Chevron: Release The Secret Evidence That Proves Your Guilt In Ecuador

Reposted from Karen Hinton on the The Huffington Post

In the wake of a controversial U.S. court ruling that a $9.5 billion Ecuador judgment against Chevron is fraudulent, the oil giant has been touting loudly its innocence of any environmental crimes in the South American country.

Chevron's lawyers even successfully pressured some CBS News corporate suits to yank a damning 60 Minutes piece from the network's website about the deliberate contamination of the Ecuador rainforest from 1964 to 1992 by Texaco, which Chevron later bought.

(See the dead link here. You can see the segment on my company's web site. So sue me, CBS.)

Instead of succumbing to Chevron's pressure tactics, CBS' lawyers should grow a backbone and demand to see contamination "playbook" documents that Chevron has been forced to produce in an international arbitration proceeding.

They are explosive and prove 60 Minutes got it right, and the U.S. judge got it wrong.

The playbook details how the company hid evidence of contamination during an eight-year Ecuador trial resulting in a $9.5 billion damage award that the Ecuadorians are waiting for Chevron to pay.

Meanwhile, Chevron is claiming in arbitration that the Republic of Ecuador should pay the judgment, and the two parties are duking it out before a panel of corporate trade lawyers who rent office space at The Hague and act as "judges" – more about them later.

The playbook took center stage in a recent arbitration filing by Ecuador. It appears the country's lawyers have gotten their hands on much, if not the entire, playbook, but the corporate trade lawyers are requiring Ecuador to redact or cover up the really damning evidence.

Even so, a recent rejoinder filed by Ecuador reveals enough to demonstrate what a morally bankrupt company Chevron is. (See the redacted rejoinder here.)

Here's what we know about the playbook, pieced together from the filings of both the Ecuadorians in U.S. court and the Republic of Ecuador in arbitration.

In 2011, the Ecuadorians obtained a few pages from the playbook and tried to enter them into evidence during Chevron's "fraud" trial, but Federal Judge Lewis Kaplan refused to allow any evidence of contamination into the record, including the small excerpt from Chevron's playbook.

(See my recent blog about this legal travesty, and this earlier 2011 press release about the playbook.)

During the Ecuador trial Chevron's paid experts wrote the playbook to document how to handle the contamination they found at the well sites in soil and water tests.

Without the knowledge of the Ecuador court, Chevron's experts conducted unofficial and secret pre-inspections of the sites so they could avoid the badly contaminated areas during the official judicial inspections. (See page 63 in the rejoinder.)

Their pre-inspection findings would have been devastating to their case had they been turned over to the court. So they never were. (See page 63.)

Instead, they used the results to avoid the contaminated areas and test at clean spots, usually from soil and water at elevations higher than the huge, unlined and open pits Texaco built to store permanently pure crude and toxic water.

[Quick backgrounder: Texaco explored for oil in Ecuador from 1964 to 1992 and was the sole operator of the well sites during that time. The Ecuadorians filed their original lawsuit in the U.S. against Texaco in 1993, one year after Texaco left Ecuador. A U.S. judge dismissed their lawsuit ruling in 2001 at Texaco's urging the litigation should be heard in Ecuador. That year, Chevron bought Texaco. In 2003, the Ecuadorians re-filed their case in Ecuador but not before the U.S. 2nd Circuit Court of Appeals instructed Chevron that it must accept Ecuador's jurisdiction, which it did.]

Chevron routinely used deceptive methods, such as mixing clean soil with dirty and undercounting hydrocarbons, to hide or reduce toxic chemicals in samplings. (See pages 66-72.)

This table below, taken from the arbitration filing, reflects just a few of the thousands of pages of playbook notes Chevron's experts and field personnel took, describing the contamination and advising the company about ways to avoid it during the official judicial inspection.

It's heavily redacted. If it's true – as Chevron says it is – that the oil giant is innocent, and the truth is what it seeks, then why won't Chevron release the un-redacted, unedited playbook for all to see?

Maybe it has something to do with the 1995 remediation agreement that Chevron argues is its get-out-of-jail-free card.

The agreement, between Texaco and the Republic of Ecuador, released Texaco from government liability in exchange for a cleanup of a relatively small number of pits. It did not, however, release Texaco from third-party claims.

During the Ecuador trial, tests found contamination levels at the so-called remediated Texaco pits as high or higher than the ones not cleaned. The Ecuadorians accused Texaco of simply throwing dirt on top of the contamination to hide it.

Chevron's playbook backs that up.

At pits Texaco said it cleaned, Chevron – according to its own playbook – found contamination during its secret PIs or pre-inspections. To avoid or reduce the contamination Chevron, during the official judicial inspection, took soil only from the top layer.

Ecuador's rejoinder references the playbook notes of Shushufindi 24, Sacha 21 and Lago Agrio 6, all three well sites that Texaco said it cleaned.

In its secret, pre-inspections Chevron discovered otherwise. (See pages 68-69.)

The rejoinder reads: "During the JIs (judicial inspections) Chevron's experts sought to avoid finding pollution by sampling only to depths that it knew to be clean. For example, at Shushufindi 24, the soil boring log at pit 2 shows that during its PI, (pre-inspection) REDACTED "Then at the JI, Chevron strategically chose to take surface soil samples only – avoiding the known contamination below."

Chevron: What did you find at Shushufini 24, Sacha 21 and Lago Agrio 6?

If you found little or no contamination, then all is well.

If you found contamination and withheld it from the court, then your remediation agreement comes unraveled as does your entire legal case.

Chevron will say today that pre-inspections were allowed, but that's not what its attorneys said during the trial. Chevron wrongfully accused the Ecuadorians of pre-inspections, telling the court that pre-inspections were a "violation of legal security and due process of law," and "no technical team from ChevronTexaco Corporation has performed any secret tests here."

The rejoinder reads:"Yet by that time, Chevron's experts had conducted PIs at least REDACTED (number of) sites and taken over REDACTED (number of) samples." (See page 65.)

Chevron wants its shareholders to believe the Ecuadorians are history, even though enforcement lawsuits are underway in three countries and an appeal of the U.S. ruling is pending before the Second Circuit Court of Appeals, which reversed an earlier Kaplan attempt to stop enforcement of the Ecuador judgment.

And, while the Republic of Ecuador is fighting aggressively Chevron's arbitration claim, it is doubtful the arbitration panel will rule against the oil giant.

Brought in 2009, Chevron's arbitration action is based on alleged violations of Ecuador's Bilateral Trade Agreement with the United States.

For some time now, multi-national corporations have been abusing these trade agreements. Allowing it to happen are the corporate trade lawyers who sit on arbitration panels as judges and then rotate off as lawyers representing corporations before panels composed of their trade lawyer buddies.

Best example is the successful claim by Phillip Morris against Australia because the country placed warning signs on cigarette packs about the dangers of smoking after Phillip Morris began selling cigarettes there. See here.

International arbitration is fraught with serious conflicts of interest, and some countries are considering ending bi-lateral trade agreements due to numerous upside down arbitration rulings that have put the interest of corporations above a country's residents.

The Ecuadorians' best bet is in Canada, Brazil and Argentina where they have filed enforcement lawsuits to seize Chevron's assets in those countries as payment for the judgment.

Who knows? The entire Chevron playbook may see the light of day in one of those courtrooms soon. Or, 60 Minutes could stand by its work and demand to see it.

Ironically, during Chevron's "fraud" trial, Kaplan quoted former Supreme Court Justice Louis D. Brandeis' famous maxim that "sunlight is said to be the best of disinfectants" but when it comes to the allegations leveled by the Ecuadorians and their lawyer, Steven Donziger, Kaplan and the corporate trade lawyers hanging out at the Hague prefer the dark side of the moon.

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Not Chump Change: $2 Billion In Chevron Assets Likely Frozen In Argentina Soon

The Ecuadorians, who recently won a $19 billion judgment against Chevron for oil contamination in the Amazon rainforest, have filed a lawsuit in Argentina, asking a court to freeze $2 billion in Chevron's Argentina assets as partial payment for the judgment. Chevron has refused to pay, even though the Ecuadorian courts have ordered the company to do so, and U.S. courts have said the judgment can be enforced. Chevron has few assets in Ecuador.

The chances of the Ecuadorians' collecting are good because Argentina and Ecuador have an agreement that they treat each other's court decisions as their own. Chevron's shareholders should be concerned because $2 billion ain't chump change.

Read more here:

Ecuador Villagers Seek $2 Billion of Chevron Assets In Argentina

Buenos Aires, Argentina – Indigenous groups and villagers from Ecuador are filing suit today to freeze an estimated $2 billion of Chevron assets in Argentina to help pay for a remediation of the extensive toxic pollution left by the oil giant on their ancestral lands in the Amazon rainforest, representatives of the communities announced.

The move is the fourth legal action filed to enforce a $19 billion judgment in Ecuador against Chevron for creating what experts believe is the world's worst oil-related contamination, dubbed the "Rainforest Chernobyl" by local communities. Earlier legal actions were filed this year against Chevron assets in Canada, Brazil, and Ecuador.

Brought by the prominent lawyer Enrique Bruchou, the action in Argentina differs from the earlier seizure actions in that it derives its authority in part from an international treaty in Latin America called the Inter-American Convention on the Execution of Preventive Measures. The treaty, which dates from the late 1970s, allows for the automatic freezing of assets of a defendant that fails to abide by the law and refuses to pay a final foreign judgment.

The Preventive Measures treaty has been ratified by Argentina, Ecuador, Colombia, Peru, Paraguay, Guatemala, and Uruguay. Venezuela and Chile have signed the treaty, but have not ratified it.

Chevron maintains oil operations and bank accounts in Argentina worth about $2 billion, said Bruchou and Pablo Fajardo, the lawyer representing dozens of indigenous and farmer communities in Ecuador. Chevron's operations in Argentina produce about 26,000 barrels of crude and 4 million cubic feet of natural gas daily.

In all, the amount of Chevron assets in the four countries are worth at least an estimated $8 billion, said Fajardo. Because the judgment in Ecuador against Chevron is for $19.04 billion, seizure actions will continue to be filed against Chevron assets in more countries to make sure the full amount of the judgment is collected, he added.

Bruchou, a native of Buenos Aries, founded his firm in 1990 after working for several years at the U.S. law firm Shearman & Sterling. International Financial Law Review named his law firm, Bruchou Fernandez Madero & Lombardi the best in Argentina for five consecutive years. Bruchou himself was named "Law Firm Leader of the Year" in 2011 by the prestigious Latin Lawyer magazine.

In a press conference in Buenos Aires on Wednesday, Bruchou said that enforcement of the Ecuador judgment in Argentina and other Latin American countries will signal to foreign investors that they should apply the same environmental standards they use at home to areas where vulnerable indigenous and farmer communities are located. "We ask for no more than that and no less than that," he said. "We call it responsible foreign investment."

Just recently, a court in Ecuador ordered the seizure of an estimated $200 million in Chevron's assets in that country, which include bank accounts and a $96.3 million debt owed the oil giant by Ecuador's government. Any further investments that Chevron tries to make in the four countries would be subject to seizure and auction, said Fajardo.

The case originally was filed in the U.S. in 1993, but shifted to Ecuador in 2002 at Chevron's request after the oil company praised the courts there as fair and transparent.

After an eight-year trial, the court in Ecuador found in 2011 that Chevron admitted to deliberately dumping billions of gallons of toxic waste into Amazon waterways, decimating indigenous groups and creating an epidemic of cancer that has killed or threatens to kill thousands of people. A video on the case can be seen here; a written summary of the evidence can be read here; and a segment from the U.S. news show 60 Minutes on the case can be viewed here.

The area affected by Chevron's toxic dumping was once one of the most bio-diverse ecosystems on the planet.

Luis Yanza, a representative of the dozens of rainforest communities that brought the lawsuit, praised the filing of the action in Argentina. "The time has come to use the force of law to obligate Chevron to correct its atrocious behavior in our country," Yanza said.

"We have fought now for almost two decades to correct the injustice created by Chevron in Ecuador," said Fajardo, who grew up in Ecuador's oil fields and is the recipient of a CNN Hero Award. "While Chevron might think it can ignore court orders in Ecuador, it will be impossible for Chevron to ignore court orders in countries where it maintains substantial assets," he added.

The action in Argentina comes just weeks after the U.S. Supreme Court denied Chevron's attempt to block enforcement of the judgment, while numerous other U.S. courts have flatly rejected the oil giant's claim that the judgment was the product of "fraud". In May, Chevron CEO John Watson suffered a stunning reprimand when investors holding 38% of the company's shares voted for a resolution that found he mishandled the Ecuador case.

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Chevron Facing Wall Street Criticism Over $19 Billion Ecuador Liability

Wall Street analysts rarely take controversial positions on publicly traded companies whose stock is doing well. But Chevron’s mishandling of its $19 billion liability in Ecuador for dumping toxins into the Amazon is beginning to look like the exception, at least to the analysts at Seeking Alpha and a commentator at the influential proxy advisor Glass Lewis.

One thing is indisputable: cracks are beginning to appear in Chevron’s determined effort to keep Wall Street in line with the idea that the Ecuador judgment represents no short-term threat to the company’s financial position.  One analyst even predicted the lawsuit eventually could lop as much as 20% off the company’s share price. Even worse, the U.S. Supreme Court just dinged Chevron’s final attempt to block enforcement around the world.

Some of these analysts are beginning to get that the judgment in Ecuador – from the very court where Chevron wanted the issues resolved– is based on overwhelming scientific evidence that proves Chevron committed what is probably the largest oil-related environmental disaster in world history. See here and here.

The fact that the plaintiffs now have launched seizure lawsuits targeting billions of dollars of Chevron assets in Brazil and Canada certainly takes the idea of litigation risk for Chevron to new and unchartered territory, leading one analyst to advise shareholders to dump the stock for now. Further, numerous U.S. courts, including the Supreme Court, recently denied Chevron’s increasingly desperate attempts to derail the litigation while several institutional shareholders and a U.S. Congresswoman have asked the SEC to investigate the company for lying about its Ecuador risk.

Consider the various analyses from Seeking Alpha, an award-winning website for stock research that has more than 800,000 followers.  Kiplinger’s recently named Seeking Alpha the Most Informative Website; it also received a “Best of the Web” award from Forbes.

Seeking Alpha recently dismissed Chevron’s fake fraud narrative and wrote in reference to the pending seizure action in Canada:

“Canada has a reputation for fair legal proceedings. This will make it incredibly difficult for Chevron to continue claiming that the lawsuit is based on fraud. I think it is highly unlikely, furthermore, that fraud is the reason for the charges against the company. In fact, I think that these recent developments may be the start of a downward trend for the company that it will struggle to recover from.” 

Another Seeking Alpha analyst, David White, said just this week that Chevron shareholders should sell. In a blog, entitled Chevron Can't Seem To Turn The Bad News Faucet Off, White devoted his entire analysis to all of Chevron’s many legal problems in Ecuador, Brazil and the company’s own home state, California.  Federal and state criminal prosecutions and hefty fines are a possibility due to safety problems at a refinery in Richmond, a small city just across the Bay from San Francisco. White wrote:

“…with all of these unexpected costs that CVX is facing, I think it is time to unload this historically strong, steady dividend payer….If you own CVX, it is time to sell it.”

Another Seeking Alpha analyst wrote that Chevron is “losing support from all corners” in its bid to evade the Ecuador judgment.  He also highlighted the growing number of courtroom setbacks suffered by Chevron’s legal team at Gibson Dunn & Crutcher, which was brought in two years ago to “rescue” the oil giant from its impending liability.

The analyst also reported concerns about the lawsuit from both shareholders and Members of Congress, writing that many of Chevron’s institutional investors have “made it clear … that a settlement is the preferred course of action, as it appears increasingly unlikely that Chevron will be able to avoid paying out a significant portion of its available cash over this lawsuit.”

“Although I believe it is in Chevron's best interests to settle the suit, this may represent a huge hit for the company, which I think could force its price per share as low as $80, a level not seen since 2010,” the analyst concluded.

Another Seeking Alpha analyst wrote that the $19 billion liability in Ecuador and a separate $20 billion potential liability in Brazil resulting from an oil spill there in 2011 is “cast(ing) a long shadow” on Chevron’s stock, which “could tumble” as a result.

He wrote:

“Chevron is continuing to build its cash balance, which now stands at $21.1 billion compared to $15.8 billion at the close of 2011. I think that fears over suits brought against it in Brazil and Ecuador, despite a Chevron show of bravado in casting these litigations as fraud, are contributing to Chevron's rapid accumulation of cash.” 

Noting that other oil majors give dividend increases, buy something and/or pay down debt when they have that much cash, the analyst projected that “it’s unlikely that its cash balance will be substantially drawn down until both of these super-suits are settled or dismissed, which could be a matter of years.” That was written in early September.  Chevron has yet to do anything with its huge surplus.

The analyst wrote that the liabilities in Ecuador and Brazil together “could wipe out Chevron's healthy cash balance as well as a significant portion of its equity. This in turn would lower Chevron's outlook across the board. Chevron is a comfortable hold, but a risky buy in the current environment.”

Glass Lewis, a leading proxy advisory firm, just this week urged shareholders to “remain vigilant” in holding Chevron accountable relative to its disclosure obligations. Courteney Keatinge, an analyst at Glass Lewis, wrote:

“As these legal battles consume considerable company resources and leave the company exposed to significant risk, shareholders should continue to remain vigilant in ensuring that Chevron is managing and disclosing these issues properly and sufficiently.” 

Another analyst, Fadel Gheit at Oppenheimer & Co., following a meeting with Chevron's CEO John Watson in 2011, wrote that "a $2-3B settlement [in the Ecuador lawsuit]... could remove uncertainty and reflect positively on the stock.”  Later, in May of this year, after the Ecuador trial judgment was upheld on appeal, Gheit doubled-down on his belief that "a reasonable settlement with the plaintiffs impacted by the oil contamination in Ecuador...could boost the stock.”

Gheit is generally pro-Chevron and he has written about the case in ways that suggest he does not fully understand how the legal process works. His recognition that Chevron now faces real liability is yet another example of the how company is beginning to lose some of its allies on Wall Street.

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Canadians Warned About Chevron's Machinations, Says Environmental Group

The internationally-respected Canadian and Brazilian courts can "put an end to Chevron's rope-a-dope strategy" to evade accountability for the widespread human suffering it caused in the Ecuadorian rainforest by illegally discharging billions of gallons of toxic waste, a worldwide environmental group said today in a blog on its website.

A group of Ecuadorian indigenous and farmer communities recently won an $18 billion judgment in Ecuador against Chevron, but the oil giant has refused to pay. The Ecuadorians are now seeking to enforce the judgment by seizing Chevron's assets in Canada and Brazil, as Chevron sold all of its assets in Ecuador.

Below is the blog, written by Paul Paz of Amazon Watch, a well-known environmental group working to protect the Amazon.  

Canadians: Don't Say You Weren't Warned

Engaged for years in a campaign of subterfuge to evade its legal obligations related to a massive environmental contamination in Ecuador. In Canada, where the Ecuadorians have come to force Chevron to comply with the rule of law, people should be aware of this company's long track record of abusing indigenous communities in Ecuador by poisoning their streams and rivers with toxic waste. Internationally respected Canadian courts have a chance to put an end to Chevron's rope-a-dope strategy to delay, deny, and distract attention from this gross and even criminal misconduct.

Chevron predictably refuses to pay an $18 billion judgment against it in Ecuador, where it was found by a court after an eight-year trial to have recklessly operated six large oil fields in the rainforest from 1964 to 1992. To understand how easily it would be Chevron to pay this judgment, the company's gross annual profit since the trial started in 2003 is over $150 billion. That's over eight times the damages imposed by the court.

The judgment number is modest compared to the magnitude of the damage. By way of comparison, the smaller BP spill in the Gulf of Mexico produced a total liability of $40 billion, or more than twice as much as Chevron's liability in Ecuador.

The Ecuador court found that Chevron–out of pure greed–dumped more than 16 billion gallons of toxic "water of formation" into Amazon waterways, and the trial record is replete with evidence of how the company engaged in a fraudulent "remediation" to try to cover up the contamination; doctored soil and water samples to hide the extent of the contamination from the court; never spent a penny on environmental monitoring or safety; used sub-standard practices that produced an outbreak of cancer that has killed numerous people; and then tried to bribe both the judge and high-level officials in Ecuador's government to quash the legal case. This is the same company that has already paid a $30 million fine in the U.S. for violating the Foreign Corrupt Practices Act in Iraq.

Independent journalists have long confirmed the company's hand in creating this unprecedented catastrophe. See these recent news reports from the Australia program Sunday Night; the American show 60 Minutes and this extraordinary video from the plaintiffs summarizing the evidence and Chevron's corrupt attempts to derail the trial. A story in Vanity Fair on the courageous Ecuadorian lawyer Pablo Fajardo, who was raised in abject poverty and who has been targeted with death threats for trying to hold Chevron accountable, can be downloaded here.

The Ecuadorian communities originally filed the case in the U.S. in 1993; Chevron delayed the matter for nine years before convincing a U.S. judge to shift the venue to Ecuador. At the time, Chevron lawyers filed 14 sworn affidavits praising Ecuador's courts as fair and transparent. These affidavits can be read here.

Looking back, it is clear that Chevron thought it likely the plaintiffs would melt back into the jungle if the case was thrown out of U.S. courts. Instead, the affected communities re-filed their claims under Ecuadorian law in the local court where Chevron had begged for the trial to be held. When the evidence began to point to its guilt, Chevron started to attack as unfit the courts it had previously praised. It also engaged in political engineering, mounting a six-year lobbying effort that is still ongoing to convince the United States to cut trade preferences for Ecuador just for allowing the lawsuit to be brought in the place where Chevron wanted the trial to be held.

When asked by 60 Minutes to explain the hypocrisy of wanting the case in Ecuador and then trying to get out of the case once it got to Ecuador, Chevron lawyer Sylvia Garrigo said, "We don't want to be sued anywhere, period." Garrigo also compared the awful waste pits in Ecuador to the oil in the makeup on her face.

There is no better snapshot than Garrigo of Chevron's deeply held belief that it is entitled to impunity for its human rights abuses in Ecuador–abuses that have killed or threaten to kill thousands of people with cancer and other diseases, according to independent peer-reviewed health evaluations in the region. See here and here.

Chevron might think it can get away with ignoring court orders in Ecuador, but it will not easily obtain impunity in Canada's courts. Chevron's interest in various oil field and refining operations in Canada are reportedly worth billions of dollars. They could easily be sold with the proceeds redirected for clean-up in Ecuador. That would be poetic justice indeed for a company that admitted contaminating drinking water with benzene-laden "water of formation", and then denied it was legally responsible.

As terrible as the BP spill was, it was still an accident. Chevron's contamination of Ecuador's rainforest was the product of a planned design to inflate profits by externalizing production costs. The company even built pipes that continue to drain the toxic waste from its pits into nearby streams, as documented in the trial and in the 60 Minutes segment.

According to American law professor Judith Kimerling, who chronicled these facts in her 1991 book Amazon Crude, Chevron engineers told the indigenous people of the region that oil had vitamins and other positive medicinal effects. Robert F. Kennedy Jr., the noted environmental lawyer, penned a powerful firsthand essay after visiting the region in 1991. See here. Kennedy said he witnessed "antiquated equipment, rusting pipelines, and uncounted toxic waste sites"; the jungle, he said, "was broken by landscapes reminiscent of war."

Chevron is notorious in communities around the world for trying to win through intimidation, political lobbying, and corruption what it can't win legitimately in court. In Ecuador, the trial judge found that Chevron tried to grind the case to a halt as part of its defense strategy. The company once filed 18 motions in 30 minutes and then tried to recuse the judge when he did not rule on them fast enough. Chevron employee Diego Borja, under the direction of company lawyers, tried to bribe a sitting judge in a sting operation; Chevron threatened other Ecuadorian judges as well as lawyers for the plaintiffs with sham criminal prosecutions; and finally, offered $1 billion to Ecuador's government (half of which was to go to an environmental project) to induce it to illegally quash the case. Chevron lawyer Doak Bishop famously announced that the Ecuadorian plaintiffs "are irrelevant". This sworn affidavit from Ecuadorian lawyer Juan Pablo Saenz provides some of the gruesome details about Chevron's ongoing efforts to corrupt Ecuador's judicial system.

Chevron's new public relations narrative claims that the evidence in Ecuador is in its favor. What the evidence actually shows is that Chevron, via its own audits and technical reports, proved the claims of the plaintiffs and then lied about it to shareholders and the financial markets to artificially boost its stock price. That helps explain why a U.S. Congresswoman and three institutional investors recently asked U.S. regulatory authorities to investigate the company for violating securities laws. See here and here.

Another prominent U.S. elected official who visited the region in 2008, Rep. Jim McGovern of Massachusetts, described seeing a "terrible environmental and humanitarian crisis" that made him "ashamed" as an American. See here for a letter he wrote to President Obama about Chevron's activities in Ecuador.

Which brings us back the falsehoods Chevron will try to market in Canada. First, the few minutes of outtakes from the movie Crude that Chevron posted on its website are spliced and diced in its editing room to present a completely distorted view of the case. Joe Berlinger, the film's director, told Fortune that he is "dismayed at the level of mischaracterizations" in Chevron's presentation of his outtakes.

American lawyer Steven Donziger, who Chevron has spied on and harassed for years as he too tried to hold company officials accountable, emphasizes throughout the full 600 hours of outtakes the strength of the evidence against Chevron and his own frustration that Chevron that was corrupting the court and improperly delaying the trial. Chevron won't show you these outtakes, which faithfully reflect the conclusion among the legal team that the scientific evidence against Chevron is overwhelming.

Chevron's take on the science is equally unavailing. To the extent you can judge somebody by the company they keep, consider this: one of Chevron's scientific consultants in the Ecuador case is Dr. Douglas Southgate, who works with an institute funded by the oil and gas industry to cast doubt on global warming. See here. Another, Ralph Marquez, is the former lead lobbyist for the chemical industry in Texas. See here. Michael Kelsh–the author of a grossly flawed cancer study funded by Chevron–was hired by a company owned by a former Chevron Board member. See here. (One can better understand how Chevron uses junk science by reading the classic book Merchants of Doubt: How a Handful of Scientists Obscure the Truth On Issues from Tobacco Smoke to Global Warming.)

The evidence relied on by the Ecuador court clearly shows that all of the toxic substances Chevron and the plaintiffs found at hundreds of contaminated well sites in Ecuador are dangerous to human health and can kill people at high exposures, according to the Agency for Toxic Disease Registry, the leading authority on toxicity in the U.S. government. Yet Chevron continues to deny any harm has occurred.

Chevron's paid "expert reports" claiming there is no risk to human health are pre-cooked by company lawyers. For example, the Chevron-funded Kelsh study severely undercounts the incidence of cancer in Ecuador's Amazon by relying on official mortality data when most rainforest residents die quietly in the forest and therefore never enter the national cancer database. In its first iteration, Kelsh never disclosed in the study that he received funding from Chevron. Chevron can also cite the existence of some "clean" water and soil samples from the trial, but it lifted these samples up-gradient from the waste pits as part of its fraudulent sampling and analysis plan, exposed here in a report by Dr. Ann Maest.

Incidentally, Dr. Maest–one of the most respected experts in the world on how contaminants travel in groundwater–testified under oath recently that there is massive contamination of water in Chevron's concession area. See here and here. In a blatant act of deceit, in a recent blog Chevron leaves the false impression that Dr. Maest agrees with the company that there is no water contamination. See here.

Chevron's assertion that the plaintiffs wrote the judgment is a both a fabrication and a final act of desperation. It plays into the company's fundamentally racist notion that an Ecuadorian judge is simply not capable of writing a considered, intelligent 188-page decision that picks apart and destroys its arguments, as was done in this case.

Of course, these arguments already were litigated and resolved in the trial that Chevron wanted. But to Chevron, any court or judge who disagrees with it is just part of an ever-widening conspiracy. As of now, the members of this "conspiracy" include numerous judges in Ecuador, dozens of respected media outlets that Chevron claims have been "hoodwinked" by the plaintiffs, prominent U.S. law firms such as Patton Boggs, and the highly respected Canadian lawyer Alan Lenczner, who represents the Ecuadorians in their legal action. You might as well throw in Sergio Bermudes, probably the most respected litigator in Brazil, who just joined the case to help the plaintiffs.

Chevron's goal in Canada will be to reopen the litigation so it can kick the can down the road several more years, calculating it is cheaper to pay the hourly rates for an army lawyers than it would be to clean one of the largest oil disasters on the planet.

Canada's courts will have a great opportunity to finally block Chevron's rope-a-dope, cynical, and manipulative legal strategy.

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Chevron Lies Through Teeth About Groundwater Contamination In Ecuador

The Ecuador indigenous and farmer communities who recently won an $18 billion judgment against Chevron have long maintained that the oil giant has been taking their comments out of context and is lying in its long-running effort to discredit the lawsuit.

Here’s a good example.

This week in a blog on its web site, Chevron claimed that Dr. Ann Maest, a prominent U.S. scientist who worked as an expert for the rainforest communities, testified under oath “that she was not aware of any scientific data indicating that drinking water wells have been impacted in any way by Texpet’s operations” in Ecuador.  (Texpet is a Chevron subsidiary.)  

What Maest said during three days of deposition testimony was that there was extensive groundwater contamination at Chevron’s production sites, but that there was no data from the plaintiffs about contamination in drinking water wells because no such wells were tested. 

In her deposition, Maest repeatedly cites multiple and widespread instances of groundwater pollution at every single waste pit in Ecuador where such testing took place. Yet Chevron claims in its blog that "even the plaintiffs own scientists" agree with Chevron's fabricated theory that there is no groundwater contamination in Ecuador.   

Here are some relevant excerpts from the Maest deposition that Chevron failed to mention in its blog:

“There has been some sampling of groundwater that's down gradient of pits, and they did find quite high concentrations of TPH [Total Petroleum Hydrocarbons] in groundwater.” (see 1/20/11 deposition, page 133)

The plaintiffs found "elevated concentrations of total petroleum hydrocarbons and polycyclic aromatic hydrocarbons...downstream of one of the separation stations in the concession." (see 12/8/10 deposition, page 161)

Samples tested from the plaintiff's and Chevron proved that "there are also PHs [a type of oil hydrocarbon] that are high in soil and groundwater immediately under the…pits that were allegedly remediated". (see 12/8/10 deposition, page 203)

Here is how Maest answered questions from a Chevron lawyer about groundwater contamination in Ecuador at a deposition that took place on December 8, 2010 (see page 212) -- an exchange Chevron ignored in its blog posting:

Q.  You had no worry about finding -- whether you were going to find it or not?

A. No. We knew at that time that they (the plaintiffs technical team) had found groundwater contamination.

Q. And where was that found?

A. Under pretty much every pit that they looked at.

Just in case you missed that last line: groundwater contamination was under pretty much every pit that they looked at.     

So much for Chevron’s claim that plaintiff's consultants agree with Chevron that there was no groundwater contamination in Ecuador.

For more on how Chevron lies to shareholders about the Ecuador litigation, see this report from securities lawyer Graham Erion and this letter from Congresswoman Jan Schakowsky (D-IL), asking the Securities and Exchange Commission to investigate the company.

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