Monday, March 1, 2010

Chevron’s Fugitives from Justice and the Bogus TCLP Test

Not only has Chevron readily admitted in trial that it deliberately discharged billions of gallons of toxic "water of formation" into Ecuador's Amazon rainforest, but it also has figured out a clever way for its employees to evade justice. What began as a corporate strategy of cover-up has trickled down to Chevron's lawyers who do the company's dirty work in Ecuador.

Rodrigo Perez Pallares is a perfect illustration of the extent of Chevron's corruption in Ecuador. This disgraced Ecuadorian lawyer had worked as Chevron's official corporate agent in Ecuador for more than three decades while it mercilessly dumped toxins into the Amazon. Pallares was paid handsomely for defending a system of oil production that imposed horrific costs on the local indigenous population. After Chevron was sued in U.S. federal court by those groups for clean-up in 1993, Pallares helped to mastermind Chevron's sham "remediation" in the mid-1990s that the company has continually (and unsuccessfully) used to try to escape liability in various courts.

Pallares now appears to be a fugitive from justice, having fled to Miami after being indicted on fraud charges in Ecuador related to a cover-up of the contamination. Chevron should fess up as to whether it is paying for his relocation costs and living expenses. The U.S. government also might note that Chevron might be harboring a fugitive from what could be the world's worst environmental crime.

Chevron used the Pallares "clean-up" to argue that the then-pending environmental against (Aguinda v. ChevronTexaco) should be dismissed from U.S. federal court. The argument didn't work, but Pallares and his sidekick Ricardo Reis Veiga built a career out of it anyway. The pair orchestrated the use of an improper laboratory test, called the TCLP test, which made it impossible to measure anything more than trace amounts of toxins at the highly contaminated "cleaned" sites. The TCLP test runs water over contaminated soil, and then measures the toxins in the water instead of the soil. Only problem? Oil and water don't mix – so it's physically impossible for anything more than trace contaminants to show up in the TCLP test results, even if the soil sample tested was full of pure crude oil. Pallares and Reis Veiga used these test results to "prove" that the sites were remediated to they could procure a "release" under false pretenses.

Pallares and Reis Veiga probably never expected that their fraudulent handiwork would come under independent scrutiny during the Aguinda trial in Ecuador. But hundreds of scientific sampling results from the trial definitively prove that Chevron's representations to Ecuador's government about the "remediation" – used to induce the release -- were lies. Chevron's "remediation" amounted to bulldozing dirt over the waste pits without cleaning them out. Other waste pits the company had agreed to clean were never touched; Chevron's engineers claimed they were being used for "fishing" by the locals.

Chevron's fraud is as plain as day. Compare what Chevron reported to Ecuador's government in 1998 (at the end of its "remediation") to the actual trial results from the same sites:

Chevron's Fraud During The Ecuador Remediation

(Measured in TPHs)

Site of Judicial Inspection:

Lago Agrio Trial

Chevron's Reported Result to Obtain Release From Ecuador


Actual Result At Same Site During Trial


Sacha 18

No Detect

35,380 ppm

Sacha 65

No Detect

32,444 ppm

SSF 27

No Detect

26,413 ppm

Atacapi 5

No Detect

21,976 ppm

Sacha 21

No Detect

17,000 ppm

SSF 21

No Detect

16,033 ppm

This chart is telling. The maximum tolerance for TPH (which measures hydrocarbon contamination) in many U.S. states is 100 parts per million (ppm). In Ecuador, the maximum tolerance for "sensitive ecosystems" like the Amazon is 1,000 ppm. In Ecuador, pits Chevron claimed it cleaned (such as pits at Well Sites Sacha 18 and Sacha 65) are obviously more than three hundred times higher than what would be a maximum tolerance in many U.S. states and dozens of times higher than the more lax Ecuadorian norm. And these are the cleaned sites.

Note in the second column of the chart that Chevron reports its results as "no detect" rather than giving the actual result. First, the clean-up standard of 5,000 ppm that Chevron maliciously negotiated with Ecuador's government is more than 50 times more lax than a typical U.S. norm. Sort of shows you how much Chevron values an Ecuadorian life. Given that the company knew it couldn't meet even this ridiculously lax standard with its clean-up, it used the bogus TCLP test which made it physically impossible to violate the 5,000 ppm standard. All this so the company could induce a release under false pretenses.

Even if the cleanup Chevron conducted hadn't been fraudulent, the cleanup would not absolve Chevron of responsibility. The release expressly excludes the private claims that are being pressed in the Aguinda lawsuit. Chevron only touched 16% of the 916 toxic waste pits the court-appointed Special Master found in his review of the evidence at trial; only a fraction of those were actually covered with the dirt. Instead of preparing some sort of estimate of how much the company should pay to clean up the mess it made, Chevron claims that the court-appointed Special Master's damages assessment to properly remediate the remaining pits is too high. Chevron prefers the Special Master lower the number to comport with the cost of running dirt over the oil sludge in the pits consistent with Chevron's shoddy method of clean-up in Ecuador.

This scam is why Pallares has been living in Miami for more than a year and might end up never returning to his country. Reis Veiga, who works in Miami as one of Chevron's top executives for Latin America, refuses to return to Ecuador to confront the charges against him.
Chevron is still using both men to play instrumental roles in advising the company in the Aguinda trial where their previous fraudulent conduct is at issue.

If this sounds familiar, that's because it is. Last year, Chevron paid to move one of its Ecuadorian contractors, Diego Borja, out of Ecuador after he was implicated in a sting operation against the judge overseeing the trial. Our sources in Chevron indicate that Borja now lives in a luxury mansion in a gated community near Chevron's headquarters. Borja now has an American lawyer paid for by Chevron to ensure he can never be questioned by investigators. There is some question as to whether Chevron implicated itself in obstruction of justice by moving Borja out of a country where he is now the subject of an official investigation.

Chevron has shown it will do anything to evade accountability for the humanitarian crisis it created in Ecuador. Now its employees seem to be rewarded for ducking out of countries where they face investigations or indictments. Just like the toxic dumping, Chevron operates on the principle that violating the law can pay handsome dividends.