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Charles James: Chevron's In-House Karl Rove?

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Since Scott Gilmore is doing a great job chronicling the day-to-day of the landmark human rights trial of Bowoto v. Chevron, I thought I would turn my attention to one of the masterminds behind Chevron's defense.

As this trial moves into the 4th week, one of the more interesting aspects of the Bowoto case has been the role played by Charles James, Chevron's General Counsel who is often found at counsel's table, sitting and watching. James is the highest-ranking African American in Chevron, serves on the company's management committee with CEO David O'Reilly, and is considered a disciple of Karl Rove-style legal and political tactics. A product of the current Bush Administration, he served as an assistant attorney general for antitrust under John Ashcroft. One of the best examples of the importance (or lack thereof) James places on Chevron's image is his recent hiring of William J. Haynes, former General Counsel at the Pentagon under Defense Secretary Donald Rumsfeld (gotta wonder if Dick Cheney is next on his "to hire" list). Haynes signed off on the infamous "torture memo" that permitted waterboarding. The irony is that Chevron now has a suspected human rights violator -- Haynes -- helping to run a legal department that is trying to beat back charges that Chevron is a human rights violator itself.

The Bowoto trial is an example of how Chevron faces the most high-profile human rights problems of any major oil company. Many believe it has to do with the fact that James, like Karl Rove, just doesn't seem to know how to finesse problems before they grow to such a point that they begin to create major risks for ownership. Some observers have opined that there is a clear parallel between James' insensitivity and clumsiness and Rove's divisive and aggressive tactics.

This lack of finesse may help explain why in the present case, Chevron finds itself on trial in San Francisco (of all places!) for helping the Nigerian military kill peaceful, apparently unarmed, protesters who had occupied an oil platform. It also helps explain why Chevron's environmental problems in Ecuador's rainforest have grown to the point where the company faces a $16.3 billion potential liability, according to an independent court-appointed expert. Chevron is also under attack for owning a pipeline in Burma that generates close to $1 billion annually for that country's brutal military regime.

James' response to these problems is simple -- he just bludgeons all of the company's opposition. He has repeatedly relied upon the same strategic playbook -- "deny everything, admit nothing, attack, attack, attack" -- each time Chevron is confronted with its human rights violations. In Ecuador, the court-appointed expert found 428 people had died from exposure to oil contamination and two of the company's lawyers are under criminal indictment for lying about the results of an earlier remediation. Yet to James and his group, everyone who challenges Chevron on human rights grounds is either a pirate, a liar, or a con man. (Larry Bowoto has been repeatedly described as a "pirate" throughout the case; Pablo Fajardo, the lead lawyer in the Ecuador environmental case, was called an "environmental con man" by Chevron earlier this year after winning the Goldman Award, the environmental movement's version of the Nobel Prize.)

So the question is: Is James acting in the best interests of Chevron's shareholders? The fact that this is even a serious question tells one how far Chevron has fallen in recent years. We now live in a world where globalization makes issues regarding human rights, the environment, and corporate responsibility directly related to a corporation's competitiveness. While Chevron is faced with increasing human rights problems, competitors BP and Shell have significant, comprehensive human rights standards in place. As oil companies are forced to negotiate exploration agreements with increasingly sophisticated governments, Chevron's reputation will necessarily affect its competitive standing -- since communities will look to partner with corporations that can generate the most profit while causing the least amount of environmental devastation. After all, given the recent mandate spelled out in the recent election results, with Democrats now in control of Washington and the country is hungering for a new energy policy, having Bush Administration retreads like James and Haynes run an oil company's legal department seems at best bizarre and at worst foolish.

In regard to the Ecuador case, James once told law students at Berkeley that Chevron will fight "until hell freezes over, and then skate on the ice". While this is a suspect stance for any lawyer to take in public, it is even more disturbing when viewed as an aspect of James' overall philosophy. His inability to head off legal disputes has cost the company millions in fees and has left it with huge potential financial and public relations liabilities.

Regardless of how the Bowoto trial turns out (and Chevron should win the legal case -- no matter what the venue, their resources alone should all but guarantee their victory), the very existence of this standoff just miles from the company's global headquarters must be seen as a huge PR disaster for Chevron. It remains to be seen if the leadership ultimately responsible to the shareholders is taking note of the way that Charles James has masterminded this case.