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Chevron Attacks DiNapoli's Support for Lago Agrio Plaintiffs
New York Law Journal
Chevron Corp. yesterday filed an ethics complaint charging that New York state Comptroller Thomas DiNapoli wrongly accepted campaign funds from plaintiffs' lawyers who obtained a $19 billion environmental judgment against the oil giant in Ecuador.
Leaving no stone unturned as it continues its worldwide campaign to defeat what it says is an unjust environmental award procured by fraud, Chevron has accused DiNapoli of accepting some $60,000 in contributions and claim he was given other political benefits by the plaintiffs' bar while at the same time overseeing the New York State Common Retirement Fund, which owns more than $800 million in Chevron common stock.
"In sum, DiNapoli and his office have aided a fraud apparently in return for money," according to the complaint in Chevron v. DiNapoli, delivered yesterday to the Joint Commission on Public Ethics by David Grandeau of David Grandeau and Associates in Niskayuna, N.Y.
Grandeau, the former director of the now-defunct State Lobbying Commission, was hired by Chevron to investigate DiNapoli.
DiNapoli issued a statement saying the allegations were without merit.
"This is a baseless attempt by big oil to intimidate me and it won't work," he said.
The complaint alleges that, beginning in 2003, lawyers and consultants led by New York attorney Steven Donziger, who represents plaintiffs in the suit against Chevron, "have orchestrated a scheme to extort a multibillion payoff from Chevron in connection with fraudulent litigation against Chevron in Lago Agrio, Ecuador."
As part of Donziger's campaign to get public figures to pressure Chevron on behalf of his clients, the complaint states, Donziger and his allies enlisted DiNapoli through campaign contributions and have since "received the unwavering support of DiNapoli and his office."
"DiNapoli has made numerous public statements denouncing Chevron, and has opened the doors of his office to the perpetrators of the Lago Agrio fraud," the complaint states.
The complaint cites several sections of New York Public Officers Law, including §74(2), which bars officials from having "any interest, financial or otherwise…which is in substantial conflict with the proper discharge of [their] duties in the public interest."
The genesis of the dispute is the environmental contamination of the Amazon rainforest from the mid-1960s to 1992 by a subsidiary of Texaco.
Well before Texaco was bought by Chevron, the Texaco subsidiary, TexPet, settled claims and launched a remediation campaign that Donziger and the Lago Agrio plaintiffs later charged was woefully inadequate when they sued Chevron.
In a statement provided yesterday by Chevron's public relations firm, Hewitt Pate, Chevron vice president and general counsel, referenced litigation in multiple jurisdictions where Chevron is fighting enforcement of the judgment, including before Southern District Judge Lewis Kaplan, where Chevron has accused Donziger and others of racketeering for allegedly conspiring to corrupt the Ecuadoran judicial system.
"The Comptroller's continued advocacy has come despite repeated findings by U.S. federal courts that the Ecuador litigation is tainted by fraud," Pate said. "Mr. DiNapoli's actions serve only his political patrons, not the citizens of the State of New York or the beneficiaries of the Common Retirement Fund. This type of quid pro quo behavior is an apparent breach of ethical and legal responsibilities that warrants investigation."
Chevron charged before Kaplan and other judges that Donziger forged expert reports, intimidated a judge and actually ghost wrote the Ecuadoran court's judgment.
Yesterday's complaint said the efforts to gain leverage over Chevron through political and public figures, including the comptroller's office, began as far back as 2003, with outreach efforts to then-Comptroller Alan Hevesi.
Allegedly, on the day that DiNapoli was appointed to replace Hevesi, Donziger wrote of DiNapoli, "the advantage of a guy like this is he is political, meaning, if we show him how he can look good going after Chevron, he might be even more likely to help us," the complaint states.
Donziger then contributed $2,000 to DiNapoli in 2009, and emailed an associate about "delivering a bunch of checks" while adding, "I am worried this might not be a great idea."
The complaint also states that Orin Kramer, an investor in Donziger's lawsuit who is the former chair of the New Jersey State Investment Council, part of that state's Department of the Treasury, also "donated heavily" to DiNapoli, a Democrat, giving $55,000 spread out over eight donations between 2008 and 2012.
Kramer also invested $150,000 as a financial backer of the Lago Agrio litigation.
DiNapoli spokeswoman Jennifer Freeman said yesterday that Kramer gives campaign contributions to both sides of the aisle and "supported Tom's opponent in the last election."
The Chevron complaint states that Donziger was rewarded when DiNapoli wrote a letter to the Chevron board urging a settlement and caused or directed the Retirement Fund to sponsor or cosponsor shareholder resolutions criticizing Chevron's record in the Ecuador case and urging it to settle.
In 2011, it states, DiNapoli published an article on the Huffington Post calling Lago Agrio an "industrial cancer zone." The article was titled "What Chevron Owes the People of Lago Agrio."
There are also allegations in the complaint that the Donziger team tried to invite DiNapoli to Ecuador to tour the area and tried to connect DiNapoli with celebrities such as Sting.
"He never met with Sting," Freeman said.
DiNapoli's statement yesterday said the retirement fund, "along with dozens of investors worldwide, has called on Chevron to settle its nearly two-decade-long legal battle for polluting the Amazon."
"Chevron refuses," he said. "This effort is about protecting shareholder value and fulfilling my fiduciary responsibility to the New York Common Retirement Fund. Instead of owning up to its corporate responsibility, time and again Chevron has denied its responsibility, distorted the facts and ignored the law."
Grandeau said yesterday that DiNapoli has 15 days to file a response.
"I would urge Mr. DiNapoli, if he thinks this is baseless," to make his response public and notify the commission "that he is happy" to have this ethics investigation open to the public, Grandeau said.
@|Mark Hamblett can be contacted at email@example.com.