--Chevron accuses N.Y. State Comptroller Thomas DiNapoli of
breach of ethics
--Oil company claims he improperly sided with Ecuadorean
plantiffs in long-running environmental suit
--Mr. DiNapoli calls the allegations baseless
(Adds details, quotes and background throughout.)
By Debbie Cai and Angel Gonzalez
Chevron Corp. (CVX) accused New York State Comptroller Thomas
DiNapoli of unethically siding with Ecuadorian plaintiffs fighting
the oil company in a multibillion-dollar environmental case in
return for political contributions and other benefits.
In a complaint filed before the New York State Joint Commission
on Public Ethics, the second-largest U.S. oil company said the
comptroller and his staff breached their fiduciary and ethical
duties in their positions with the New York State Common Retirement
Fund, which is overseen by Mr. DiNapoli and owns more than $800
million in Chevron shares.
Chevron alleged that the plaintiffs' supporters contributed more
than $60,000 to Mr. DiNapoli's political campaign. In return, the
comptroller allegedly used his public office to explicitly push the
company to settle the lawsuit via shareholder resolutions and
public statements, Chevron said.
The comptroller, in a statement, called the allegations baseless
and an "attempt by big oil to intimidate me."
"It won't work," he added.
He said the retirement fund and investors have called on Chevron
to settle its nearly two-decade-long legal battle for about eight
years.
"Instead of owning up to its corporate responsibility, time and
again Chevron has denied its responsibility, distorted the facts"
in the Ecuadorean suit, Mr. DiNapoli said. In his statement, Mr.
DiNapoli didn't address specific allegations by Chevron, such as
the campaign donations.
The complaint is Chevron's latest move in a long-running,
globe-spanning legal saga that pits the company against residents
of Ecuador's Amazon, who allege that U.S. oil company's Texaco
operations caused harmful pollution there. Chevron, which denies
the allegations, inherited the lawsuit when it bought Texaco in
2001.
Last year, a court in Ecuador found Chevron liable and levied an
$18.2 billion judgment. In July, an Ecuadorean judge raised that
amount to $19 billion. Chevron has said the ruling is the result of
fraudulent evidence and has sought to block its enforcement in U.S.
and international courts. Plaintiffs, who deny the fraud
accusations, have responded in kind, filing fraud claims against
Chevron and seeking to seize Chevron assets in Canada, Brazil and
Argentina. Earlier this month, an Argentine judge ordered a freeze
of Chevron assets and receivables in that country.
The U.S. oil company is alleging that Mr. DiNapoli "used his
office to support the Ecuadorian plaintiffs' lawyers' scheme to
pressure Chevron into settling the lawsuit in exchange for benefits
received from the plaintiffs' representatives."
Chevron said Steven Donziger, a U.S.-based legal adviser to the
plaintiffs, as well as several associates, made campaign
contributions to Mr. DiNapoli exceeding a total of $60,000 between
late 2008 and early 2012.
The oil company also argued that Mr. DiNapoli'S staff met with
plaintiffs' allies at activist organizations such as Amazon Watch,
which invited Mr. DiNapoli and staffers to Ecuador. Chevron also
alleges that Amazon Watch also plied Mr. DiNapoli and staffers with
invitations to the site of the environmental dispute--and for a
meeting between Mr. DiNapoli and the pop star-activist Sting.
Chevron said one staffer visited the area, with the trip paid
for by the New York state government, but met only with plaintiffs
and their allies; the company added that it was unclear whether any
of the other invitations were accepted.
Kevin Koenig, the Ecuador program coordinator for Amazon Watch,
said Chevron's complaint amounted to a distraction to take
attention away from the company's problems in Argentina, where its
assets and receivables have been frozen. Mr. Donziger couldn't be
reached for comment.
In the complaint, Chevron said Mr. DiNapoli breached the law
whereby public officials are prohibited from having "any interest,
financial or otherwise...which is in substantial conflict with the
proper discharge of his duties in the public interest."
Plaintiffs' attorney Graham Erion said that for Chevron to
accuse anyone of ethics violations or improper influence "is the
height of hypocrisy" and the move is part of an intimidation
campaign.
"Chevron is one of the biggest corporate contributors to
political campaigns in the U.S. and exercises its political and
legal muscle not only in Washington but in other capitals across
the world to get what it wants. Mr. DiNapoli is carrying out his
responsibilities as a caretaker of New York state funds and has
every right to question Chevron's actions," Mr. Erion said.
Chevron's third-quarter earnings fell 33%, missing expectations
as its oil-and-gas production was disrupted by maintenance, legal
issues and storms, and a refinery fire in California caused a sharp
drop in fuel sales.
Shares finished Friday's session down 79 cents at $103.56. The
stock is down 2.7% so far this year.
Write to Debbie Cai at debbie.cai@dowjones.com and Angel
Gonzalez at angel.gonzalez@dowjones.com
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