Chevron CEO and Board Confronted for Lying To Shareholders, SEC and Public at Annual Shareholder Meeting
Watson unable to respond to fraud charges and clear ethics violations
- May 25, 2016
- FOR IMMEDIATE RELEASE
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Paul Paz y Miño, 510-281-9020 x302 or firstname.lastname@example.org
San Ramon, CA – After six years as Chevron CEO and Chair of the Board John Watson has been unable to resolve major shareholder unrest over his leadership. In one of its strongest rebukes to date, thirty percent of Chevron shareholders representing $57.6 billion of assets under management sent a clear message to Watson and his team on the Ecuador issue: your leadership has failed. Sponsors of the resolution contended that "Chevron's management has materially mishandled legal matters brought against the company by communities in Ecuador – in ways that increased liabilities for the matter, currently amounting to $9.5 billion. Moreover, proponents are concerned about the adequacy of the company's disclosure of those risks to shareholders."
Again, the issue of the company's ongoing contamination in Ecuador and efforts by indigenous and farmer communities to enforce their $9.5 billion judgment against Chevron dominated the meeting.
Humberto Piaguaje, Secoya indigenous leaders whose community has been gravely affected by Chevron's pollution in the Amazon, addressed the CEO directly: "Mr. Watson, stop your racism against us. We are neither manipulated nor will we ever be manipulated by lawyers or anyone else, as you continually repeat. We are intelligent enough to think and act for ourselves and to seek justice." To which Watson inexplicably responded, "We are sorry that the indigenous people of Ecuador have been manipulated by lawyers and by their own government."
Watson had absolutely no response to repeated questions about the company's $11 billion liability in Canada and specific criticism of his mismanagement of the issue. Instead he turned to a Chevron-produced video released months ago alleging that the company "cleaned up its part" in Ecuador. Unfortunately for Watson, Amazon Watch immediately responded to the video pointing out to the room, "If that were true, why did your own technicians find toxic contamination in 2005 on those very sites you claimed in this video to have cleaned up years prior? In 2014, your own lawyers authenticated leaked videos showing toxic contamination remains at the Texaco-only operated sites. They even interviewed local residents who were still getting sick at the time from the contamination you accepted responsibility for as recently as a few months ago in your new video."
While Chevron's propaganda video blames Petroecuador for its own legacy of contamination in Ecuador, after the Ecuadorian government Chevron is by far the largest processor of Petroecuador's oil. Not only is Chevron refusing to clean up its legacy of contamination; it's deepening it by refining nearly 70,000 barrels a day of oil from the Amazon.
At the next mention of the words "Amazon contamination," Watson become visibly flustered and frustrated, shutting off the microphone and disallowing further questions on the Ecuador issue. Tellingly, he said, "I've been trying to answer questions on Ecuador for seven years and I am not going to take any more questions."
For Watson, who took over the reins as CEO from David O'Reilly, Chevron's liability on the Ecuador issue is squarely on his shoulders. Watson was the principal architect of the merger between Texaco and Chevron in 2000, despite being fully aware of Texaco's toxic legacy in Ecuador and ongoing litigation. Texaco operated in Ecuador's Amazon between 1964 and 1990, using obsolete technology and dumping billions of gallons of toxic wastewater into the Amazon ecosystem and poisoning local communities. It left behind over a thousand toxic waste pits that continue to contaminate the region. The Ecuadorians won a historic verdict against the company and are seeking to enforce their judgment in several countries where Chevron has significant assets.
Chevron is staring down an $11 billion debt collection action in Canada for failure to pay the 2011 Ecuadorian verdict. The affected communities in Ecuador recently won a resounding victory before Canada's Supreme Court in their effort to force Watson to comply with the judgment by seizing the company's assets. In Canada, Chevron has an estimated $15 billion worth of oil fields, bank accounts, and refineries – or more than enough to pay the entirety of the Ecuador judgment. No mention was made of this liability in Watson's report to shareholders, nor has the company reported it to the SEC in accordance with the law.
Adding to Chevron's problems in Canada is growing solidarity between the country's First Nations and indigenous communities affected in Ecuador. Chevron has significant upstream development projects and pipelines planned in Canada, some of which are on or slated for First Nations' territory.
"As First Nations peoples of Canada, we stand with the affected indigenous communities in Ecuador who continue their decades-long quest for justice from Chevron for its deliberate contamination of the Amazon rainforest," said Michelle Thrush, Cree from Treaty 7 in Alberta Canada, noted Canadian actor and winner of a Gemini Award (Canada's highest honor for Screen Actors).
Adding to Watson's blunders as CEO, Chevron admits it is still paying disgraced Ecuadorian ex-judge Alberto Guerra, the key witness in Chevron's retaliatory RICO case who recently admitted under oath that he lied about the alleged bribe from the Ecuadorians. As part an ill-advised parallel case Chevron filed with the Hague, Chevron was forced to concede that a witness who already lacked any credibility for admitting to lying and accepting numerous bribes in his past, Guerra "exaggerated to Chevron in an attempt to improve his negotiating position," as Chevron itself indicated it its own legal filings. Yet Watson failed to disclose these important legal developments to his shareholders.
Watson also faced harsh criticisms for wasting millions more shareholder funds in an outright attempt to buy local elections in Richmond, CA last year. The company's candidates received a thumping from grassroots Richmond Progressive Alliance candidates and the entire debacle has made Chevron a prime target for the movement to get corporate funding out of politics. Richmond continues its $24 million suit against Chevron for the 2012 refinery fire which sent 15,000 people to the hospital.
In fact, Chevron faced six additional shareholder resolutions related to climate change in addition to appointing a board member with environmental expertise. Chevron leadership remains completely divorced from reality in insisting that by 2040 a full 60 percent of the world's energy needs will be met by oil and gas. Despite the clear climate science about the dangers of methane emissions, Watson said that the company would address climate issues primarily via the "miracle of hydraulic fracturing." Watson claimed Chevron "does not disagree" with the Paris Climate Accord but accepts none of the policies intended to implement it.
"It's astonishing that John Watson still has a job. Under his leadership, or lack thereof, Chevron's liabilities have snowballed, its brand has taken a beating, and any lingering idea that Chevron had any dedication to environmental or social responsibility has been eviscerated," said Paul Paz y Miño. "Poisoning local communities where you operate, belittling them afterwards, and in some cases suing them, is no way to conduct business.