Monday, September 19, 2016

Calling Chevron's Bluff

The courthouse in Canada

Reposted from Eye on the Amazon.

One of the worst oil-related disasters in history occurred when Texaco, later purchased by oil giant Chevron, deliberately dumped 18 billion gallons of toxic waste into the Ecuadorian Amazon over the course of decades. The resulting health crisis in the rainforest home of 30,000 Amazonian inhabitants continues to this day. A $40 million deal with the government of Ecuador in 1995 resulted in a sham remediation, after which Texaco publicly washed its hands of the affair.

Not satisfied with such an egregious lack of justice, the affected communities have continued to demand accountability, taking their case all the way to the Ecuadorian Supreme Court, and winning: in 2011 an Ecuadorian judge found Chevron liable for $9.5 billion in damages, a ruling upheld by the Supreme Court. Instead of doing the right thing, however, Chevron took its assets and fled from Ecuador, and continues to use its corporate might to avoid accountability. Nonetheless, the communities and their allies around the world haven't given up the quest for justice.

The quest continues

Amazon Watch spent four days last week in a courthouse in Toronto to witness the latest, and hopefully last, chapter in this epic quest for justice.

When Chevron fled Ecuador after the $9.5 billion judgement against it, the affected communities turned to the courts in Brazil, Argentina and Canada to hold the company accountable, seeking summary judgments allowing the seizure of the assets of Chevron subsidiaries in order to pay for the Ecuador judgement.

Backed by a unanimous 2015 decision from Canada's Supreme Court giving a green light for the Ecuadorians to sue Chevron in Canada, last week's trial is an important step in the quest for justice. The principal issue before the court was whether to grant the Ecuadorian's request for access to Chevron Canada's assets to cover the $9.5 billion judgement, versus Chevron's defense motion to summarily dismiss the entire claim. The Ecuadorians base their plea on the massive evidence of contamination in Ecuador and a $9.5 billion verdict issued in Ecuador and upheld by its highest court. Chevron claims the verdict itself is fraudulent, basing this claim on the fact that it managed to win a retaliatory RICO (racketeering) lawsuit in the US by alleging bribery, corruption, and a "ghostwritten" judgment by the Ecuadorian court.

Also at issue is what lawyers call "piercing the corporate veil" of hidden parent-subsidiary relationships in order to hold Chevron Canada – a wholly owned subsidiary of Chevron Corp. – liable for the actions and its parent company. The Ecuadorians assert that their action doesn't really hold Chevron Canada responsible, it simply seeks to hold Chevron accountable by seizing assets it controls in Canada through what is actually nothing more than a holding company. This is an important issue for corporate accountability advocates everywhere, because corporations around the world attempt to hide behind the corporate veil.

Therefore, Ontario Superior Court Judge Glenn Hainey will have to decide whether to grant a summary judgement in favor of either the Ecuadorians or Chevron, or to send the case to trial to examine in depth the claims made by both sides.

This last option was welcomed by the lawyer for the Ecuadorians, Alan Lenczner, who encouraged Judge Hainey to give him the opportunity to demonstrate the falsehood of Chevron's claims of bribery and a ghostwritten judgement in Ecuador, and the resulting invalidity of the US RICO decision.

Lenczner's offer provoked quite a reaction from Chevron's legal team in the courtroom (over a dozen US and Canadian lawyers), but he persisted. "That's the issue and what should be tried here. If they're right and have confidence in that, then they can show you and... well then, we lose," Lenczner continued emphatically. "We should have a trial on the ghostwriting! Here's how a trial would go. I will stand up and file a judgment which will be valid until you [the judge] set it aside. Chevron will then bring on their defense and call Guerra [Chevron's “witness” to the alleged bribery]... They won't call Guerra, they're afraid to," concluded Lenczner. By doing so he called their bluff; Chevron's RICO verdict is predicated on the testimony of a corrupt witness, who has since admitted he lied in exchange for over $2 million from Chevron.

To explain the details of this sordid tale and just how Chevron has apparently backed itself into a seemingly impossible corner, we must return to the beginning of the story and detail more about Chevron's efforts to escape justice at all costs.

The history

While Texaco long since admitted to dumping the toxic waste as a cost-saving measure, and is therefore responsible (as the sole operator) for the contamination, Chevron, since its purchase of Texaco, has itself dumped billions of dollars into fighting to avoid a full cleanup, even while knowing full well it could never win the case based on the merits.

The number of legal hoops that Chevron has jumped through to avoid accountability are impressive. When the communities brought their first claim against Texaco, in New York, Texaco spent a decade arguing that Ecuador was the proper venue for the case. It eventually won that argument, but then on the first day of the trial in Ecuador objected to the entire case and claimed it shouldn't be there either. It proceeded to drag out this second trial another eight years and used every dirty trick in the book to throw wrenches in the wheel of justice.

As the case was finally coming to an end in Ecuador, leaked internal memos revealed Chevron's plan to vilify the Ecuadorians, their lawyers and the entire Ecuadorian judicial system, as an attempt to invalidate in the court of public opinion any judgement that would be issued against it. Sparing no expense, the company waged a scorched earth legal strategy and hit pay-dirt when US Federal Judge Lewis Kaplan suggested Chevron file a RICO (racketeering) suit in the US; Kaplan made his suggestion based primarily off doctored outtake clips from the documentary Crude.

Kaplan's court was exactly what Chevron desperately needed – a friendly judge thousands of miles away from the actual events in the Amazon who didn't read Spanish and expressed public disdain for the Ecuadorians before his trial even began. Most importantly for Chevron, Kaplan would not even allow the word "contamination" in his courtroom, let alone evidence of the actual crime of Chevron's toxic waste. Further, Kaplan's willingness to grant any request of Chevron's lawyers at Gibson Dunn & Crutcher meant the widespread issuing of subpoenas of a long list of "non party co-conspirators" – a tactic to intimidate and harass anyone critical of Chevron in support of the Ecuadorians (including Amazon Watch).

The underlying claims made by Chevron are that the Ecuadorian verdict was obtained by fraud committed by the Ecuadorian and US legal team led by Steven Donziger. Chevron claims that Ecuadorian Judge Alberto Guerra was offered a $500,000 bribe by the Ecuadorian's lawyers to ghostwrite the $9.5 billion judgment and give it to the presiding judge Nicolas Zambrano. The truth is none of that actually happened.

In a mockery of justice, Judge Lewis Kaplan accepted the testimony of Guerra, even though it came to light during the trial that Guerra received millions of dollars from Chevron to testify and had been coached for 57 days before the trial. Guerra himself had already lost his position as a judge because he had admitted to taking at least 20 bribes in other cases, some for as low as $200. Kaplan even acknowledged that Guerra was not a very credible witness, but decided to believe him in this instance. This despite the fact that Guerra was unable to produce the evidence he claimed he had of the verdict he supposedly wrote for Zambrano, and that the details his story changed several times during his testimony.

Few people know that the way Chevron found out that Guerra was corrupt in the first place was because, as he admitted during the RICO trial, he approached Chevron looking for a bribe. Chevron claims it turned him down, but curiously it didn't report the incident to anyone. Ultimately, Guerra should never have been permitted to take the stand, but Kaplan allowed it. After a trial called a "Dickensian farce" by noted California Attorney John Keker, Kaplan issued a 500-page verdict and blasted the Ecuadorians and their lawyers. He never claimed that Chevron was innocent of the environmental crimes in the Amazon, but he declared that the Ecuadorian judgment was unenforceable in the U.S. The Second Circuit Appeals Court inexplicably held up Kaplan's verdict a few months ago. And while the Ecuadorians' appeal to the Second Circuit was based on Chevron's misuse of the RICO statute and their lawyer Donziger vehemently contested the "facts" of Kaplan's ruling, Chevron's PR spin machine often succeeds in getting the mainstream media to not report on the facts of the case but only on the allegations of fraud. Nor has the media reported widely that Kaplan's RICO verdict offers no legal remedy for Chevron since no one has sought to enforce the case in the U.S.

Nonetheless, things were looking bright for Chevron, even knowing that the Ecuadorian's lawyers will likely appeal Second Circuit decision. But soon, Chevron's strategy of legal shell games and forum shopping began to backfire. At the same time as the RICO case, Chevron filed a case against the government of Ecuador at the Hague under a bilateral trade agreement. A panel of three judges were tasked with determining if Ecuador had offered Chevron adequate legal protection. A ruling in Chevron's favor could essentially end up forcing the government of Ecuador, and thus its taxpayers, to foot the bill for the cleanup. While this tribunal process offered no role for the actual affected people of Ecuador, but it did offer another opportunity for more evidence from Ecuador to see the light of day.

After Kaplan had already issued his verdict, Chevron's "star witness" Guerra took the stand before the tribunal... and proceeded to recant his RICO testimony about the bribe he allegedly received from the Ecuadorians! Furthermore, he admitted he came to no arrangement with Zambrano and he had no evidence of a ghostwritten judgement. Guerra also admitted that he told Chevron what they wanted to hear to get a bigger payout as reported by Vice News:

In testimony before the tribunal, Guerra admitted that at this point he tried to get more money from Chevron. "At some point, I said, well, why don't you add some zeroes to that amount, and then later on I said, 'I think it could be 50,000.'"

In an even bigger blow to Chevron, the government of Ecuador produced an expert forensic report of the computer of Judge Zambrano proving the judgment was written over the course of four months and no external devices, nor pasted-in excerpts from Guerra were inserted into the judgment.

The US Second Circuit Court of Appeals did not consider Guerra's new testimony nor the forensic report, but the court in Toronto might. And THAT brings us to this past week in Canada. Chevron cannot afford to have Alberto Guerra get back on the stand. Their lawyers are desperate to avoid that – so much so that they made an outrageous and false claim in the last few moments of the hearing stating that they "held transcripts of both Guerra's RICO and Tribunal testimonies side-by-side and there was no daylight between them." That appears to be a pretty desperate lie when Guerra stated in the Tribunal when referring to the RICO testimony, "yes sir, I lied there." You could see a solar flare through that gaping hole.

So now we wait, hopefully not too long, for Judge Hainey to decide. In the meantime, some Canadian journalists have already started to ask: "where is Alberto Guerra? Does anyone know?" Presumably he's still living somewhere in the US in the house Chevron bought for him and driving the car they gave him to the mall each week to spend some of the monthly stipend he still receives from his friends in San Ramon. We can't wait to see if he surfaces.

We certainly hope someone does track Guerra down, because the Ecuadorian communities living in the midst of Chevron's deadly oil waste shouldn't have to wait a day longer. As their lawyer Lenczner said in closing, "this case calls for assistance not barriers. These people have been waiting more than 20 years."

Thursday, September 15, 2016

No Money, Power or Influence, But the Ecuadorians Are Still Here, Fighting Chevron

A portrait of this Ecuadorian couple’s family members who died from cancer in a community contaminated by Chevron

Reposted from Medium.

I am sitting now in Ontario Superior Court wondering how the hell I got here but also marveling at the fact.

Over 23 years ago, 48 Ecuadorians sued Chevron for massive oil contamination in the Amazon rainforest.

Nobody thought they would win. They may never see a dime from Chevron.

But, like Celie (Whoopi Goldberg) said in The Color Purple, "I'm poor, black; I may even be ugly, but dear God! I'm here!"

The Ecuadorians have no money; no power; no influence. But, they are still here, demanding justice.

This Ecuadorian woman died from cancer not long after this photo was taken

The Ecuadorians are asking a Canadian court to enforce a $9.5 billion Ecuador judgment against Chevron for massive contamination since the oil giant sold all its assets there. I'm here to answer reporters' questions about the enforcement hearing.

For three decades, Chevron's predecessor Texaco treated the Ecuadorians' homeland, the Amazon rainforest, like a trash dump, intentionally pumping 16 billion gallons of toxic water into streams used for drinking and storing left over crude in over 900 huge unlined oil pits that leached into soil and water.

In 1993, the Ecuadorians sued Texaco in U.S. court. At Texaco's request, the court moved the case to Ecuador, and both Texaco and Chevron promised to abide by the Ecuador court's rulings. By 2013, three levels of Ecuador's judiciary had ruled against Chevron, affirming the $9.5 billion in damages.

Meanwhile, Chevron refuses to pay, saying it will fight "until hell freezes over, and then we will fight it out on the ice."

Given that indigenous peoples and the poor everywhere rarely have any pull with their governments and not enough money to pay for lawyers and lobbyists, they generally have been left to fend for themselves when the news media grows tired of their causes.

The Ecuadorians, however, have refused to go away.

They are still here, fighting for the justice that they deserve, beyond a shadow of a doubt.

Tuesday, September 13, 2016

Chevron's Elephant in the Room

Oil Giant's 53-Day Fraud, Denying Ecuadorians Justice in Ecuador Contamination Case

Reposted from Medium.

Today an elephant is lurking in a Canadian court where a group of Ecuadorian indigenous are seeking to enforce a $9.5 billion Ecuador judgment against Chevron for one of the largest environmental disasters in history. (See recent Medium piece.)

The elephant is Alberto Guerra, the witness Chevron "prepped" for 53 days to testify against the Ecuadorians and their lawyers on fraud and bribery charges brought by the oil company in a U.S. court to taint the Ecuador judgment. (See page 61 and page 815.)

Problem is Guerra, an Ecuadorian, recently admitted he lied about the fraud, after being paid at least $2 million for his testimony. (See page 853.)

(By the way, 53 days is a lot of days. Not normal. $2 million isn't normal either, and Chevron refuses to say if Guerra continues to be paid under a contract he negotiated {pages 853–857}, after being relocated by the oil giant with his family to the U.S.)

Meanwhile, Guerra has backed Chevron up against the proverbial wall in a Toronto courtroom.

Yesterday Chevron argued dryly for several hours that "corporate separateness" between Chevron Corporation and Chevron Canada blocks the Ecuadorians from seizing Chevron's assets and, as such, their enforcement case should be dismissed.

The Ecuadorians' lawyer, Alan Lenczner, disagreed. "The two are bound hand and foot" as Chevron Canada must seek approval from Chevron Corporation to drill on land and make expensive purchases, for example. Lenczner plans to detail today how Chevron Canada received $10.5 billion from its parent, Chevron Corporation.

(Chevron sold all its assets in Ecuador, forcing the Ecuadorians to obtain their damage award through enforcement proceedings in countries that do have Chevron assets, like Canada.)

But, if Chevron's legal farce of bifurcation fails to win the day and the Canadian judge grants the Ecuadorians a trial to enforce, Chevron will have to explain why Guerra recanted his incriminating testimony only 13 months after U.S. Judge Lewis Kaplan bought Guerra's story hook, line and sinker.

After obtaining a transcript of a related but secret arbitration proceeding between Chevron and the Government of Ecuador, the online news site VICE reported:

"Guerra has now admitted that there is no evidence to corroborate allegations of a bribe or a ghostwritten judgment, and that large parts of his sworn testimony, used by Kaplan in the RICO case to block enforcement of the ruling against Chevron, were exaggerated and, in other cases, simply not true."

Also see coverage by Courthouse News.

Here's a quick run-down on Guerra, a former Ecuador judge who admitted to taking bribes in 40 other, unrelated cases and got kicked off the court in 2009: (See page 2 of this legal brief.)

First, by the end of the 53-day, Chevron inquisition, Guerra had changed his testimony three times, and the changes were not minor. (See pages 55–57.)

Story #1: Guerra alleged the Ecuadorians' attorneys "ghostwrote" the judgment and hired Guerra to edit it, which he said he did on his home computer. But when Chevron couldn't find the judgment on his computer, Guerra recanted.

Story #2: Actually, Guerra said, the verdict was on a flash drive that the judge gave him at the Quito airport. But when Chevron couldn't find the judgment on any flash drives, Guerra changed his story yet again.

Story #3: Actually, Guerra said, he traveled to the jungle on a bus and edited the judgment there on a laptop owned by one of the Ecuadorian attorneys.

Second, after clinching Chevron's win over the Ecuadorians in U.S. court, Guerra told yet a different story only a year or so later to arbitration lawyers for the Government of Ecuador. From the transcript that VICE obtained:

"Can you recall how you tried to increase your negotiating position with the Chevron representatives?" a government lawyer asked Guerra.
"I must recognize that I did exaggerate about [some things], yes," said Guerra.
"When we are looking for a job, you say, how much experience do you have, and in fact you really don't have any experience, and you say, well, I have ten years of experience really. It's a situation just like that."
The lawyer asked: "And among the ways you tried to leverage your position was to falsely tell the Chevron representatives that the Plaintiffs had offered you $300,000; isn't that right?"
"Yes, sir. I lied there," Guerra responded. "I recognize it."

With seemingly no shame whatsoever, Guerra described one of his first meetings with Chevron lawyers.

"One of them took me by the arm and said, 'Look, look, look what's down there. We have $20,000 there.' Specifically, one of them was the one that led me to take a look at it. It was inside a safe."
"At some point, I said, well, why don't you add some zeroes to that amount, and then later on I said, 'I think it could be 50,000.'"

Right then, Chevron should have adhered to Abraham Lincoln's sound advice about elephants.

"When you have got an elephant by the hind legs and he is trying to run away, it's best to let him run."

Instead, Chevron's lawyers may soon have to corral their elephant back into court and explain why Guerra can't seem to get his stories straight – even after 53 days of prepping.

For more details on Guerra and his sordid tales, see here.

Monday, September 12, 2016

The Beginning of the End: Day One of Chevron's Legal Farce Comes to Canada

The best part of Day One of Chevron's enforcement trial is that it has started. For the oil giant and its odyssey in Ecuador, this could be the beginning of the end.

The first day of the long-awaited trial to enforce the $9.5 billion environmental judgment against Chevron began with the company flooding the courtroom with 20 lawyers to argue a simple motion over a legal technicality. Twenty more lawyers from the company were in the gallery. With Chevron, that's just how it rolls. The company can't file a simple motion without a football team of clerks taking it to the courthouse, all billing their hourly rate.

For more than two decades, Chevron has spent at least $2 billion and used 60 law firms to try to obstruct efforts by the villagers to hold the company accountable for billions of gallons of toxic dumping in Ecuador's rainforest when it operated there from 1964 to 1992. (For background on the overwhelming evidence against Chevron, see here.)

This includes sending the case from U.S. federal court to Ecuador for trial back in 2001; selling off its assets in Ecuador as evidence mounted against it; bringing the case back to the U.S. when it lost the trial it wanted in Ecuador; getting a U.S. trial judge to buy its fabricated evidence of "fraud" from a lying witness to whom the company paid $2 million; filing two international arbitration actions against Ecuador's government to obtain a taxpayer-funded bailout of its liability; and going to more than 25 U.S. courts to sue more than 100 lawyers, activists, bloggers and supporters of the villagers as part of an intimidation campaign.

Thus far, little of this unprecedented and unethical defense strategy has worked. In Canada, Chevron is clearly coming to the end of the trail.

The small army of Chevron lawyers who entered the Superior Court of Ontario on Monday is trying to use its muscle to again deny due process of law to Ecuadorian villagers who have suffered from high cancer rates and other health impacts related to Chevron's deliberate dumping of billions of gallons of toxic waste into the rainforest. They have come to Canada to collect on their judgment because Chevron refuses to pay up, despite having made promises to do so as a condition of sending the case to Ecuador from U.S. federal court in 2001.

Chevron's goal is to prevent the villagers from collecting the first dollar of their judgment on the theory that all Chevron's assets in Canada are held by a wholly-owned subsidiary, and not by Chevron. There is virtually no chance the argument will work for the simple reason that Canadian law (and the law in almost every other country) makes it clear that any party can collect any assets of a scofflaw debtor to force payment, be it a subsidiary or money in a bank account.

In its corporate shell game game that started more than two decades ago, Chevron was as slippery as ever on Monday. Any objective observer could see it wasn't working; Justice Glen Hainey – a highly respected jurist – looked bored while Chevron's lawyers droned on for almost three hours as they explained the 1,000 or so reasons why they believed Chevron Canada was not really the same as Chevron Corporation.

People are dying in Ecuador because of Chevron's dumping and technicalities is all its lawyers could talk about.

Chevron lawyer Benjamin Zarnett tried to claim that even though Chevron owns its subsidiary in Canada, the Ecuadorians could not seize it because it is not an actual "asset" as required by law but is instead only an "operating body" – whatever that means, as there is no such distinction in the law that we can ascertain. Put simply, while Chevron reaps 100% of the profits of Chevron Canada, it feels it should not pay for any of its liabilities.

Alan Lenczner, the litigator extraordinaire who represents the Ecuadorian villagers in Canada, summarized Canadian law in a way that explains why Chevron is in trouble: "According to Canada's Supreme Court, a debt is enforceable against any and all assets of a given debtor." Pretty simple, and true the world over.

The larger issue for Chevron is that it is being engulfed by risk in Canada; its team of ethically-challenged lawyers at Gibson Dunn & Crutcher in the New York – the same crowd that fabricated the "fraud" evidence by coaching witness Alberto Guerra for 53 consecutive days to lie on the stand – are at risk of being ordered to disgorge their documents to the Canadian court as part of the enforcement trial. That would be poetic justice to say the least.

Chevron's use of 2,000 legal personnel to implement a scorched earth strategy to kill off the case clearly has failed. Otherwise, the trial to seize the company's substantial assets in Canada would not be taking place. And unlike in the U.S., Canadian judges cannot be so easily influenced by corporate power and political connections; they will actually rule on the merits, which is something that Chevron deeply fears.

In fact, the villagers are within a short distance of a total victory where they can collect 100% of the judgment, plus statutory interest – a result few saw coming, and one that has never happened before on anything close to this scale when indigenous groups are the plaintiffs and a major oil company the defendant.  Last year, Canada's Supreme Court delivered a unanimous opinion granting the villagers the right to proceed with their action; numerous Canadian civil society organizations have weighed in on their behalf.

Later this week, Justice Hainey will hear argument on whether Chevron's defenses to enforcement – largely centered on its discredited and wholly fabricated "fraud" narrative that has unraveled – will be allowed in as evidence. The villagers believe Chevron should not be given yet another bite at the apple after its arguments already were fully litigated and rejected by three layers of courts in Ecuador.

If Chevron loses the motion, or even part of it, look for the company to approach the villagers for a way out of its growing risk and ongoing reputational harm for being convicted as a human rights violator. Trust us: the pain Chevron will feel to settle the case will hurt a lot less than the pain of its assets being publicly seized in humiliating fashion.

This is what happens when an oil company has to face justice before the transparent, neutral courts of Canada. We look forward to the rest of the motions hearing – expected to last until the end of the week – and the enforcement trial, which is expected to begin in 2017.

Stay tuned as the resolution to the world's most important corporate accountability case gets closer.

Chevron Once Again Spouts Tired Excuses (aka Lies) for Ignoring Toxic Mess in Ecuador

Chevron Says This Unlined Oil Pit Isn’t Harming Ecuadorians & Their Food & Water Supply In Rainforest

Reposted from Medium.

Today a group of indigenous Ecuadorians take their long-running fight against Chevron to a Canadian court to try and seize company assets there as payment for a $9.5 billion Ecuador judgment against the oil giant for massive oil contamination in the Amazon rainforest.

It’s been 23 years since they first filed their lawsuit in U.S. court, only to have Texaco, which Chevron later bought, successfully plead to move one of the world’s largest and most complicated environmental trials to Ecuador. The U.S. courts agreed, though, it took ten years for them to sort it out, thanks largely to Texaco’s and later Chevron’s ability to drag out every legal proceeding as long as possible.

Delay has been their strategy from the beginning. Deplete the Ecuadorians of resources. Wait them out. And, when that didn’t work, Chevron’s top executives accused them and their lawyers of a criminal conspiracy to “shake down” the company.

In 2003, the Ecuadorians re-filed their lawsuit in the South American country, and in 2012, an Ecuador court ruled against Chevron. Having sold all of its assets in Ecuador, Chevron refused to pay the judgment even after the nation’s two appellate courts upheld it.

During that nine years in Ecuador, Chevron devised all manner of false excuses (aka lies) to side step its responsibility for cleaning up a toxic mess deadlier and dirtier than the BP and Exxon Valdez disasters.

Today a Canadian judge will hear the company’s excuses for the first time. For the Ecuadorians? A million times plus in the two decades they have been waiting for justice.

Chevron Excuse #1: We aren’t Texaco. We never drilled in Ecuador.

The argument boils down to we bought their assets, but not their liabilities. No court anywhere has ever bought that one.

Chevron Excuse #2: What contamination? There is no contamination. It is a figment of your imagination.

But, then, someone found a document where Texaco admitted to intentionally dumping around 16 billion gallons of toxic waste water into the rainforest’s rivers and streams that people still use as drinking and cooking water today. And, let’s not forget those 50,000 or so soil and water samples that Chevron itself took and found contamination. Of course, we’ve got hundreds of photos of the huge unlined pits where Texaco permanently stored left-over crude. I guess Chevron thought no one would go check it out, either. The Ecuadorians regularly operate a “Toxico Tour” to show people how Texaco treated their rainforest like a trash dump.

Chevron Excuse #3: If there is contamination, it’s not harming anyone.

Right. And, in the 70s, when Texaco first started drilling, the gringo workers told the indigenous that rubbing oil on their bodies was as healthy as drinking milk.

Chevron Excuse #4: OK, so maybe digesting oil and carcinogenic waste water is not such a good idea, but Texaco made a deal with the Ecuador government that if they cleaned up a few pits, the government wouldn’t sue Texaco, so legally we aren’t responsible.

Hold up. Lots of problems here.

1) Texaco made the deal after the Ecuadorians filed their lawsuit, and a U.S. court said the deal was not binding.

2) The deal itself said it wasn’t binding on the Ecuadorians.

3) Ecuador’s courts later ruled the same, as did an international arbitration panel.

4) Even if it were binding, Texaco faked the clean-up. They just poured dirt over the pits.

Chevron Excuse #5: We need to take tests at all of the well sites that Texaco drilled and the pits it built — over 300 well sites and over 900 pits. And, if the Ecuador courts don’t allow it, then that proves they are corrupt.

During the Ecuador trial, it took six months to finish testing at one well site because of Chevron’s legal maneuvers. (Do the math. 300 well [email protected] a year = 150 years.) The courts reviewed over 60,000 soil and water samples and found extensive contamination. No one needed to test all the sites.

Chevron Excuse #6: An Ecuador judge wouldn’t let us take tests at all the well sites, and then he ruled against us, so the whole entire judiciary is corrupt, (even though Chevron argued in U.S. court that it could get a fair trial in Ecuador). We are going to hire 2,000 lawyers and file a RICO/fraud lawsuit, back in the same U.S. court where it all started 23 years ago.

Why? Because we have so much money lying around we would rather spend it on lawyers than help people in Ecuador.

Chevron Excuse #7: We are going to do this our way because we are big oil. And, the U.S. better not let little countries screw around with big oil companies.

Literally. See this Newsweek article.

Chevron Excuse #8: Thank you, U.S. courts, for not letting these little Ecuadorians screw around with us.

U.S. courts ruled against the Ecuadorians after hearing “fraud” and “bribery” evidence from a witness that Chevron paid at least $2 million to testify.

Like we said, till hell freezes over, we are never paying the judgment.

The Ecuadorians go to Canada to seize Chevron’s assets there.

Chevron Excuse #9: Yes, but Chevron USA — who made the decision to buy Texaco’s mess — is NOT Chevron Canada. It is a separate business.

Never mind that all of Chevron Canada’s profits go directly to Chevron USA and its shareholders.

Chevron Excuse #10: We are not paying these little Ecuadorians because, if we do, even more little people will come after us.

And, we can’t have that.

Stay tuned for more reports from a Canadian courtroom this week.

Chevron’s "Hell Freezes Over" Tour

Chevron should clean up its toxic messes.

Reposted from Eye on the Amazon.

One might wonder why one of the most clear-cut cases of environmental destruction and criminal corporate acts will be heard in yet another courtroom twenty-three years after the first legal claims were ever made. The only reason is because when corporations like Chevron are committed to throwing billions of dollars at fighting justice instead of accepting responsibility, they often are able to delay (and thus deny) justice in perpetuity. For the sake of justice everywhere, this must end here and now.

This chapter in the ongoing saga of Chevron's toxic contamination in Ecuador highlights one of the most grievous threats to the notion of justice in the face of crimes committed by corporations anywhere in the world.

There's no good reason why anyone should have to be continuing this fight in Toronto, but Amazon Watch is here today because it's "Day One" of a critical enforcement trial in Canada to make Chevron finally pay the US $9.5 billion (now closer to US $11 billion with interest) it owes to clean up the biggest oil-related disaster in history which is still polluting the Ecuadorian Amazon today – close to fifty years since drilling first began. We are here alongside our Ecuadorian allies because Chevron has vowed to "fight until hell freezes over and then fight it out on the ice" rather than do the right thing and clean up its mess – a mess it has confessed to creating deliberately in order to squeeze a little more profit out of its operations in the Amazon.

As everyone should know by now, Texaco (now owned by Chevron) admitted to systematically dumping billions of gallons of toxic oil drilling waters into nearly 1,000 open-air pits in the rainforest. Those pits remain today, despite a 1992 agreement Texaco signed with the government of Ecuador to "clean up its share." Turns out that small portion that Texaco incorrectly claimed was "its share" wasn't actually cleaned up (which has been independently verified by many, including the company's own videos leaked to Amazon Watch by a Chevron whistleblower).

Despite those incontrovertible facts, in recent years Chevron has succeeded (by spending hundreds of millions of its shareholder's money on lawyers and PR firms) in changing the story to one about alleged fraud and malfeasance by what they call "corrupt lawyers" and "unethical environmental groups." There's a perverse logic to this, since when considering that the evidence is so soundly against it in Ecuador, Chevron's management decided it's could only fight on by vilifying its critics in a profoundly bizarre way, claiming it was the "real victim" in the case.

But in Canada that convoluted story becomes a lot more problematic for the oil giant. Here Chevron will attempt to defend itself with the results of its outrageously flawed US SLAPP suit against the massive and damning evidence in the Amazon. They will ask Canada's courts to ignore the company's admission of intentional dumping, the wave of cancers and other health impacts, the indigenous peoples decimated by the contamination, the growing number of environmental and human rights NGOs publicly condemning Chevron for its failure to clean up and transparent tactics to attack its critics, and the reality that three levels of Ecuadorian courts – including its Supreme Court – reviewed the evidence (including Chevron's fraud claims) and unanimously ruled against the company.

Furthermore, Chevron will walk into court today and ask the judge to ignore the laws of his own country and throw out the entire enforcement case based on the findings of a US judge who never went to Ecuador, doesn't understand Spanish, and refused to allow a single piece of evidence in court of the actual contamination in the Amazon. Even according to the appellate decision itself, the US case has no legal relevance in Canada. Regardless, Chevron will demand that the Canadian court accept the word of disgraced former Ecuadorian judge Alberto Guerra, Chevron's star witness, who admitted to lying in his testimony about a bribe to get a bigger payout from Chevron. Guerra received US $2 million to testify and has been unable to offer any hard evidence of his claims of a ghostwritten verdict, but Chevron still expects the Canadian judge to believe he's credible.

The reality of this week's hearing is as simple as the first case brought against Texaco in 1993. In fact, this week's proceedings are a simple debt collection trial. Common in Canadian law is the basic notion that a party can request to enforce a valid foreign judgment and seek assistance in forcing a debtor to pay up. Meanwhile, Chevron is understandably worried and is already seeking to sell billions of dollars of Canadian assets, as we have reported before. Chevron also claims that its Canadian assets – the same ones it reports to its shareholders each year – can't be touched because they're not really theirs, something that we expect to hear more about later in the week.

Fortunately, so far the Canadian courts have shown no signs that they are willing to arrogantly dismiss every Ecuadorian court as corrupt and refuse to review the evidence, unlike US Federal Judge Lewis Kaplan and his superiors on the Second Circuit Court of Appeals. Indeed Canada's Supreme Court has already sided unanimously against Chevron and allowed this trial to move forward. We will be here all week, with support from some of Canada's largest environmental organizations, to observe the hearings and continue to confront Chevron's ongoing lies in its attempt to crush the people brave enough to take on the third largest US corporation.


Chevron's weak argument: Canadian wing is separate from the mothership

When Chevron first stood to defend itself from the Ecuadorians legal action to enforce the $9.5 billion verdict to pay for a clean-up, its opening argument couldn't have been more befitting of the oil giant. This is, after all, the company whose lawyers were blasted in US Federal Court last April for suggesting that "it was Texaco" that was responsible in Ecuador and that Chevron is a different company. True to form, Chevron kicked off its opening argument by claiming that Chevron Canada is not the same as Chevron Corp and therefore can't be held liable for Chevron Corp's debts.

Most of the courtroom yawned through a lengthy presentation of all the ways Chevron Canada is different from Chevron Corp – Chevron's lawyers even went so far as to point out that one has headquarters in Canada and the other in the US. That's really their legal argument?

Here's the rub for Chevron: as the lawyer for the Ecuadorians, Alan Lenczner, explained, the court doesn't even need to rule on the issue of "corporate separateness" to decide whether the Ecuadorians can enforce the judgment in Ontario. They only need show only they have a judgment debt from a foreign court. Which they do, of course.

After hours of Chevron attempts to distance itself from Chevron Canada, Lenczner called Chevron out for its same tired tactics. As he forcefully argued, "this company polluted the area [the Ecuadorian Amazon] and then dragged these people through twenty years of litigation! In first instance they sought to bring their case in the US and Chevron said no. Now they are here. This is a commercial court and it should recognize the debt that is owed."

Lenczner also pulled apart Chevron's transparent attempt to show Chevron Canada isn't directly connected to Chevron Corp because there are six subsidiaries between the two; he explained how every one of those entities is simply an investment company and the funds pass directly from one to the other up to Chevron. "Chevron Canada is one of the cash cows that sends money to its parent. It sends $5 billion a year in dividends," he said.

Further demonstrating the corporate oversight Chevron Corp exercises over its Canadian wing, Lenczner highlighted that fact that, per Chevron's own internal policies, every decision of $25 million or over needs to get direct approval from the Vice Chairman at Chevron Corp.

"They can't even drill a new well without concurrence – complete agreement," Lenczner said. “But I am not even 'allowed' to say this, your Honor." Lenczner referred to the fact that as the trial, began the company redacted the public copy of Lenczner's factum to hide all its policies that would show the level of controls over its subsidiaries. Chevron's lawyers were visibly agitated and squirmy as he continued to say things he was "not allowed to say" and declared that the public has a right to know and his brief must be unredacted. Today, both sides will continue to argue over those redactions, but for those of us with years of experience watching Chevron tactics in the courtroom, it's no surprise they want to keep the truth about their practices hidden from view.


Chevron's Cash Cow

The Chevron trial in Canadian commercial court continues as 30,000 people from Ecuadorian indigenous and farmer communities seek to enforce their $9.5 billion verdict against Chevron for an environmental clean-up.

The Ecuadorians are using Canada's Foreign Judgment Execution Act in an attempt to gain legal recognition of the Ecuadorian court's judgement against Chevron Corp. and use the assets of Chevron Canada to satisfy it.

Chevron's legal options here are narrow. According to Canadian legal precedent, there are very few defenses that can be raised with respect to recognition and enforcement when preceded by a final judgment like the one from Ecuador (where Chevron fought – and lost – all the way through Ecuador's Supreme Court). So Chevron will not be able to prevail by relying on the same laundry list of recycled arguments it has used to obfuscate what is at its essence a very simple issue of deliberate and widespread contamination by the oil giant.

But with a straight face, Chevron tried one more time.

The company started off the week by dusting off its old "It wasn't me" routine. It has argued before various courts that the Ecuadorians were suing the wrong company; that Texpet (as Texaco was known in Ecuador) is not the same as Texaco; that Texaco is not part of Chevron; that Chevron Corp. doesn't have any assets in Canada because Chevron Corp. and Chevron Canada are not the same company. That's right, shareholders: Chevron and Texaco didn't technically merge, it was a reverse triangular merger! And the money generated by Chevron Canada doesn't get paid out to your dividends! With arguments like that Chevron, with feigned incredulity, claimed it doesn't know why it's even in the Toronto courtroom. Apparently it ignored this scolding from the U.S. Court of Appeals in New York:

"Chevron Corporation claims, without citation to relevant case law, that it is not bound by the promises made by its predecessors in interest Texaco and ChevronTexaco, Inc. However, in seeking affirmance of the district court's forum non conveniens dismissal, lawyers from ChevronTexaco appeared in this Court and reaffirmed the concessions that Texaco had made in order to secure dismissal of Plaintiffs' complaint. In so doing, ChevronTexaco bound itself to those concessions. In 2005, ChevronTexaco dropped the name "Texaco" and reverted to its original name, Chevron Corporation. There is no indication in the record before us that shortening its name had any effect on ChevronTexaco's legal obligations. Chevron Corporation therefore remains accountable for the promises upon which we and the district court relied in dismissing Plaintiffs' action."

Often, in seeking to hold transnational corporations accountable for environmental crimes and human rights abuses, victims are forced to seek relief from the parent company because the local subsidiary is purposely set up as a limited liability company with no assets, no money, and questionable legal standing. But in this case the Ecuadorians have a judgment against the parent company – Chevron Corp. itself – and seek to fulfil the judgment debt using subsidiary assets.

As a result, all that the attorneys for the communities need to show is a direct relationship between the parent company and the subsidiary. In this case, it is complete dominance.

"Chevron is tied hand and foot to Chevron Canada," said Alan Lenczner, attorney for the plaintiffs to the court. "Chevron Canada is Chevron's cash cow."

Want to see what Chevron internal docs say about its financial relationship to Chevron Canada? So do we.Want to see what Chevron internal docs say about its financial relationship to Chevron Canada? So do we.

To back up this argument, the Ecuadorians used discovery to obtain copies of internal Chevron documents that expose just how much control Chevron Corp. has over its subsidiaries. But Chevron doesn't want the public to see them. Responsive documents turned over were heavily redacted. Several pages were blacked out entirely. But Mr. Lenczner had seen the unredacted version, and shared the details of them in oral argument with the court.

It turns out that Chevron Corp. is a holding company that doesn't own anything – not even its office buildings. It's essentially a shell company with all of its assets compartmentalized and stored in its subsidiaries, which is clearly an attempt to avoid responsibility in exactly this kind of case.

Chevron Canada is a "7th tier subsidiary" of Chevron Corp. The other six companies in between Chevron Corp. and Chevron Canada are investment companies, with every level being 100% owned by the level above it. Finance flows down the cash cascade from Chevron Corp. to Chevron Canada and returns in dividends.

Apparently Chevron Canada can't do anything on its own. There are no independent directors and the company must get agreement from the higher ups in Chevron Corp. for virtually every decision – from the major to the mundane. Money for off-road tires? Yep, have to go to corporate. Bid on a tar sands oil block in Athabasca? Talk to headquarters. Joining a pipeline consortium? Run it up the chain of command. Signing an office lease? Not without agreement from a Chevron Corp. Vice Chairman.

Maybe the best person to be deposed if this case does go to trial is John Watson, the current Chevron Corp. CEO and Chairman of the Board. He ran Chevron Canada for years, so he must have intimate knowledge about how his corporate veil really works in practice. He also has the unique distinction of orchestrating Chevron's acquisition, err, reverse triangular merger, with Texaco when he was head of mergers and acquisitions before becoming the CEO of Chevron Corp.

Chevron has tried to treat the entire Canadian proceeding as a first instance case – and then arguing that there's a lack of jurisdiction. This is absurd because the Ecuadorian judgment the communities are seeking to enforce is a final judgment from the country's Supreme Court. It is not a new case. Over ten years it passed through three layers of Ecuadorian courts – trial, appellate, and Supreme courts. The communities are merely seeking to enforce it.

So Chevron cannot re-litigate the entire case, and it cannot present defenses that have already been heard in the original proceedings. And Chevron has certainly been heard. According to the trial record, there are some 216,692 pages of evidence, 100 expert reports, 56 official visits to toxic sites. Chevron participated at every level. It brought 1,000 motions. There were 20,000 pages presented to the appeals court, and 10,000 more to the national Supreme Court.

Chevron's tactics have always been to deny and delay, hoping to drag out the proceedings as long as possible to avoid paying and hope that the communities will give up, run out of money, or worse. The company is literally trying to delay justice in this case until all of the original plaintiffs are dead. The company's counsel famously said, "We'll fight this until hell freezes over, and then we'll fight it out on the ice."

Well Chevron better lace up its skates, because they may get a hearing in Canada on exactly what they don't want to talk about: undeniable contamination in Ecuador and concocted claims of bribery and ghostwriting.

When counsel for the communities began to talk about the trial record in Ecuador and the 16.8 million gallons of oil spilled, 15 billion gallons of toxic waste water dumped, and over 1,000 oil pits that stain the rainforest floor, Chevron lawyers jumped from their seats.

Chevron tried to cut off any mention of their contamination. But unlike Judge Kaplan in New York, who forbade any talk of it and rarely let lawyers for the communities finish a sentence, Judge Hainey allowed it. The courtroom heard the criminal shortcuts Chevron took, like dumping waste instead of re-injecting it deep into the ground as was standard industry practice and building pits with no lining that allowed heavy metals and carcinogens to overflow into the forest and leach into groundwater.

"It's disastrous. A number of people die every year," Lenczner said.

Mr. Lenczner closed the day arguing for a truncated trial specifically on Chevron's claims of bribery and ghostwriting.

"Chevron concocted a sordid – and untrue – tale of bribery and ghostwriting," argued Lenczner. "But Chevron's star witness in that case – a corrupt ex-judge who Chevron paid over $2 million and coached for 52 days to testify, has recanted his testimony in a different proceeding."

"Let's have a trial on that. Bring it on!"

On Chevron claims that the communities and lawyer ghostwrote the judgment, Lenczner exclaimed, "Let's have a trial on that, too," citing forensic evidence that proves the judge was written by him alone on his computer.

While Chevron's back is up against the wall in Canada, you wouldn't necessarily know it by the media coverage in the U.S. Reporters who have covered the saga with incredible, pro-Chevron bias have been quick to write off the Ecuadorians. Those "journalists" are conveniently absent in the courtroom up here, nowhere to be found when the tide turns against the company.

The Ecuadorians are still standing, and may be closer to justice than ever. And if they can use Chevron Canada's assets to pay for a clean up, it will be a victory for communities around the world who seek to put an end to corporate impunity.