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Chevron accuses NY State comptroller of ethics breach

A Chevron tanker truck unloads gasoline into underground storage tanks in Burbank, Calfiornia June 18, 2008. REUTERS/Fred Prouser
A Chevron tanker truck unloads gasoline into underground storage tanks in Burbank, Calfiornia June 18, 2008. REUTERS/Fred Prouser

By Nichola Groom

LOS ANGELES (Reuters) - Chevron Corp sought to open an investigation on Tuesday into New York State Comptroller Thomas DiNapoli, claiming he pressured the oil company to settle environmental litigation in Ecuador in exchange for campaign contributions from supporters of the lawsuit's plaintiffs.

Chevron said it filed a complaint before the New York State Joint Commission on Public Ethics, seeking a probe of DiNapoli and current and past members of his staff.

In a statement, Chevron said the plaintiffs' supporters have contributed more than $60,000 to DiNapoli's campaign, as well as "other political benefits."

The complaint alleges that Steven Donziger, the plaintiffs' U.S. legal adviser, and his associates wooed DiNapoli into applying pressure on Chevron through campaign donations and an offer to meet with the rock musician Sting and his wife, Trudie Styler.

The company said DiNapoli and Donziger and his associates engaged in "an apparent quid pro quo exchange."

DiNapoli oversees the New York State Common Retirement Fund, which owns more than $800 million of Chevron stock, the company said, citing U.S. Securities and Exchange Commission filings.

"This is a baseless attempt by big oil to intimidate me," DiNapoli said in a statement. "The allegations are without merit."

A spokeswoman for DiNapoli, Jennifer Freeman, said the comptroller has never met Sting.

"Having failed at derailing the lawsuit, (Chevron) now seeks to discredit anyone associated with it," a spokeswoman for Donziger, Karen Hinton, said in an email.

The specific actions Chevron objected to by DiNapoli include sponsoring shareholder resolutions "and making public statements against Chevron that were explicitly intended to pressure the company to settle" the lawsuit.

In a statement, DiNapoli said his call on Chevron to settle the Ecuador litigation "is about protecting shareholder value and fulfilling my fiduciary responsibility to the New York State Common Retirement Fund."

Chevron has been locked in an almost two-decade conflict with residents of Ecuador's Lago Agrio region over claims that Texaco, which Chevron bought in 2001, contaminated the area from 1964 to 1992. The plaintiffs from the villages in the oil-rich Amazon won an $18.2 billion judgment from an Ecuadorean court against Chevron. The company claims the judgment was fraudulent and unenforceable.

Graham Erion, an attorney representing the Ecuadorians, said in a statement that DiNapoli "has every right to question Chevron's actions... Turning on its own shareholders shows how desperate Chevron has become. Chevron needs to listen to its investors instead of attacking them and own up to its responsibilities in Ecuador."

Chevron, based in San Ramon, California, has not settled the litigation in Ecuador.

Because Chevron has few assets in Ecuador that can be taken as compensation, the plaintiffs are trying to get the ruling enforced in other countries.

Earlier this year, DiNapoli sponsored a shareholder resolution that would have required Chevron to appoint an independent director with environmental expertise. At the time, he and 39 other Chevron investors also called on the company to settle the protracted legal battle. DiNapoli made a similar appeal last year and in previous years.

A U.S. trial has been set for next fall in the Chevron lawsuit that accuses Ecuadorean residents, their lawyers and advisers of fraud in obtaining the pollution award.

(Reporting By Nichola Groom; editing by Andrew Hay, Leslie Adler, Bernard Orr and Leslie Gevirtz)

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