Chevron Corporation on Thursday announced the retirement of Charles James as executive vice president and a member of the company's five-person executive committee. James held the post of general counsel from 2003 until last year. Before that, he served as the Justice Department's antitrust chief under both former President Bush and George H.W. Bush, and as a partner at Jones, Day, Reavis & Pogue.
According to Chevron's statement, James will join the adjunct faculty at Arizona State University College of Law, and devote himself to philanthropic activities. Never shy of controversy, James offered Corporate Counsel his unedited thoughts on national security review, corruption, human rights, climate change, and running a legal department.
The material below has been edited for length and clarity.
Q: Phoenix, huh? What are you going to teach and what charities will you be involved with?
A: Antitrust law initially. And I'm on the board of the Make-a-Wish Foundation, which is headquartered in Phoenix. But this is retirement. I expect to write. I have a pretty good book in me on the Microsoft case as an exercise in public policy. I want to build great motorcycles too.
Q: So it's antitrust and the art of motorcycle maintenance?
A: They're both challenging and worthwhile endeavors.
Q: As you look back, what are your biggest achievements at Chevron?
A: We've been successful on matters like the Unocal merger, the Bowoto [alien tort] and Buncefield [U.K. mass tort] cases. When a company like Chevron gets a 30-year extension in the partitioned neutral zone between Saudi [Arabia] and Kuwait, that's a big day for us as well. But these are all testament to something I'm even more proud of. We have built a strong organization in the law function that works well with our businesses and can deliver results.
Q: What institutional changes did you put in place?
A: We unified the legal function with common legal standards, performance expectations, compensation and evaluation systems, and a common view of client service. We also established specialty practices in major capital projects contracting and environmental law. We created a litigation management system recognized by CC as best practice.
Q: How big is your group, and what about your stable of outside counsel?
A: Our legal organization is now hovering around 400, up from 300 lawyers. When I first started we were using nearly 800 law firms. We're probably currently using 400 law firms globally. But 35 preferred providers do 60 or 70 percent of the work. Everyone likes to sue us and sue all over world.
Q: Not long after you joined you had occasion to use your antitrust skills in the Unocal merger. Some think Chevron benefited from a xenophobic response to the competing bid by China's Cnooc. Do you have any mixed feelings?
A: We have no mixed feelings at all about the transaction. There was a question whether Cnooc would get CFIUS [national security] approval. We spent a fair amount of time convincing Unocal's management and board that our offer had more certainty of confirmation. It took a fair amount of legal work on our part to preserve that certainty, since we faced the prospect of antitrust review, and needed to resolve a pending FTC complaint, and a host of securities lawsuits. We were lucky enough to announce the deal in April , and consummate the deal in August. I don't think an oil merger of that scale has ever been pushed through that fast. We were moving at warp speed, and Cravath and Pillsbury gave us superb support. [Our] speed ... was a big part of the value proposition we offered shareholders. The Chinese were unable to convince Unocal they could overcome their obstacles, but we're unapologetic about that. It was a tough four months.
Q: Is there room to improve the CFIUS process for reviewing foreign investment?
A: I think there's room to reform any government institution. I actually sat on CFIUS as a government representative for DOJ. By and large I think companies get a fair hearing.
Q: Antitrust is traditionally a big legal concern. But a lot of your time has been consumed by emerging issues like human rights or foreign corruption or climate change. Let's first talk about corruption. You settled an "oil for food" investigation in 2007 for $30 million. Do you think regulators sometimes interpret the FCPA too aggressively?
A: I'm certainly not going to say that prosecution of foreign corruption is inappropriate. We settled that case and put it behind us. But I continue to think we had a strong and worthwhile legal position. One of challenges in that space is that there are virtually no FCPA cases that get litigated. This was a case in which it was alleged that Chevron should have known the people it engaged in arms-length transactions with were giving money to the Saddam Hussein regime. Nobody ever said Chevron gave anyone a dime.
Q: That certainly puts the onus on companies to do due diligence on their intermediaries. Have you improved compliance during your time overseeing the function?
A: Yes, we have increased our due diligence in this and other areas. But I'm not altogether sure, if your conduct is going to be judged by what a person actually did, that you're really protected by due diligence. That's one of the risks in enforcement based on secondary theories of liability. I question that as a policy resolution but in individual cases you have to do what you have to do.
Q: Let's talk about human rights now. Is one of the lessons you draw from Bowoto that corporations should be more willing to fight claims they don't accept on the merits?
A: I can't think of a way a company could have confronted claims more directly than we did. People got away for years with characterizing a series of events in a way that we knew we could demonstrate didn't happen. We did not win as the result of tricky legal maneuvers. We won because we were able to prove that what they said happened didn't happen.
Q: To what degree is human rights now a concern for GCs or board members?
A: I defy almost anyone to come up with a commonly accepted definition of the phrase human rights. Does a company like ours want to operate responsibly where we operate? Absolutely. But we are cognizant when any event of any type happens there is a propensity for aggressive trial lawyers to come back to us and characterize it as a human rights issue. We deal with it in our compliance and operating regimens, and hope that when a thing like Bowoto occurs we have a documentary record to show our company has done the right thing. The common thread in all these cases is that the government hasn't done something it was supposed to do. The reality we have to deal with all over world is people want to change governments through litigation against our company.
Q: There is a movement afoot to address climate change through litigation. Is that on your radar?
A: Well, yes. I read an editorial yesterday on the beneficial social role of plaintiffs' lawyers. I laughed and then I threw up. The fact of the matter is litigation is never a way to get appropriate societal results. The idea that we have all these plaintiffs' lawyers acting as private attorney generals [sic] trying to achieve appropriate social results and they happen to get rich doing it is preposterous. If there's ever going to be an appropriate resolution of climate change it's not going to take place in anybody's courtroom. All this litigation is dressed up as people trying to change the world and it's really trying to change the balance of their bank accounts. How can we possibly throw a social issue like this into the hands of a nonexpert decision maker who then makes the decision based on the presentations of someone in it for money? It's just not a good way to make public policy.