Chevron's Legacy

Chevron's Legacy
The Pollution Chevron Left Behind...Shushufindi pit 38. Chevron's scientists found no contamination at this pit.

Monday, January 30, 2012

Diego Borja: On the Chevron Dole

What’s in the Files of Chevron’s $2.2 Million Man?

Gotta read this article by San Francisco Chronicle’s energy reporter, David Baker, about Chevron’s paying its own self-described “dirty tricks” operative $2.2 million in hush money.

The Chevron Pit believes the oil giant paid Diego Borja so he wouldn’t blow the whistle on its fraudulent sampling protocol at contaminated well sites during the Ecuador trial that recently resulted in an $18 billion judgment against Chevron for massive oil contamination.

Baker writes:
“In the sprawling legal drama surrounding Chevron Corp. in Ecuador, Diego Borja has played one of the strangest roles. In 2009, Borja and a colleague used amateur spy equipment to secretly record two meetings with the Ecuadorian judge presiding over a massive oil-field pollution lawsuit against Chevron…. Questions soon arose about Borja … and his colleague, an American named Wayne Hansen.”
Plenty of questions. Like what’s on Borja’s iPhone?

In a taped conversation with a childhood friend, Borja said if Chevron didn’t pay him handsomely for the videotapes of the judge, he would turn over evidence convicting Chevron in the Ecuador case.

He said he had the goods on Chevron, and some of them were stored on his iPhone.

As Baker discusses, Chevron has spent $1 million in legal fees on Borja alone to prevent the Ecuadorians from obtaining additional discovery from the mysterious Borja files, including data on his iPhone.

A decision in a California federal court on the Ecuadorians’ discovery request is pending.

Borja was a longtime Chevron consultant who lifted soil and water samples during dozens of critical court-supervised inspections during the eight-year trial from 2003 to 2011.

Today he’s unemployed, hanging out in Houston on the Chevron dole while company lawyers and private investigators tend to his every need.

In addition to paying Borja a monthly retainer for doing nothing, Chevron pays his wife as well for a job that no one seems able to describe.

Chevron also picks up rent for their house, their furniture, their car, cell phones and other life necessities.

His buddy, Wayne Hansen, doesn’t have it bad either.

Adam Klasfeld of Courthouse News got his hands on some emails between Hansen and Chevron’s private investigators that tell us Hansen is hanging in Peru, enjoying life.

Come on down, Hansen tells one of Chevron’s private investigators in an email. The water is fine, and you can live like a king for $1,200 a month.

Hansen, who is a convicted drug felon, wasn’t so jovial a year or so before when he wrote another Chevron private investigator that no one was taking care of “Wayne;” that Diego had a deal, but not him.

Hansen’s attitude toward Chevron clearly perked up by the time he landed in Peru a few weeks after the Government of Ecuador sought to subpoena him in the United States for his role in taping the judge. (It’s illegal to videotape anyone secretly in Ecuador.)

Ask yourself: How did Hansen, who has no visible means of support, find himself in Peru on the heels of a subpoena?

Why was Hansen communicating with Chevron’s private eyes?

The plot thickens. More is sure to follow.

Read these other interesting article, too, about the exploits of Borja and Hansen: Kate Sheppard of Mother Jones, Rebecca Beyer of the Daily Journal and Braden Reddall and Dan Levine of Reuters.


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Chevron’s Deceit Exposed In “Legal Misapprehension” Ruling

Less than 24 hours after the U.S. Second Circuit Court of Appeals threw out Chevron's case against a group of Ecuadorian indigenous peoples, the oil giant's CEO John Watson accused them of fraud in an analyst call, while trying to explain his $18 billion problem in Ecuador and his $11 billion one in Brazil.

Yet, a close read of the court's opinion reveals Watson’s lawsuit itself was the actual fraud that not only cost the indigenous groups greatly -- both emotionally and financially -- but also delayed a cleanup of the oil company's toxic mess in the Amazon rainforest that is costing lives.

Last week the three-judge panel dismissed in its entirety a lower court ruling that sought to block enforcement of the $18 billion Ecuador judgment against Chevron for the deliberate and massive contamination of the Amazon rainforest.

Judge Gerard Lynch wrote that lower court’s "endorsement" of Chevron's "theory of relief" was a "legal misapprehension."

We don't use the word "misapprehension" a lot. Here are a few synonyms, according to Thesaurus.com:
absurdity, blunder, boo-boo, delusion, fallacy, falsehood, goof, howler, screamer, screw-up, sin, transgression, trespass, untruth, wrongdoing
Chevron’s “theory of relief” revolved around twisting a New York state statute used to enforce foreign judgments to make it an affirmative weapon to block the enforcement of foreign judgments anywhere in the world. 
 
The theory was opposed by almost every legal academic the world over, many of whom filed amicus briefs explaining how absurd it was for a U.S. trial court judge to think he could dictate to judges around the world how they should rule on the enforceability of a foreign country's judgment. See here and here.

Chevron sold off its holdings in Ecuador in anticipation of an adverse judgment in that country, forcing the rainforest communities to consider standard collection actions against company assets around the world. 
 
The panel wrote that the Recognition Act "nowhere authorizes a court to declare a foreign judgment unenforceable on the preemptive suit of a putative judgment-debtor (Chevron) .... (the act) and the common law principles it encapsulates are motivated by an interest to provide for the enforcement of foreign judgments, not to prevent them." (Emphasis added.)
 
So, Chevron was allowed to drag the Ecuadorians, their country, and their courts threw the mud for almost a year due to a legal "boo-boo" and a "goof".
 
The appellate panel also wrote that concerns about jurisdictional mutual respect among countries become "far graver" when "a court in one country attempts to preclude the courts of every other nation from ever considering the effect of that foreign judgment .....
 
"In such an instance the court risks disrespecting the legal system not only of the court in which the judgment was issued, but also of those other countries, who are inherently assumed insufficiently trustworthy to recognize what is asserted to be the extreme incapacity of the legal system from which the judgment emanates."
 
The lower court, the panel wrote, did not address the legal rules that would "govern enforceability of an Ecuadorian judgment under the laws of France, Russia, Brazil, Singapore, Saudi Arabia or any of the scores of countries, with widely varying legal systems, in which the plaintiffs might undertake to enforce their judgment."

That's some humbling stuff for Chevron and its theory of relief.


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Friday, January 27, 2012

Gibson Dunn: Litigation Disaster of the Year Award

Can We Get A Re-Count?

So much for Gibson Dunn's Litigation Firm of the Year Award, recently bestowed on it by the legal publication, American Lawyer.

If ever there was a reason for a re-count, it's now.

In a critical ruling yesterday, the U.S. Second Circuit Court of Appeals seriously dissed Chevron's law firm Gibson Dunn and specifically its lead partner on the Ecuador case, Randy Mastro, in its outright dismissal of a lower court ruling that sought to block enforcement of an $18 billion Ecuador judgment against the oil giant for massive contamination in the Amazon rainforest.

In selecting Gibson Dunn as its Litigation Firm of the Year, the highly-conflicted American Lawyer described Mastro as .... well, a maestro of legal strategy.

(American Lawyer covers the legal fight between Chevron and the Ecuadorians yet, at the same time, worships at the Gibson Dunn altar -- and its advertising budget.)

Gibson Dunn itself brags openly about its ability to "change" laws so its huge corporate clients can run amuck in developing countries, much like Chevron did in Ecuador. Read all about it at Paul Paz y Mino's great Huffington Post blog here.

But the 2nd Circuit decision painted a much different picture than the one American Lawyer sketches regularly for its legal audience.

Despite Mastro's arguments to the contrary, the three judges said the lower court did not have the authority to “dictate to the entire world which judgments are entitled to respect and which countries’ courts are to be treated as international pariahs."

Ouch, Randy.

And, there's more:

“It is a particularly weighty matter for a court in one country to declare that another country’s legal system is so corrupt or unfair that its judgments are entitled to no respect from the courts of other nations. In such an instance, the court risks disrespecting the legal system not only of the country in which the judgment was issued, but also of other countries, who are inherently assumed insufficiently trustworthy to recognize what is asserted to be the extreme incapacity of the legal system from which the judgment emanates.”

Double ouch.

Now maybe you're thinking The Chevron Pit is being too catty about Mastro's run of bad decisions -- there have been four in all. See here.

But Randy Mastro is the lawyer who stood before dozens of U.S. courts and called the victims of his client's misconduct in Ecuador "criminals," "con men," and "extortionists" guilty of atrocities worse than any the "Mafia mobsters" have committed.

So excuse us for pointing out the obvious: Gibson Dunn lost the argument. One judge, one court, one law firm cannot sit in judgment of another sovereign country's judiciary, especially since Chevron wanted the trial there in the first place.

One day the real story about Chevron in Ecuador will be told, and it will be abundantly clear the only fraud committed in the context of this historical and important lawsuit was Chevron's.

Read the judgment here.

Randy Mastro


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Thursday, January 26, 2012

In Critical Ruling, Chevron Hit Hard By Federal Appellate Court

Judge Kaplan Ordered To Dismiss Chevron Case Against Ecuador

Amazon Defense Coalition, 26 January 2012, Contact: Karen Hinton, 703-798-3109, karen@hintoncommunications.com

U.S. representatives for the Ecuadorians, who recently won an $18 billion judgment in Ecuador against Chevron for massive contamination, issued the following statements today about the U.S. Second Circuit Court of Appeals opinion, dismissing a lower court ruling that sought to prevent enforcement of the Ecuador judgment.

Karen Hinton, U.S. spokesperson for the Ecuadorians, said:

"A grave injustice against the Ecuadorians has been set right by today's 2nd Circuit ruling. It rebukes Chevron's abusive legal tactics of the past two years designed solely to malign the very people who suffer as a result of the company's deliberate poisoning of their homeland, the Ecuadorian rainforest. Once Ecuadorian law allows enforcement of the judgment, it will become even more evident that the only fraud committed in Ecuador in the context of this historic environmental litigation was Chevron's. Chevron's fraud includes the deliberate use of substandard operational practices all designed to further inflate company profits at the expense of human life, the manipulation of scientific evidence during the trial and the launching of a smear campaign to distract attention from its own misconduct."

Craig Smyser of Smyser Kaplan & Veselka in Houston, an attorney for the Ecuadorians, said:

"The Ecuadorian inhabitants of the Amazon river basin today scored a remarkable victory in the United States Court of Appeals for the Second Circuit. That court rejected Chevron’s efforts to declare the Ecuadorian judgment invalid and unenforceable and instead ordered the New York trial court to dismiss Chevron’s claim for injunctive and declarative relief in its entirety. For 18 years, the Ecuadorians have sought vindication for Chevron’s pollution of their land, rivers, and lives with toxic wastes as a result of Chevron’s substandard drilling practices that would not have been permitted in the United States.


“Instead of confronting its environmental despoliation, Chevron has engaged in an international smear campaign of lawyer- and court-bashing. As a result of the 2nd Circuit’s opinion today and the confirmation of the Ecuadorian trial court’s judgment by the Ecuadorian appellate court, the wheels of the law are bringing Chevron to justice. This decision vindicates the application of international law and comity to these proceedings in New York.”

Visit www.chevrontoxico.com to find out more. Become a follower of The Chevron Pit. Support Amazon Watch and Rainforest Action Network.

Tuesday, January 24, 2012

Chevron's Fraud On Public Display In U.S. Courts

Oil Giant's Unclean Hands Soil Its Image

Chevron's fraudulent conduct during the Ecuador trial for massive oil contamination is on public display for all to see in recently-released U.S. court documents.

They reveal that Chevron has paid its "dirty tricks" operative Diego Borja $2.2 million in retainer fees, living expenses, income taxes and legal fees.

They also reveal that Borja was one of several testers at contaminated well sites who manipulated the soil and water samples to Chevron's advantage before submitting them to the court as evidence.

Here's some background for those of you new to the Borja story.

In 2009 Borja, along with his mysterious partner Wayne Hansen, secretly videotaped a judge in a failed effort to derail the trial that charged Chevron with deliberately contaminating the rainforest and resulted in an $18 billion judgment against the company.

Chevron whisked Borja and his family out of Ecuador and into the U.S. after Borja turned over the tapes to Chevron. Later, though, Borja threatened to turn evidence against Chevron if he was not paid handsomely for them.

Since that revelation, the Borjas have been practically under house arrest in Houston, but the money ain't shabby so maybe they don't mind. See court documents here.

Chevron has picked up their rent, the car payments and the costs for a washer, dryer, and all their furniture. Both Borjas get retainer checks every month. The wife has a job with Chevron but nobody seems to know what she does exactly. Borja is unemployed.

Why is this a problem? Borja is likely to be a witness in pending litigation and hearings about the $18 billion judgment. Will Borja bite the hand that feeds him? We doubt it, and that's exactly the Chevron plan.

We hope the news media won't let Chevron get away with it. Hats are off to the reporters who have taken the time to peruse these documents.

See articles by Kate Sheppard of Mother Jones, Adam Klasfeld of Courthouse News, Rebecca Beyer of the Daily Journal and Braden Reddall and Dan Levine of Reuters.

Sheppard recently revealed a Chevron document that directed Chevron employees or consultants on how to test for contamination at the well sites in Ecuador. Bottom line: prior to the official testing day, go and figure out where the clean spots are; test far away and uphill from the unlined pits full of pure crude; any "dirty" samples you find, send them, not to the court, but a secret lab. Read more here.

Klasfeld got his hands on some eye-popping emails, after Chevron mistakenly sent them to him, that confirmed the oil giant had “cut a deal” with its most infamous contamination tester -- none other than Diego Borja. He also reported on an email that revealed Hansen, an American citizen, is living large in Peru. In another email, Hansen thanked a Chevron private investigator for his help, encouraging the PI to join him in Peru where one could "live like a king" for $1,200 a month. See here. Care to speculate how Hansen ended up in Peru? Hint: He landed there only a few weeks after he was subpoenaed by the Government of Ecuador about the secret tapes he made with Borja. He basically escaped the U.S. before the Government of Ecuador could depose him for questioning.

Beyer quoted a law professor at Pennsylvania State University questioning the ethics and legality of Chevron's payments to Borja as a potential witness.

Reddall and Levine reported on Borja's statements, recorded by a childhood friend, that Chevron had "cooked" evidence in the trial and that he would turn evidence against Chevron if he wasn't paid for the tapes.


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Friday, January 20, 2012

Chevron's 500 Lawyers At 39 Law Firms Defeated For Third Time

Five Impoverished Indigenous Groups One Step Closer To Justice

How many lawyers does it take to lose four court decisions in a row?

According to a Chevron declaration -- almost 500 lawyers and paralegals at 39 firms. See here.

Chevron's public face for its unprecedented legal attack against the impoverished Ecuadorians has been Gibson Dunn's Randy Mastro, a former political hack to tough guy Rudy Guiliani, a former NYC Mayor and onetime presidential candidate.

See here and here for more information.

Early on in the fight, Mastro got lucky when another fellow New Yorker, federal judge Lewis Kaplan ruled in Chevron's favor in its effort to block the $18 billion judgment out of Ecuador.

(The $18 billion is to cleanup the company's massive contamination of the rainforest, provide health care and deliver clean drinking water to the area.)

Kaplan and Mastro competed in court to see who could out-disparage and out-ridicule the indigenous groups. Read here about the disturbing comments Kaplan made from the bench about the Ecuadorians.

Mastro's luck ran out, though, when he appeared before the 2nd Circuit Court of Appeals in September. The judges literally laughed at Mastro's argument that a U.S. court could sit in judgment of Ecuador's court system. One business day later, the court threw out Chevron's case.

In January, after Ecuador's appellate court upheld the $18 billion judgment, Chevron went back to its favorite judge, but even Kaplan wouldn't touch the oil giant's desperate plea to stop the Ecuadorians from enforcing the judgment.

Seeking relief from what Chevron described as "imminent harm," Mastro tried again twice with the 2nd Circuit but failed -- denying the company's motion to block enforcement block the judgment and ending Chevron's 18-month odyssey in U.S. courts to derail the Ecuadorian trial. A trial it asked for and fought for ten years ago.

For more insights into Mastro’s “legal thuggery,” see this Huffington Post blog.

Visit ChevronToxico to find out more. Become a follower of The Chevron Pit. Support Amazon Watch and Rainforest Action Network.

Thursday, January 19, 2012

Chevron Defeated For Third Time In US Courts!

Ecuadorians One Step Closer To Justice

The 2nd Circuit Court of Appeals has refused Chevron again, denying its motion to block enforcement of the $18 billion judgment in Ecuador. This is the third consecutive legal setback for Chevron. Here's the statement from the Ecuadorians, who against all odds have defeated the oil giant and its 39 law firms and 500 lawyers fighting five impoverished indigenous tribes in the Amazon rainforest.
"The Ecuadorian communities affected by Chevron's contamination are one step closer to justice as a result of today's ruling. For almost two decades, Chevron has stood in the way of a comprehensive cleanup of billions of gallons of crude oil and toxic waste water it deliberately dumped into the pristine rainforest. Thousands of people have died or suffered as the oil giant and its legions of lawyers have fought to distract attention from the overwhelming evidence against the company.
"Now a U.S. appellate court has refused to grant Chevron relief from blocking the $18 billion judgment of an Ecuadorian court that it should pay for a clean-up.  With its promise to fight the Ecuadorians until hell freezes over, Chevron reveals its callous disregard for the rule of law and the humanity of indigenous groups.
"Chevron's legal options to evade the Ecuador judgment continue to narrow.  Chevron's shareholders must now understand that the company's management team is putting their interests at great risk due to the company's bungling of the Ecuador litigation."
In September, a federal appellate panel blocked Chevron's attempt to seek an unprecedented worldwide injunction blocking enforcement.  A federal district recently denied Chevron's illegal attempt to freeze the assets of the plaintiffs.  Chevron's latest attempt to lift an injunction blocking enforcement also has been denied. These defeats follow a January 3rd appellate court ruling in Ecuador confirming the validity of the trial court judgment.

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Chevron Tells Another Whopper To U.S. Appellate Court

For the past two years Chevron has been trying to get U.S. judges to dictate to Ecuadorian judges all that is wrong with Ecuador's judiciary. In the process, Chevron has told so many lies it's impossible to keep up with them.

But, here's one that screams for attention.

On September 16th, 2011, Chevron lawyer Randy Mastro of Gibson Dunn responded to a question posed by the U.S. Second Circuit Court of Appeals about the company's previous efforts to convince an arbitration tribunal at The Hague to stop enforcement of the Ecuador court's $18 billion judgment against it (a much longer story). Here's what he said:
"I want to—I do want to be super clear about this. We have not attempted, and we will not attempt, to ask the ... tribunal to stop entry of a judgment. We do intend to fight enforcement, but we—and we do intend to fight in Lago Agrio against entry of a judgment, but we have not and we will not, if I left any doubt about it, ask the ... tribunal to stop entry of a judgment in Lago Agrio."
On January 3rd, 2012, the day the Ecuador appellate court upheld the $18 billion judgment, Chevron lawyer R. Doak Bishop of King & Spalding wrote to the arbitration tribunal, once again requesting help in stopping enforcement:
"Time is now of the essence to ensure that the Republic takes measures to prevent enforcement of the fraudulent Judgment... (Chevron) request(s) that the Republic of Ecuador inform the Tribunal...of the steps that it intends to take to ... prevent the Lago Agrio Judgment from becoming enforceable."
One assumes Mastro thinks that asking the tribunal to ask the Republic of Ecuador to stop the enforcement gives him a passing grade on the lie detector test.

We anticipate Mastro will be in front of the Second Circuit again very soon, explaining the distinction and arguing why three U.S. appellate court judges have jurisdiction over an Ecuadorian court -- in a super clear way.

Maybe then he can find the doubt he left behind.

Chevron lawyer Randy Mastro

Monday, January 16, 2012

Kerry Kennedy Speaks Out Against Chevron's Desperate Attacks

Ecuadorians Call Kennedy Fierce Activist & Good Friend

Our most recent post about Chevron's turning victims into enemies was prescient. This weekend Chevron planted a story in a tabloid to disparage one of the Ecuadorians' most effective supporters, human rights activist Kerry Kennedy. It was a lie. Pure and simple.

Ms. Kennedy did not hesitate to fight back. In a Huffington Post piece, she did as other human rights activists have done in past struggles: She spoke truth to power.

She described what she and her three daughters saw when they visited the area in the Ecuadorian rainforest where Chevron explored for oil:
"We looked at pools of oily muck abandoned in the early 1970s that still drain toxic soup into nearby streams used for drinking water, fishing, and washing. We visited the home of an elderly woman who told us about the skin lesions that covered the bodies of her son, daughter, and grandson. She had built the family home on a field Texaco claimed to have cleaned. In fact, the oil giant had merely covered up the poisonous pond with four feet of dirt and a thin layer of grass. We smelled the fumes emanating from water Chevron claims is now clean. All this is part of the massive environmental damage and accompanying cancer clusters, lung disease, skin lesions and other injuries left behind by a U.S. multinational corporation."
"Chevron's irresponsible operational practices are now responsible for a catastrophe that has cost untold lives and destroyed an area of pristine rainforest the size of Rhode Island. Chevron lost the legal case in Ecuador, and a U.S. appellate court recently blocked efforts by the company to prevent enforcement of the judgment. The company is on its last legs after battling to deny the claims of indigenous groups for almost two decades since the case was filed in 1993.
"This helps explain why Chevron is now turning to personal attacks."
Pablo Fajardo, the Ecuadorian lawyer who has lead the successful litigation against Chevron, responded as well:
"Kerry Kennedy is a fierce human rights advocate and friend of thousands of Ecuadorians who have been victimized by Chevron's horrific contamination. She has stood behind the indigenous and farmer communities of the rainforest as they struggle to properly remediate one of the world's worst environmental catastrophes.
"The newspaper article is inaccurate. Such an accusation only proves Chevron's desperation. The oil giant has run out of legal options, with multiple defeats in both Ecuador and U.S. courts. Chevron's legal team now has turned to personal attacks against those like Kerry who speak out to defend the victims of the company's deliberate contamination of the soil and water in the Amazon rainforest."
"The best way to divert attention from your own crimes is to turn your victims into your enemy. Chevron hasn't hesitated. Company lawyers have hired spies to find out if people who are dying actually have cancer. They have called the people suffering in the rainforest liars, con men and frauds. It should come as no surprise that Chevron would resort to leaking misleading court documents to tabloid newspapers about our supporters."

Visit ChevronToxico to find out more. Become a follower of The Chevron Pit. Support Amazon Watch and Rainforest Action Network.

Sunday, January 15, 2012

Chevron Tries To Make Its Victims The Enemy


"This is how it's done. When people are sittin' on shit that you want, you make 'em your enemy. Then you're justified in taking it."

Jack Sully in the James Cameron movie Avatar, the U.S. Marine who works for an energy company but later sides with the indigenous peoples living on top of precious minerals company officials are willing to kill for.

Avatar's Jack Sully

"In thirty years of practice and as a former prosecutor, I've never seen a record so shocking of illegal and improper conduct .... (The Ecuadorians want) to try and shake down a settlement .... By their own words they intend to extort, to coerce ... to cause the maximum harm to Chevron."

Randy Mastro, the Chevron lawyer whose law firm is being paid hundreds of millions of dollars to take from Ecuadorian indigenous tribes an $18 billion judgment against the oil giant for the world's largest oil-related environmental disaster.


Chevron's Randy Mastro

For more information about Chevron's deliberate contamination of the Ecuadorian rainforest, see here and here.

Friday, January 13, 2012

Crafty Craig, Chevron's Man In Ecuador, Up to No Good Again

We reported not long ago that James Craig, Chevron's man in Ecuador, refused to deny to a Miami Herald reporter that his employer had offered the government of Ecuador a bribe to pressure the courts to dismiss the lawsuit against the oil giant.


Today we have an update on the latest crafty Craig move:

Craig escorted a New Yorker reporter to some of the contaminated oil pits in the rainforest. After accusing Ecuadorian indigenous people of "spiking" the water with fresh oil to give the appearance of contamination, he downplayed the thick, oily surface on top of the pits by explaining it was only a few inches thick. Later the reporter wrote:
"A few miles outside Lago Agrio, we stood on the lip of a waste pit, and Craig told me that the vile-looking residue on its surface was only a few inches thick. To illustrate this point, he picked up a rock and lobbed it into the pit. It landed, with a sickly thud, on the surface. “If we had a bigger rock . . .” he said, and threw a much larger one. It, too, failed to sink."
What also has failed to sink into Craig's head is that he sounds absolutely like the shrill he is when he declares: "Chevron has never identified a positive reading for hydrocarbon contamination" in the rainforest.

The New Yorker reporter also spent time viewing the pits with Ecuadorians. Here is what he had to say:
"During the plaintiffs’ portion of the tour, a local man named Donald Moncayo showed me around. Wearing white surgical gloves, he dug up a fistful of black mud and held it so that the sunlight caught the telltale blue-orange tint of petroleum. At one fetid pit in a jungle glade, he stepped gingerly onto the surface of the pool, where the solid matter in the produced water had congealed into a tarlike crust that was sturdy enough to support him. Smiling a little, Moncayo shifted his weight from one foot to the other, until the whole surface began to undulate beneath him. He looked like a kid on a waterbed. According to the plaintiffs, there are nearly a thousand of these pits in the Oriente, scattered across an area the size of Rhode Island.

Watching Moncayo, I had a sense of déjà vu. He is the regular master of ceremonies on the toxic tour; I had read accounts of his routine, and had seen it enacted, in nearly identical fashion, in “Crude,” the Berlinger documentary. But, if Moncayo’s cadences were rote, there was nothing feigned about his indignation. He led me down a steep ravine to a creek. In the gauzy light filtering through the canopy, the water, which was only a foot deep, looked crystalline. Moncayo drove a stick into the creek bed and churned the mud until the water grew clouded by sediment. At his encouragement, I skimmed my hand across the surface of the creek. My palm was coated in an acrid film."

If only Craig had had a bigger rock ...

Monday, January 9, 2012

Ecuador’s Appellate Court Upholds $18 Billion Judgment Against Chevron

Leading Oil Industry Analyst Says Chevron Should Settle
Other Analyst Says Chevron Is Hiding Its Liabilities In Ecuador & Elsewhere


Based on an overwhelming amount of scientific evidence, Ecuador’s appellate court last week upheld the $18 billion judgment against Chevron for oil contamination in the country’s rainforest.

Immediately following the ruling, the oil industry’s leading analyst, Fadel Gheit, told the Financial Times the lawsuit isn’t going away and the oil giant should settle.

In a January 5th article in the Financial Times, Gheit, an analyst at Oppenheimer in New York, said Chevron should end its misery and pay $2 to $3 billion in a settlement.

He said, “When the dog keeps on barking and barking, eventually you have to throw it a bone.”

We assume Gheit meant no insult by referring to the Ecuadorian plaintiffs as a “dog.” Whether or not a $2 to $3 billion settlement would be enough remains to be seen.

Here and here is more information about the evidence against Chevron and the appellate court’s ruling.

Meanwhile, Chevron continues to withhold the extent of its financial liability not only in Ecuador but also in other parts of the world.

Socialfunds.com, a socially responsible investing web site, reports that Chevron refuses to deal with its terrible corporate governance history and human-rights problems.

Importantly, Chevron also isn’t coming clean to shareholders about its potential liability in pollution lawsuits against it.

Consider an incident in Burma, says Larry Dohrs of Newground Social Investment, a socially responsible money manager. Just before Chevron acquired Unocal in 2005, 13 Burmese plaintiffs won an out-of-court settlement against Unocal that was reputed to be $2.5 million per plaintiff.

And, there may be 5,000 more Burmese plaintiffs out there, Dohrs says. Were they to bring a class-action suit, damages could run into the billions of dollars.

However, Dohrs writes, “even the potential amount of that claim pales,” compared to Chevron's liability in Ecuador, with the $18 billion judgment staring it in the face. Chevron dumped billions of gallons of waste byproduct and oil into the water and soil and burned hundreds of millions of cubic feet of gas and waste oil into the atmosphere.

Chevron, socialfunds.com reports, tells investors it will ultimately prevail and there’s nothing to worry about. 



That doesn’t add up for the critics. “To continue to say there is no merit and we're not going to end up paying anything is a completely unrealistic approach for management," Dohrs said. "But that continues to be the story they tell shareholders. We're very worried that that's not accurate." 



As evidence, Dohrs cites Chevron Deputy Comptroller Rex Mitchell, who said in a court affidavit if plaintiffs seized company assets to pay damages, it “would disrupt Chevron's supply chain and operations” and “damage Chevron's business reputation as a reliable supplier.” 



Mitchell's statement was revealed last year in a report by Simon Billenness and Sandford Lewis.

As a result, Trillium Asset Management, a $1 billion asset management firm, asked the U.S. Securities and Exchange Commission in May to review "whether Chevron has appropriately disclosed to shareholders the scope and magnitude of financial and operational risk from a recent adverse legal judgment in Ecuador." 


Now Chevron faces fines and lawsuits from a November spill off the coast of Brazil that could run to additional billions of dollars and criminal prosecutions.

When is Chevron going to come clean environmentally? And when is it going to come clean with its shareholders?

Thursday, January 5, 2012

Gibson Dunn: Fewer Options But Bigger Bills for Chevron in Ecuador Case

Paul Paz y Mino of Amazon Watch writes an excellent blog on Huffington Post, called How Lawyer Arrogance Imperils Chevron Shareholders in Ecuador.

He details the “monumental mistakes” made in the Ecuador contamination case by Gibson Dunn, the Chevron law firm that pushed out the company’s other law firm Jones Day from being the lead on the lawsuit about two years ago. Paz y Mino argues the firm’s mistakes – specifically those of lead partner Randy Mastro – have “increasingly imperiled” Chevron shareholders.

This week the Ecuador appellate court upheld the trial court’s $18 billion judgment. If Chevron does not post a bond in its final appeal, the Ecuadorians can begin to enforce by asking courts in other countries to seize Chevron’s assets. (Chevron has none in Ecuador and has refused to pay the judgment.)

Gibson Dunn is quickly running out of legal options, but it is a master at invoicing for the 60 or so lawyers working on the case. In all, Chevron is paying for close to 500 lawyers and legal assistants fighting five indigenous groups in some of the poorest regions of the world.

We ask the same question one of the U.S. 2nd Circuit Court of Appeals judges asked before throwing out Gibson Dunn’s efforts to block enforcement: Do Chevron’s shareholders understand how much money is being spent on this lawsuit?