One of Chevron's chief Ecuadorian lawyers, Rodrigo Perez Pallares, has admitted under oath that the company has been lying to courts in the United States and Ecuador to evade a potential $27 billion liability in Ecuador. Chevron is accused in a lawsuit of deliberately dumping more than 18.5 billion gallons of toxic "produced water" and oil waste into Ecuador's Amazon rainforest when Texaco (now Chevron) operated and reaped the profits of an oil concession there from 1964 to 1992.
For years, Chevron's primary defense in the case – given that the scientific evidence of pollution is overwhelming -- is that the government of Ecuador "released" it from any future liability in return for a partial "remediation" even though that so-called "remediation" has been exposed as a complete fraud.
But the sworn testimony of Perez Pallares, Chevron's own lawyer and the man who negotiated and signed the "release" agreement, proves what the Amazonian communities have long said – that Chevron knows that this legal defense is bogus. When Perez Pallares was asked in a deposition in the United States if the "release" impacts claims of third parties parties who did not sign the release (like those of the Amazonian residents currently suing Chevron) his response was simple: The release has no impact on those claims.
This testimony directly contradicts what Chevron is saying in various courts around the world, to its shareholders, to journalists, and to the SEC and regulatory authorities. Perez Pallares made his statements on November 16, 2006, during a deposition in a separate litigation between Ecuador's government and Chevron in New York federal court. 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.
An excerpt from the stunning testimony of Perez Pallares:
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.
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, know that the company has been lying about its "release" of liability in Ecuador – which is why they've been desperate to attack the people bringing the lawsuit against the company and their allies. This desperation (and Watson's thin skin about the Ecuador issue) was on display in recent days when the company's annual shareholder meeting exploded into chaos when Watson couldn't handle being confronted by critics of Chevron's abysmal human rights and environmental record. Instead of talking to the critics, who had a legal right to be present at the shareholder meeting, Watson lost control of the meeting and ordered Chevron's private security forces and the Houston Police Department to crush the protestors – arresting five non-violent company critics, including a reverend from Oakland, CA. Now Chevron and the Houston Police Department are facing additional liability for blowing their cool and treating the shareholder's meeting like a junior high school student council meeting.
Given the size of Chevron's Ecuador liability and his own involvement in covering it up, Watson's desperation is understandable. Watson and Pate know that the scientific evidence – more than 62,000 chemical sampling results – and trial record – more than 200,000 pages of evidence, testimony, and motions – conclusively demonstrate Chevron's culpability in a disaster that is several orders of magnitude larger than the terrible tragedy caused by BP's spill in the Gulf of Mexico.
Given Chevron's despicable conduct in Ecuador, it is not surprising that Watson is using any means necessary to escape the liability – even if it includes lying to U.S. and Ecuadorian courts about the so-called "release" that his own lawyer knows is a bogus defense.