[lbo-talk] Chevron's big squeeze on Ecuador

Michael Pollak mpollak at panix.com
Tue Jul 29 13:35:37 PDT 2008


[Fun story. Two special bits: (1) the quote from the Chevron Lobbyist: "We Can't Let Little Countries Screw Around With Big Companies;" and (2) Obama's prospective role -- finally some news with him on the correct side.]

http://www.newsweek.com/id/149090

or

http://www.commondreams.org/archive/2008/07/29/10677/

July 29, 2008 Newsweek Magazine

Chevron Hires Lobbyists To Squeeze Ecuador in Toxic-Dumping Case

by Michael Isikoff

WASHINGTON/QUITO, Ecuador - Few legal battles have been more exotic

than the lawsuit tried over the past five years in a steamy jungle

courtroom in Ecuador's Amazon rain forest. Brought by a group of U.S.

trial lawyers on behalf of thousands of indigenous Indian peasants, the

suit accuses Chevron of responsibility for the dumping (allegedly

conducted by Texaco, which Chevron bought in 2001) of billions of

gallons of toxic oil wastes into the region's rivers and streams.

Activists describe the disaster as an Amazon Chernobyl. The

plaintiffs-some suffering from cancer and physical deformities-have

showed up in court in native garb, with painted faces and half naked.

Chevron vigorously contests the charges and has denounced the entire

proceeding as a "shakedown."

But this spring, events for Chevron took an ominous turn when a

court-appointed expert recommended Chevron be required to pay between

$8 billion and $16 billion to clean up the rain forest. Although it was

not the final verdict, the figures sent shock waves through Chevron's

corporate boardroom in San Ramon, Calif., and forced the company for

the first time to disclose the issue to its shareholders. It has also

now spawned an unusually high-powered battle in Washington between an

army of Chevron lobbyists and a group of savvy plaintiff lawyers, one

of whom has tapped a potent old schoolmate-Barack Obama.

Chevron is pushing the Bush administration to take the extraordinary

step of yanking special trade preferences for Ecuador if the country's

leftist government doesn't quash the case. A spokesman for U.S. Trade

Representative Susan Schwab confirmed that her office is considering

the request. Attorney Steven Donziger, who is coordinating the D.C.

opposition to Chevron, says the firm is "trying to get the country to

cry uncle." He adds: "It's the crudest form of power politics."

Chevron's powerhouse team includes former Senate majority leader Trent

Lott, former Democratic senator John Breaux and Wayne Berman, a top

fund-raiser for John McCain-all with access to Washington's top

decision makers. (A senior Chevron exec has met with Deputy Secretary

of State John Negroponte on the matter.) Chevron argues that it has

been victimized by a "corrupt" Ecuadoran court system while the

plaintiffs received active support from Ecuador's leftist president,

Rafael Correa-an ally of Venezuela's Hugo Chávez. The company says a

loss could set a dangerous precedent for other U.S. multinationals.

"The ultimate issue here is Ecuador has mistreated a U.S. company,"

said one Chevron lobbyist who asked not to be identified talking about

the firm's arguments to U.S. officials. "We can't let little countries

screw around with big companies like this-companies that have made big

investments around the world."

But Chevron's foes are not without their own resources. Just recently,

Donziger and other trial lawyers in the case retained their own

high-profile D.C. superlobbyist, Ben Barnes, a major Democratic

fund-raiser. And they have tapped a capital connection that may pay off

even more. Roughly two years ago, when Donziger first got wind that

Chevron might take its case to Washington, he went to see Obama. The

two were basketball buddies at Harvard Law School. In several meetings

in Obama's office, Donziger showed his old friend graphic photos of

toxic oil pits and runoffs. He also argued strongly that Chevron was

trying to subvert the "rule of law" by doing an end run on an Ecuadoran

legal case. Obama was "offended by that," said Donziger. Obama vetted

the issue with Vermont Sen. Patrick Leahy (who has long worked on Latin

American human-rights issues), and in February 2006 the two wrote a

letter to the then U.S. Trade Representative Rob Portman urging the

administration to permit the Ecuadoran peasants to have "their day in

court."

The Obama letter, written before the senator had even announced his run

for president, is now the wild card in the Ecuador-Chevron dispute.

Donziger said he has had no further discussions with Obama on the issue

(although he has co-hosted a New York fund-raiser and, together with

his wife, raised between $40,000 and $50,000 for Obama's campaign). An

Obama spokesman last week said the senator "stands by his position"

that the case is a "matter for the Ecuadoran judicial system." So now

the prospect of an Obama presidency has given additional urgency to

Chevron's plea for help in Washington. Waiting until next year could

leave the oil giant at the mercy of a judge in the Amazon jungle.

With Stephan Küffner in Quito

© 2008 Newsweek



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