What do the BP Deepwater Horizon “disaster” of 2010, the $113 billion lawsuit against Chevron in Ecuador and Interior Secretary Ken Salazar have in common? Stratus Consulting Inc. of Boulder, Colo., was involved in the first two and, possibly, the third.
BP DEEPWATER HORIZON
Interior Secretary Ken Salazar over Gulf.
President Barack Obama talked as if he was ready to lock up “Big Oil” and throw away the key after a deadly explosion caused oil to begin leaking from the Deepwater Horizon oil rig April 20. With help from his lapdogs in the state-run media, he made sure every American knew it would take decades for the Gulf’s delicate ecosystem to recover.
Nine months have passed since then, and some would argue that the only visible signs of the disaster that remain visible are dollar signs on the government’s accounting sheet. As of Nov. 1, according to a Bloomberg report, the government has awarded $186.8 million in clean up-related contracts related to the oil spill.
The company listed in the report as having “received the second-largest amount of money from the contracts” awarded following the disaster is Stratus Consulting Inc. The company received $22.73 million — second only to Industrial Economics Inc. of Cambridge, Mass., which received $47.52 million.
Not familiar with the case? In short, the Amazon Defense Coalition, an Ecuador-based group led by New Yorker Steven R. Donziger, purports to represent the interests of some 30,000 Ecuadorans in a hotly-contested lawsuit against Chevron. But not for what Chevron allegedly did. It’s for the wrongs allegedly committed by Texaco years before Chevron purchased the company in 2001.
Estimates of possible settlement amounts began at $1 billion, increased to $27 billion, topped off at $113 billion and are likely headed back down. Why? In part, because of several factors — not the least of which is that Chevron appears on the verge of winning its case outright and could very possibly file counter suits against a number of parties involved in the litigation that’s dragged on for most of two decades.
Why is Chevron about to win? Because the plaintiffs’ legal claim against Chevron seems to have crashed and burned. Because their primary funding source, Philadelphia law firm Kohn & Swift, has dropped out of the picture. And because attorneys working both sides of this case seem to be have shifted much of their attention to the involvement of Stratus Consulting.
At the heart of the matter involving Stratus Consulting is a “global report” presented to the Ecuadoran court as his own by Richard Cabrera, the man known as the “court-appointed independent expert.” In short, both sides are arguing over the extent of the role the folks at Stratus Consulting played in crafting that report.
On May 24, 2010, Chevron attorneys in Ecuador filed a motion about the report which read, in part, as follows:
Article 117 of the Code of Civil Procedure provides that only evidence that is duly processed in accordance with the law shall be valid in litigation. As I will prove below, the reports presented by the Court-appointed global expert Richard Stalin Cabrera Vega, P.E. are the product of fraud on the Court and illegal collusion between plaintiffs and Cabrera, and thus are invalid.
Just before midnight three days later, one of the best legal minds the plaintiffs could muster was burning the midnight oil inside the offices of Emery Celli Brinckerhoff & Abady LLP at 75 Rockefeller Center in New York City. In an e-mail to more than a dozen other attorneys — including Donziger — ECBA Law attorney Ilann M. Maazel shared a “Mini-revelation” which read, in part, as follows:
“Unless we want the Stratus/Cabrera revelation to come out in CO, which seems like the worst possible place, we need to make our submission in Ecuador and fast. Say, Tuesday. We’ve bought over a month in CO and everywhere else but time is almost certainly about to run out. So we need to make a decision whether we can file in Ecuador and control this story, or whether we let events overtake us in CO, as I think they will very shortly.”
Fast-forward seven months, and you’ll find the transcript of Special Master Max Gitter’s deposition of Donziger Dec. 29 in New York City contains salacious details about Stratus Consulting’s apparent involvement in the case. Likewise, you’ll find the company mentioned in a Houston Chronicle article published New Years Eve. Not the kind of publicity any company wants.
INTERIOR SECRETARY KEN SALAZAR
Interior Secretary Ken Salazar
Even before Deepwater Horizon, Secretary Salazar seemed intent on thwarting efforts by the oil and natural gas industry to reduce the nation’s dependence on foreign sources of energy.
Same thing during the disaster. Salazar was always on the scene, micromanaging efforts to paint the oil spill as the worst thing to ever happen in the Gulf.
After the disaster, he pushed more drilling bans, added more red tape and made life in general more difficult for people in the oil patch.
When it comes to the lawsuit Chevron’s been battling in Ecuador, it’s difficult for someone with few political sources in Colorado to find much evidence of Secretary Salazar’s involvement; therefore, I’ll leave it to others to try and unearth any ties between Salazar, the former U.S. senator from Colorado and the Boulder, Colo.-based Stratus Consulting.
I will, however, share what I found out about the company, using the search term, “Stratus Consulting,” in the Federal Procurement Data System.
The company has been awarded 942 government contracts since 1999. Many, but not all, involved work for either the National Oceanic and Atmospheric Administration, the EPA or the Justice Department. From 1999 to 2007, Stratus Consulting pulled in an average of 64 contracts per year. From 2008 to 2010, the average per year nearly doubled — to 121 per year. So far, the company has generated only three contracts in 2011.
According to the Federal Elections Commission database, individuals from Stratus Consulting gave a combined $3,274 in federal campaign contributions to Democrat causes during the past decade. The largest was ecotoxicologist Douglas Beltman’s $1,000 contribution (28992965004) to Obama for America Oct. 1, 2008.
It remains anyone’s guess as to exactly how this might turn out, but I suspect we haven’t heard the end of Stratus Consulting’s involvement in this monumental lawsuit. Stay tuned!
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UPDATE 1/26/11 at 5:09 p.m. Central: The San Francisco Sentinel is reporting an update on the case under the headline, Chevron Makes Public Ecuador Plaintiffs’ Email, Latin American Media Raises Questions About Alleged Fraud by Plaintiffs Against Chevron. Big quote: “Apart from bringing down the case, we could all end up in jail.”
UPDATE 1/27/11 at 5:30 p.m. Central: File this under “Dang it!” I had many of the details of this huge story from an “insider” source, but couldn’t put all the pieces together before Forbes broke it today. In short, it details how Donziger recruited J. Russell DeLeon, a founder of online-poker firm PartyGaming and a fellow Harvard Law School graduate, to invest at least $1.6 million in the case in exchange for as much as 6% of the anticipated fee, which would be 25%-30% of any settlement. I’m told, however, that more news like this will surface soon, so stay tuned!
UPDATE 4/28/11 at 7:16 p.m. Central: I Scooped The New York Times by 100 Days!