality link to carcinogens is questioned.

Barrett avoids the truly scandalous and criminal examples of Chevron's tactics to hide contamination during the Ecuador trial, like swapping toxic soil samples with clean ones, and avoiding sampling at depths at which Chevron knew contamination existed, at locations Chevron knew were still contaminated, and were downgradient from known contamination. You'd think that a book purportedly covering the largest environmental litigation in history would merit a real review of the evidence, much of which was provided by even the skewed soil and water samples taken by the company.

Other corrupt and illegal acts that were Chevron's standard practice during the Ecuador trial are glanced over or omitted by Barrett. This includes the company's successful cancellation of a judicial inspection of a major toxic site through collaboration with the Ecuadorian military to produce a phony security threat. Perhaps most audaciously, Barrett fails to adequately mention a sting operation where Chevron employees posed as remediation contractors in an attempt to entrap the presiding judge.

Barrett also overlooks all the arguments that render Chevron's fraud claims ridiculous. If the trial was marred by fraud, why hasn't Chevron filed an action to nullify the judgment under the fraud protection statute in Ecuadorian courts? Three layers of Ecuadorian courts – eight appellate judges – reviewed and upheld the $9 billion verdict, and threw out Chevron's claims of fraud. But for Barrett, apparently U.S. courts are the only legitimate court system in the world. Barrett lets Judge Kaplan off the hook for his colonial overreach in judging a country's legal system that he knows nothing about. Kaplan can't read the native language, nor did he read the trial record. On top of that, Barrett seems unconcerned that Chevron's star witness received some $300,000 in payments for his testimony, plus a new life for him and his family in the United States, thanks to a Chevron financed and supported asylum bid. Even Kaplan called it a corporate witness protection plan.

Not only does Barrett's bias show throughout the book, his extracurricular activities lay bare his leanings. On July 20, 2014, Barrett joined Chevron and its legal team from Gibson, Dunn, and Crutcher for a Congressional subcommittee hearing organized by Chevron lobbyists on Latin American democracy. Alongside a Chevron lawyer, and a representative from the American Enterprise Institute, Barrett played the role of expert on Latin America, lamenting Chevron's legal plight in the country jurisdiction of its choosing, without irony.

So what we're left with is a book that's a copy-paste job from Chevron's legal briefs and reads as if the case, and the plight of the affected communities, is over. Peter Maass, author of the book "Crude World: The Violent Twilight of Oil," reviewed Barrett's book for Outside Magazine, and concluded: "There are two sides to the story of the biggest environmental lawsuit ever, but a new book tells only one of them."

Parloff, Barrett, and Goldhaber are quick to claim that from the outset they had high hopes for the Ecuadorian villagers. They had hope that U.S. courts could be used to hold corporations accountable for human rights violations abroad. But given the overwhelming evidence against Chevron, we have to seriously question these claims. Two of the pillars of American business reporting, and a conservative legal magazine hoped that the Ecuadorian rainforest communities who procured the largest environmental judgment in history from the second largest U.S. oil company would prevail? That's doubtful. The reporters have held on to that story merely to give the appearance of objectivity and to reinforce their framework claiming Chevron as the true victim. Immediately after publishing a number of articles, their "journalist" buddies began chiming in. Thus, the pro-Chevron feedback loop was set in motion.

For example, after Barrett's book launched on Sept. 23, Joe Nocera, a columnist for The New York Times, wrote a piece about Barrett's account. Nocera unquestioningly sides with Barrett and Chevron, while failing to mention that his wife's law firm represented Chevron in a discovery matter directly related to the Ecuador litigation. Shouldn't a journalist cite such an obvious conflict of interest?

Then cue Debra Saunders, the "token conservative" columnist for the San Francisco Chronicle. Saunders writes an article the next day about Nocera's article about Barrett's book. Feeling dizzy?

Saunders ends her piece quoting Nocera, with an alleged quote from Donziger, excerpted from the movie Crude, and edited and used by Chevron during the RICO trial. The quote is this: "Facts do not exist. Facts are created." Sounds incriminating, right? Except Donziger goes on to say, "...and you talk to Texaco, because they create facts. Texaco creates facts. They create standards. … That's what I am saying. They create fiction."

This is how the Chevron media echo chamber continues to feed itself. A book repeats Chevron's flawed arguments during the RICO trial almost verbatim, which produces articles and reviews of the book, which then produces yet more articles about articles about the book – all recycling and reinforcing Chevron's false and misleading narrative. The great irony is that Nocera, Saunders, and Barrett and the others accuse Donziger of trying the case in the media, when in fact it's Chevron and its minions who continue to prop up the company's crumbling house of cards in the court of public opinion, because its legal case is meritless.

We all know that a good "David vs. Goliath" story sells. But what sells better is the 'Hero's fall from grace' frame that Chevron's defenders are pushing about Donziger. Except, the demonize Donziger narrative is not new. In fact, it's been part of Chevron's playbook long before the New York RICO trial began

Enter Sam Singer, from Chevron's PR firm Singer and Associates. Singer is not merely Chevron Apologist-in-Chief; he's a long time Bay Area PR hit man who prides himself on cleaning up the image of his corporate clients. He's like the "Wolf" in Pulp Fiction – the guy you call to clean up your mess, hide the bodies, or whatever other unmentionables are needed. A recent piece in SF Weekly, "Trust Me: Who Are you Gonna Believe, San Singer or Your Own Eyes?" exposes Singer and his tactics:

When your workspace is engulfed in flames; when your mistress threatens to reveal your illegitimate family; when your restaurant serves up E. coli burgers; when your employees inadvertently kill a young child; when a wild beast rampages through your place of business – you better call Sam Singer. "When things go bump in the night," assures Singer, "we are there."

"The truth, after all, isn't exactly Singer's milieu. His mission is to push ‘the facts as our clients see them,'" writes Joe Eskenazi for the Weekly. That's what Singer does for Chevron.

According to internal Chevron emails with Singer, the plan was to target Donziger from the get go. Singer's strategy was to paint Ecuador "as the next major threat to America" like Iran or a "Cuban missile crisis in the making" and Donziger as "the most powerful man in Ecuador, pulling the strings of an emerging banana republic." Indeed, another Chevron strategist in an internal memo to colleagues was more blunt, noting that the company's [long-term] strategy is to demonize Donziger."

But even Singer and Chevron's strategy was wearing thin after Donziger and the Ecuadorians proved more resilient that Chevron thought possible. A recent article in Rolling Stone was a turning point, finally putting the spotlight on Chevron's phony narrative and the vacuousness of its arguments for anyone willing to look past Chevron's talking points. Despite this, Parloff, Barrett, and Goldhaber have been quick to take up the slack.

In the meantime, Chevron was unhappy with the unfavorable coverage it continued to receive in Richmond, California, home to the company's largest and oft exploding refinery. Richmond's mayor traveled to Ecuador to tour Chevron's toxic legacy and saw firsthand the company's impact on the rainforest and human health. Since then, she has been a vocal critic of Chevron's disaster in Ecuador. Combined with coverage of a controversial $1 billion refinery expansion plan and Chevron dumping $1.6m into local elections, there was little positive traction for the company in the local press. What was Chevron to do? If you can't influence the media, become the media!

Thus, the Richmond Standard was born. A Chevron-funded daily, the Richmond Standard is an Orwellian extension of the corporate media. An LA Times piece by Michael Hiltzik titled, "A Chevron PR website pretends to be an objective news source," explains:

This is what the news business has come to in communities where economics have wiped out traditional local newspapers. Self-interested corporations have stepped into the vacuum. You'd be hard-pressed to find a case as flagrant as Richmond's.

As the Financial Times describes it:

The Richmond Standard is one of the more polished sites to emerge in the age of hyper-local digital news brands such as Patch and DNAinfo.com. That may be because it is run and funded by Chevron, the $240bn oil group which owns the Richmond refinery that in August 2012 caught fire, spewing plumes of black smoke over the city and sending more than 15,000 residents to hospital for medical help.

The only writer for the "paper" is an account executive for Singer and Associates, Mike Aldax. According to Aldax, "my function is to report the news you're not seeing in Richmond." Translation: pro-Chevron stories. Hiltzik reports:

Aldax says Chevron doesn't review or edit his stories, but it doesn't have to. It provides his paycheck, and even subconscious self-censorship can undermine news gathering – especially if one defines news as information its subject doesn't want the public to know.

According to Singer, the Standard has at least found some support. "The rappers...They love us!"

For Chevron and the Ecuador case, there's no need to bypass corporate media when you have Parloff, Goldhaber, and Barrett. As the company's prime cheerleaders, they give voice and credibility to Chevron's recycled claims that were rejected by Ecuadorian courts. Meanwhile, the voices of indigenous and farming communities, who continue to suffer on the ground in Ecuador, are largely drowned out in the U.S.. These three pro-business American reporters give cover to Chevron's board of directors whose oversight of the liability has been called out by its own shareholders. Parloff, Goldhaber, and Barrett help immunize CEO John Watson who, as Chief Architect for the Texaco acquisition, has let the Ecuador issue come to define the company, while the liability has ballooned into the billions. And they've wrongly lifted the spirits of Chevron's stockholders who are led to believe that the issue is over.

But here's the rub. Chevron never intended to file a RICO suit, nor did Watson ever think it would get this far. The company's strategy has always been to outlast and out-resource the Ecuadorian communities and their legal team. It was Judge Kaplan who, presented with edited outtakes from the movie Crude that Chevron now admits were not properly translated or did not include the full transcript, asked, "does RICO play here at all?" A U.S. federal judge suggested that Chevron ought to file RICO charges, and the company quickly obliged. Kaplan navigated Chevron and its legal team through the trial, and issued a ridiculous verdict ripe to be overruled.

Which is why, during the four years in the run up to and during the trial, Chevron has sought to eviscerate the plaintiffs, their legal counsel, their funders, NGOs, or anyone who has ever dared to support the communities. The company hoped to outlast Donziger and the plaintiffs in a resource and PR battle, because they know exactly how hard it is to win the case on the merits. Ironically, given the tremendous amount of resources and time Chevron has invested in its scorched earth strategy, the communities and their counsel are not only still alive, they are in a remarkably good position.

The seven-week bench trial that Kaplan presided over – and that Parloff, Goldhaber, and Barrett sat through – may have generated back slaps and high-fives from San Ramon to Midland, Texas. But it was never built to last. Which is why, at least according to the rumor mill, Chevron is looking for an exit strategy. The company likely hopes the Ecuadorian government will play a role in its hoped-for rescue.

With a panel from the Second Circuit Court of Appeals looming over the company, Watson has reason to be worried.. The last time the Second Circuit had a crack at Judge Kaplan, it vacated his preliminary injunction in the case almost immediately. It was also an embarrassing public depantsing of Gibson Dunn lawyer Randy Mastro, who was literally laughed out of court. Don't expect to see Randy making the oral arguments this time.

But before the Second Circuit hearing, another critical hearing is slated for December. In Canada, the country's Supreme Court will hear arguments on whether the Ecuadorian communities can indeed go after Chevron's massive assets as a way of enforcing their judgment. These are major, make-or-break hearings for Chevron. But you wouldn't know that by reading the work of Parloff, Barrett, or Goldhaber. These three gringos who have been guzzling Chevron's Kool-Aid for the last four years may very soon wake with a hangover of a lifetime.

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