Freedom Line Blog

For several years, California-based Chevron Corporation has been fighting against what has long appeared to be a rather bogus lawsuit on behalf of Ecuadorian plaintiffs (and the Ecuadorian government, driven by American trial lawyers, in the course of which the specter of potential fraud on the part of those attorneys has been brought up repeatedly by judges and others).

Now come two new-ish developments in the case, which has become an important test of whether American courts and/or the Obama administration will stand up for an American company under apparently groundless assault abroad.  I’ll blog here about the second of these developments tomorrow, but for now, the first one merits watching. About two weeks ago, The NY Times’ “Greenwire” featured this story about a problematic tie-in between the alleged skulduggery against Chevron and a company that is a major U.S. federal contractor on other eco-projects, including last year’s BP oil spill:

Boulder, Colo.-based Stratus Consulting, a long-term contractor with the National Oceanic and Atmospheric Administration and other federal agencies, is gathering and analyzing data concerning the Gulf of Mexico spill.

Stratus was named in February as a defendant in the federal racketeering suit filed by Chevron against Ecuadorean plaintiffs and their legal team who are seeking damages for environmental contamination relating to Texaco Petroleum Corp.’s operations there…. Chevron’s allegations concerning Stratus’ involvement in the conspiracy to extort the company center on the actions of an independent expert, Richard Cabrera, who was hired by the Ecuadorean court to conduct a study of the alleged environmental damage.

Chevron noted this:

Stratus’ own insurance company, Navigators Specialty Insurance Company, submitted a filing with a federal court in Colorado to argue that it had no duty to defend Stratus against allegations of fraud.  According to an article in Law360.com, “Navigators Specialty is now seeking to avoid covering Chevron’s suit on the grounds that the consultant knew when the professional liability policy began in October of an alleged act, mistake or omission that could have reasonably led to a lawsuit. A policy provision excluding coverage for intentional acts also bars indemnification and defense, as does an exclusion for undisclosed circumstances, according to the declaratory relief suit.”

Stratus, of course, denies culpability for any wrongdoing, and this blog post is intended to reach no ultimate judgment on that issue. The point here is to note that if Stratus is found culpable for major misdeeds, it darn well ought to affect its ability to garner federal contracts — a major source of revenue for the company, as this list of what (by my quick arithmetic) looks like nearly $40 million of work indicates.

It also is quite interesting how large a proportion of those contracts (by my VERY quick count, well over half) have come after Barack Obama took office. Stratus’ principles seem to be Democratic/Obama donors. Granted, the amounts aren’t very high, and further granted (indeed, I insist) that political donations are not in any way inherently corrupt or corrupting. But they can give evidence of political connections, of course, and when they coincide with federal contracts they should always be examined so the public itself can decide whether anything looks amiss. That said, for the record, Stratus principles have donated the following amounts in recent years: Douglas Beltman, $1,000 to Obama for America. David Chapman, $250 to the Democratic National Committee Services Corporation and $300 to Obama for America. And Robert Rowe, $250 to Obama for America. As Jerry Seinfeld would say, “not that there’s anything wrong with that.”  But it does show what looks like an apparent liberal bent by Stratus, and at the margins it puts a spotlight on the Obama administration’s failure to lift a finger in support of Chevron’s seemingly just cause.

For more on this, read the excellent round-up by Carter Wood at Shop Floor.  And, to give major credit where due, Bob McCarty beat everybody on this story by a mile.

Again, more on this tomorrow as well.