Wednesday, September 29, 2010

Chevron’s Short Fuse: Is CEO Watson’s Skin Too Thin?

Looks like pressure from shareholder activists is getting to Chevron’s CEO John Watson, who has filed criminal trespassing charges against longtime Chevron critic Antonia Juhasz. You may recall Juhasz raised serious questions about Chevron’s policies related to Ecuador and other countries during a shareholder meeting this past May in Houston. Chevron summoned the Houston police to arrest Juhasz and four other critics, including Han Shan and Mitch Anderson from the environmental group Amazon Watch. Chevron also refused to allow about 20 people with legitimate proxies to attend the meeting. All 20 had traveled from various countries to raise questions about Chevron’s poor human rights practices.

Read the article below about Chevron’s decision to press charges against Juhasz, as well as this blog about reaction to Chevron’s latest strong-armed tactic to muzzle its critics. (Also see this press release about Chevron trying to hire a journalist to spy on people sick with cancer and other illnesses as a result of the oil contamination in Ecuador)

Watson might be thin-skinned about Ecuador because he was the architect of the merger between Chevron and Texaco. The merger is a potential disaster for Chevron given that the size of Texaco’s old Ecuador liability could surpass the $31 billion that Chevron paid for the company. Watson has continually failed to answer questions about this potential conflict of interest.

John Watson

By John Letzing, MarketWatch
SAN FRANCISCO (MarketWatch) — As the nation’s second-largest oil company, Chevron Corp. is accustomed to a cavalcade of activists at its annual shareholder meetings.

But Chevron (CVX 80.88, +0.80, +1.00%) is working with authorities who are prosecuting a particular shareholder activist, who harangued executives at the annual meeting in Houston last May. Antonia Juhasz was removed from the meeting and then arrested outside, after blasting Chevron’s environmental record and starting a derisive chant, according to people at the meeting. The meeting wrapped shortly afterward.

Juhasz has been charged with criminal trespass and disrupting a meeting or procession, and now faces up to six months in jail. She said the charges are an overreaction and doesn’t accept them. Her attorney said they will fight them.

Juhasz’s prosecution may result in an odd instance of a shareholder activist being not just removed, but also arrested and prosecuted for trespass and disruption. It raises questions about the best way for firms to deal with activists who use small amounts of stock to get into annual meetings to make a public statement.

“This is very, very unusual,” says Sanjai Bhagat, a professor at the University of Colorado at Boulder’s Leeds School of Business, when asked if he heard of shareholder activists being faced with jail time for actions at corporate events.

Chevron spokesman Morgan Crinklaw said in a statement that the company is “cooperating fully with the [Harris County, Texas] district attorney’s office as they move forward in their prosecution.”

Juhasz, who runs the energy program at San Francisco-based advocacy group Global Exchange, deferred questions about the shareholder meeting to her attorney, John Parras. Parras said he will argue that Juhasz did not disrupt the meeting, which could have continued after her turn at the microphone during a question-and-answer period. “The larger question is, can shareholders within a corporation use the process to make the corporation better or more responsive to their concerns,” he added.

The incident has led to the hobbling of one of the company’s most vocal critics. Juhasz said she now must limit what she says publicly about the company for fear of hindering her defense.

Chevron’s Crinklaw deferred some questions about the Juhasz case to the district attorney’s office of Harris County, Texas. George Flynn, a spokesman for the office, said the authority to dismiss criminal cases belongs solely to the district attorney’s office, though it “certainly takes the sentiments of the complainants into consideration in making any decision to proceed to trial.” A preliminary court date has been scheduled for Thursday.

‘Lives lost, wars fought’ and more

San Ramon, Calif.-based Chevron held its 2010 annual meeting far from its San Francisco Bay Area headquarters. It came at a tense time for the oil giant.

‘The larger question is, can shareholders within a corporation use the process to make the corporation better or more responsive to their concerns.’

The BP PLC (BP 39.24, -0.05, -0.13%) oil spill had begun only about a month earlier in the Gulf of Mexico, drawing greater scrutiny to the industry; meanwhile, a high-profile lawsuit was proceeding against Chevron in Ecuador, alleging the company was responsible for massive environmental damage. Chevron has denied the charges.

Four other protesters also were arrested outside of Chevron’s gathering and face trespassing charges, according to media reports at the time. But Juhasz was unique as a stockholder pulled from the meeting, the reports said. She says she owns 14 shares in the company, which were donated. Each charge against her is punishable by up to 180 days in county jail, though the sentences in the case would run concurrently if she is convicted, according to the Harris County district attorney’s office.

Juhasz stands out as a particularly active critic, who has co-authored exhaustive “alternative annual reports” for Chevron, detailing the “lives lost, wars fought, communities destroyed, environments decimated, livelihoods ruined and political voices silences” because of the company. Until recently, her program was called the Chevron program at Global Exchange, though it was recently renamed. Juhasz said the name change of the program is not related to her arrest. However, she pointed out that her day-to-day duties have been constricted by her status as a defendant. “I’m definitely being limited in my actions,” she commented.

Boston University Prof. James Post said he can’t recall a similar case where a shareholder activist had criminal charges filed against them: “A company almost never wins in a case like that.”

Companies are better off, Post suggested, when they allow critics to vent and then move on. “Corporate democracy can be an ugly thing,” he added.

The company does not have video footage of the shareholder meeting, according to Chevron’s Crinklaw. “When Ms. Juhasz disrupted the meeting, it was after she and other activists had already posed a series of questions to the chairman,” he said. “Her actions clearly show that she was not interested in what the company had to say, only making a disturbance.”

A person who attended the meeting, but declined to be identified due to a lack of authorization to speak to the press, said it seemed possible to continue the event following Juhasz’s expulsion. However, the person said the event could not likely have continued while she remained in the room.

Chevron has a legal history with its work in Ecuador. The company recently won the legal release of outtakes from a 2009 documentary about a lawsuit filed against it there.

At the shareholder meeting in Houston earlier this year, several media outlets reported arrests and disruptions at the event. In a statement issued on the same day, the company announced that stockholders were informed of Chevron’s “reliable operations and superior execution.”

John Letzing is a MarketWatch reporter based in San Francisco.

Wednesday, September 22, 2010

Magistrate Judge Tells Chevron Its Legal Tactics “Spiraling Out of Control”

The lawyers representing the Ecuadorians suing Chevron for oil contamination finally got a chance to present their case against the oil giant in Tennessee and, as a result, the federal magistrate judge expressed concern about Chevron’s legal tactics. Read the press release below for details.

Federal Judge Hits Chevron Over Ecuador Litigation Tactics

Amazon Defense Coalition
22 September 2010 – FOR IMMEDIATE RELEASE
Contact: Karen Hinton at 703-798-3109 or

Nashville, TN (September 22) -- A federal magistrate judge in Tennessee told Chevron yesterday that he would sharply limit any further discovery of a scientific consultant for the Amazonian communities suing for the clean-up of what is believed to be the world’s worst oil-related disaster, according to court papers in the case.

Judge Joe B. Brown, in an order, limited further discovery by Chevron and ruled that the oil giant cannot “use” the U.S. federal court “to try a dispute that is pending in a foreign proceeding.” The case against Chevron is being heard in Ecuador at the request of the company after 30,000 Ecuadorians originally filed suit in U.S. federal court in 1993.

Judge Brown was ruling on Chevron’s attempt to obtain further testimony and document production from Mark Quarles, a former scientific consultant for the Ecuadorian communities based in Nashville. Quarles already was deposed by Chevron; he is one of 23 persons in ten states that Chevron has sued in federal courts to get discovery documents related to the Ecuador case to try to prove that a “fraud” occurred in the preparation of a damages assessment.

Lawyers for the plaintiffs in Ecuador have called the discovery lawsuits a form of harassment designed to exhaust the resources of the Amazonian communities just as the long-running trial comes to a close. They also say that Chevron’s allegations are actually designed to distract attention from its own fraud and misconduct; two Chevron officials are under criminal indictment in Ecuador for lying about the results of a purported environmental clean-up.

Both Chevron and the Amazonian communities say the evidence points to Chevron’s culpability and that a judgment against Chevron is likely.

In the Quarles case, Judge Brown wrote that the discovery proceeding initiated by Chevron “is not an opportunity to put on a full trial” and ruled that “Chevron is not entitled to pierce the work-product protection…because it has not shown the ‘exceptional circumstances’ required” by the Federal Rules of Civil Procedure.

Judge Brown noted in his ruling that what should be a limited proceeding is quickly “spiraling out of control.” He added:

“Chevron had the opportunity to litigate this matter in the United States and strongly opposed jurisdiction in favor of litigating in the Ecuadorian courts. While fraud on any court is a serious accusation that must be investigated, it is not within the power of this court to do so, any more than a court in Ecuador should be used to investigate fraud on this court.”

“Chevron’s litigation strategy throughout the trial has been one designed to distract and delay,” said Pablo Fajardo, the Ecuadorian lawyer for the communities.

“All information that Chevron supposedly is seeking is already squarely before the Ecuadorian court and most of it has been in the trial record for years,” he added. “In the meantime, thousands of people are suffering from cancers and other health impacts as a result of Chevron’s contamination.”

For a copy of the judge’s order, see this link:

Monday, September 20, 2010

Almost 10,000 Ecuadorians Face Risk of Dying From Contamination

Chevron argues the that lawyers for the Ecuadorian communities have submitted inflated damage claims as the oil giant seeks to derail the lawsuit against it for extensive oil contamination in the rainforest. That argument has now been turned on its head. Last week, several leading American technical experts submitted damage estimates on behalf of the Amazonian communities that found costs higher than those found in the earlier Cabera report, which calculated damages at $27 billion. One reason the damages assessment rose is because the American experts -- using official mortality and census data -- found that 10,000 Ecuadorians risk death from cancer in the coming decades as a result of Chevron’s contamination, even if the contamination is cleaned up over the next ten years. The truth is the Ecuador rainforest will never be the same due to Chevron’s contamination, and no amount of money will ever restore it to its original condition. But whatever can be done to address the contamination should be done – and Chevron, as the operator responsible for the contamination, should take the lead in fixing it just like BP is doing in the Gulf of Mexico. Below is the press release about the new economic valuation analyses of damages in Ecuador’s rainforest -- valuations prepared by American experts that put the lie to Chevron's claims about "fraud" in the Cabrera report.

Uterine cancer victim Rosana Sisalima with her granddaughter
at their home in San Carlos on November 24, 2004.
Rosana succumbed to cancer in 2006.

Chevron Faces Tens of Billions in Clean-up Costs
Top American Technical Experts Weigh In On High-Profile Damages Case

Lago Agrio, Ecuador (September 17) – A group of highly respected American technical and medical experts, using conservative assumptions, have concluded that it could cost Chevron up to tens of billions of dollars to clean up oil waste discharged into Ecuador’s rainforest and compensate local communities for the damage it caused over the 26 years it operated a large oil concession, according to valuation assessments submitted Thursday to the Ecuador trial court.

Relying on official Ecuador census and mortality data, as well as relevant studies, the analysis finds that what is believed to be the world’s largest oil-related catastrophe likely will cause nearly 10,000 Ecuadorians to be at significant risk of dying from cancer by the year 2080 even if Chevron cleans up in the next ten years. The numbers could rise substantially if no remediation takes place.

The assessments analyzed numerous categories of damages, including soil and groundwater contamination, drinking water, excess cancer deaths, natural resources damage, and health costs. While the high end of the damages range of $113 billion is substantially greater than the $27.3 billion damages number set forth in a report in 2008 by court-appointed expert Richard Cabrera, some categories of damages were found to be lower than those estimated in that report.

For example, the combined cost of clean-up for soil and groundwater contamination in the new analysis – which relied mostly on Chevron’s own internal environmental audits -- at the high end of the range was roughly $1.8 billion, compared to more than the $5 billion estimate in the earlier Cabrera report. The analysis found the existence of other categories of contamination, such as oil sediment in rivers, but they could not be accurately quantified.

The differences in the soil and groundwater remediation numbers is largely a function of the fact the new analyses used far more conservative assumptions than the Cabrera report. For example, the Cabrera report concluded soil should be cleaned to a depth of five meters, while the recent analysis assumed only four meters.

A large portion of the damages in the new analyses can be attributed to Chevron’s “unjust enrichment” – money saved by using sub-standard drilling practices – and compensation for potential excess cancer deaths that have a significant chance of occurring in coming decades due to exposure to cancer-causing crude oil. Most of the damages in the Cabrera report were from the same two categories.

“The new valuation analyses are different, in many ways, than the damage assessment report from 2008 but both present reasonable and sound assessments based on the evidence,” said Pablo Fajardo, the lead lawyer for the Amazonian communities suing the oil giant.

“The Ecuador court has more than enough evidence and expert analyses to determine the cost of remediating the extensive oil pollution that has devastated thousands in the region for decades,” Fajardo added. “There are more than 100 different expert reports in evidence, dozens of them produced by Chevron, which overwhelmingly demonstrate extensive contamination at all of Chevron’s former oil production facilities.”

The new damages analyses came in a supplemental report submitted by lawyers for the dozens of Amazon communities suing Chevron for what is believed to be the world’s worst oil-related disaster – larger than the size of the BP Gulf spill. Unlike the BP Gulf spill, the Ecuador disaster has been contaminating the rainforest ecosystem for almost 50 years.

Ecuadorian law provides that the court can consider the supplemental information when reaching a decision, but under Ecuadorian law the judge is under no obligation to adopt the estimates. Chevron, which has attacked the credibility of Cabrera’s damages assessment, had the opportunity to submit its own valuations analysis but the company previously indicated it would boycott the process.

Lawyers for the affected communities have asserted Chevron has been trying to sabotage the Ecuador trial by bombarding the court with frivolous motions and boycotting any part of the case that addresses damages. The indigenous and farmer communities first filed the lawsuit in 1993 in U.S. federal court, but it was shifted to Ecuador at Chevron’s request.

“The information in this submission is highly significant because it reflects clearly that there is a terrible oil-related disaster in Ecuador in the area where Chevron operated,” said Fajardo.

“What these analyses make chillingly clear is that thousands of Ecuadorian citizens may well contract and die of cancer in the coming decades because of Chevron’s contamination,” he added.

The analyses, based largely on technical information found in the 200,000-page trial record and relevant studies, found the following damages:

· Soil Remediation: A conservative estimate of potential costs to remediate contaminated soils at all of Chevron’s 378 former oil production facilities in Ecuador ranges from $487 million to $949 million depending on the clean-up standard used. The actual cost could be significantly higher.

· Groundwater Remediation: Based on data in the trial record, the range for clean-up of groundwater is $396 million to $911 million.

· Rivers and wetlands: Data indicates that sediment contamination exists, but no clean-up number was presented pending further investigation.

· Health Care: Using recent data from the World Health Organization and the Ecuadorian Ministry of Health, an estimated $1.4 billion will be needed to provide health care to the thousands of affected persons over the next three decades.

· Drinking Water: Degradation of the environment with petroleum hydrocarbons associated with Chevron’s production activities has been documented at numerous locations. The cost of a comprehensive series of regional water systems is estimated to be between approximately $326 million to $541 million.

· Excess Cancer Deaths: Actuarial life-table methodology demonstrates that the aggregate cost of excess cancer deaths due to exposure to oil contamination in the area where Chevron operated could be approximately $69.7 billion. This is the based on the value of a statistical life used by averaging relevant data used in the U.S. court system and by the U.S. Environmental Protection Agency ($7 million for each lost life), and comparing it with official Ecuador mortality data and census information. Up to 9,950 people in the affected area will face a significant risk of dying from cancer in the coming decades even if the area is remediated in the next ten years. Even if the analysis stops in 1990 – the year when Chevron ceased being the operator of the oil fields – the aggregate cost of excess cancer deaths is still estimated at $12.1 billion based on 1,732 deaths from cancer. (The earlier Cabrera report estimated 1,401 deaths from cancer, but he did not project future deaths.)

· Natural Resources Losses: This estimate is based on the evidence that concentrations of petroleum hydrocarbons and harmful metals in soil, groundwater, and surface water have exceeded levels considered to be toxic to terrestrial and aquatic biota. While determining the exact values of service losses in the rainforest with precision is not possible, it is not clear that further studies would produce a range of plausible values different from the range posited earlier by Mr. Cabrera – approximately $874 million to $1.7 billion, depending on the methodology employed.

· Unjust Enrichment: Chevron’s unjust enrichment ranges from $4.57 billion to $9.46 billion assuming a 100% probability of detection and ultimate payment, and from $18.26 billion to $37.86 billion assuming a 25% probability of detection and ultimate payment. Given the evidence of Chevron’s malfeasance in Ecuador, the plaintiffs assume the company had at best a 25% probability of detection and ultimate payment, and therefore the unjust enrichment award should at minimum range from $18.26 billion to $37.86 billion. This is a conservative figure, as in reality it is highly unlikely that Chevron believed it had more than a 10% probability of detection and ultimate payment.

· Cultural Impacts on Indigenous Groups: Representatives of the Amazonian communities, noting the acute interdependence between indigenous groups and the rainforest ecosystem, analyzed the impact of hydrocarbon contamination on indigenous culture. The team reviewed economic valuations to repair the loss of cultural and ancestral practices, including a program to purchase unspoiled land, and to construct pools of native fishes and centers to restore flora and fauna. The cost for this restoration is estimated at $481.5 million.

The analyses were submitted by the following scientists and technical experts:
· Douglas Allen, who has 25 years of experience as an environmental consultant working in soil and groundwater remediation;
· Dr. Lawrence Barnthouse, one of the nation’s leaders in ecological risk assessment and a Fellow at the American Association for the Advancement of Science;
· Carlos Emilio Picone, a medical doctor certified in critical care medicine and Chief of the Pulmonary Section at Sibley Memorial Hospital in Washington, D.C.;
· Jonathan S. Shefftz, a financial economist from Harvard who has performed economic modeling on theories of unjust enrichment for the U.S. Environmental Protection Agency and the U.S. Department of Energy;
· Dr. Daniel L. Rourke, who has extensive experience applying advanced statistical techniques to solve complex litigation problems; and
· Dr. Robert Paolo Scardina, a civil and environmental engineer and member of the faculty at the Virginia Polytechnic Institute.

The analyses in both English and Spanish, as well as background information on the scientists, can be found at

Friday, September 17, 2010

Chevron Is In Double Trouble

A Daily Kos blog slams Chevron’s “gameplan” and shows how it is unraveling. Also, a federal judge in San Francisco has ordered Chevron operative Diego Borja to sit for a deposition, possibly as soon as October 1st, to talk about evidence that suggests — in the judge’s words — how he was not a “innocent third party” but a “longtime associate whom Chevron would pay for any favorable testimony.”

California Court Orders Deposition of Chevron Operative

Amazon Defense Coalition
16 September 2010 – FOR IMMEDIATE RELEASE
Contact: Karen Hinton at 703-798-3109 or

San Francisco, CA – Allowing a Chevron contractor to be deposed to explain his involvement in the oil giant’s attempts to derail a multi-billion environmental lawsuit against it in Ecuador, a federal district court judge has ruled that evidence suggests Diego Borja is a “longtime associate of Chevron’s whom Chevron would pay for any favorable testimony.”

San Francisco Magistrate Judge Edward M. Chen ordered Borja to appear on October 1st in San Francisco, near his San Ramon home, where Chevron paid to re-locate him from Ecuador, after he and an accomplice secretly videotaped a judge hearing the lawsuit. Last year Chevron released the videotape to the news media and accused the judge of bribery. Borja lives only a few miles away from Chevron’s corporate headquarters in San Ramon.

“The subpoena is important because Borja has bragged about being at the epicenter of Chevron’s fraudulent activities in Ecuador,” said Karen Hinton, spokesperson for the Amazon Defense Coalition.

Investigations conducted by the news media and the Ecuadorians suing Chevron found that Borja had threatened to turn evidence in the lawsuit against the company if Chevron officials did not pay him for making the videotapes and that his accomplice, Wayne Hansen, was a convicted felon who had been sentenced for two years in a federal prison for drug trafficking.

In his order, Chen wrote: "there is evidence ... suggesting that Mr. Borja was not an innocent third party who just happened to learn of the alleged bribery scheme but rather was a long-time associate of Chevron whom Chevron would pay for any favorable testimony."

Chen also noted that Chevron was using the videotapes that Borja made as evidence that the Ecuadorian court is corrupt and biased against the company and plans to call Borja as a witness should an international arbitration court agree to hear its claims.

The government of Ecuador and the Ecuadorians suing Chevron are awaiting a decision from the Second Circuit Court of Appeals on their request to stay Chevron’s arbitration claim on grounds that the international panel does not have jurisdiction. The government of Ecuador asked Chen’s court, the Northern District Court of California, this past Friday to order the deposition.

Borja, who has worked for Chevron in Ecuador from at least 2004 until the video scandal erupted in 2009, has been taped in phone conversations saying he has incriminating evidence that would cause Chevron to lose the Ecuador environmental litigation, according to papers filed September 10th in federal court in San Francisco. Chevron paid for Borja to relocate to the United States, where he remains on the company payroll while living in a luxury house abutting a golf course in a gated community.

Borja has failed to turn over the incriminating evidence, but representatives of the plaintiffs have long charged the oil giant with engaging in corrupt practices to undermine the trial.

The court filings, made by the American law firm Winston & Strawn on behalf of Ecuadorian authorities fighting Chevron over an international arbitration claim, seek to depose Borja about his involvement in the sting operation, conducted with Borja’s sidekick Wayne Hansen. In 2009, both Borja and Hansen used cameras hidden in a pen and a watch to secretly tape meetings with the trial judge presiding over the environmental case, and supposed government officials.

The men then turned over the tapes to Chevron, which posted them on YouTube. Chevron initially alleged the tapes showed an attempted bribery of the judge, but it was only the Chevron employee who discussed the bribe, and the judge was never in a meeting when a bribe was discussed. For more information about Borja and Hansen, see

Despite this fact, Chevron lawyer Andrea Neuman told the Los Angeles/San Francisco Daily Journal that the judge was seen on the tapes “soliciting” a bribe. It also turned out that Hansen was a convicted drug trafficker with a history of legal problems, and had been lying about owning a remediation company, which stood to benefit from a judgment ordering a clean-up of the oil disaster.

For more than a year, many journalists and the falsely accused judge have questioned the credibility of Chevron’s claims. The judge and representatives of the plaintiffs have charged that the sting was likely orchestrated by Chevron’s U.S. legal counsel, and could expose the company to potential civil and criminal liability in the U.S. and Ecuador, said Hinton. Chevron’s lawyers have admitted meeting with Borja in the United States before the only meeting where the issue of a bribe was raised.

The court documents supporting Borja’s subpoena make it plan that:

· Chevron claimed in a press release that Borja was a “Good Samaritan,” when in fact he was working under the direction of Chevron’s legal team since at least 2004, and he himself said he was responsible for “dirty tricks” during the trial;
· Borja formed four dummy companies for Chevron to make the work he did for Chevron appear independent;
· Borja’s wife also worked for Chevron, and both he and his wife signed documents as representatives of Severn Trent Labs, a supposedly independent laboratory used to test soil and water samples from the litigation;
· Borja and his Chevron “boss” attempted to infiltrate a lab used by the plaintiffs using false names.

Among Borja’s quotes from the tapes cited in the legal papers is the following passage:

“… I have correspondence [with Chevron officials] that talks about things you can’t even imagine, dude… they’re things that can make the Amazons win this just like this [snapping fingers]… I mean, what I have is conclusive evidence, photos of how they managed things internally.”

The tapes were made by Santiago Escobar, a childhood friend of Borja’s who lives in Canada. They have been turned over to authorities in Ecuador and the United States.

Escobar had told journalists that Borja indicated to him on several occasions that he has carried out a series of clandestine “dirty tricks” operations on behalf of Chevron over a series of years. In June 2009, Escobar said Borja told him he arranged “the biggest business deal of his life” that would “take down the lawsuit” and that he had received a “ton of money” from Chevron for his work.

Thursday, September 16, 2010

Chevron's "Dirty Tricks" Hero Diego Borja Now Under the Gun

Chevron employee Diego Borja was known among his friends and acquaintances as “Chevron’s dirty tricks man” in Ecuador, according to a testimony of a childhood friend of Borja’s. One of those tricks was to try to entrap the judge hearing the $27 billion lawsuit against the company — a dirty trick he discussed with Chevron officials in San Ramon, the oil company’s corporate headquarters.

Borja’s friend, Santiago Escobar, said Borja told him that when he first spoke with Chevron about the videos, he made it clear he wanted to be paid for his efforts. Borja said he expected to be covered in terms of security and economically – “in everything” after handing over the videos. He told them, “Obviously, I’m not going to ask for anything now, because it would ruin everything.” Chevron told him not to worry, but it is “totally understood.”

This is just one of many dirty tricks played by Chevron to undermine the trial. Read more below in an informative post by Han Shan at the ChevroninEcuador blog.

Tables Turned: Lawsuit Targets Chevron "Dirty Tricks" Operative in Ecuador

Chevron and its liars – oops, I mean lawyers – are about to get a taste of their own medicine.

As the San Francisco Daily Journal reported yesterday, Chevron's 'dirty tricks guy' in Ecuador, Diego Borja, has been targeted with a subpoena and a demand to sit for a deposition and tell the truth about his operations to undermine the trial over Chevron's contamination of the Ecuadorian Amazon.

Chevron has been on a legal rampage, filing motion after motion against the Ecuadorian plaintiffs' expert witnesses and consultants residing in the U.S. Most notably, the oil giant outraged 1st Amendment supporters when it subpoenaed hundreds of hours of raw footage from filmmaker Joe Berlinger whose film CRUDE examined Chevron's toxic legacy in Ecuador.

Now, as the Daily Journal writes, the tables have turned:

On Friday, Ecuador filed its own discovery request in San Francisco federal court under the same law Chevron has been using - 28 U.S.C. 1782, a statute designed to help parties obtain U.S.-based evidence for use in foreign proceedings. Ecuador is seeking to depose Diego Borja, one of two men who secretly videotaped a conversation with the original Ecuadorean judge in the case. In re Application of the Republic of Ecuador, 10-80225. Chevron claims the tapes showed the judge - who denied wrongdoing but recused himself - had already made up his mind to rule in the plaintiffs' favor as part of a bribery scheme. But Ecuador cites a report made by an investigator hired by the plaintiffs that suggests Borja is improperly linked to Chevron.

Last summer, Borja, a long-time Chevron employee in Ecuador who has been closely associated with the oil giant's legal defense in the environmental lawsuit, spearheaded the undercover sting operation against the judge overseeing the trial in Ecuador. Borja and a shady American former drug trafficker and convicted felon named Wayne Hansen posed as businessmen interested in contracts for environmental remediation should the plaintiffs prevail in the legal battle demanding Chevron clean up its oil contamination of the region.

As the Amazon Defense Coalition explains in a press release:

The court filings, made by the American law firm Winston & Strawn on behalf of Ecuadorian authorities fighting Chevron over an international arbitration claim, seek to depose Borja about his involvement in the sting operation, conducted with Borja's sidekick Wayne Hansen. In 2009, both Borja and Hansen used cameras hidden in a pen and a watch to secretly tape meetings with the trial judge presiding over the environmental case, and supposed government officials.

The men then turned over the tapes to Chevron, which posted them on YouTube. Chevron initially alleged the tapes showed an attempted bribery of the judge, but it was only the Chevron employee who discussed the bribe, and the judge was never in a meeting when a bribe was discussed.

But don't take their or my word for it. Reporting on revelations about the shady past of Borja's partner Wayne Hansen, the New York Times reported, simply:

"No bribes were shown in the tapes..."

In fact, Borja's plan to corrupt the trial and reap a windfall from Chevron has been unraveling since it was hatched.

In April, the Amazon Defense Coalition and Amazon Watch revealed a series of stunning admissions by Borja. A childhood friend of Borja's named Santiago Escobar, disgusted by Borja's bragging about his 'dirty tricks' for the company, recorded conversations and saved online chats in which Borja admits he "cooked" evidence in the trial and would reveal the damaging evidence unless he received enough money from Chevron for his 2009 sting operation.

Santiago Escobar has received death threats for blowing the whistle on Borja's operations but it didn't stop him from testifying before Ecuador's Prosecutor General's office about what he knew. And now, Borja will have to testify.

Among the quotes from the recordings cited in the legal filings is this gem:

"... I have correspondence [with Chevron officials] that talks about things you can't even imagine, dude... they're things that can make the Amazons win this just like this [snapping fingers]... I mean, what I have is conclusive evidence, photos of how they managed things internally."

And at one point, Borja laughs and says to his friend, "Crime does pay."

Before Chevron pushed its bullshit "corruption scandal" story out, the company paid to relocate Borja and his wife – who also apparently assisted in schemes to corrupt the trial – to the United States. For more than a year, Chevron has been paying $6,000 a month in rent for his large home with a swimming pool that abuts a golf course in a gated community only minutes away from Chevron's headquarters in San Ramon, CA. Chevron claimed to have moved Borja and his family to the U.S. for his "security" but it also helped him escape prosecution for any of the illegal activities he was involved in during the attempted sting operation against the judge, or in tampering with evidence in the trial.

Ironically, the fact that Borja is currently residing in the U.S. is what makes him subject to the legal action he now faces. The oil giant admitted a year ago that it had hired a high-powered and expensive criminal defense attorney for Borja, who was caught on tape talking about his "bosses" at Chevron directing his operations. Today, I'm sure those Chevron bosses are hoping the lawyers they've hired are worth their cost.

To the plaintiffs and many of the people who have watched with disgust at how Chevron has waged a dirty and deceitful campaign to evade responsibility for environmental devastation and human suffering in Ecuador, Diego Borja is but a bit player in the wide-ranging criminal enterprise that Chevron has built around this case. And none of it compares to the crimes the oil giant committed against the indigenous people whose way of life ended with the company's arrival in their land.

But hopefully, this latest legal action, and a thorough interrogation of Chevron's self-proclaimed 'dirty tricks' guy, Diego Borja, will help to further unravel the web of lies that Chevron has woven to conceal the truth about its poisonous legacy in Ecuador.


San Francisco Daily Journal, September 14, 2010:
With Discovery Bid, Ecuador Turns Tables On Chevron

Amazon Defense Coalition press release, September 14, 2010:
Lawsuit Targets Chevron "Dirty Tricks" Operative Over Ecuador Video Corruption Scandal

The whistleblower report on Diego Borja, including recordings of him spilling the beans to his childhood friend about his involvement in Chevron's systematic attempts to corrupt the trial:
Chevron's Dirty Tricks Operative in Ecuador, Diego Borja: Whistleblower Report

And for further background, read two Huffington Post articles I wrote:

First, I blew the lid off the whole supposed "corruption scandal" only days after Chevron announced it last fall:
Chevron's 'Dirty Tricks Operation' in the Amazon

Then I revealed the shockingly shady past of Diego Borja's convicted felon, drug-trafficker, partner-in-crime Wayne Hansen:
Chevron's Man in Ecuador: Felon, Drug-Trafficker, and Liar, Oh My!

– Han

Wednesday, September 15, 2010

Chevron Critical of Cabrera’s Damages But Won’t Submit Its Own Estimate

Over 100 Expert Reports Show Contamination That Oil Giant Hides From US Judges

Chevron, you are getting what you asked for! Now what’s the problem? Chevron lawyer Andrea Neuman has said the oil giant simply wants to “get to the truth” about the oil contamination in the Amazon rainforest, yet Neuman and other Gibson Dunn lawyers are refusing to adhere to a court order requiring them to submit their own damage assessments reports about the extent of the contamination and the cost to remediate it.

New damages assessments from both Chevron and the Amazonian communities are due in Ecuador’s court Thursday, but Chevron has indicated it likely will refuse to participate despite complaining previously it never had the opportunity to submit its own damages report. For more than two years, Chevron has protested a previous $27 billion report submitted by court-appointed expert Richard Cabrera.

“We predict that Chevron’s bad faith will be on full display yet again,” said Pablo Fajardo, the lead lawyer for the Amazonian communities. “Chevron complained that it did not have an opportunity to produce its own damages assessment. But when given the opportunity, company lawyers accuse the judge of bias against Chevron and launch attacks on the justice system.”

Fajardo said the Amazonian communities will submit their own damages assessment to the court on Thursday and that it was prepared by a team of scientific and medical experts. Chevron, on the other hand, recently filed a motion in Ecuador to remove the judge and cited the order asking for the new damages assessments as a basis.

Chevron has filed 104 separate motions before the Ecuador court in the last several weeks as part of a strategy to delay the trial, which has been litigated now for seven years, said Fajardo. Most of the recent motions concern efforts to nullify the report of Cabrera, who in a 4,000-page summary of the evidence found Chevron could be liable for up to $27.3 billion in damages.

The $27.3 billion would only partially clean up the damage given that a significant portion of the harm caused by Chevron to the delicate rainforest ecosystem can never be fully remediated, said Fajardo.

As an example of Chevron’s abuse of the judicial process, in just one 30-minute period on August 5 – just three days after the court ordered the parties to submit their own damages assessments – Chevron bombarded the court with 19 separate and largely repetitive petitions, said Fajardo.

“It’s extraordinary how Chevron tries to abuse the judicial process while thousands of people, many sick from cancer, cannot afford to pay for the most basic medical treatment,” he said. “Tragically, many suffering people will not live long enough to see justice done.”

He added: “Chevron’s actions demonstrate the company’s blatant disregard of the people of Ecuador and prove its double standard in asking that the case be tried here. No litigant, including Chevron, would ever get away with this in the United States.”

Chevron is accused in the lawsuit of deliberately dumping billions of gallons of toxic waste into Amazon waterways when it operated a large oil concession from 1964 to 1990. Independent studies demonstrate cancer rates in the area are higher than in other parts of Ecuador, and several indigenous groups have seen their traditional lifestyles decimated.
After the communities submit their new damages assessment to the court on Thursday, the judge will have in evidence 105 expert reports and more than 64,000 chemical sampling results from dozens of former Chevron well sites, all of which show extensive contamination, said Karen Hinton, a spokesperson for the communities.

Most of the evidence comes from Chevron’s own sampling, which alone prove the claims in the lawsuit, said Hinton. In all, the court has voluminous scientific evidence to impose liability and damages on Chevron independent of the Cabrera report, she added.

In the meantime, Chevron’s outside counsel at Gibson Dunn & Crutcher have filed a series of discovery actions in U.S. federal courts where they claim there is no evidence of contamination left by Chevron in Ecuador – a blatant misrepresentation, said Hinton.

“The company’s own test results in Ecuador show that Chevron’s lawyers are mischaracterizing the entire case before U.S. courts,” said Hinton. “What’s worse is that these misrepresentations have grave human consequences.”

The case against Chevron was originally filed by 30,000 rainforest residents in 1993 in U.S. federal court, but was shifted to Ecuador at Chevron’s request in 2002. Once the trial evidence in Ecuador pointed to a possible multi-billion dollar judgment against Chevron, the company launched a public relations and lobbying campaign to discredit Ecuador’s justice system as well as the lawyers who represent the communities.

As a condition of the removal of the case from U.S. federal court to Ecuador, Chevron promised to subject itself to jurisdiction in Ecuador and to satisfy any judgment imposed by Ecuador’s courts.

Fortune's Roger Parloff Sucked In By Chevron Spin

More headlines on Chevron’s fraud. A post on

Enough to Make You Sick: Chevron's Successful Spin & Toxic Lies in Ecuador

Yesterday, I began my workday drinking coffee and reading over a brutal article on by legal reporter Roger Parloff, entitled Evidence of fraud mounts in Ecuadorian suit against Chevron.
My hopes that the article would help to highlight Chevron's long history of corruption and fraud were quickly dashed... it was not exactly the start to the week I had hoped for.

As I read Parloff's review of the latest in the titanic legal battle to force Chevron to clean up its poisonous legacy in the Ecuadorian Amazon, my chest tightened as it ocurred to me how good Chevron has become at making this case about everything except for the ravaged rainforest and the men, women, and children who have suffered over the decades due to the oil giant's greedy, reckless, behavior.

The article begins:

Over the past ten months, Chevron's outside lawyers at Gibson, Dunn & Crutcher have filed 11 civil actions in federal courts across the United States, each designed to pull back the curtain on what they say is an elaborate, two-year-long charade in which plaintiffs lawyers covertly planned and ghostwrote a crucial report on damages that was ostensibly being authored by an independent expert appointed as an "auxiliary" to the Ecuadorian court. The expert's final report, issued in November 2008, recommended that Chevron pay the plaintiffs $27.3 billion.

And throughout the article, Parloff does an exceptional job at presenting the story as if it wasn't lifted almost entirely from a bunch of Chevron talking points. The gist of Chevron's claim is that the lawsuit against the company is a giant baseless swindle concocted by contingency fee lawyers looking to get at the oil giant's deep pockets. And now, as Parloff's writes, Chevron's multiple discovery actions – most notably its successful subpoena of hundreds of hours of outtakes from Joe Berlinger's documentary film CRUDE – have produced evidence that the plaintiffs attorneys have engaged in fraud.

Except that neither Parloff, nor any of the federal judges who have opined about the case in rulings granting Chevron's motions for discovery, have any basis upon which to draw their conclusions except for Chevron's self-serving, dishonest, and, apparently, superbly-made arguments.

In fact, as the lawyers for the Ecuadorians noted in a response to Parloff's article:

"...Parloff has never been to Ecuador, never examined the 200,000-page trial record, never seen an original lab report from the 64,000 sampling results at trial, never talked to any witnesses who have testified in the case, and utterly fails to understand either the enormous quantum of evidence or the procedural rules that govern trials in Chevron’s preferred forum of Ecuador."

A major focus of Chevron's latest legal & PR blitz is the relationship between the plaintiffs and court-appointed expert Richard Cabrera. Unsurprisingly, this is also the major focus of Parloff's article.

Richard Cabrera is the court-appointed expert who was asked to come up with an overall damages assessment – in the end, $27.3 billion – to assist the judge overseeing the trial in Lago Agrio to make a final ruling about Chevron's liability for massive oil contamination across a vast swath of the Ecuadorian Amazon.

Parloff rolls with Chevron's cynical narrative:

Chevron claims that the logs already prove that the plaintiffs' consultants ghostwrote Cabrera's report, and the plaintiffs lawyers do not deny that they and their consultants provided materials to Cabrera.

He then goes on to detail the ex parte contacts between the plaintiffs side and Cabrera as if it's a smoking gun (ex parte is a Latin legal term that in this context refers to contacts between one party and the court or experts without the opposing party present).

But, as the plaintiffs explain in a legal filing in U.S. Federal Court opposing a subpoena served upon the lead U.S. attorney in the case (an extraordinary over-reach unto itself):

“Ex parte” contacts with Mr. Cabrera remain at the heart of this petition, yet (i) the matter of contacts between Plaintiffs and Cabrera is undisputedly before the Lago Agrio Court, and that court has given no indication that such contacts are improper; (ii) Chevron has still not denied it that also had ex parte contacts with court experts in Lago Agrio; and (iii) Chevron still cannot point to a single order, rule, regulation, or law prohibiting such contact; to the contrary; it is reduced to relying on lengthy expert opinions to resolve what it had claimed was a cut and dry example of fraud under Ecuadorian law.

Chevron complains about the “ghostwriting” of expert reports, yet it has become clear that Chevron’s private expert, John A. Connor, ghostwrote part of the report of another independent, neutral court expert in Lago Agrio: Mr. Barros. Attached as Exhibit 67 is a report Chevron’s private expert, Mr. Connor, prepared dated June 16, 2005 titled Prácticas y Reglamentos Internacionales Para el Uso y la Remediación de Piscinas de Campos Petroleros. Apparently without any attribution, the neutral and independent expert appointed by the Lago Agrio Court, Mr. Barros, copied entire pages of Chevron’s report, word for word.

The legal memorandum continues:

Nowhere does Barros appear to acknowledge that he has cut and pasted Chevron’s expert’s materials into his own avowedly neutral and independent report. Does Chevron deny it had ex parte conduct with Barros? It does not.

Is it a miraculous coincidence that an entire section of the Barros report is a clever cut and paste of disparate portions of Chevron’s work product? It is not.

By Chevron’s argument, this is fraud on the court, collusion with a neutral, independent expert, and criminal conduct that should send the people at Chevron who engineered the fraud to jail.

Chevron also fails to refute the now-undisputed declarations that Chevron’s lawyers met secretly and repeatedly not just with experts, but with the Court, and specifically discussed the Lago case. When this ex parte conduct was exposed, Chevron’s security guards tried to keep plaintiffs’ representative away. This secret contact was pursued by Chevron’s counsel, yet counsel is completely silent in Chevron’s opposition: not one declaration, not one response on the facts. If it is acceptable for Chevron’s lawyers to meet ex parte with the Court itself, why is it unacceptable for plaintiffs to meet “ex parte” with an expert? Chevron does not and cannot explain.

Evidently, Parloff has chosen the convenient path of simply ignoring the plaintiffs' thorough debunking of Chevron's breathless accusations.

In a brief aside, Parloff writes:

It should be noted that the fraud claims -- even if true -- do not necessarily impugn the legitimacy of the Indians' underlying cause, or even the genuineness of their lawyers' belief in that cause..."

But as Parloff also notes, to the certain gratification of Chevron and its highly-paid American corporate lawyers, legitimacy of the indigenous communities' cause – and the reality of their continued suffering – won't necessarily secure them justice in court.

I'm not sure what is more devastating about an article like this, but either choice is just a different side of the same coin. Yesterday, I was saddened that a man as smart as Parloff can be so completely taken in by the dishonest narrative that Chevron has spun. Today, I'm sickened by how astonishingly good at their devious task the Chevron lawyers and spinmasters have grown to manipulate a man as smart as Parloff.

Chevron has scored another PR victory, yes. But the truth, as I've said before, has a way of bubbling to the surface like crude in the Amazon.

Concluding their response to Parloff's article, and to Chevron's increasingly dishonest and abusive legal tactics, the lawyers for the communities in Ecuador write:

Chevron’s problem in Ecuador is that it is losing the case based on the evidence and that its own officials are under criminal indictment for fraud related to a sham remediation. The real story is that the evidence convincingly demonstrates that an American company went to a foreign nation and deliberately devastated the Amazon rainforest environment out of greed. The destruction was done in violation of Ecuadorian laws, industry standards, Chevron’s own operating contract, and all sense of basic decency. Chevron’s allegations of “fraud” are themselves part of an elaborate scheme to cover up the company’s pervasive illegality in its Ecuador drilling operation and in its advocacy during the trial.

– Han

Tuesday, September 14, 2010


Government Seeks To Depose Chevron Contractor Diego Borja

Below is a story that appeared today in the San Francisco Daily Journal, a legal publication, about the government of Ecuador’s motion to depose Chevron contractor Diego Borja. For more information about Borja, go here.

September 14, 2010
By Rebecca Beyer
Daily Journal Staff Writer

SAN FRANCISCO - The Republic of Ecuador, which has seen its judicial system come under attack by Chevron Corp. in the last year, has taken a strategy from the oil giant's legal playbook in an effort to defend itself in an arbitration in The Hague.

Home to a massive environmental lawsuit against the San Ramon-based company, the South American country has stood by for nearly a year while Chevron - armed with a law dating back to the 1800s - has filed multiple discovery requests in federal courts across the United States aimed at proving the Ecuadorean judicial system is corrupt. In Ecuador, Chevron is fighting plaintiffs' claims that the company should be held responsible for cleaning up the devastation from nearly 30 years of drilling by Texaco in the Amazon rainforest (Chevron acquired Texaco in 2001).

On Friday, Ecuador filed its own discovery request in San Francisco federal court under the same law Chevron has been using - 28 U.S.C. 1782, a statute designed to help parties obtain U.S.-based evidence for use in foreign proceedings. Ecuador is seeking to depose Diego Borja, one of two men who secretly videotaped a conversation with the original Ecuadorean judge in the case.In re Application of the Republic of Ecuador, 10-80225. Chevron claims the tapes showed the judge - who denied wrongdoing but recused himself - had already made up his mind to rule in the plaintiffs' favor as part of a bribery scheme. But Ecuador cites a report made by an investigator hired by the plaintiffs that suggests Borja is improperly linked to Chevron.

A spokesman for Chevron said the Borja videos were authenticated by forensic experts and that it was too soon to say whether the company would oppose Ecuador's deposition request. Ecuador's filing is just the latest chapter in litigation that dates back 17 years, spans three continents and includes allegations of corruption and collusion on both sides. The country's 1782 petition also comes after Chevron has had great success using the law to obtain discovery from people involved in the Ecuadorean case on the plaintiffs' side.

"Turn-around is certainly fair play," said Georgene M. Vairo, a professor at Loyola Law School. "It's appropriate for Ecuador to try to protect itself by looking into the alleged wrongdoing of Chevron. 1782 is there to do that."

Although Ecuador is not a party in the litigation within its borders, it is a defendant in an international arbitration Chevron initiated in The Hague last year under the Bilateral Investment Treaty between Ecuador and the United States. There, Chevron is seeking, among other things, a declaration that it has no liability for the damage in the Amazon because of a settlement Texaco signed with Ecuador in 1995 in which the oil company agreed to do some environmental clean-up and Ecuador agreed to release any claims against the company.

In the arbitration, Chevron alleges that it is being denied due process in Ecuador because of a corrupt judicial system. For its part, Ecuador wants to depose Borja about his employment history, his relationship to Chevron, his wife's relationship to Chevron and his meetings with the judge and others. The discovery request is "directly relevant to the Republic's defense in the Treaty Arbitration," Ecuador's attorneys from Winston & Strawn wrote in Friday's filing, and "will help determine the authenticity, importance and relevance of Chevron's videotape evidence, and to discover the underlying motives for Borja to produce such clandestine videotapes."

Ecuador is represented by Washington, D.C. partner Eric W. Bloom and New York partner C. MacNeil Mitchell, who did not respond to a request for comment. Richard A. Lapping, of the firm's San Francisco office, declined to comment. Cristina C. Arguedas, an attorney for Borja from Arguedas, Cassman & Headley in Berkeley, declined to comment.

"I think it is legitimate for [Ecuador] to investigate instances of judicial corruption," said Andrea E. Neuman, a Gibson, Dunn & Crutcher partner in Irvine and one of Chevron's lead attorneys. "It strikes me that the target of the investigation here would normally be the judge who was seen on these authenticated tapes soliciting a multimillion-dollar bribe."

Edward A. Klein, a partner at Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor in Los Angeles who has handled 1782 cases said Chevron would be "pretty hard-pressed to resist Ecuador's efforts to get discovery in the United States given Chevron's liberal use of the 1782 process."

Chevron has used the 1782 statute to get a wide range of discovery - mostly aimed at proving their claim that consultants on the plaintiffs' side were behind the $27 billion damages estimate found in a court-appointed expert's report - for use in the proceedings in Ecuador and The Hague. Its highest-profile use of the law came when a New York federal judge - and later the 2nd U.S. Circuit Court of Appeals - agreed with the company that a documentary filmmaker should turn over hundreds of hours of raw footage from "Crude," a film about the litigation (last week the same judge granted Chevron's request to depose the filmmaker). Earlier this month, a magistrate judge in New Mexico granted a discovery request for Chevron and cited the footage as one reason for doing so.

Karen Hinton, a spokeswoman for the plaintiffs in the Ecuadorean lawsuit, said Chevron's discovery efforts "are nothing but theatrics to draw attention away from what the company cannot deny, the overwhelming evidence that Texaco intentionally contaminated the rainforest and Chevron is now responsible for it."

In court papers, the plaintiffs have called Chevron's assertions that they have improperly colluded with the expert "hypocrisy," claiming Chevron's consultants' work appeared in the report of another court-appointed expert. No hearing date has been set on Ecuador's request to depose Borja.

Chevron Fraud Evidence Mounts In Ecuador

Bogus Lab Tests, Threats Against Plaintiffs Counsel, Ex Parte Meetings With Judge Paint Nasty Picture of Oil Giant’s Litigation Tactics

Amazon Defense Coalition
13 September 2010 – FOR IMMEDIATE RELEASE
Contact: Karen Hinton at 703-798-3109 or

New York, NY – Evidence of fraud by Chevron is mounting in Ecuador, dealing the oil giant a potentially crippling blow as it faces a potential multi-billion judgment for environmental damage, representatives of the Amazonian communities asserted today.

In a series of recent court filings in federal courts across the United States, the Ecuadorians suing Chevron for oil contamination in the Amazon rainforest have demonstrated the oil company faces an increasing array of problems, among them:

· Diego Borja, a Chevron contractor in Ecuador, ran a “dirty tricks” operation for the oil giant in Ecuador that attempted to ensnare the trial judge in a corruption scandal, according to taped phone conversations.

· Borja claimed that Chevron had “cooked” court evidence and that he would turn against Chevron if company officials did not pay him what they promised for videotapes he made of the judge in the lawsuit. Widely covered by the news media, the videotapes were later discredited.

· Chevron hired Kroll, the publicly traded investigations firm, to try to pay an American journalist to become an undercover spy for the company in Ecuador, according to a recent article in The Atlantic.

· Chevron’s lawyers had ex parte meetings with judges and have not denied having ex-parte meetings with court-appointed experts on the case – the exact same basis for Chevron’s false claims of “fraud” against lawyers for the plaintiffs.

· The plaintiffs also produced evidence that a court-appointed expert adopted many materials wholesale that were prepared by Chevron’s own expert without citation – the exact same charge that Chevron has leveled against the plaintiffs.

· Two Chevron officials are under criminal indictment in Ecuador for, according to the charges, conspiring to defraud the government by lying about the results of a sham remediation in the mid-1990s. Chevron’s own tests submitted into evidence show illegal levels of contamination at the so-called “remediated” sites.

· Due to a series of death threats from unknown sources, lawyers for the plaintiffs and their families are now protected with armed bodyguards.

Chevron is arguing in various jurisdictions around the country that any ex parte meetings between the plaintiffs and a court-appointed expert prove “fraud,” though they have failed to cite any order, rule, regulation, or law prohibiting such meetings under Ecuadorian court procedures. Legal experts in both Ecuador and in the United States have disagreed with Chevron’s argument.

“Chevron has not denied that its own lawyers met with court experts and has yet to deny the evidence that its lawyers met ex parte with judges in the lawsuit,” said Ilann Maazel, an American who is representing the Ecuadorians. “Why can Chevron meet ex parte with judges, but plaintiffs can not meet with an expert? This is hypocrisy with a capital “H”.

“Chevron’s true complaint is not with the Ecuadorian courts, but with the evidence of its own wrongdoing,” Maazel said.

Originally filed in the U.S. in 1993, Chevron requested the case be moved to Ecuador. Now that a decision is approaching and the evidence points to its culpability, Chevron is attempting to retry the lawsuit in the same U.S. court system it once rejected as inappropriate.

In a brief submitted to the Southern District Court of New York last week, attorneys for the Ecuadorians argued that Chevron had conducted ex parte meetings with court-appointed experts and that one of them, Gerado Barros, copied entire pages of a 2005 Chevron report into his expert report, entitled Prácticas y Reglamentos Internacionales Para el Uso y la Remediación de Piscinas de Campos Petroleros. Barros is one of several experts who have written about 100 reports, in total, that the court may rely on as evidence in the case. The majority of the reports show illegal levels of contamination, even at sites allegedly “remediated” by Texaco.

The plaintiffs assert that adopting materials directly from reports is not inappropriate, as long as the court-appointed expert is in agreement with the materials or is using them to explain or make a point. Such practice is common in U.S. courts, Maazel said.

Maazel said Chevron has yet to identify an “order, rule regulation, or law prohibiting” contact with experts.

Penn State law professor Catherine Rogers, a scholar of international arbitration and professional ethics, wrote on, a well-respected online legal forum, that Ecuadorian “standards for the impartiality of court-appointed experts may treat such attendance (ex parte meetings) as acceptable, and perhaps not even necessary to disclose.....”

Thursday, September 9, 2010

Chevron Desperate Over Ecuador Disaster

As Evidence Piles Up, Company Ignores Own Scandals

Chevron has been dishing dirt to tarnish the Ecuadorian and American lawyers representing the indigenous groups suing the oil giant for what is considered the largest, oil-related environmental disaster on the planet. Yet Chevron is silent on the latest scandals surrounding the company’s potential $27 billion liability for the unprecedented oil contamination in Ecuador’s once pristine jungle.

After filing over 250 legal briefs in numerous U.S. federal district courts in a full-throttle attempt to undermine the Ecuadorian proceedings, Chevron is now mute on a plot, recently revealed, to spy on Ecuadorians who are sick or have lost family members as a result of the contamination. The oil company also has refused to comment on two internal audits that detail the vast extent of the contamination caused by the oil giant during its 26 years of operations. (view full audits here and here). The audits have been submitted as evidence in a U.S. federal court to prove that Chevron has been lying about its responsibility for the billions of gallons of oil and toxic formation water that the company intentionally dumped into the Ecuadorian rainforest.

Chevron’s refusal to speak to the spy plot and the findings of its own audits, which track exactly what the plaintiffs have long alleged and what expert reports at trial have concluded, speaks volumes about the company’s legal strategy. The company attacks the individual plaintiffs and their lawyers, ignores solid evidence and pays to manufacture junk science. Sounds like the old playbook of the tobacco industry.

Long accused of engaging in an illegal dirty tricks campaign in Ecuador, Chevron recently tried to recruit an American journalist to spy on the plaintiffs. Mary Cuddehe, an Iowa-born graduate of Columbia University, said Chevron wanted her to pretend to interview individuals, identify any discrepancies in their stories and turn over all the information she gathered to the private investigative firm Kroll that Chevron hired. Sam Anson, a Kroll investigator, offered Cuddehe $20,000 for six weeks of undercover work. Kroll is the largest private investigative firm in the world and shares an office building with Chevron in San Francisco.

Monday, September 6, 2010

Chevron Proves Own Guilt In Ecuador With Devastating Internal Audits

More Than 100 Expert Reports, Chevron’s Own Lab Tests, and Chevron’s Audits Demonstrate CEO Watson Lying to Courts and Shareholders

Environmentalists and other concerned citizens have been spreading the news about two environmental audits, conducted by Chevron, that detail the vast contamination the oil company left behind as it exited Ecuador in 1992. That’s right. Chevron’s audits prove Chevron’s responsibility for the 18 billion gallons of toxic formation water dumped into the Ecuadorian rainforest, and the more than 900 unlined waste pits built by Texaco to store its deadly sludge and cancer-causing chemicals such as Chromium 6. These pits, built in violation of all legal norms and industry customs, have been leeching toxins into the soil and water for decades. Just look at the 60 Minutes segment to show how Chevron recklessly built the pits with pipes to drain their sludge into the surrounding streams.

Meanwhile, Chevron has been desperately filing legal briefs in the United States and abroad to discredit the Cabrera report, an analysis of the contamination that the Ecuadorian court ordered as part of the 17-year legal battle. Only problem is that the Cabrera report is based, in part, on Chevron’s own audits and Chevron’s own sampling results. There’s also the 100 other expert reports in evidence that found extensive contamination at 100% of the former Chevron well sites. And Chevron’s own tests, submitted into the court record, also found illegal levels of contamination. See this chart.

Chevron, in other words, is jammed by its own evidence. It can talk about the Cabrera report all it wants, but it cannot escape the fundamental fact that there is voluminous and unassailable evidence that it proved the case against itself. And we know Chevron’s sampling results are valid because they are corroborated by the results produced by the technical experts for the Amazon communities and by the sampling done by Cabrera himself.

Read about the Texaco audits here and here and at these blogs:

Chevron vs. Chevron: Oil Company Digs for Truth in Ecuador Case, and Finds It

Chevron’s Own Audits Prove Company Lied About Massive Pollution In Ecuador

Chevron Lies About Its Toxic Legacy in Ecuador. Who Says? Chevron

Proof of Guilt

Wednesday, September 1, 2010

Court Filing: Chevron’s Own Audits Prove Company Lied About Massive Pollution in Ecuador

Evidence of Chevron’s “Stunning Hypocrisy” and Lies to U.S. Federal Courts

Amazon Defense Coalition
Contact: Karen Hinton at 703-798-3109 or

NEW YORK – A U.S. Federal Court has been presented with two separate audits conducted at Chevron’s request that show “clear and convincing evidence” that the oil giant knowingly dumped billions of gallons of toxic waste directly into the Amazon and subsequently lied to cover it up, according to a legal brief by the 30,000Ecuadorian rainforest residents suing the company for the illegal dumping.

The two separate audits, commissioned by Chevron’s predecessor company Texaco as it was wrapping up operations in Ecuador from 1990-92, found that the oil contamination “require[d] remediation at all production facilities.” The audits also demonstrate deliberate contamination by Texaco, noting that the company failed to protect surface water quality and intentionally dumped untreated toxic waste directly into the streams and rivers of the jungle.

The findings of the audits – presented for the first time in a U.S. federal court as part of a battle over various discovery requests related to the Ecuador litigation – stand in stark contrast to Chevron´s numerous sworn statements that there is “no evidence that Chevron is responsible for any environmental damage” in Ecuador, made in multiple filings in recent weeks in several different federal courts.

Chevron’s public denials of damage to the region given the extraordinary findings in its audits are “shocking and cynical,” according to Ilann Maazel, an attorney for the Amazon residents. “These audits definitively prove that Chevron is guilty of contaminating Ecuador´s rainforest and that the company is now shamelessly lying about that undisputed fact to U.S courts,” he said.

“It is incredible that Chevron lawyers have stated in US courts that there is no damage in the region even while their own audits unequivocally state the exact opposite,” said Maazel. “Chevron has consistently and intentionally made such false statements to federal judges in a cynical attempt to hide the extent of the contamination caused by its operations.”

Some of the shocking findings of the audits, which were conducted by two Chevron sub-contractors and paid for by the company, are:

· “All twenty-two production stations are currently, or have at some time, discharged oily produced water to the environment and flared excess gas. The stations have produced a total of approximately 1.4 billion barrels of oil, 250 million cubic feet of gas and 375 million barrels of produced water during the period 1964 to 1990.”

· “The audit identified hydrocarbon contamination requiring remediation at all production facilities and a majority of the drill sites.”

· “Produced water (which contains carcinogens and toxic heavy metals) is being discharged to the environment in all cases.”

· “Produced waste is then passed through a series of open, unlined pits. The remaining oil emulsion and produced water is discharged into a local creek or river or in some instances directly into the jungle...Produced water has historically not been tested prior to disposal…”

· “Contamination of soil and water was observed at well sites, production stations and along roadways, flowlines and secondary pipelines.”

· “Workover, completion wastes, salt solutions and oil/water emulsions have historically been disposed of into well site pits. … Little maintenance has reportedly been done on any of the pits at the well sites.”

· “[Texaco’s] operation included the intentional burning of crude oil from spills and contained in pits. This operation usually created large amounts of black smoke and soot that can potentially impair the environment and human health.”

Both audits were relied upon by a court-ordered damages assessment report that found Chevron could be responsible for up to $27.3 billion in environmental damages and remediation costs. Chevron’s lawyers have called the report “scientifically bankrupt” but thus far have refused to comment on their own audits, which were conducted in the early 1990s as the company was winding down its operations in Ecuador.

The audits were conducted by HBT Agra and Fugro McClelland, two Chevron sub-contractors. They are part of the evidence in the Ecuador trial. Chevron, through its predecessor company Texaco, operated in Ecuador from 1964-1990. The lawsuit, originally filed by 30,000 Ecuadorians in New York in 1993, was transferred to Ecuador at Chevron’s request. Since the trial began in Ecuador, more than 64,000 scientific sampling results and a 200,000-page trial record, has created a mountain of evidence demonstrating Chevron’s responsibility for the environmental devastation in the region, said Maazel.