Chevron Lawyer Rodrigo Perez PallaresIf there was ever ironclad proof that Chevron is being deceptive in court and before the public about the "release" it claims it received in Ecuador, it can be found in the sworn deposition testimony of Chevron's own lawyer in Ecuador who signed the release for the company. It turns out that this lawyer, Rodrigo Perez Pallares, admitted under oath that the "release" does not apply to the claims in the pending Lago Agrio lawsuit in Ecuador. This contradicts what Chevron's American lawyers and public relations operatives are telling judges, journalists, the SEC, and shareholders all over the world.
Proof of this admission can be read here. Remember, Perez Pallares negotiated and signed the "release" for Chevron so we can assume he knows what he's talking about.
Chevron's CEO, John Watson, and General Counsel, Hewitt Pate, continually refer to the release as "proof" Chevron's contractual rights are being violated in Ecuador by the mere existence of the lawsuit brought by the indigenous groups for environmental clean-up. The company has submitted this false information as "fact" to the Bush and Obama Administrations in an attempt to convince them to cancel trade preferences for Ecuador as a "punishment" for letting its own citizens sue Chevron in their own courts. (Chevron, remember, fought for nine years to move the case to Ecuador out of U.S. federal court where it was filed in 1993.)
But that's not all. Chevron is also basing an entire international arbitration against Ecuador's government – which commenced recently in London -- on what is essentially a misrepresentation of the facts. This is not the first time Chevron has tried this maneuver – they also tried it against Ecuador's government in a litigation in New York federal court that lasted from 2004 to 2009 (which is where Perez Pallares testified). In that case, Chevron hastily withdrew the "release" claim when it appeared a U.S. federal judge could actually review it and issue a ruling.
In his deposition, Perez Pallares was clear that Chevron's arguments about the "release" are bogus. Under questioning from a lawyer from Ecuador's government, he said the "release" does not apply to the claims of the plaintiffs in the Lago Agrio case.
An excerpt from his sworn testimony:
Q: But what [Article 8 of the MOU] does do instead is it carves out entirely any action brought by parties who were not parties to the settlement agreement. Would you agree with that?
The Witness (Pallares): I agree…
Q: If I'm understanding you correctly, and I don't mean to mischaracterize your testimony – you'll tell me if I'm incorrect – I think what you're saying is that a plaintiff can sue in Ecuador but can only obtain relief to the extent that Ecuador permits that relief.
Pallares: That's exactly it.
Q: But the MOU and the settlement doesn't affect that one way or the other. It doesn't give them rights they would not otherwise have. Is that a fair statement.
Pallares: That's correct.
Read the entire page of the testimony here.
Note also that section VIII of the Memorandum of Understanding signed by Chevron and Ecuador's government in 1994 explicitly states (in reference to the release):
The provisions of this agreement shall apply without prejudice to the rights possibly held by third parties for the impact caused as a consequence of the operations of the former PETROECUADOR-TEXACO Consortium.
Because of these facts, Watson and Pate have Chevron in a legal pickle over the Ecuador problem. Chevron is faced with overwhelming scientific evidence of the extreme destruction that Texaco's substandard operational procedures caused in the Ecuadorian rainforest when it operated there from 1964 to 1992. As a result, Chevron faces an enormous potential liability.
Chevron has spent years trying to evade accountability in Ecuador. The company has tried lobbying, public relations campaigns, wild accusations, and even a "Nixon"-style dirty tricks operation to undermine the trial. Now, Chevron is using all of its influence in Washington and around the world to try to pressure the government of Ecuador based on a myth about the "release" -- just so it can extract an advantage in a private litigation that it is losing.
Chevron needs to understand that the Obama (and Bush) Administrations try to make policy on what is best for the country, not what is best for Chevron. That is why for five straight years our government has renewed Ecuador's trade preferences over Chevron's objections.
About the only thing separating Chevron from that enormous liability in Ecuador is a misrepresentation about its supposed "release". That must not be terribly comforting for Chevron's shareholders, even if it gives false comfort to those managing the company.