Chevron Files Ethics Complaint Against N.Y. State Comptroller

Chevron Corp. is seeking an ethics investigation of New York State Comptroller Thomas DiNapoli as well as current and past members of his staff for violations of the New York Public Officers Law.

The company, in a complaint filed before the New York State Joint Commission on Public Ethics, alleged that the comptroller and his staff breached their fiduciary and ethical duties.

Chevron is defending itself against accusations of causing environmental and social harms in Ecuador. 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.

The U.S. oil company is now 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."

A representative from Mr. DiNapoli's office declined immediate comment.

Mr. DiNapoli oversees the New York State Common Retirement Fund, which owns more than $800 million of Chevron stock according to Securities and Exchange Commission filings. The company said he 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."

Chevron alleged that the plaintiffs' supporters have contributed more than $60,000 and other political benefits to Mr. DiNapoli's campaign. In return, the comptroller allegedly used his public office to take actions on behalf of the plaintiffs, such as sponsoring shareholder resolutions and making public statements against Chevron that were explicitly intended to pressure the company to settle the lawsuit.

In October, the multibillion-dollar legal battle between Ecuadorean indigenous groups and Chevron moved to Argentina and Colombia, where lawyers say the company can be held responsible for environmental-damage claims in Ecuador.

The company's recent 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 were down 66 cents at $103.30 in recent trading. The stock was up 5.9% over the past 12 months.

Copyright (c) 2012 Dow Jones & Company, Inc.


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Rob Dean | Nov. 21, 2012
This move initiated by Chevron is another attempt to divert attention from the real issue...payment of the 19 billion court approved award. Its a big waste of Chevrons time and resources. Mr. DeNapoli, is effectively an investor in Chevron, and as such is directing the Board of Director and Management of Chevron, to deal with the realities before the company. I believe a prudent Chevron stockholder would want the company to comply with the result of the litigation-pay the award and get on with running the business. If Chevron assets around the globe are frozen, how does it continue to operate efficiently and maximize the bottom line in the long term. Mr Watson and management have a larger concern. When ordinary people, such as mysel,f begin to understand the incomprehensible stance that Chevron has taken (ie will not settle until hell freezes over...) even though they have lost the litigation in a court forum approved by the company and have been ordered to pay 18 billion(now 19 billiion) when it could have settled this matter for 1.4 billion 18 years ago, people will start looking at Chevron, and its management with an Enronesc eye. What do I mean by that? Management at Enron, thought itself above the law, employed all types of tactics to keep itself from being investigated, bullied dissenters, manipulated reports and generally missinformed the public and its shareholders. Chevron, in my view, is following a similar path.

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