Recent Decisions On the $19b Ecuador Judgment Do Little to Decrease Chevron’s Enormous Risk

For indigenous and farmer communities, the fight continues

Supporters of the heroic two-decade effort to hold Chevron accountable for its indisputable toxic dumping and destruction of the Amazon rainforest in Ecuador should not despair over recent court rulings that have slowed the seizing of the oil giant’s assets in Argentina and Canada.

The fight is far from over and overall trend lines still favor the affected rainforest communities, who have suffered from Chevron’s toxic dumping for decades. (For a summary of the evidence, see here; for a video about the case see here or this 60 Minutes segment.)

In Toronto, in an unusual decision without any precedent in Canadian law, a court found that because Chevron operates only through subsidiaries then the case must be stayed.  That decision is now on appeal.  The court decision this week in Argentina to lift a freeze on Chevron’s assets will have little impact on a parallel judgment recognition action which is proceeding.  That action will allow the rainforest communities to seize up to $3.5 billion of assets if successful.

Chevron has roughly $15 billion in assets in Canada and another $4 billion in Brazil that are being targeted in court actions based on the valid Ecuador judgment.  That’s real risk no matter how Chevron’s management team – including its conflicted CEO, John Watson -- try to spin it.

Under oath in court, where company officials are obligated to tell the truth, a Chevron comptroller recently claimed such asset seizure actions will cause the oil giant “irreparable harm” and disrupt its global business operations.  Chevron also operates via its subsidiaries in dozens of countries around the world that could be targeted.

There is also a deeper reality to the reasoning behind the recent Canada and Argentina decisions that should disturb concerned citizens everywhere.  In effect, based on legal technicalities, these courts are flirting with a total grant of impunity to human rights violators like Chevron.

Let us explain.

In Canada, a trial judge ruled that Chevron is a separate company from its local subsidiary even though that subsidiary is 100% owned by Chevron.  Yet Chevron itself operates only through its many subsidiaries around the world.  The company does not even own its own building housing its headquarters near San Francisco.

It was also Chevron officials (operating under the Texaco brand) who made the decision to deliberately dump billions of gallons of toxic waste in Ecuador, decimating indigenous groups and farmer communities.  Chevron itself stripped almost all of its assets from Ecuador in recent years in anticipation of losing the case.  It then refused to pay the judgment.

The upshot is this:  when Chevron wants to increase its profits by dumping toxic waste, it can deliver a high level of fake value to its shareholders by externalizing the costs of pollution to impoverished local residents.  But when it comes time to pay the hefty tab for that dumping, it plays the corporate shell game and hides behind its subsidiaries.

That's Chevron's conception of impunity. The question is whether courts will let the oil giant get away with it.

The cultural mindset that it produces in a large oil company leads to excessive risk-taking and arrogance.  And that explains why Chevron always seems to be dealing with a massive number of environmental problems around the world, including in the U.S. where it is currently under criminal investigation for a recent refinery fire in Richmond, CA.

Courts in most countries would not allow Chevron to get away with this brazen mockery of the rule of the law.  Many of Chevron’s own shareholders are also disturbed enough to have sternly rebuked Watson for mishandling the fallout from the Ecuador judgment.

Knowing it cannot win the Ecuador battle on the merits, Chevron also cleverly tries to exercise improper political influence over governments and courts.  In Argentina, after the freeze order became a viable possibility, Chevron suddenly decided to “invest” $1.5 billion in a large gas field with the local state-owned oil company, YPF.

Chevron also took out full-page advertisements in Argentine newspapers claiming impending national doom if the Ecuador judgment were to be enforced.  Its local representative publicly announced Chevron would only follow through on its investment if the freeze order was lifted.  Suddenly, after some furious behind the scenes lobbying, Argentina’s Attorney General recommended the freeze order be lifted.  Voila!

We think Canada’s appellate court will see Chevron’s rope-a-dope for what it is: a sneaky attempt to play the corporate shell game to escape justice.  Ultimately, we feel Argentina’s courts will see it the same way.

Chevron should not take too much comfort from these latest rulings.

The evidence against Chevron for committing a horrific level of environmental contamination in Ecuador is strong.  It has been documented not only by the company’s internal files and a 220,000-page trial record, but by independent journalists the world over who have visited the disaster zone.

Only in an unjust world can a corporation get away with murder by hiding behind legal fictions created by bean counters.  As this battle rages on, everybody concerned about accountability for corporate human rights abusers should take note and demand that judges stand up for the fundamental principle that polluter pays.

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Forget WallyWorld, at Chevron They Live in WatsonWorld

Reposted from Eye on the Amazon, May 31, 2013 

There are many ways to describe the experience of participating in a Chevron Annual Shareholder Meeting. One is often left wondering if those inside are as completely divorced from reality as their words suggest, or if they are just putting on a show for a room full of cardboard cut outs of corporate yes-men. This past Wednesday was no exception. While hundreds protested outside the 2013 Chevron Annual Shareholder Meeting holding the largest "pink slip" you've even seen reading, "Watson: You're Fired!" Chevron CEO John Watson once again demonstrated that he is largely divorced from reality when it comes to the company's $19B liability in Ecuador and its other environmental problems, both local and global. Watson would hate to admit it, but once again the meeting was dominated by his critics and the largest ever shareholder support for Ecuador-related resolutions.

The Chevron Way: We Know Better

Time and again when faced with shareholder resolutions critical of Chevron or the compassionate voices of community members living with the harsh reality of exposure to the company's toxic operations, Watson claimed it was his critics who were "unfamiliar with the facts". Servio Curipoma, who has lived his entire life in the Ecuadorian Amazon surrounded by Chevron waste pits, who lost his parents to cancer caused by Chevron contamination, does not need Watson to tell him what it's "really like" in Ecuador. Yet Watson dismissed his testimony and offered Servio nothing but his "pity" for being "used by US trial lawyers."

Likewise, Dr. Henry Clark of Richmond, CA, whose 15,000 neighbors were sent to the hospital last August after Chevron's refinery blew up into a fire, or Laura Livoti, representing JINN and the Nigerians who suffer from never-ending flaring and a rig fire that burned for six weeks in 2012, do not need Watson to tell THEM their reality. They are living it. Watson told Ms. Livoti that she should consult with some of his executives, who have a greater understanding of what goes on in Nigeria. The grim reality is that due in great part to environmental conditions caused by Chevron's operations, the Nigerians in the area only have a 41-year life expectancy. With that dire statistic, it's conceivable that Chevron execs COULD be there on the ground for longer.

To the community of Richmond, long suffering from Chevron's toxic refinery and its poor safety record (now under criminal investigation, Watson's message was that his refinery actually has a better safety record than others in California. Funny, not a single other refinery in California BLEW UP last year!

Amazon Watch founder and Executive Director Atossa Soltani stood to remind Watson, the board and the other shareholders that she was there BEFORE Chevron bought Texaco with over 800 pages of evidence that Texaco was an enormous liability for what it had done in Ecuador. Watson's "bubble" appeared to weaken as he became visibly disturbed when Ms. Soltani reminded everyone that he himself was head of mergers and acquisitions at the time. What was then estimated to be a minor nuisance by lawyers and investment bankers anxious to close the merger deal for their exorbitant fees has since ballooned into a $19 billion judgment that rises every year with interest. Chevron is already spending an estimated $400 million per year just in legal fees, dwarfing the $40 million it claims it spent on its sham clean-up in Ecuador. Unwilling to even reply to Ms. Soltani, Watson turned on a completely unrelated video clip and then had her removed from the room by four security guards when she attempted to respond. The Watson World bubble remained intact, but only to Watson and the true believers (read: personally conflicted managers) he appears surrounded by on his executive team.

Facts vs Fiction: On WatsonWorld up is down

Real World: Texaco (now Chevron) builds and operates a system designed to pollute and then dumps 16 billion gallons of toxic foundation waters into the rainforest over decades causing a wave of cancers and other deadly illnesses.

In WatsonWorld: the local water shows ZERO signs of toxicity and is totally safe to drink, even though Chevron's own lawyers luxuriated with bottled water imported from Quito during the eight-year trial in the jungle. Furthermore, anyone who complains about it and pushes for a clean-up is a "global conspirator" out to extort billions from good global citizen Chevron.

Real World: Socially responsible investment firms collaborate with human rights and environmental organizations to challenge a company's false assertions and work with shareholders with billions of dollars of assets in Chevron to create reform from within.

In WatsonWorld: every single person involved should be forced to turn over every private communication they've ever made about Chevron because if they are critical they must therefore be part of a massive global conspiracy to defraud the company.

Real World: An offshore rig burns for six weeks off the coast of Nigeria, killing workers, destroying fishing, and sickening communities.

In WatsonWorld: That's called, "no damage to the community."

Real World: Chevron spills over 100,000 gallons of crude oil off the coast of Brazil, resulting in hundreds of millions in fines and billions of dollars of potential liability.

In WatsonWorld: There's no need for greater oversight of Chevron's offshore work because Chevron is "committed to safe operations."

Back to Earth

Outside, hundreds of protesters representing dozens of environmental and human rights organizations, and communities who live in the harsh REAL world of Chevron's operations, reminded Watson and Chevron that no amount of misdirection and factual distortion is going to make them go away. They continue to call for his firing and for true accountability and they pledge to stand up to Chevron until justice is achieved.

Perhaps sweetest of all is the fact that Watson will be forced to testify soon under oath about the Ecuador disaster in a case brought by Chevron itself that is rapidly threatening to bite the company on its own backside. Without his protective WatsonWorld bubble, he's likely to find that in the real world there are penalties for lying about Chevron's actions and misdeeds.

– Paul Paz y Miño

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Federal Judge Asked To Stay Case Over $19 Billion Ecuador Judgment

A New York federal judge long accused of bias against Ecuadorian rainforest residents over a $19B pollution case is continuing to allow Chevron to “systematically harass” two victims of its toxic pollution and their long-time New York lawyer, according to new motions filed in recent days.

The lawyer, Steven R. Donziger, asked Judge Lewis A. Kaplan to grant a three-month stay to prevent the case from degenerating into a “mockery” where unrepresented defendants are fighting hundreds of Chevron lawyers and are barred by the court from mounting a basic defense using evidence of Chevron’s pollution and corrupt acts in Ecuador. The motion is available here.

“This is an extraordinary situation where the evidence suggests that a federal judge is allowing a major oil company to crush its critics by denying them a defense and overwhelming them with abusive legal tactics to drive up their costs, making it virtually impossible for them to obtain counsel,” said Donziger.

“Judge Kaplan is now allowing Chevron to pursue litigation over litigation over litigation,” said Donziger. “It’s unprecedented and offensive.”

In the motion seeking the stay, Donziger outlined for Judge Kaplan how he is now litigating alone (pro se) against at least 114 lawyers from Chevron’s lead outside firm in a case with millions of pages of discovery documents, a privilege log that is 15,000 pages long, and close to 1,200 docket entries. Chevron also disclosed that it has well over 100 private investigators working on the case, some of who have conducted secret surveillance of the plaintiffs and their lawyers to intimidate them, said Donziger.

Despite the request for a stay, Judge Kaplan is allowing 14 depositions in three weeks, with the first starting tomorrow and the last – of Chevron’s CEO, John Watson – scheduled for June 27. Kaplan also is allowing Chevron to depose Donziger for another two days on top of the 16 days he already testified in 2010 and 2011.

“This compressed schedule is a per se violation of my due process rights,” said Donziger. “There is simply not enough time to adequately prepare to take depositions, to defend myself in my own deposition, review millions of pages of discovery, and also search for substitute counsel,” he said.

Chevron previously identified roughly 2,000 legal personnel and 60 law firms who have worked on the case. An affidavit from a former FBI agent describing some of the surveillance of Donziger can be found here. Kaplan is also allowing Chevron to hide the identities of three Ecuadorian witnesses against the Ecuadorians and Donziger, a blatant violation of their due process rights that a prior lawyer likened to tactics used by courts in the Spanish Inquisition.

In his papers, Donziger said that he has never tried a federal case and that he needed time to procure a new lawyer in the face of a “concerted effort” by Chevron to interfere with his right to counsel.

He disclosed evidence that Chevron has now filed civil suits against four different law firms and one funder who have supported the Ecuadorians, falsely claiming they are part of a “conspiracy” to extort money. Donziger also took aim at Randy Mastro, Chevron’s lead lawyer from Gibson Dunn, for making false public statements to the media about the case to “scare off” supporters. (For background on how Mastro and Gibson Dunn have committed ethical violations behalf of Chevron, see here.)

Donziger’s former counsel, famed San Francisco-based trial lawyer John Keker, withdrew from the case two weeks ago because Donziger could not pay his fees. On his way out, Keker took the unusual step of publicly criticizing Judge Kaplan for letting the case degenerate into a “Dickensian farce” due to Chevron’s abusive litigation tactics.

“Through scorched earth litigation, executed by its army of hundreds of lawyers, Chevron is using its limitless resources to crush defendants and win this case though might rather than merit,” Keker said in his motion to withdraw. “Encouraged by this court’s implacable hostility toward Donziger, Chevron will file any motion, however meritless, in the hope that the Court will use it to hurt Donziger.”

Keker also said his firm “would be proud” to represent Donziger at trial if it could get the resources. “We are confident that were we to do so, we would prevail,” Keker said.

Donziger also called on Judge Kaplan to allow him and the Ecuadorians sufficient latitude to develop a defense via questioning of key Chevron witnesses, including CEO Watson, Deputy General Counsel Edward Scott, and Rhonda Zyglocki, who used to head Chevron’s lobbying and governmental affairs division. All are scheduled to be deposed this month.

Judge Kaplan also appointed – over the objection of Donziger – his former law partner, Max Gitter, as a Special Master to make rulings during depositions. Gitter, who has a history of bias against the Ecuadorians and Donziger, works at a large corporate law firm in New York City and bills at his standard hourly rates, which include $630 per hour for an associate to assist him.

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Ecuadorian Tells Chevron It's Time For Change In Leadership

Amazon Watch's latest official blog gives us a heads-up that one of the Ecuadorians suing Chevron will be at the oil giant's next shareholder meeting in San Ramon, California, Chevron's headquarters, on May 29th, urging CEO and Chairman of the Board John Watson to take a permanent hike.  The blog is below and here. Enjoy!

Servio Returns to Hand Watson a Pink Slip

May 20, 2013

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Two years ago Ecuadorian farmer Servio Curipoma left his rainforest home and traveled thousands of miles to bring his story to the United States. This month he returns to demand – on behalf of all the Amazonian communities that have been destroyed by Chevron – that John Watson pay a personal price for his region's suffering. Servio is calling on Watson to resign from his dirty post as CEO of Chevron.

You may remember how Servio had us all grasping our seats just two years ago with his deeply personal story of how Chevron devastated his lands and drinking water, causing a public health crisis that continues to this day. Servio lost both his parents (his mother's heartbreaking story is told here) and a sister to cancer, which doctors have attributed to drinking water contaminated by toxic crude waste. Since that time, Servio has become an active voice for his community over the past 16 years, demanding that Chevron take responsibility for the contamination that has so severely affected his family.

In 2011, we were honored to accompany Servio to the halls of power in Washington DC and New York to meet with decision makers in the government, media and environmental and human rights groups. He then took it right to Chevron's doorstep in San Ramon, California to confront John Watson and Chevron face to face. At that time Chevron had just lost the $19 billion legal battle for environmental and human rights crimes in Ecuador. Watson, who had been CEO for just over a year, was dismissive of Servio and his plea for help for the communities of Ecuador. Watson, an architect of the Texaco-Chevron merger, knew full well what had happened in the rainforest and did everything but take responsibility for the disaster, blaming Servio's suffering on Ecuadorian oil companies. Of course Watson knows that to be untrue since Texaco was the sole operator and has been found guilty of deliberately creating the environmental disaster.

Servio will return to Chevron headquarters for their Annual General Meeting on May 29th with a pink slip in hand for Watson and clear a demand of the Board of Directors. In the last two years, rather than face the reality and consequences of the judgment against them, John Watson has led Chevron on a "scorched earth" legal campaign against anyone and everyone who has ever spoken up about the company's atrocious crimes in Ecuador. He has labeled Servio and his community members as global conspirators and accused THEM of attempting to extort money from Chevron. Ludicrous and completely unacceptable! He has even attacked his own shareholders and tagged human rights and environmental organizations (including Amazon Watch) as co-conspirators. His company now faces a criminal investigation in California, billions of dollars in damages in Brazil, has its assets frozen in Argentina and Watson himself will be deposed in a matter of weeks related to the matter.

John Watson clearly represents the failed approach and reprehensible strategy of Chevron. Human rights and environmental organizations have now called for his resignation. Thousands of individuals citing these serious issues and others have added their voices to Servio's in a growing chorus that demands that John Watson must go! Please join them if you haven't already.

When will Chevron finally FESS UP and CLEAN UP its toxic mess in Ecuador and help the communities who still suffer to this very day?

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Judge Lewis A. Kaplan Allowing Chevron to Use Secret Witnesses Against Ecuadorians and Donziger

Decision Compared to “Spanish Inquisition” and “Star Chamber”

We already have reported how New York federal Judge Lewis A. Kaplan has been under furious criticism of late from prominent lawyers, including famed San Francisco-based attorney John Keker, for trying to mount a “show trial” in New York to help Chevron evade its $19 billion liability in Ecuador for dumping billions of gallons of toxic waste into the Amazon rainforest.

Never one to mince words, Keker publicly accused Chevron of trying to drown Judge Kaplan’s court in “chicken shit” discovery motions and said, “I’ve never seen a judge treat an oil company… like a widow or orphan.  Everything they [Chevron] want, they get.”  Read the extraordinary article from the San Francisco legal newspaper, where Keker recounts what he calls Kaplan’s “implacable hostility” toward his client Steven Donziger, a longtime lawyer for the rainforest communities in Ecuador and the main target of a vicious Chevron retaliation campaign.

Lately, there is evidence that Judge Kaplan is going even more off the rails in what appears to be an increasingly  personal crusade to destroy the case of the Ecuadorians.

Judge Kaplan is now routinely entertaining Chevron motions to deny the Ecuadorians and Donziger the right to know the identities of witnesses the oil giant plans to use against them.  See this motion Chevron filed today.   Kaplan already has granted Chevron’s request with respect to two “secret” witnesses; Chevron’s latest motion seeks the same status for a third.
 
A well-known Texas law firm is now joining Keker in calling out Judge Kaplan for acts that indigenous leaders in Ecuador have characterized as xenophobic, arrogant, and racist.  See this article for a summary of how Judge Kaplan has insulted the Ecuadorians from the bench.

Craig Smyser, of Smyser Kaplan & Veselka in Houston filed a powerful motion (available here) in response to Chevron’s extraordinary request to hide its witnesses from the accused.  (Smyser represents two Ecuadorians who are part of the class that won the judgment, Hugo Camacho and Javier Piaguaje.)

Smyser writes:

“Chevron files motions to conceal identities of accusers that would be right at home in the Spanish Inquisition or the Star Chamber, confident that the Court will grant the motions every time…  The motion is offensive to basic principles of U.S. law … that permit an accused to confront his accuser.  Only totalitarian and repressive regimes permit, especially in a civil context such as this, an accuser to hide his or her name from the accused.”

Chevron is trying to claim the secret affiant might be subject to reprisals in Ecuador, but Smyser pointed out correctly that Chevron has presented not a shred of evidence to support its claim.  In fact, nobody from Chevron involved in the 19-year case – including hundreds of people from Chevron’s 2,000-person legal team and 60 law firms – has ever reported being harmed by anybody in Ecuador, a nation that enjoys warm diplomatic relations with the U.S. and is a mecca for U.S. tourists visiting Quito (a UNESCO world heritage site) and the Galapagos.

Most of Quito is far safer than parts of New York City, where Judge Kaplan lives.  That’s especially true when you work for Chevron and get to travel abroad with beefy security dudes at your side.  Just last week Chevron officials, some from the U.S., held a large press event in Quito to discuss the company’s view of the case.  All apparently got out alive.

In fact, Chevron conducted a hotly-contested eight-year trial in its preferred forum of Ecuador -- and continues to do battle on appeal there -- without being able to cite a single incident of harm needed to justify such an extraordinary request.  Dozens of Chevron lawyers and advisors, many from the U.S., participated in the trial.

The irony is telling. Those who really have been, and continue to be, under threat are the Ecuadorians and Donziger. They have been subject to death threats, espionage, and defamatory attacks by the oil giant and its “investigators” at Kroll and generally labor under a cloud of hostility created by Chevron’s goon squad. Donziger himself was a victim of a Chevron espionage campaign in Manhattan.

Chevron’s sudden use of “secret” witnesses is an old trick used by lawyers at Gibson Dunn & Crutcher to create the optical illusion that the human rights abuser in this case (Chevron) is actually under “threat” from its victims, the indigenous communities who have seen their cultures decimated by the company’s pollution. (See here for a summary of the evidence used to find Chevron liable, and here for a video about the case.)

The lawyers on Gibson Dunn’s dream team, led by the ethically-challenged Randy Mastro and Andrea Neumann (both have been sanctioned for their work on behalf of Chevron – see here and here), pulled the same “secret witness” stunt in another case in Florida.  That was before the firm quickly withdrew its motion for the court to hear secret testimony when it was clear the maneuver was going to backfire.  (Read this rather shocking and extensive legal brief for details of how Gibson Dunn paid secret witnesses to present false testimony in court on behalf of the Dole company.)

Smyser’s criticism of Judge Kaplan should not be taken lightly.  He and two partners founded their boutique litigation firm as refugees from the prominent Houston corporate firms of Vinson & Elkins and Baker Botts.  Smyser has been recognized repeatedly as one of the top litigators in Texas and has a roster of prominent clients.

Two weeks ago, Keker – a decorated former Marine who knows a thing or two about courage -- asserted in a brief that Judge Kaplan has let the New York case “degenerate into a Dickensian farce” where “Chevron is using its limitless resources to crush defendants and win this case through might rather than merit.”

Keker has moved to withdraw from the case because Donziger cannot pay his fees.  Donziger recently filed a notice of appearance and is prepared to defend himself alone against Chevron’s army (114 lawyers at Gibson Dunn work on the case), although he has very little trial experience.

Chevron is suing Donziger for roughly $60 billion; Donziger lives in a two-bedroom apartment with his family.

It is also obvious that Judge Kaplan does not want the truth about Chevron to come out in his courtroom.  He already has ruled that Donziger cannot use as evidence the extensive scientific evidence of Chevron’s contamination in Ecuador that the court there relied when finding the company liable.  This essentially neuters Donziger’s ability to defend himself from Chevron’s preposterous claim that he was pursuing “sham litigation” in Ecuador.

Judge Kaplan also has signaled he will deny Donziger the right to pursue counterclaims against Chevron that provide a chilling picture of the company’s crimes, fraud, espionage, and bribery in Ecuador. Donziger’s counterclaims against Chevron are not what Judge Kaplan wants in his hoped-for script.

Chevron’s public relations flaks have been pretty open about the company’s strategy to evade justice by “demonizing” Donziger, as shown in a 2009 email from Chris Gidez, the company’s longtime press representative from Hill & Knowlton.  (We will have more on that soon.)  Copied on the Gidez email are two employees of CRC public relations, the right-wing extremist entity in Northern Virginia responsible for the Swift Boat campaign against John Kerry when he was running for President.

Donziger recently released this statement and this press release explaining why he believes he cannot get a fair trial in Judge Kaplan’s courtroom.

The Second Circuit Court of Appeals this week set May 28 as the date it will consider a petition by the Ecuadorians and Donziger that Judge Kaplan be taken off the case. The appellate court already unanimously reversed Judge Kaplan in 2012 when he tried to impose an illegal and unprecedented injunction purporting to block the Ecuadorians from enforcing their winning judgment in other countries – an injunction that brought scorn on the U.S. federal judiciary from academics and lawyers worldwide.

 We will keep you posted. 

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$19B Ecuador Liability Puts Chevron CEO Watson On Hot Seat Before Annual Meeting

Amazon Watch has issued this press release (see below) about Chevron's upcoming shareholder's meeting and the heat CEO and Chairman of the Board John Watson will take from activist shareholders about the Ecuador liability.

OAKLAND, Calif., May 14 /CSRwire/ - Facing growing shareholder unrest over asset seizure actions and forced to testify about his alleged misconduct in the $19 billon Ecuador case, Chevron CEO John Watson again will be on the hot seat at the company’s annual meeting in late May where rainforest indigenous villagers and investors plan to confront him over his company’s toxic dumping in the Amazon.

In a stunning rebuke to Watson, U.S. Magistrate Judge James C. Francis last week ordered that he and another top Chevron legal official sit for depositions to be taken by lawyers for the villagers and one of their representatives, New York-based attorney Steven Donziger. (See the judicial order hereand a Reuters article here.) Watson likely will have to answer questions about his own role in the case, including payments from Chevron officials for witness testimony, among other hot-button topics that the villagers say prove Chevron committed crimes in Ecuador.

The depositions had been furiously opposed by Chevron’s lawyers at Gibson Dunn & Crutcher, who are facing their own ethical challenges in defending the oil giant’s toxic dumping in Ecuador. (See this court ruling and this blog.)

At the Chevron annual meeting, scheduled for May 29 at company headquarters near San Francisco, Watson also will try to beat back two shareholder resolutions that directly challenge his mishandling of the Ecuador liability. Currently, Chevron faces enforcement actions targeting billions of company assets in Argentina, Canada and Brazil (see here for Canada, here for Brazil, and here for Argentina) and has suffered a series of devastating courtroom setbacks, including one in the U.S. Supreme Court, which prevented the oil giant from using U.S. courts to block international enforcement efforts.

The Financial Times reported just this week that Chevron was forced to “rethink” a planned $1.5 billion investment in a huge gas field in Argentina because of the enforcement action stemming from the Ecuador judgment. Earlier, a Chevron official has testified that the enforcement actions could cause “irreparable harm” to the company’s global operations.

The enforcement actions stem from an Ecuador court finding that Chevron dumped billions of gallons of toxic waste into the Amazon rainforest, decimating indigenous groups and causing an outbreak of cancer and other oil-related diseases. A summary of the judgment, based on a 220,000 page trial record and more than 64,000 chemical sampling results, can be found here.

A video about Chevron’s human rights abuses in Ecuador can be viewed here while a 60 Minutes report on the legal battle – which documents how Chevron installed pipes to deliberately run oil sludge into streams – can be viewed here.

Watson also is under fire for subpoenaing the files of several shareholder critics and alleging they are in a “conspiracy” with the Ecuadorian villagers who won the judgment against the company.New York Times columnist Gretchen Morgenson called the Chevron counterattack against its own investors “remarkable” in the annals of shareholder activism. (See Morgenson's article here.)

Last year, a resolution critical of Chevron management for the Ecuador liability received a whopping 38% of the vote from shareholders representing a combined $73 billion worth of Chevron stock. In addition, 40 institutional investors representing $580 billion in assets sent Watson a letter asking him to settle the case.

This year, the two shareholder resolutions that cite the Ecuador liability as a driving factor call for Chevron to appoint a director with environmental expertise and to lower the threshold needed to hold a special meeting.

Watson also faces these additional problems related to the Ecuador liability:

**Conflict of interest. Shareholders and activists say Watson should step down as Chevron CEO because of his failure to properly vet the Ecuador liability when the company purchased Texaco for $31 billion in 2001. Watson was a key driver behind the controversial transaction even though Amazon Watch specifically warned the company about the size of the liability.

**Deceit of shareholders. Watson also has been accused of lying to shareholders and the markets about key facts in the case, according to a recent report prepared by a Canadian securities lawyer. Several shareholders and a U.S. Congresswoman have asked the SEC to investigate Chevron for violating its disclosure obligations under U.S. law.

**Use of Kroll to spy on Chevron adversaries. The order from Judge Francis also requires that an official from the U.S. investigative services company Kroll, which essentially functions as a private surveillance agency for Chevron on the Ecuador case, sit for a deposition. Kroll operative San Anson was caught trying to bribe journalists to spy on the plaintiffs, while evidence surfaced the company has been involved in payments to judges in Ecuador and espionage against Donziger and his family, who live in Manhattan.

**Cash for witness testimony. Under Watson’s leadership, Chevron used Miami lawyer Andres Rivero to offer a suitcase full of cash to a former Ecuador judge in exchange for favorable testimony. Chevron later admitted it paid the judge more than ten times his annual salary and moved him to the U.S., where it is helping him obtain political asylum even though he is an admitted criminal.

**The Diego Borja bribery scandal. Under Watson’s tenure, Chevron admitted that it paid former employee Diego Borja more than $2 million to try to sabotage the Ecuador trial by entrapping a sitting judge in a fake bribery scandal. The move backfired, but the company still moved Borja to the U.S., where it pays him a substantial salary – the plaintiffs call it “hush money” – with no indication he is working.

As for enforcement actions, Watson faces a series of growing headaches.

In early November, a court in Argentina ordered that the company's assets be frozen while independent analysts are beginning to take notice that Chevron faces significant litigation problems around the world related to the Ecuador judgment. Chevron has $2 billion worth of assets in Argentina, and approximately $80 million of in cash is already in a court escrow account pending resolution of the enforcement action.

While Chevron recently won a temporary stay of the enforcement action in Canada on narrow technical grounds, the court found that the Ecuadorians established jurisdiction over Chevron subsidiaries that control roughly $15 billion worth of assets. The stay is now on appeal, with a decision expected in a few months.

In Brazil, where Chevron has an estimated $4 billion in assets, the Ecuador enforcement action is going through a streamlined process in the country’s highest court, with a ruling expected sometime in 2014. Chevron also faces a lawsuit from Brazilian authorities over its spill off the coast of Rio de Janeiro in 2011.

On a more personal level, the indigenous communities in Ecuador plan to confront Watson directly at the annual meeting. In past years, Watson has turned off the microphones of the Ecuadorians to silence them.

“Chevron needs to put its pants on, start acting like a grown up and accept responsibility for its mess in Ecuador,” Watson was told last year by Luz Trinidad Andrea Cusangua, an Ecuadorian who traveled from the rainforest to speak at the 2012 annual meeting.

Two years ago, Chevron’s annual meeting in Houston erupted in chaos when five shareholder critics were arrested as they confronted the company about its human rights abuses in Ecuador. At the time, Watson was accused of "losing his head" over the Ecuador case by Rainforest Action Network’s, Maria Ramos. Last year, he prevented two villagers from showing a video of the company’s damage to their ancestral lands. Chevron security officials also blocked them from passing out copies of the video to shareholders.

“Since becoming CEO Watson has led Chevron further down a dismal path – one where its international reputation is that of a corporate criminal on the run from justice,” said Paul Paz y Miño, a director at Amazon Watch, which has been monitoring the Ecuador liability for a decade.

“At any other company with an independent Board of Directors that adhered to proper ethical standards, Watson probably would have been fired by now,” added Paz y Miño.

For more background on the case, see this update prepared by Fenton Communications.

For more information, please contact:

Matt Krack

Twitter: @ChevronPit

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