Chevron Board Member Armacost Tied to Conflict of Interest Over Cancer Study in Ecuador’s Amazon

Disclosure Follows Investigation by New York Attorney General into Shareholder Complaints

Amazon Defense Coalition
19 May 2009 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109

New York, New York (May 19, 2009) – A highly-criticized study financed by Chevron to “prove” that the dumping of billions of gallons of toxic waste into Ecuador’s rainforest did not cause cancer failed to disclose that the study was conducted by a company tied to a member of Chevron’s Board of Directors, say representatives of the Amazon Defense Coalition. 
 
Samuel Armacost, a member of Chevron’s Board of Directors since the early 1980s, is the largest individual shareholder in Exponent Inc., a pro-industry scientific consulting firm that was paid by Chevron to perform the study of cancer rates in Ecuador’s Amazon region where Texaco (now Chevron) was the exclusive operator of an oil concession from 1964 to 1990. Chevron faces a $27 billion liability in a long-running trial over pollution stemming from Texaco’s operations, including roughly $9 billion to compensate the region for 1,401 cancer deaths tied to pollution, according to an independent court expert in Ecuador. 
 
The disclosure comes after New York Attorney General Andrew Cuomo opened a probe of Chevron on allegations the company has misled shareholders about the Ecuador liability, according to news reports. Chevron management’s handling of the Ecuador issue is expected to be a major topic at Chevron’s annual meeting on May 27, where a shareholder resolution on Ecuador will be voted on. 
 
The Chevron-financed cancer study -- entitled "Cancer Mortality and Oil Production in the Amazon Region of Ecuador, 1990-2005" -- purported to find that cancer rates in the highly contaminated 1,700 sq. mile area where Texaco operated were consistent with cancer rates in the rest of the country, and even lower than cancer rates in Quito, the nation’s capital.  Critics quickly noted that the study was flawed in that it used death certificates to measure cancer in an isolated area of rainforest where the vast majority of deaths never get recorded, and where most sick people never see a doctor. 
 
By basing the study on mortality rates which are incomplete, Chevron was able to undercount the number of cancer deaths and thereby “conclude” that cancer rates had not increased.  The Chevron study contradicts numerous other studies of the region, all done independently and published in peer-reviewed journals, that have concluded cancer rates had increased in the area by a significant factor due to oil contamination. 
 
“Chevron’s  cancer study in Ecuador is an example of a industry-biased study conducted to further the interests of Chevron rather than to better understand the health problems faced by the people,” said Douglas Beltman, a former EPA scientist who consults with several Amazon communities suing Chevron for clean-up.   
 
“By failing to disclose the ties of the authors to Chevron’s Board of Directors, the peer review process was undermined because the article could not be tested for bias by the reviewers,” said Andrew Woods, an American advisor to the Amazon communities who is familiar with Chevron’s scientific studies. 
 
The Chevron study, whose lead author is Exponent consultant and UCLA adjunct professor Michael Kelsh, was published in the International Archives of Occupational and Environmental Health in July 2008.  The article has a small notation at the end saying the work was financed by Chevron but it does not reveal the ties to Armacost or the Chevron Board. 
 
Exponent advertises itself as offering a service to companies that produces “science” that generally downplays the risks of exposure to chemicals, thereby enabling industry to better fight government regulations designed to protect the public from the health effects of pollution.  Kelsh is known as a pro-industry scientist and is listed prominently on Exponent’s website. 
 
Armacost is one of the largest individual shareholders of Chevron and the largest individual shareholder of Exponent.  He owns approximately $3.1 million in Chevron stock and approximately $4 million in Exponent stock, according to public records.  He is member of the Board of Directors of both companies.

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