Chevron's CEO Wirth Criticized for Trying to Hide $9.5b Ecuador Pollution Liability From Financial Markets as Company's Defense Suffers Setbacks
Chevron's Israel Energy Deal Hit Over Wirth's Failure to Comply With Court Rulings in Ecuador; Accuracy of Press Release Questioned
New York – Chevron CEO Michael Wirth and General Counsel R. Hewitt Pate are being accused by lawyers of hiding material risk from the company’s $9.5 billion Ecuador pollution liability as the company’s environmental problems in South America threaten to act as a drag on its business opportunities around the globe, including an attempted purchase of gas assets in Israel.
The Ecuador pollution judgment won by Amazon Indigenous peoples in 2011 has been confirmed by six appellate courts in Ecuador and Canada -- including the Supreme Courts of both countries. Chevron’s refusal to comply with the judgment despite exploding cancer rates in the affected communities now threaten to scuttle a planned $13 billion stock purchase of Noble Energy which includes Israeli gas assets, according to reporting from that country.
Israeli environmentalists have tied approval of the Chevron deal to the company's compliance with the Ecuador judgment and the release of human rights lawyer Steven Donziger from home detention in Manhattan, where he is being prosecuted by the oil giant's private law firm in a case that has prompted furious criticism from judges and human rights advocates. Donziger led the legal team that won the judgment.
“Chevron is an unreliable, immoral, and litigious company that should not be allowed into the Israeli energy market,” wrote Yosef Abramowitz, an Israeli Green Globe winner, and Maya Jacobs, the CEO of the Zalul Environmental Association.
“As demonstrated in Ecuador, Chevron has acted with brazen disrespect of the local rule of law in a judgment awarded to 30,000 Indigenous,” said the letter, addressed to Dr. Yuval Steinitz, the country's Minister of Energy. "While refusing to address massive environmental contamination in a once pristine environment, Chevron has viciously attacked the plaintiffs’ human rights defender, Steven Donziger.
“Past behavior is a key determining factor in assessing how [Chevron] would relate to Israeli law, waters and courts -- especially if there is an oil or gas leak in our waters. Why should we trust Chevron to honor Israeli laws, Israeli court judgments and Israeli environmental regulations and respect Israeli lives?”
(See summary of the evidence against Chevron as found by courts in Ecuador.)
Wirth and Pate, who have approved major campaign donations by Chevron to Donald Trump while refusing to address the company’s“Amazon Chernobyl” disaster in Ecuador, also issued a misleading press release last week celebrating a July legal decision in Argentina that on narrow technical grounds dismissed an effort to enforce the Ecuador judgment, said Patricio Salazar, a lawyer for the Ecuadorian communities and a member of the U.S.-Ecuador Chamber of Commerce.
The press release falsely claimed the Ecuador case had ended, said Salazar. “The reality is Chevron is a serial polluter that faces billions of dollars of risk from the Ecuador judgment around the world, in addition to business disruption like we are seeing in Israel,” he said. “This financial and business risk will last for decades unless Chevron complies with court orders that it remediate the humanitarian disaster it caused to Indigenous peoples in Ecuador.”
Salazar said lawyers for the Ecuadorians have developed detailed plans to try seize Chevron assets in countries around the world given that the high courts in Canada, Ecuador, and the United States have validated the decision for enforcement purposes. Wirth earlier had threatened the indigenous groups with a “lifetime of litigation” unless they dropped their claims, a statement which Salazar cited as another example of the company's lack of respect for the rule of law.
In their misleading press release on Argentina, Wirth and Pate called the Ecuador judgment “fraudulent” even though the courts in Argentina and other countries cited by the company never ruled on the merits and six different appellate courts in Ecuador and Canada have validated the Ecuador trial court decision.
Chevron’s $9.5 billion Ecuador liability already has been affirmed by 17 appellate judges in the country where the company insisted the trial be held and where it had promised to comply with all laws and court decisions. There is no statute of limitations on judgment enforcement actions, which means the oil giant will face perpetual risk unless it complies with the rule of law, said Salazar.
Ecuador’s courts ruled against Chevron based on 220,000 pages of record evidence and 64,000 chemical sampling results, almost all of which point to Chevron’s massive pollution. Canada’s Supreme Court validated the judgment for enforcement purposes. Chevron is also charged with committing fraud in Ecuador by using junk science and trying to entrap an Ecuador judge in a fake bribery scandal spearheaded by Diego Borja, a Chevron employee in Ecuador who was later moved by the company to a luxury home in the United States. (See here.)
Chevron’s business problems in Ecuador and Israel come at a particularly tough time for Wirth.
Not only has the company’s stock price cratered due to the pandemic and collapse of oil prices, but Wirth was personally attacked by his own shareholders in a recent annual meeting over his mishandling of the Ecuador litigation. Backing the shareholders was Nobel laureate Jody Williams (video), actor Alec Baldwin (see video), and rock legend Roger Waters (video). All demanded the company comply with the Ecuador judgment and cease its attacks on Donziger, the U.S. attorney who helped win the case.
In the meantime, 29 Nobel laureates have demanded the company pay the Ecuador judgment and stop attacking Donziger, who has been in home detention in Manhattan for 12 months without trial after he appealed an unprecedented court order from Kaplan that he turn over his computer and cell phone to Chevron. Donziger -- who graduated from Harvard Law School with President Obama -- is being “prosecuted” by Chevron law firm Seward & Kissel after the charges were rejected by the regular prosecutor’s office. (See here.)
“Chevron’s detention of Steven Donziger and its continuing violations of the rights of Indigenous peoples is a leading example of why the climate crisis continues to accelerate and threatens the entire planet,” said Paul Paz y Mino, associate director of Amazon Watch, a U.S.-based non-profit. “No government in the world should do business with Chevron until it pays the judgment owed to the people it poisoned in Ecuador.”
“Putting out a flagrantly misleading press release shows just how desperate Wirth is to defend his failed Ecuador defense strategy to try to prop up the company’s falling stock price,” said Paz.
In the meantime, evidence has emerged that Chevron appears to have violated multiple criminal statutes in the U.S. by paying an admittedly corrupt Ecuadorian witness $2 million to present false testimony to try to frame Donziger in a fraud. Evidence has emerged that Chevron and its lawyers at the firm of Gibson Dunn fabricated evidence to attack Donziger, as letters from human rights groups to the U.S. Department of Justice explain. (Gibson Dunn has a history of marketing a “fraud” playbook to corporations in trouble and has been caught fabricating evidence in multiple cases -- see here.)
Courts in Argentina previously had seized billions of dollars of Chevron assets in the country to pay for the Amazon clean-up. But that decision was put on hold in 2013 after the company made a major investment in a natural gas field (here) as part of a corrupt move to manipulate the country’s court system, said Salazar. Several Argentinian journalists believe bribes were paid, according to sources the country who have contacted leaders of the Ecuadorian communities.
Ecuador courts relied on 105 technical evidentiary reports to confirm that Chevron deliberately dumped billions of gallons of cancer-causing oil waste onto Indigenous ancestral lands when it operated in Ecuador from 1964 to 1992. Studies show the dumping decimated Indigenous groups and caused an epidemic of cancer that has killed or threatens to kill thousands of people.
Chevron has suffered a series of in-court and out-of-court setbacks in recent years. Its attacks on Donziger clearly have backfired, with the lawyer winning support from the Nobel laureates, 475 lawyers and bar associations, and national bar councils in France, Italy, and Spain. Donziger recently was nominated for a human rights award given by the International Lawyer’s Association.
In court, Chevron appears to have no legal path to block enforcement of the Ecuador judgment against its assets around the world.
Chevron also claimed in the press release that an unnamed court in the “Hague” ruled in favor of the company, but that decision was actually part of a secret investor arbitration process held in hotel conference rooms where the Ecuadorians did not participate. That decision is illegitimate on its terms and has no legal effect on the Ecuador judgment, said Salazar.
Marty Garbus, who has practiced law for six decades in New York, called on Chevron to correct its misleading statements.
“Once again, Chevron’s CEO appears to be directing his company’s legal team to provide materially false information about the company’s Ecuador liability to shareholders and the financial markets, with the apparent aim of propping up the company’s falling stock price,” said Garbus.