Caution Issued to Chevron Shareholders: New Ad Campaign Warns Chevron that it Must Pay Billions for Texaco's Dumping in Amazon Rainforest

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    Washington, D.C. - A group representing more than 30,000 Ecuadoran Indians suing Texaco launched a television ad campaign today in three major cities (San Francisco, New York, and Washington) to create awareness among Chevron shareholders of a new chapter in Texaco's problems with race discrimination and of the huge potential liability those shareholders will assume if Chevron's purchase of Texaco is approved.

    In addition to the ad campaign, the Ecuadorians have filed a complaint with the SEC alleging that Chevron has not adequately divulged the potential liability of the lawsuit to its shareholders. The amount of oil dumped in Ecuador by Texaco over the two decades of its operations there (1970 to 1990) is one and one-half times the amount of the Exxon Valdez disaster, which produced a $5 billion judgment against Exxon. Texaco concedes that it dumped the oil, but claims the practice was not harmful.

    Under the title, "Attention Chevron Shareholders," the ad charges that Texaco "dumped millions of gallons of oil waste full of toxins and carcinogens, destroying the lives of thousands of people of color." The ad warns Chevron shareholders that they "will pay to clean up Texaco's mess."

    The ads draw attention to Texaco's history of racial discrimination. Two years ago, Texaco settled the largest ever employment racial discrimination suit, agreeing to pay $176 million to approximately 1,400 employees. In the Amazon region of Ecuador - populated mostly by Indians – the ads assert that Texaco has continued this pattern of discrimination by failing to adhere to basic health and environmental standards that it upholds in the United States and the rest of the world.

    To demonstrate this point, the ads feature an image of a Texaco oilman driving up to a well-manicured suburban house in the United States and spraying black oil over the lawn while the parents and children watch in horror. "This is what Texaco did to thousands of people of color in the rainforest in Ecuador," the ad asserts.

    At the height of its operations, Texaco dumped some 4.3 million gallons per day of toxic oil waste water into the Amazon. Texaco also left behind more than 300 open waste pits contaminated with heavy metals and other carcinogenic hydrocarbon compounds.

    Lawyers for the plaintiffs estimate that Texaco saved $3 to $4 per barrel - or a total of $6 billion of additional profits over the company's 20 years of operations in Ecuador - by dumping the waste water rather than pumping it back beneath the earth's surface, as was the industry standard at the time.

    Damages caused by Texaco's practices are estimated to exceed $1 billion. If the case goes to trial, punitive damages against Texaco could increase that amount significantly.

    "This was an environmental crime of epic proportion that has created a black plague of cancer through the Amazon region where Texaco drilled," said Luis Yanza, the president of the Frente para la Defensa de la Amazonia, which represents the affected people. "Our hope is that Chevron and the SEC will pressure Texaco to clean up this mess before letting the merger go through."

    The 30,000 Ecuadorans are suing Texaco in U.S. Federal District Court in New York (the company is headquartered in New York and no longer has operations in Ecuador). The plaintiffs cite a wave of deadly cancers, skin lesions, birth defects, and other abnormalities among the area's indigenous peoples, and massive die-offs of plants, crops, and animals from air and groundwater pollution as well as poisonous "black rain."

    The case has been pending in the United States since November 1993. An initial ruling allowing the case to proceed was reversed when the judge who issued it died and Judge Jed Rakoff took over and dismissed the case. In October 1998, the U.S. Court of Appeals reversed Judge Rakoff's dismissal. Judge Rakoff recently dismissed the case again, and that latest dismissal is being appealed.

    Allegations of bias were leveled by the Ecuadorans against Judge Rakoff last year after the judge attended an all-expense paid environmental law seminar, funded, in part, by Texaco, at a resort in Montana where a former Texaco CEO was a featured speaker. "While Texaco continues to try to hide from its liability, our people are getting sick and dying," said Yanza. "Chevron shareholders need to know this."

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