Refuses to Let Board Members Answer Own Questions As Conflict of Interest Becomes Evident
Amazon Defense Coalition
27 May 2009 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
San Ramon, CA (May 27, 2009) – Several large investors blasted Chevron CEO David O'Reilly today at the company's annual meeting for mishandling a potential $27 billion liability in Ecuador, while O'Reilly left open the possibility he would visit Ecuador to inspect the damage personally after being invited by a well-known local community leader.
In a display of control, O'Reilly refused to let Chevron's Board members answer their own questions about whether they had independently vetted O'Reilly's handling of the Ecuador matter, which has been the subject of withering criticism this week from industry analysts, shareholders and journalists.
Atossa Soltani, the executive director of the environmental advocacy group Amazon Watch, asked Chevron's Board members to explain what, if anything, they had done to ascertain the truth about Ecuador independent of information given them from O'Reilly and his management team. There have been charges that Chevron's legal department is misleading shareholders about the Ecuador suit in its public filings, prompting a probe by New York State Attorney General Andrew Cuomo that could impose both civil and criminal liability on the company.
O'Reilly refused to let any Board member answer Soltani's question --underscoring a criticism made by her this week in an open letter to Chevron shareholders that the company's Board is "passive" and failing to discharge its fiduciary duties.
"It is clear O'Reilly rules Chevron's Board with an iron fist to inoculate him and other top Chevron officials from any independent critique of their mishandling of the Ecuador matter," Soltani said after the meeting. "O'Reilly has a conflict of interest being CEO and Chairman of the Board, and that was clearly evident today."
"There is no evidence that Chevron's Board has done anything meaningful to challenge Chevron management as it goes off the rails and continues to mislead shareholders about its responsibility for a humanitarian crisis of epic proportions," she added.
Pat Doherty, a representative of several New York City pension funds that control roughly $280 million of Chevron stock, told O'Reilly that Chevron's human rights problems in Ecuador, Nigeria, and Burma "threaten shareholder value" and that it is clear the company has no "exit strategy" as regards Ecuador. He also differed with O'Reilly on his attempt to blame the company's legal woes in Ecuador on the country's President, Rafael Correa.
Chevron has launched a multi-million dollar lobbying campaign in Washington "punish" Ecuador's government for letting its own citizens bring suit against Chevron.
"Chevron's current strategy of attempting to demonize the democratically elected government of Ecuador makes no sense to us and ultimately will prove to be self-defeating," Doherty warned.
Shelly Alpern, a representative of a private fund in Boston called Trillium Asset Management, said in reference to Ecuador: "We believe that this is a sad state of affairs that the [Chevron] Board is so lacking in independence and accountability."
Luis Yanza, who is leading the effort by 80 indigenous and farmer communities to hold Chevron accountable in court, emphasized how there is no evidence any top Chevron manager, Board Member, or corporate officer had visited Ecuador to see firsthand the enormous damage done by Texaco when it operated a large oil filed in the country from 1964 to 1990. Yanza invited O'Reilly to visit the area at his invitation.
O'Reilly at first ignored the invitation, but a few minutes later another shareholder insisted he answer Yanza. O'Reilly then said he would consider it and come with an answer within six months.
Also speaking was Ermegildo Criollo, a leader of the Cofan indigenous group in Ecuador that is facing extinction if the oil damage is not cleaned up. Criollo explained how the toxic waste discharged by Texaco had decimated the traditional lifestyle of the Cofan, who now could not use the rainforest and have no access to clean water.
The lawsuit charges that Texaco (now Chevron) dumped billions of gallons of toxic waste into Amazon waterways and abandoned over 900 unlined waste pits carved out of the jungle floor, leading to a spike in cancer rates the decimation of the traditional lifestyles of indigenous groups.