Full disclosure: Singer Associates has worked as part of a multi-firm team to assist Chevron in public communications about the Ecuadorian lawsuit.
The most important legal ruling in recent memory with impact for communications occurred earlier this month – and its implications reach far beyond the subjects in the case.
For nearly two decades, Chevron was accused of polluting the Amazon in a multibillion-dollar lawsuit by a group of Ecuadorians led by an American plaintiff attorney in Lago Agrio, Ecuador.
Supporting the plaintiffs were a handful of American "environmental" NGOs, PR consultants, and Hollywood celebrities who made it their mission to convict the oil company in the public’s mind through shareholder lawsuits, online campaigns, and even a Hollywood movie.
US District Judge Lewis Kaplan found that lawyer Steven Donziger and his litigation team fabricated evidence, promised $500,000 to an Ecuadorean judge to rule in their favor, and ghostwrote much of the case’s final verdict during a six-week trial last November.
The ruling calls out the "bad actor" environmental NGOs and communications pros that pursued a scheme to defraud Chevron of billions of dollars.
On March 4, the US District Court for the Southern District of New York ruled that these environmental groups and individuals led, or were complicit in, an effort against Chevron in Lago Agrio that violated the US federal Racketeer Influenced and Corrupt Organizations Act (RICO).
The blockbuster ruling in favor of Chevron found the plaintiffs committed extortion, money laundering, wire fraud, Foreign Corrupt Practices Act violations, witness tampering, obstruction of justice, and other crimes. The court ruled "the decision in the Lago Agrio case was obtained by corrupt means" and "the defendants here may not be allowed to benefit from that in any way."
The Wall Street Journal called this case the "legal fraud of the century."
At the core of the plaintiffs’ strategy was the misuse of PR and social pressure, exerted through negative media stories about Chevron, digital communication attacks against the company, political pressure and lobbying, shareholder lawsuits, and protests.
The court summed up the plaintiffs’ strategy this way:
"The importance of [lead plaintiffs’ lawyer Steven] Donziger’s media and public relations strategy is evident from the manner in which Donziger spent the millions of dollars that were obtained from investors. He outlined the campaign in a memorandum he wrote to his team in late 2003. He explained that the team would initiate and/or utilize celebrities; non-governmental organization ‘pressure;’ the ‘Ecuador government – executive, and Congress;’ national, international, and Ecuadorian press; a ‘divestment campaign’ in which the team would seek to convince institutional investors to sell Chevron stock, and even a criminal case in Ecuador in its effort to obtain money from Chevron."
This ruling in favor of Chevron is vitally important to our profession because it is all about transparency. Not just corporate transparency, but by all parties.
Over the past few decades, transparency and openness has been the charge – rightfully so – public groups and the media have demanded of business, government, and regulatory and elected officials. The concept being that the more information is revealed, the more it allows the public and media to make informed decisions.
During this same period, the growth of nonprofits, NGOs, and special interest groups has surged dramatically. Because these organizations appear to be altruistic, they have not been held to the same transparency standard.
In Chevron’s case, the NGOs were knowingly used as a front by plaintiffs’ attorneys to hide information from the public and make it appear as if the communications were coming from the environmental groups. In a digital world, this is even more dangerous because it is harder than ever to tell whom information is coming from.
Transparency makes the difference between propaganda and PR. Chevron’s victory will hopefully spur the public, press, and shareholders to no longer give any group – not just businesses and governments – a free pass when it comes to transparency.
Sam Singer is president of Singer Associates in San Francisco. He can be reached at email@example.com.