Wednesday, May 6, 2009 5:50 PM

Former CNN Reporter Pitches for Chevron (Update)

UPDATE (May 6 @ 5;45 p.m.): We have obtained two letters related to the Chevron case. One is by New York Attorney General Andrew Cuomo ( Cuomo Letter.pdf), and the second is from Amnesty International to Cuomo ( Amnesty Letter to Cuomo.pdf)

 This past Sunday, "60 Minutes" aired a tough piece about oil pollution in the Amazon region of Ecuador and the massive lawsuit by some 30,000 Ecuadorans against American corporate giant Chevron.

(View the "60 Minutes" piece: http://www.cbsnews.com/video/watch/?id=4988079n)

But weeks before the May 3 CBS program, the oil company was already fighting back through an Internet video narrated by former CNN television newsman Gene Randall that portrayed Chevron in a more positive light. Randall's video blamed much of Ecuador's oil pollution problems on its state-owned oil firm, and it downplayed criticism from Ecuadorans and their lawyers about Chevron's responsibility for toxic oil wastes in many Ecuadoran rivers and streams owing to more than two decades of oil drilling by Texaco, which Chevron bought in 2001.

(View Randall's video: http://www.youtube.com/watch?v=0YMCGC-2ytE)

Randall's news report has an authentic feel - but the video was paid for by Chevron, which hired Randall last fall, not long after the company got wind that "60 Minutes" was working on a big story.

"I don't portray it as a piece of journalism, but I used journalistic techniques in telling Chevron's side of the story," Randall said in an interview. "I belong among the people who don't think Chevron has gotten a fair shake over the years."

Randall, now a corporate consultant who has done one other project for Chevron, worked with the Alexandria, Va. firm CRC Public Relations to produce the video. He would not say how much he was paid. Two environmental groups have called on Chevron to cease airing the video unless it discloses its role.

Randall's project is just one part of Chevron's legal, lobbying and PR full-court press to influence a court proceeding in Ecuador that could result in civil damages of up to $27 billion against the company. A court in Ecuador is expected to rule this year.

Chevron is also facing pressure from other sources, among them major public employee pension funds that are longtime shareholders of the company and have raised questions about the potential liability from the lawsuit.

National Journal has learned that the nation's two largest public employee pension funds - California-based CalPERS and CalSTRS - are expected to announce in coming days that they will join other pension funds in backing a shareholder resolution related to the Ecuador suit at Chevron's annual meeting in late May.

To try and fend off the litigation, Chevron's lobbying and legal blitz has focused heavily on trying to persuade the Office of the United States Trade Representative to rescind some of Ecuador's prized trade preferences as a way to pressure the Quito government to drop the suit, or adopt a more Chevron-friendly stance.

Among the outside lawyers and consultants on Chevron's payroll are two former USTR chieftains - Mickey Kantor and Carla Hills - as well as Mack McLarty, who was a chief of staff to President Clinton.

(See NJ's April 25, 2009 story on this issue (subscription required): http://www.nationaljournal.com/njmagazine/ll_20090425_4134.php

Chevron says that the lawsuit is without merit. It has also charged that an Ecuadoran court appointee's recommendation that the company pay up to $27 billion in damages if found liable is the "result of fraud, gross errors and conflict of interest." Chevron became enmeshed in the litigation after its 2001 purchase of Texaco. The suit, which was originally filed against Texaco in 1993 in New York, was moved to Ecuador at the behest of Chevron. 

                                                                                                             -- Peter H. Stone