Fox News: Chevron Shares Held Down by $27b Ecuador Environmental Liability

Chevron has been desperate to downplay its potential $27 billion environmental liability in Ecuador. It employs dozens of lobbyists and lawyers to distract attention from the fundamental fact the company's financial picture is materially and adversely affected by the Ecuador liability. It spends millions on a widespread legal and public relations assault against the affected indigenous communities, directed by the law firm Gibson, Dunn & Crutcher. But it appears that the markets aren't buying what Chevron and its law firm are selling. According to this article that appeared on Fox Business, Chevron's shares have been shedding value due in part to the massive liability the company faces in Ecuador. The Gibson Dunn lawyers clearly need to step up their game if they hope to continue billing massive amounts of money in an increasingly futile effort to get their client off the hook for its human rights violations in the Amazon. Read on:

Chevron Down as It Continues to Fight $27B Environmental Lawsuit in Ecuador

By Jennifer Booton

Published August 24, 2010

FOXBusiness

Despite tripling its second quarter profit last month, Chevron (CVX: 73.74 ,-1.32 ,-1.76%) has since fallen nearly 2.46%, as it remains under the grip of a $27.3 billion lawsuit, the largest environmental damages lawsuit ever tried.

The company reported quarterly earnings last month of $2.70 a share on sales of $48.9 billion, beating estimates by 24 cents, though missing revenue expectations by $9.7 billion.

The strong results catapulted Chevron's stock to a 10-day winning streak, peaking on Aug. 10 at $79.32.

But the oil company has lost much of its gains over the past few weeks as it continues to fight a lawsuit in Ecuador that alleges Texaco, acquired by Chevron in 2001, wrecked portions of a jungle while drilling for oil in the 1970s and 1980s.

Chevron has fought the accusations, filing a petition earlier this month before the Provincial Court of Sucumbíos in Lago Agrio in Ecuador seeking dismissal.

The court's decision, expected in the months ahead, may be appealed to Ecuador's Supreme Court, and the energy giant has vowed to do so if it loses the case.

Chevron traded in the red Tuesday, down about 1.20% to $72.15 at 2:40 PM EST

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Zennie: The Lies That Destroy Your Credibility

Last week our friend and pro-Chevron blogger Zennie Abraham at zennie2005.blogspot.com took a page from Chevron's talking points and went on yet another ill-informed rampage against the 30,000 rainforest residents suing Chevron. The point of Zennie's rant? That one of the lawyers for the Amazonian communities supposedly "destroyed" the case against Chevron with a single statement, as shown in film outtakes from Joe Berlinger's documentary CRUDE.

Zennie makes his usual outlandish claims – ranging from those relating to the film outtakes (the "statement that destroys the case") to wholesale and paternalistic condemnations of entire countries ("under-developed nations like Ecuador…don't take steps to make life better for their poorest people [but instead] allow them to be exploited by [lawyers] for their own personal gain.") At one point he claims that the video shows consultants to the communities stating that they don't have evidence of groundwater contamination and the lawyers saying it doesn't matter because the case is all "smoke and mirrors."

But Zennie and Chevron are wrong again. It turns out that the video that created this manufactured outrage are heavily-edited clips that were, predictably, spliced and diced by Chevron to mislead the court. In reference to Chevron's court filings, filmmaker Berlinger told Fortune magazine
that he was ""dismayed at the level of mischaracterizations... The footage citations are being taken out of context and not being presented to the court in its entirety, creating numerous false impressions, precisely what we feared when we were first issued the original subpoena."

Once the plaintiffs finally got a chance to look at the same outtakes (which in an amazing violation of protocol Chevron had refused to turn over to the Lago plaintiffs), their response shredded Chevron's claims. An excerpt from the brief from the communities:

Now it is clear why Chevron hid the full outtakes from the Court and from Plaintiffs, and pressed to have this motion decided before Plaintiffs could even review the evidence. Chevron and its counsel have rushed to mislead the Court and the public with a McMotion based on sound-bites and highly-edited, de-contextualized snippets constituting less than 0.1% of the outtakes. It did so while concealing massive evidence in the outtakes of its own misconduct. And it did so in plain violation of a Second Circuit order.

Zennie's claims that the scientists for the communities said that there is no evidence of the damage to the region? The actual quotes from the film scene show the consultants really said just the opposite:

"[W]e also have water with very, very high contents of carcinogenic minerals .... The contaminants are located all over. If you just go through the area and you look at a small stream you will see the sheen of the oil on the water. Which means it's still going on."}; "The ground water is contaminated. How much? How far? You know, we know that Texaco is wrong, Chevron's wrong, you know, it's definitely some ground water contaminated, there's discharges that go right in the waterways .... They destroyed this area. It's done."

Zennie, why the animus toward the thousand of rainforest residents? What in your fragile psyche makes you lie on behalf of an American company trying to cover up its crimes?

We hope you are smart enough to get paid handsomely for your undying service to Big Oil's cause.

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Democracy Now Reports on Journalist Exposé of Chevron’s Ecuador Spy Scandal

Yesterday, Democracy Now! covered Chevron's attempt to hire a journalist to turn corporate spy to undermine the rule of law in Ecuador. Mary Cuddehe, the journalist who turned down the offer and exposed the effort in The Atlantic magazine, appears, along with Han Shan, Coordinator of Amazon Watch's Clean Up Ecuador Campaign.

Take a look at the film below:

Rush transcript available here.

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Chevron’s “Wild Distortions” Eviscerated in Court Filing

A legal paper filed in U.S. Federal Court last week by the plaintiffs taking on Chevron over its toxic contamination in Ecuador filed an explosive legal memo that finally shines some light on Chevron's consistent mischaracterizations of heavily edited, out-of-context film footage that the company has used to make hyper aggressive allegations of fraud. It turns out that the company, predictably, has used "wild distortions" of the Ecuador video to make their claims - wild distortions that are plainly contradicted by showing the film footage in its entirety and in the context that it was shot. Take a look at the press release from the Amazon Defense Coalition about Chevron's distortions, and the filing that sheds light on them:

 

Chevron Submits "Wild" Distortions of Ecuador Video to Federal Court; Conceals Evidence of Own Misconduct

Violates Federal Court Order By Sending Filings to Media

NEW YORK--(BUSINESS WIRE)--In an explosive legal filing, lawyers for Ecuador's Amazonian communities suing Chevron for environmental damage have submitted evidence that the oil giant is attempting to mislead a U.S. Federal Court with "wild, superficial allegations" based on "snippets" of private video outtakes from Joe Berlinger's award-winning documentary film CRUDE.

Representatives of the 30,000 rainforest residents, who have suffered from nearly 50 years of living in and around oil contamination, responded in their own legal filing to Chevron's misleading use of the video clips by claiming Chevron is hiding "massive evidence of its own misconduct" contained in the footage.

CRUDE chronicles part of the 17-year legal battle between the Ecuadorian Amazonian communities and Chevron, which the residents accuse of creating the worst oil-related disaster on Earth.

Chevron had pressed to have U.S. federal judge Lewis Kaplan decide its motion before the plaintiffs could review the entire 500 or hours of film clips, as Chevron refused to share them after receiving them from Berlinger under court order. Review of even a small sample of clips by lawyers for the communities shows clearly that Chevron had attempted to mislead the Court and had violated a court order by turning over excerpts from the outtakes to the media before even serving opposing counsel.

According to the motion filed by the communities:

"Now it is clear why Chevron hid the full outtakes from the Court and from Plaintiffs, and pressed to have this motion decided before Plaintiffs could even review the evidence. Chevron and its counsel have rushed to mislead the Court and the public with a McMotion based on sound-bites and highly-edited, de-contextualized snippets constituting less than 0.1% of the outtakes. It did so while concealing massive evidence in the outtakes of its own misconduct. And it did so in plain violation of a Second Circuit order."

The motion also pointed out that Chevron provided its filing to a blogger previously paid by Chevron, Carter Wood, and sent out a press release and Tweet around two hours before it served opposing counsel. In direct violation of the court order, Chevron then produced transcripts of the outtakes directly to the San Francisco Chronicle, according to a report in that newspaper.

The legal brief for the communities showed Chevron's bad faith and selective editing of the film clips, including Chevron's false assertion that consultants for the Amazon communities admitted they have no evidence of groundwater contamination, when in fact those consultants said repeatedly that the groundwater is contaminated.

"Chevron's failure to accurately describe the evidence is part of a larger scheme by the Chevron lawyers to hide the company's misconduct in Ecuador," said Jonathan Abady, an American attorney for the Amazonian communities.

"Chevron is engaged in a desperate attempt to distract attention from the environmental disaster and public health crisis it caused in Ecuador," he added.

Chevron also came under fire from Berlinger for violating a federal court order prohibiting use of the materials for press or public relations purposes, noting Chevron's distribution of the material on Twitter and to bloggers hours before it was served on opposing lawyers.

Chevron's lawyers also suggested that an "enterprising" law student copy the outtakes from the court and post them on the Internet, in an apparent violation of the order, according to a blogger.

In his own court filing, Berlinger accused Chevron of making "false and misleading" statements about the film outtakes. He told Fortune magazine that he was "dismayed at the level of mischaracterizations in Chevron's Memorandum brief... The footage citations are being taken out of context and not being presented to the court in its entirety, creating numerous false impressions, precisely what we feared when we were first issued the original subpoena."

More information about the filing can be found at www.chevroninecuador.com.

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Chevron’s Secret Agent In Ecuador: Meet Sam Anson of Kroll

Last week The Atlantic Magazine, in an article by American journalist Mary Cuddehe, exposed the latest element of Chevron's world-wide campaign to escape liability for illegally dumping toxins in Ecuador: a bona fide corporate espionage scandal.

According to a firsthand account by Cuddehe, Chevron used Kroll (the world's leading publicly traded investigations firm) to help the company concoct a creepy plan to create a journalist spy ring in Ecuador's Amazon to try to undermine a potential multi-billion dollar judgment against the company for 26 years of toxic dumping.

This is consistent with Chevron's desperate behavior in Ecuador. And Kroll had the perfect man for Chevron's black-bag job: Sam Anson, the company's "Managing Director for Latin America & the Caribbean." The fact that this conduct was likely to violate the ethical rules of the legal and investigative professions was apparently of no instance to the company or to Anson.

How do we know the "Sam" in The Atlantic story is Sam Anson? Read on.

The Cuddehe article described "Sam" as a former free lance writer reporting on race and hip hop… a former American journalist… someone in his mid-40s… who carries himself with "the ease that comes with professional achievement". He was also described as a Kroll operative working for Chevron.

Well, that seems to fit Sam Anson neatly. A former reporter before going over to the dark side (check out a Vibe magazine article written by "Sam Anson" on race and hip hop here, and Anson's LinkedIn profile lists him as a former "investigative reporter" for various publications), Anson has a long history with Kroll. He has been with the company for a decade, moving from Managing Director of the company's Los Angeles unit to his current position – at least according to his LinkedIn profile. But we can't give you a link for that – Anson deleted it sometime last week after the article appeared. (You can still catch a glimpse on Google's Cache, if you hurry…) And a simple Google search of his name gives us a bunch of pictures of Mr. Anson (which we've conveniently pasted into this blog), and a bunch of articles (here and here) citing Anson as Kroll's Managing Director for Latin America & the Caribbean.

As a former reporter, Anson knew that if he could find a reporter willing to lie, he would have the perfect spy. So he tried to recruit Cuddehe, a youngish reporter in her 20s based in Mexico City.

Cuddehe, an Iowa-born graduate of Columbia University with a Masters degree in Journalism, has published articles in The New Republic, the Miami Herald, and The Associated Press. She spoke Spanish and was a legitimate journalist – the perfect "pawn" (in her words) for Anson and Chevron.

Anson flew Cuddahe to Bogota and put her up at Chevron's expense in a luxury hotel. Anson then told Cuddehe that he wanted her to go to Lago Agrio, Ecuador (the site of the trial) and pretend to be writing a story about the case, while secretly funneling information back to Chevron.

Cuddehe wrote about Anson's attempt to hire her in The Atlantic:

"At first I thought I was underqualified for the job. But as it turned out I was exactly what they were looking for: a pawn."

"…there was a reason [Chevron] wanted me… If I went to Lago Agrio myself and pretended to write a story, no one would suspect that the starry-eyed young American poking around was actually shilling for Chevron."

Chevron's decision to pay journalists to lie as part of a spy campaign is "disturbing evidence of questionable if not outright illicit conduct by Chevron and Kroll" according to Jonathan Abady, a lawyer for the plaintiffs. Abady noted in a press release that Chevron had the option to use legitimate, above-board investigators, but instead choose to use a clandestine and unethical investigative strategy.

"Legitimate investigations are fine; paying journalists to lie is unethical and a direct attack on the credibility of all journalists worldwide," he said in a press release available here.

Abady also noted that Kroll investigators who misrepresent themselves at the behest of legal counsel could be violating the ethical rules of the legal profession, subjecting Chevron's lawyers to sanctions in the United States. Hew Pate, Chevron's General Counsel, needs to explain the situation.

Chevron's actions shouldn't come as a surprise. The company has been embroiled in a steady procession of scandals as it has engaged in unethical and potentially illegal activity in its efforts to escape liability in Ecuador. Just last year, the Amazonian communities accused Chevron of violating the U.S. Foreign Corrupt Practices Act by engaging in a "sting" operation where a bribe was offered to help remove the trial judge from the case. An investigation determined that the "sting" operation and bribe offer was made by a long-time Chevron contractor, Diego Borja, who worked under the direction of Chevron's lead Ecuador lawyer Adolfo Callejas and the Chevron vice-president supervising the trial, Ricardo Reis Veiga (now under indictment in Ecuador for criminal fraud).

Borja has a long history with Chevron in Ecuador – earlier this year, Santiago Escobar, a childhood friend of Borja's - publicized taped conversations he had with Borja where Borja brags about the criminal acts he had conducted on Chevron's behalf. Among the items that Borja bragged about? Falsifying evidence at trial and facilitating a Chevron bribe of Ecuadorian army officials in 2005 to fabricate a charge that local indigenous leaders were planning a terrorist attack against Chevron's lawyers, forcing the cancellation of a critical judicial inspection of a contaminated Chevron well site.

Borja is now residing in San Ramon, California – just a few blocks from Chevron's headquarters – where the company stashed him away to keep him out of reach of the subpoena power of the Ecuadorian courts he conspired to undermine. He lives in a luxury villa that backs up to a golf course.

Chevron's actions are irresponsible, unethical, and potentially criminal. But this is a company that dumped (by its own admission) more than 18 billion gallons of toxic "produced water" directly into the waterways and environment on which tens of thousands of people rely – so it isn't expected to care about little things like ethics and corporate responsibility.

Chevron should stop spending millions of dollars on spies, and recognize the fact that it has a moral, ethical, and legal duty to clean up the catastrophe it left in Ecuador.

Sam Anson: who among Chevron's law firms is running you? Gibson Dunn, Jones Day, or King & Spalding? And exactly why did you delete your LinkedIn profile after Cuddehe published her article? And which journalists are you paying to go undercover in Ecuador?

Come clean, Sam Anson.

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Chevron P.R. Campaign Gets It Wrong Again

Last week Chevron's P.R. mavens were at it again – this time spinning out a number of carefully edited and selected outtakes from the documentary "Crude" to as part of an all-out assault on the lawyers for the 30,000 Ecuadorians suing the company for destroying an area of the rainforest the size of Rhode Island. Chevron is trying to intimidate the lawyers by using the edited film clips as the basis for fraud charges that are a cynical and desperate 11^th-hour attempt to escape liability by any means necessary.

(Recently, Chevron got access to the private film outtakes of celebrated documentarian Joe Berlinger from his award-winning documentary "Crude" – in a highly criticized, unprecedented assault on the First Amendment. After a long court fight, Berlinger surrendered the film to Chevron after the company promised not to use it for any purpose other than litigation. Take a look at this post here.)

Chevron has claimed that the video outtakes show that the plaintiffs' lawyers have manufactured the lawsuit against the company out of "smoke and mirrors" that are "all bullshit" and are simply an extortion racket to get money from the oil company. Over the last week the company's lawyers and public relations specialists have been working bloggers and journalists to try to push this view as far and wide as possible. Among Chevron p.r. firms is Hill & Knowlton, which used the same playbook for the tobacco industry, and Creative Response Concepts, which invented the Swift Boat ads that targeted John Kerry.

Of course, Chevron's not telling the truth about what the video outtakes do show. In fact, any viewing of the actual film footage – and not Chevron's edited, hand-picked, out-of-context scenes - shows exactly the opposite. Even the concept where the plaintiffs' attorney is making the comments Chevron has zeroed in on is in the context of a methodical outlay of the massive amount of the scientific evidence proving the company's guilt for creating the world's worst environmental disaster. Chevron has not disputed this – but it has refused to release the entire scenes, or the unedited video on which it was basing its public relations assault on the plaintiffs.

Nor, of course, does Chevron publicize the hundreds of hours of outtakes provided by Berlinger that point clearly to its own misconduct in Ecuador.

This shouldn't surprise anyone. Chevron has a long history of playing fast and loose with video, using misleading and mischaracterized film footage to try to score public relations points. Almost a year ago, Chevron spliced and diced footage that it claimed showed a bribery scheme in Ecuador – a claim that was later completely discredited as a company "dirty tricks" operation. Before that, Chevron paid a former CNN anchor, Gene Randall, to produce a video about the lawsuit that appeared to be a legitimate "investigative reporting" newscast, presumably to trick viewers into thinking they were watching an independent report on the issue.
The company has proven it will stop at nothing to try to find a way to evade its liability in Ecuador – earlier this week The Atlantic reported that a freelance reporter for the publication was flown to Columbia and offered $20,000 to go undercover on behalf of the company.

For all of the efforts to attack the lawsuit, it is interesting what Chevron has not done: focus on the evidence that clearly prove its responsibility for the worst oil-related contamination on the planet.

After more than 17 years of litigation, Chevron has not seriously disputed the scientific evidence that conclusively shows it is responsible for creating the world's worst oil-related disaster. In the Ecuador trial, more than 64,000 chemical sampling results – 80% of which were provided by Chevron's own scientists – and a 200,000 page trial record has produced a mountain of evidence showing the extent of the contamination. The evidence is clear: over 26 years of operations, from 1964-1990, Chevron produced a legacy of environmental destruction that is at least twice as large as the BP spill in the Gulf of Mexico in sheer size.

It is time for Chevron and its bloggers to stop misrepresenting film clips, quit the public relations battle, and take a look at the hard science that proves it is responsible for the horrible contamination.

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Chevron Breaks Promise to U.S. Courts, Misrepresentation Campaign Continues

As predictable as ever, Chevron has violated another promise made to a U.S. federal court – this time just days after it was made by Gibson Dunn lawyer Randy Mastro.

Last week Mastro (the former Deputy Mayor to Rudy Giuliani who is now Chevron's lead lawyer in the Ecuador litigation) promised the 2^nd Circuit Court of Appeals that the oil giant wouldn't use any footage turned over by filmmaker Joe Berlinger in its publicity campaign to distract attention from its role in creating the worst oil-related disaster on Earth.

Chevron had been trying to access the film footage - Berlinger shot it for his award-winning documentary "Crude" – in a highly criticized, unprecedented assault on the First Amendment. After a long court fight, Berlinger surrendered the film to Chevron after the company promised not to use it for any purpose other than litigation.

Only days after getting the footage, Chevron has gone back on its promise and pushed the contents of the film out to its pet bloggers – exactly what it had promised not to do. Predictably, Chevron has spliced and diced the footage to claim it shows evidence of "fraud". The basis for this extraordinary accusation? One scene which showed a lawyer telling the scientific consultants for the plaintiffs that he thought no more proof was necessary to make the case that Chevron was responsible for massive environmental contamination, and then asking the filmmaker to turn off the camera.

Wow Randy – you really hit paydirt!!!!

Talk about spending millions of dollars in legal fees to hit a dry well. Chevron's lawyers at Gibson Dunn, sniffing a billing bonanza and promising on its website to mount a "rescue operation" from the potential $27 billion liability in Ecuador, sold Chevron's in-house counsel on the idea that Berlinger's outtakes contained "smoking gun" evidence of "collusion" between lawyers for the Amazonian communities and Ecuador's government. On this theory Mastro has justified a legal odyssey that has trampled the First Amendment and lined up pretty much every actor and filmmaker on the planet, from Leonardo Di Caprio to Bill Moyers to Michael Moore, against Chevron. Gibson Dunn actually had the audacity to bill for this abomination.

Mr. Mastro, we're still waiting for that smoking gun evidence. In the meantime, why don't you investigate Chevron's fraud in the so-called "remediation," the use by Chevron of a bogus laboratory test to fraudulently induce a release from Ecuador's government, the bribe that your buddy Reis Veiga orchestrated to stop the Guanta inspection, the Borja sting operation orchestrated by Chevron's in-house counsel, the corporate espionage campaign where you hired Kroll to pay journalists to go undercover in Ecuador to spy on the plaintiffs, and the role of you and your colleagues in whisking Borja and others out of Ecuador so they could not be questioned by prosecutors.

In Chevron's desperate attempt to direct attention away from the massive evidence of the contamination caused by its oil operations in Ecuador's rainforest (all told, more than 64,000 scientific sampling results and more than 200,000 pages of trial record point to Chevron's culpability), the company is using every card in the old tobacco industry playbook. Chevron management surely knows what its lawyers try to hide from the public: that the evidence before the court conclusively proves its responsibility for an environmental disaster at least twice the size of the BP disaster in the Gulf.

This isn't the first time Chevron has gotten itself into hot water for manufacturing videos to "prove" its points. Last year the company fell flat on its face when it misrepresented the contents of a secret video created by Borja and became a laughingstock when it paid former CNN reporter Gene Randall to produce a propaganda video masquerading as a "news" report.

So Chevron's misrepresentation campaign marches on, with human lives destroyed and the integrity of the company in tatters, and with lawyers like Mastro laughing all the way to the bank.

Federal courts should sanction Chevron and Mastro for this latest travesty. The oil giant clearly thinks it is above the law. Let's hope that the Court reminds Chevron's lawyer Mastro that promises to the federal judiciary are not made in vain.

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Chevron Outed for Corporate Espionage Spy Scandal in Ecuador’s Amazon Rainforest

Chevron's latest desperate attempt in its effort to avoid a potential $27.3 billion liability for illegal dumping in Ecuador's rainforest? The company has taken to trying to hire journalists in an unethical attempt to derail the litigation. Take a look at the below press release from the Amazon Defense Coalition explaining the company's entanglement in the spy scandal below:

Chevron Outed for Corporate Espionage Spy Scandal in Ecuador's Amazon Rainforest

Atlantic Magazine Exposes Offer to Journalist to Go Undercover to Sabotage $27 Billion Environmental Case

LAGO AGRIO, Ecuador--(BUSINESS WIRE)--Chevron, long accused of engaging in an illegal dirty tricks campaign in Ecuador, tried to recruit an American journalist to take part in a corporate espionage spy ring in Ecuador's Amazon to undermine an expected multi-billion judgment against the oil giant in a high-profile environmental lawsuit, according to an article published in the latest issue of The Atlantic.

Mary Cuddehe, an Iowa-born graduate of Columbia University with a Masters degree in Journalism, published an article documenting that the investigative firm Kroll has been running an espionage operation in Ecuador on behalf of Chevron, which faces a $27 billion damages claim for creating what experts believe is the worst oil-related catastrophe on the planet.

A Kroll employee offered Cuddehe $20,000 for six weeks of work to appear as an independent journalist while working as an undercover spy in Lago Agrio, Ecuador. Lago Agrio is the jungle town in the Amazon where the trial is being held at Chevron's request after the case was originally filed in New York federal court several years ago.

The Kroll employee, identified as a former journalist named Sam, paid for Cuddehe to travel to Bogota where the case was explained and she was offered the money in the suite of a luxury hotel. Cuddehe said in a blog that she has published articles in The New Republic, the Miami Herald, and for the Associated Press.

"Last February, I got an offer from Kroll … to go undercover as a journalist-spy in the Ecuadorian Amazon," wrote Cuddehe in the article, titled "A Spy In the Jungle".

"At first I thought I was underqualified for the job. But as it turned out I was exactly what they were looking for: a pawn."

She added: "…there was a reason [Chevron] wanted me… If I went to Lago Agrio myself and pretended to write a story, no one would suspect that the starry-eyed young American poking around was actually shilling for Chevron."

Representatives for the Amazon communities who are victims of the environmental damage blasted Chevron and Kroll for engaging in corporate espionage. The article suggested that numerous Kroll employees were working on the Ecuador project from a base in neighboring Colombia.

With headquarters in New York, Kroll is considered the largest investigative firm in the world and is publicly traded.

"This is disturbing evidence of questionable if not outright illicit conduct by Chevron and Kroll, possibly subjecting Chevron's lawyers to sanctions or penalty in the U.S.," said Jonathan Abady, an American lawyer who represents the plaintiffs. "It is hard to imagine Kroll engaging in this conduct alone without oversight from Chevron's lawyers."

"Legitimate investigations are fine; paying journalists to lie is unethical and a direct attack on the credibility of all journalists worldwide," he added.

Abady noted that Kroll investigators who misrepresent themselves at the behest of legal counsel could be violating the ethical rules of the legal profession, subjecting Chevron's lawyers to sanctions in the United States.

Events described in Cuddehe's article fit with a larger pattern in recent years of unethical and potentially illegal activity by Chevron to undermine the rule of law in Ecuador. The company has admitted to deliberately dumping more than 18 billion gallons of toxic waste into the Amazon when it operated an oil concession from 1964 to 1990.

Last year, the Amazonian communities accused Chevron of violating the U.S. Foreign Corrupt Practices Act in Ecuador by engaging in a "sting" operation where a bribe was offered to help remove the trial judge from the case. An investigation determined that the "sting" operation and bribe offer was made by a long-time Chevron employee, Diego Borja.

Chevron later paid to move Borja to a luxury villa close to Chevron's global headquarters in California to avoid questioning by Ecuadorian prosecutors.

Once in the U.S., Borja was taped in a telephone conversation with childhood friend Santiago Escobar as saying Chevron was "cooking" evidence in the Ecuador trial, using fake soil samples, and representing its own laboratory as independent when in fact it was operated by Chevron agents. He described himself to Escobar as being in charge of Chevron's dirty tricks campaign in Ecuador.

Borja also admitted to Escobar that Chevron bribed an Ecuadorian army official in 2005 to charge local indigenous leaders were planning a terrorist attack against Chevron's lawyers, forcing the cancellation of a critical judicial inspection of a contaminated Chevron well site.

Information relating to the Borja sting operation has been turned over to the U.S. Department of Justice.

In 2006, lawyers for the Amazonian communities were hit with a series of anonymous threats that prompted protest letters from the International Commission of Jurists and the United Nations.

The U.S. law firms employed by Chevron to defend the Ecuador trial are Gibson Dunn, King & Spalding and Jones Day. One or more of the firms likely is overseeing Kroll's work, said Abady.

"I have two words for Chevron's management and Board of Directors: Hewlett Packard," said Ilann Maazel, who represents the Amazonian plaintiffs in the United States. "This is outrageous and potentially exposes Chevron to even more liability."

In 2006 the Chairperson of Hewlett Packard's Board, Patricia Dunn, was forced to resign and fight criminal charges from California's Attorney General for authorizing espionage to find out the source of leaks to journalists. Chevron is a California-based company.

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