Amazon Defense Coalition
11 June 2012 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
Washington, DC – A U.S. Congresswoman has asked the Securities and Exchange Commission to determine whether Chevron is violating securities laws related to a court finding that it deliberately dumped billions of gallons of toxic waste into the Amazon rainforest.
In a letter to SEC Chairperson Mary Schapiro, Rep. Jan Schakowsky (D-IL) asked the Commission to review a new report by securities lawyer Graham Erion that provides a "deeply disturbing analysis of alleged violations by Chevron…of multiple securities laws intended to protect the investing public."
The SEC is charged with protecting the integrity of the financial markets in the U.S. It has the power to subpoena documents and witnesses, refer wrongdoing to prosecutors, and to bring civil charges.
Erion's report, released in April of this year and available here found the oil giant is presenting materially misleading information to shareholders about an $18 billion liability that it faces in the Ecuador case. Erion concluded that Chevron "appears to be actively trying to hide its Ecuador risk from its investors and the markets."
An Ecuador appellate court in January affirmed the judgment against Chevron for systematically discharging 16 billion gallons of toxic waste into Amazon waterways from 1964 to 1992 and abandoning more than 900 unlined waste pits in a 1,500 square mile area. Experts believe the disaster, which decimated indigenous groups and has haunted the region for almost 50 years, could be the largest oil-related environmental problem on the planet.
Schakowsky's letter is the second to the SEC in recent weeks seeking an investigation of Chevron over the Ecuador liability. The first, which can be seen here, was signed by the Unitarian Universalist Association, Zevin Asset Management, and Newground Social Investment.
Schakowsky wrote that the nation's "truth in investment" laws are critical to investors and shareholders and that the SEC should therefore review "whether Chevron has followed its legal obligations in informing current and potential investors about the risks to the company inherent in the Ecuador litigation and, in particular, about the impact of the $18.1 billion judgment rendered against Chevron early in 2011 (since upheld on appeal)."
Schakowsky serves on the Energy & Commerce Committee, the Permanent Committee on Intelligence, and is the Chief Deputy Whip for the Democrats.
Chevron has faced a multitude of problems recently from shareholders and elected leaders over the Ecuador liability.
Three weeks ago, 40 of Chevron's institutional shareholders with over $500 billion in assets under management asked the company to settle the Ecuador lawsuit. At Chevron's annual meeting in May, fully 39% of Chevron stock (including several large Chevron shareholders) chastised the company's mishandling of the Ecuador liability and voted in favor of a resolution to strip CEO John Watson of his title as Chairman of the Board. See here.
After visiting the disaster zone in 2008, Rep. Jim McGovern (D-MA) wrote a letter to then President-elect Obama in which he called contamination in Chevron's former operating concession a "terrible humanitarian and environmental crisis" that made him "angry" and "ashamed" as an American. He also blasted Chevron for failing to address its Ecuador contamination in an impassioned speech on the House floor.
Other well-known individuals to criticize Chevron for its Ecuador contamination include Trudie Styler, wife of Sting and founder of the Rainforest Foundation; Robert F. Kennedy, Jr., who in the early 1990s and penned a powerful essay about the damage; Bianca Jagger, a human rights activist who visited the area in 2003; Atossa Soltani, the executive director of Amazon Watch, a leading non-government organization advocating for the rights of indigenous groups in the rainforest; and Thomas DiNapoli, the New York Comptroller who manages more than $100 billion in stock for the state's retirees.