Bloomberg News

Chevron Fires Ogilvy as Lobbyist Over Ecuadorean Dispute

May 31, 2012

Chevron Corp. (CVX:US) fired Ogilvy Government Relations as its U.S. lobbyist after a person affiliated with the firm spoke to a group advocating for residents of the Ecuadorean rainforest in a multibillion legal fight with the oil company, a person familiar with the matter said.

On May 9, Felipe Benitez of Ogilvy’s public relations branch gave a presentation to San Francisco-based Amazon Watch on “strategic communications for environmental defense and protection on human rights,” according to that group’s website.

Lloyd Avram, a spokesman for Chevron, which was Ogilvy’s third-largest lobbying client last year, said the company discovered a serious conflict recently. He declined to comment about the nature of the issue or the date Chevron ended its relationship with Ogilvy.

Another person, speaking on the condition of anonymity due to the sensitivity of the matter, said the conflict concerned Benitez and his talk to Amazon Watch, which advocates on behalf of indigenous tribes in the Amazon basin and has called damage from oil drilling in Ecuador “Chevron’s Chernobyl.”

“Chevron discovered a material conflict of interest with Ogilvy,” Avram said in an e-mailed statement. “It could not be resolved and made our relationship with them untenable. Under the terms of our agreement, we terminated the relationship.”

Ogilvy Revenue

Ogilvy received $600,000 from Chevron in 2011 to lobby on energy, environmental, tax and financial policies in the U.S., according to federal lobbying records, making the oil company its third-biggest client by revenues, according to the Center for Responsive Politics, which tracks political and lobbying spending.

Ogilvy, the sixth-largest U.S. lobbying firm by revenue, according to the center, had represented Chevron since at least 2004, public records show. Ogilvy’s various units are owned by WPP Plc (WPP), a communications company based in Dublin.

Avram declined to comment on Chevron’s plans to replace Ogilvy.

While Chevron, based in San Ramon, California, doesn’t operate in Ecuador, it has become embroiled in a lengthy legal fight over the alleged disposal of toxic wastewater from drilling operations by Texaco Inc., which used to operate in the country and was acquired by Chevron in 2001.

Previous Work

Previously, Benitez worked for Fenton Communications, and had helped Ecuador improve its global image, according to his page on Linked In, a social networking website.

“Chevron informed Ogilvy & Mather of its decision to end its relationship with Ogilvy Government Relations because of a perceived conflict with Ogilvy PR,” Rachel Ufer, a spokeswoman for Ogilvy public relations, said in an e-mailed statement, referring to the parent company. “As this is primarily a personnel matter, we are unable to provide further detail.”

Amazon Watch didn’t return a phone call seeking comment.

Chevron is fighting an $18 billion judgment from an Ecuadorean court finding the company was responsible for damage. The company argues that Texaco performed all the environmental remediation under the terms of its contract with Ecuador.

It has accused the plaintiffs’ lawyers and Ecuadorean officials of fraud and misconduct in the case.

Ecuadoreans filed a lawsuit yesterday in the Superior Court in Ontario targeting Chevron assets in Canada as a way to begin collecting on the judgment, because the oil company has few assets in Ecuador.

In Washington, Chevron spent more than $9.5 million on lobbying last year and keeps a team of outside firms to lobby on a variety of issues.

More than 70 companies and trade groups paid Ogilvy Government Relations more than $20 million to lobby on their behalf in 2011, according to the Center for Responsive Politics, which is based in Washington.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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