Chevron's illusory $28 million judgment for legal fees against an empty shell investment vehicle owned by Ecuadorian villagers in the tiny protectorate of Gibraltar is worthless -- despite the attempt by Bloomberg's Paul Barrett to build it up with his incomplete and dishonest reporting.
After largely ignoring the stunning legal setbacks to Chevron in recent months in Canada and elsewhere regarding the $9.5 billion Ecuador pollution judgment against the company, Barrett this week posted a story about how Chevron won a default judgment in Gibraltar. Gibraltar has only 30,000 people and four trial judges.
Nobody defended the company because the entire litigation is part of Chevron's nefarious effort to entrap the villagers in meaningless cases in irrelevant jurisdictions. Chevron wants to suck the villagers into doing anything except what really matters -- which is seizing company assets to pay for a long-awaited clean-up of lands where the oil major dumped billions of gallons of toxic waste.
In a misleading press release parroted by Barrett on the Businessweek website, Chevron General Counsel R. Hewitt Pate claimed the "Supreme Court" in Gibraltar ruled in favor of the company. What Pate didn't tell Chevron shareholders is that the Supreme Court of Gibraltar is actually a trial court with fewer judges than most small towns in America.
FPate tried to suggest in his press release that it was the highest appeals court in the country, which it decidedly is not. Pate of course never wants to talk about how Chevron polluted the crap of Ecuador and then tried to corrupt and sabotage the trial where it was held accountable.
The dormant investment vehicle targeted by Chevron was used years ago by the company's victims in Ecuador to fund the prosecution of their environmental claims against the oil giant. The villagers also planned to use it to aggregate proceeds of the judgment that would come with selling off Chevron's seized assets. The idea was to distribute the proceeds for an environmental clean-up in Ecuador without the Ecuadorian government interfering with the process.
The villagers chose not to divert their limited resources from Canada, where they have a real chance of collecting the entirety of their historic judgment. Chevron has $15 billion worth of assets in the country and the Supreme Court recently gave the green light for the villagers to go after them, dealing a devastating blow to Pate's blocking strategy.
"We must be disciplined and focus on seizing Chevron assets to force the company to comply with orders from the courts in Ecuador where the company insisted the trial be held," said Luis Yanza, an Ecuadorian community leader. "We will not fall into the trap of defending against frivolous cases that Chevron chooses to initiate in irrelevant jurisdictions."
With the help of corporate sympathizers in the journalism world like Barrett, Chevron's beleaguered management team is using the Gibraltar ruling to try to present a false picture of "progress" in the litigation. That is all part of an attempt by Pate and Chevron CEO John Watson to keep company shareholders and the financial markets from belching too loudly about the company's growing risk in Ecuador.
Chevron is on its heels in Canada and in the United States. Chevron's star witness in its retaliatory "racketeering" case in the U.S., Alberto Guerra, recently admitted lying on the stand to try to frame New York lawyer Steven Donziger in a bribery scheme in Ecuador. In apparent violation of federal law, Chevron had paid the witness $2 million for his testimony. Chevron lawyers coached Guerra for 53 consecutive days before allowing him to present his false testimony.
A concrete example of Barrett's dishonesty is how he used only a small portion of a written statement given him by Yanza, the internationally renowned Goldman Prize winner. The statement explained why the Gibraltar judgment has no impact on the case.
Here is Yanza's full statement as sent to Barrett:
Chevron's default judgment is against a dormant investment vehicle. We believe this judgment has zero value other than as a public relations stunt designed by Chevron to project the false appearance of 'progress' in a litigation where the company recently suffered multiple setbacks, including an admission by its star witness that he testified untruthfully in the RICO case and a decision by Canada's Supreme Court allowing our communities to try to seize company assets
While after two decades of litigation Chevron has yet to pay even one dollar to the thousands of people in our country that it harmed, it is no small irony that Chevron rushed to a courthouse in a far-flung jurisdiction to try to collect millions of dollars in fees that it has paid to its army of lawyers. Rather than engage in a multi-jurisdictional campaign of evasion, Chevron's management team would better serve company shareholders by complying with the Ecuador judgment so that the humanitarian crisis afflicting our communities can be addressed immediately.This is the only part of Yanza's statement that Barrett quotes in his story:
While after two decades of litigation Chevron has yet to pay even one dollar to the thousands of people in our country that it harmed, it is not small irony that Chevron rushed to a courthouse in a far-flung jurisdiction to try to collect millions of dollars in fees that it has paid to its army of lawyers.Journalists of course have a right to use only parts of statements in their stories. But Barrett's long history of uncritical service to Chevron's narrative understandably makes us skeptical of his motives. In an obvious conflict of interest, Barrett last year testified in favor of Chevron before the U.S. Congress while reporting on the case.
Barrett's latest article repeats yet again a false thematic narrative almost always found embedded in his reporting. Barrett suggests that Chevron's retaliatory racketeering case against Donziger and his clients in the U.S. somehow amounts to an "exoneration" of the company's environmental crimes and fraud. Nothing could be further from the truth.
The reality is that Chevron made a mockery of justice in the RICO proceeding. The trial judge, Lewis A. Kaplan, arrogantly disparaged the affected communities and excluded any evidence of Chevron's toxic dumping in Ecuador. He also refused to seat a jury and then accepted the paid-for testimony of Guerra, Chevron's discredited witness. The judge knew nothing of Ecuadorian law or procedure and let Chevron abuse the process throughout.
Kaplan also failed to disclose his own investments in Chevron when he presided over the case. The entire proceeding reeked of racism and was reverse-engineered to favor the oil company.
Ultimately, the RICO judgment -- like the default judgment is Gibraltar -- does nothing to mitigate Chevron's risk from it pollution in Ecuador. But with Barrett promoting these judgments with a fundamentally false narrative, they do allow Chevron yet another bite at the apple on the public relations front.
That false hope is a major factor that allows Chevron's management team to spend millions on its army of lawyers to keep the litigation going even after it lost the case in its preferred forum.
Good work, Paul. As we have said before, you could make a lot more money by joining Chevron's public relations department.
(For more background on Barrett's distortions of fact and made-up scenes in his book about the Ecuador case, see this "notice of defamation" letter sent to him and his publisher. For a summary of the overwhelming evidence against Chevron in Ecuador, see here.)