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Chevron Lobbies White House to Pressure Ecuador to Stop $12 Billion Amazon Pollution Lawsuit

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Chevron is being accused of promoting geopolitical blackmail in its efforts to stave off a lawsuit accusing it of contaminating the Ecuadorian rain forest. Nearly 30,000 Amazon residents are seeking $12 billion from Chevron for dumping billions of gallons of toxic oil waste. According to Newsweek, the oil giant is urging the Bush administration to yank special trade preferences for Ecuador if the country’s government doesn’t force the Amazon residents to drop the case. If the White House agrees, it would be the second major lobbying victory for Chevron in just a matter of weeks. Last month, the Senate dropped an effort to penalize Chevron for maintaining extensive ties to the military junta in Burma. [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We turn now to Chevron, the oil giant based in California that’s being accused of promoting geopolitical blackmail in its effort to stave off a lawsuit accusing it of contaminating the Ecuadorian Amazon rain forest. Nearly 30,000 Amazon residents are seeking $12 billion from Chevron for dumping billions of gallons of toxic oil waste. Activists have described the disaster as an Amazon Chernobyl.

Earlier this year, a court-appointed expert recommended Chevron be required to pay up to $16 billion to clean up the rain forest. Now, Newsweek magazine has revealed new details of how Chevron is lobbying the Bush administration to pressure Ecuador. Chevron is urging the Bush administration to yank special trade preferences for Ecuador if the country’s government doesn’t force the Amazon residents to drop the case.

Chevron’s lobbying team includes former Senate Majority Leader Trent Lott, former Democratic Senator John Breaux, and Wayne Berman, a top fundraiser for John McCain. The Ecuadorian government has staunchly backed the case. In an interview for Democracy Now! earlier this year, Ecuadorian President Rafael Correa told journalist Greg Palast “Ecuador is no longer for sale.”

    PRESIDENT RAFAEL CORREA: Well, with these lawsuits, well, they don’t go to interrupt the oil production in the third world. They go to push these big international companies in order to be a lot more careful when they want to extract our oil, because they did and they do in the third world things that they don’t do in the first world. So it’s a double standard.

    Ecuador is no longer on sale, you know? Now, Ecuador has a sovereign and nationalist government. That is the huge different — difference, sorry.

AMY GOODMAN: That’s the Ecuadorian President Rafael Correa.

The Bush administration has confirmed it’s considering Chevron’s request to pressure Ecuador to drop the case. If the White House agrees, it would be the second major lobbying victory for Chevron in just a matter of weeks. Last month, the Senate dropped an effort to penalize Chevron for maintaining extensive ties with the military junta in Burma. The Senate approved new trade sanctions against Burma but excluded a provision that would have eliminated a large Chevron tax break. Burmese activists had supported the provision to pressure Chevron to end its ties with the junta. The measure had been named after the late Tom Lantos, a Burma advocate and the only US lawmaker to have survived the Nazi Holocaust.

Well, to talk about these developments, I’m joined by three guests. I’m going to start with Michael Isikoff , investigative reporter with Newsweek magazine, who broke the story on Chevron’s recent lobbying of the Bush administration to pressure Ecuador.

Welcome to Democracy Now!

Michael, can you lay out what exactly is happening around this lawsuit against Chevron?

MICHAEL ISIKOFF: Well, as you pointed out, Amy, there was the finding by the court-appointed expert a few months ago, which held that Chevron could be liable for up to $16 billion in this lawsuit. And at that point, Chevron stepped up its lobbying campaign in Washington, essentially, to take the case — get the case out of Ecuador and make its pitch in Washington. The specific proposal that it has publicly filed with the US Trade Commission is that Ecuador be denied benefits under the Andean trade preference program, which expires at the end of the year, unless it take action to essentially squash the legal case.

It has hired a formidable lobbying team, as we reported — John Breaux, Trent Lott, Wayne Berman and a host of others — who have been pressing the case, both within the Bush administration and in the White House and Special Trade office, the State Department — a Chevron executive recently met with Deputy Secretary of State John Negroponte on this — and in Congress.

Now, I should point out that the plaintiffs’ lawyers here and Ecuador do have a potential key ally. This first came up a couple of years ago, the idea that Chevron might go to Washington. The chief plaintiffs’ lawyer, Steve Donziger, did go to an old Harvard Law School friend of his, the junior senator from Illinois, Barack Obama, laid out what Chevron was trying to do, and Barack Obama, together with Patrick Leahy, did write a letter to then-US trade rep Rob Portman, urging him not to take any action that would take this away from the Ecuadorian court system. So Obama is on record as being against what Chevron wants to do, and Obama’s office reaffirmed his stand on that as recently as two weeks ago, when I wrote the story.

AMY GOODMAN: You wrote that after Donziger took this story to Barack Obama, the junior senator from Illinois. Obama consulted with the senior senator from Vermont, Patrick Leahy.

MICHAEL ISIKOFF: Correct. Leahy has a long history of working on Latin American human rights issues. He’s on the — one of the subcommittees that deals with that. And so, Obama, after hearing Steve Donziger lay out the case of what Chevron was trying to do, his office then consulted with Leahy’s office, and they agreed to write this letter that was sent, actually, in 2006 on this. But it pretty much staked out Obama’s position on where he is on this. So that has given, as I reported, you know, some special urgency to Chevron’s lobbying campaign. I mean, I think they want this action taken against Ecuador this year, some fearing, perhaps rightly, that the prospect of an Obama presidency, they’ll get a much less favorable hearing in Washington than they might get now in the Bush administration.

AMY GOODMAN: I want to talk about the effect of Chevron, before Chevron — it’s ChevronTexaco now, it was Texaco — in the Amazon and wanted to bring into the discussion Atossa Soltani, who is executive director of Amazon Watch, a group that’s worked closely with the Amazon residents suing Chevron.

Welcome to Democracy Now!

I wanted to ask you about just the origins of this suit and what the Amazon residents, these tens of thousands of residents, are claiming.

ATOSSA SOLTANI: Well, this suit was initially brought by Texaco in 1993, but — by residents of the Amazon disaster in 1993. The court case was initially filed in New York courts. And after ten years of Chevron arguing and presenting motion after motion asking that the court case be moved to Ecuador, the case was finally sent to Ecuador in 2002.

And so, this case has to do with the fact that for — from 1964 until 1990, Texaco operated in an area of the Amazon Basin that was the size of Rhode Island, and they dug over 900 open waste oil pits, drilled over 350 wells, and dumped over 18 billion gallons of toxic waste into the rivers and streams of this area that was formerly a pristine rain forest. Now, this is a practice that was in breach of industry standards and even illegal here in the United States at the time.

So, in breach of their own, you know, industry standards, Chevron — back then, Texaco — made a decision to save what would amount to $1 to $3 a barrel by not installing a reinjection system that would have prevented all this pollution. They also did not line the pits, so that every time — you know, so that the oil waste and the drilling muds and all of that seeped into the groundwater and contaminated the rivers and streams upon which the local people depend on. I mean, there is no plumbing in this part of the world. People live off the rivers and streams. They fish and bathe and use water from the surface — from sources in the rivers.

And so, in this case, you have a situation where 30,000 people are poisoning themselves on a daily basis living in this area. So you have high rates of cancer, birth defects. The court-appointed expert, actually, in his reports attributed 428 deaths to the Texaco disaster, and that’s just, we think, you know, totally underestimating the real number, because most of the people in this area don’t have access to medical facilities or never get tested and pretty much find out too late that they’re dying.

So this is a serious case. Texaco, now Chevron, argued for ten years that this case should be sent in Ecuador, and now that their own samples and the court case is going poorly for them, they’re now saying that the case — the trial is not fair.

AMY GOODMAN: And the role of Ecuador in supporting this lawsuit of the tens of thousands of Amazonian residents, what power does it have in this lawsuit, Atossa?

ATOSSA SOLTANI: This — I didn’t hear your question. Can you please repeat?

AMY GOODMAN: The power that the Ecuadorian government has in this lawsuit?

ATOSSA SOLTANI: Well, first of all, for — again, for over the last five years, Chevron has tried with previous administrations to do everything it can in its power to get the Ecuadorian government to dismiss this case — the Ecuadorian court systems to dismiss this case without luck. Now, this is — you know, what this case has the power to do is really — Chevron, for the first time, is standing trial in an area where it operated without — you know, up to now [with] impunity. It is now being asked to stand trial and face justice. And we have to let the judicial process have its course. You know, this is Chevron’s attempt to interfere with the due process of law, a pillar of democracy. So the fact that, you know, Texaco argued this case deserves to be heard in Ecuador, that Ecuador was a fair and transparent court system, and then had to go and basically present itself in the jurisdiction of the Ecuadorian courts, is where it is now, and now, you know, the US court did say that that was the condition upon sending the case to Ecuador, that basically Chevron would submit itself to the jurisdiction of Ecuadorian courts. Now that things are going badly for Chevron, I think it’s now trying to squash this case.

And, you know, it’s outrageous that, in the Isikoff article, Chevron’s spokesperson was quoted as saying, “We can’t let little countries screw around with big companies like this.” I think this is ultimately what this is about: Chevron is used to bullying its way and, you know, playing power politics. And this is not working out for them in Ecuador.

For the rest of the world, what this case means, I think this is really a signal to the oil industry that the days of operating in areas [with] impunity are over and that, really, there is a way for communities in the developing world to bring corporations to justice.

AMY GOODMAN: If Chevron were to get what it wants, Michael Isikoff, an ending to the special trade preferences for Ecuador, what would that mean for this South American country?

MICHAEL ISIKOFF: Well, it would have a devastating impact on large segments of the Ecuadorian economy that depend on exports to the United States — broccoli, flowers. There are a number of economic sectors that are heavily dependent on these Andean trade preferences, which have been, you know, part of the law for the last several years. So, the Ecuadorian ambassador to the United States told me this would have an enormous disruption on his country’s economy. Ecuador is a relatively impoverished country to begin with, so to lose something like these trade benefits would be — you know, would have a real impact.

AMY GOODMAN: So this is a race to the finish here, Chevron pushing very hard in Washington, when you have the prospect of an Obama presidency.

MICHAEL ISIKOFF: Right. I should also point out that the Andean trade preferences law expires at the end of the year anyway, so it does need a renewal. I think what the Chevron people want is an amendment attached to the trade benefits bill this year, which they can get in Congress, if the Bush administration does not act, that would have the effect of doing what they want, that would either remove Ecuador or require Ecuador to be removed if it doesn’t take the sort of action on the legal case that Chevron is seeking.

AMY GOODMAN: Well, Michael Isikoff, I want to thank you for being with us from the streets of Washington, D.C. I want to thank Atossa Soltani for joining us in Los Angeles.

And I want to turn now to the second part of Chevron’s case. It is a story I mentioned in the lede about last month’s decision, the Senate dropping an effort to penalize Chevron for maintaining extensive ties to the military junta in Burma, the Senate approving new trade sanctions against Burma but excluding a provision that would have eliminated a large Chevron tax break. Burmese activists have supported the provision to pressure Chevron to end its ties to the junta. The measure had been named after the late Tom Lantos, the California congressman who was a Burma advocate, survived the Holocaust, the only member of the Congress to have survived the Holocaust.

We’re joined now by Marco Simons, legal director of Earth Rights International. The significance of this defeat for pro-democracy activists in Burma and the major role that the California Senator Dianne Feinstein played in the defeat?

MARCO SIMONS: Well, it’s hard to say exactly what role Senator Feinstein played, although we do know that she has been close to Chevron in the past. But I don’t want to overstate the importance of this provision in the context of the overall Burma sanctions measure, and I don’t want to overstate Chevron’s power on Capitol Hill.

ATOSSA SOLTANI: It’s really low.

MARCO SIMONS: Sorry, can you hear me now?

AMY GOODMAN: We hear you just fine.

MARCO SIMONS: OK. I don’t want to overstate Chevron’s power on Capitol Hill, because, frankly, this provision was a fairly minor provision in the overall context of the sanctions. This provision would have targeted about $30 million in tax write-offs that Chevron gets to avoid double taxation between the Burmese military junta and the US government. But the much bigger picture of Chevron’s project in Burma, which is a massive natural gas project, is that this project provides about a billion dollars annually in hard currency to the Burmese junta, which is a massive proportion of that regime’s income. So, in the grand scheme of things, this is a relatively small part of the sanctions. And what may be much more significant to the regime itself is not Chevron’s tax preferences, but financial sanctions that may — that are part of this bill that may help to cut off the flow of cash to the regime.

If this provision had really been targeting something that would have gone directly to the junta’s bottom line, that would have really effected the cash flowing into the regime, I don’t know that Chevron would have had the power to stop it, because in recent years, while Chevron certainly does have power on Capitol Hill, they have not actually had the power to get Congress, for example, to dismiss other human rights lawsuits against Chevron. Chevron lobbied very forcefully to cause amendments to the Alien Tort Statute, a human rights law under which Chevron is being sued for human rights abuses in Nigeria, for example, and that lobbying effort failed. And they failed to get the US State Department to intervene in the case, to say that this case would interfere with foreign policy with Nigeria. So —

AMY GOODMAN: People may be surprised to know that Chevron is the only US multinational corporation, oil company, grandfathered in, that is allowed to operate in Burma right now. Can you explain that and how significant Chevron’s support for the Yadana pipeline is for the Burmese regime’s continuation?

MARCO SIMONS: Sure. The Yadana pipeline itself is immensely important for the Burmese regime. It probably provides somewhere between 20 and 40 percent of the hard currency income to the regime, which is vital for it to purchase arms and other materiel that it needs to get on international markets. And the Yadana pipeline came online about ten years ago, and before that point, the regime was facing a tremendous shortage of hard currency, was almost in a financial meltdown, and then, suddenly, hundreds of millions of dollars annually, up to a billion dollars now, were injected into the regime’s coffers, and it’s been keeping it afloat for the last ten years.

Chevron’s participation in that is somewhat less significant, because the project goes on with or without Chevron. So, regardless of whether Chevron stays in or pulls out, this billion dollars annually is still flowing to the military regime. That money doesn’t come from Chevron. The money comes from Thailand, because Thailand is buying the gas. So, until you stop Thailand from paying for the gas, or until you cause banks to stop processing those payments, the money is still going to be flowing to the regime’s coffers. Chevron’s participation is offensive, in that it’s definitely profiting off of human rights abuses against the Burmese people, but whether Chevron stays or goes doesn’t necessarily make a huge difference to the junta itself.

AMY GOODMAN: Well, I’ll leave it there. Marco Simons, thanks so much for being with us, legal director of Earth Rights International, speaking to us from Washington, D.C.

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