The Truth Behind The Stratus Affidavits

Scientific Evidence Against Oil Giant Remains Overwhelming

The Stratus affidavits did not change anything for Chevron's perilous legal position in the Ecuador environmental case where it faces a $19 billion liability, as well as asset seizure actions in Canada, Brazil, and Argentina.

In a classic misdirection move designed to distract attention from its liability, Chevron last week unveiled affidavits from two scientsts from Stratus Consulting who used to work for the Amazon communities that for almost 50 years have been victimized by the company’s pollution. Chevron claimed the consultants, Douglas Beltman and Ann Maest, “disavowed” their involvement in the Ecuador litigation as well as the findings in a technical assessment known as the Cabrera Report that the Ecuador court did not even consider when finding the company liable.

These affidavits show just how limited the options for Chevron have become as it spends more and more money in an increasingly futile quest to escape accountability for its toxic dumping in the Amazon.

Chevron’s fundamental problem is that Beltman and Maest are not telling the truth about the science behind the Ecuador case.
 
As background, Chevron aimed a figurative gun at the head of Stratus, where  Beltman is a partner.  The company faced bankruptcy just by having to defend itself against Chevron’s 114-lawyer army at Gibson Dunn, which had named Stratus as a defendant in a highly questionable RICO case in New York.

Chevron had also waged a vicioius campaign to persuade clients of Stratus to fire the company based on false allegations that the company had committed "fraud" in Ecuador.  As part of the settlement it extorted, Chevron forced Beltman and Maest to abide by a gag order and agree not to work on projects involving Chevron for two decades.

The problem Beltman and Maest (and Chevron) now have is that the recent affidavits clearly contradict their earlier sworn testimony (available here and here) that concluded Chevron was responsible for massive pollution in Ecuador.  A chart of how Beltman and Maest have flagrantly changed their testimony in the face of Chevron’s threats can be found here.

Just weeks ago, in a legal filing, Stratus itself described the shakedown it was experiencing, saying Chevron has engaged in “an extrajudicial campaign of malicious defamation and deliberate interference with Stratus' business to tortuously destroy Stratus (and the livelihood of its employees).” Stratus made it clear in its court filings that it believed the Ecuador case was legitimate and based on valid scientific evidence. (See Stratus' Counterclaim against Chevron here)

Chevron is also trying to spin the affidavits to convince courts that the Amazon communities have “lost” the main source of their scientific data supporting the Ecuador judgment. Nothing could be further from the truth.  Stratus played a major role in preparing materials for one technical report that the court threw out.

Stratus had nothing to do with any of the more than 100 other expert reports submitted as evidence that were relied on to find liability.

Stratus never produced a single one of the 64,000 chemical sampling results presented by the parties to the court that documented extensive pollution at 100% of Chevron's well sites in Ecuador.  This data was produced by 23 court-appointed experts nominated by the parties that did not include Stratus.

The trial judge also pegged the majority of the remediation cleanup valuation figures to the work of Gerardo Barros, a court appointed expert who had been designated by Chevron.  Chevron’s argument that the process was “tainted” has not been accepted by any court in Ecuador, but as a practical matter the issue of what Stratus did in Ecuador with the Cabrera report is a nullity.

Apart from the prior sworn testimony of Beltman and Maest that proves the contentions of the communities, there is overwhelming scientific and testimonial evidence that documents Chevron’s environmental abuses in Ecuador, where it operated from 1964 to 1992 under the Texaco brand.
 
For example:

• Chevron’s own internal audits, produced in the early 1990s as it was winding down its operations in Ecuador, documented pollution at each one of its drilling sites.  They also found the company exercised no environmental controls in the 25 years it operated in Ecuador. (See the audits here and here)

• During the trial, Chevron’s own chemical sampling results (see this comparison chart compiled with data from the Ecuador trial) proved the claims of the plaintiffs.

• Stratus itself documented the pollution in a devastating power point presentation that concluded 100% of the Chevron well sites in Ecuador tested during the trial had levels of toxicity that violated legal norms in the U.S.

Beltman said it best in a deposition taken by the Amazon communities on Sept. 9, 2011, on a date well before the effects of Chevron’s extortion effort had fully kicked in.  Beltman testified that the way Chevron operated in Ecuador was “substandard” and that “groundwater, streams, rainforest, wells and stations” were “all contaminated” by the company’s operations.

Also on that day, again under oath, Beltman concluded that Chevron’s claims that its “remediation” in Ecuador was effective are “false” and that he believes that “exposure to carcinogens caused by Texaco operations at least contributed to the higher rates of cancer.”

If Beltman and Maest testify consistent with the recently extorted affidavits, they will look like liars.  If a jury hears the earlier testimony under oath, which is corroborated by extensive evidence at trial, Chevron will (as it should) look terrible.

The bigger picture is that what Chevron does in a New York court has virtually no significance.

Courts in other countries being asked to enforce the judgment against Chevron assets, if anything, will recoil when asked to abide by any decision coming from a clearly biasd judge trying to give the oil giant a home court advantage.  For an understanding of just how biased, read these mandamus petitions (here and here) asking for the reassignment of Judge Lewis A. Kaplan.

The Second Circuit Court of Appeals has set a date in May to consider that issue yet again, so it is unclear if the RICO trial will even get off the ground or if Chevron will blink when it comes time for a jury to hear even some of the awful facts relating to its criminal activity in Ecuador -- which includes attempted bribes of Ecuador's government to quash the case.

If anything, the New York proceeding before Judge Kaplan – like much else in this case – could easily boomerang against Chevron.  Ditto for Beltman and Maest, who now have lost all credibility in the face of Chevron's pressure campaign that threatened their ability to earn a livelihood.

Stay tuned.

Become a follower of  The Chevron Pit.

Also follow us on Twitter at @ChevronPit and like us on Facebook

Visit and watch a video on ChevronToxico.com to find out more.
Support Amazon Watch and Rainforest Action Network.

Read More

U.S. Appeals Court To Hear Request To Remove Biased Judge In Ecuador Case

The Second Circuit Court of Appeals -- the same court that stopped cold Chevron's effort to block enforcement of the $19 billion Ecuador judgment in 2012 -- has agreed to hear arguments by the Ecuadorians on why U.S. trial court judge Lewis A. Kaplan is continuing to engage in acts of insubordination from the bench.

The decision by the appellate court to hear the arguments is bad news for Kaplan, who already has been overturned once by the Second Circuit for imposing an unprecedented “global injunction” that purported to prohibit indigenous and farmer communities in Ecuador from enforcing a judgment from their own courts anywhere in the world. Kaplan had become the target of worldwide derision for trying to dictate rulings to the courts of other countries. (See press release here.)

The Ecuadorians say Kaplan’s efforts to orchestrate a show trial warrant the reassignment of the case, as documented by this previous posting on The Chevron Pit.

Chevron is using the remaining fraud counts it filed against the Ecuadorians and their counsel to try to chill fundamental human rights advocacy that attempts to hold the oil giant accountable for its discharge of billions of gallons of toxic waste into the Amazon, as found by an Ecuadorian court based on overwhelming scientific evidence. Steven Donziger, a longtime American lawyer for the communities, has countersued Chevron for lying and engaging in fraud to cover up its misconduct. (See Donziger’s counterclaims here.)

Chevron suffered a major setback recently when a California judge ruled that the environmental group Amazon Watch – known as Chevron’s “sharpest critic” – was engaged in First Amendment-protected activity when it criticized the company for its refusal to clean up its contamination in Ecuador. Chevron had tried to subpoena the group’s documents, claiming its advocacy was part of an improper pressure campaign. (See an article explaining the decision here.)

The Ecuadorians, meanwhile, have denied Chevron’s outrageous charges. The company is desperate to distract attention from advancing seizure lawsuits targeting billions of dollars of assets in Canada, Brazil, and Argentina – with more such actions to come, according to lawyers for the communities.

Kaplan had shocked legal observers with his rants and prejudicial statements from the bench about Ecuador, a longtime U.S. ally where Chevron itself has won multiple lawsuits against the country’s state-owned oil company. He derided Ecuador’s government and judiciary. He refused to recognize the fundamental humanity of the impoverished indigenous victims, referring to them as the "so-called plaintiffs" and urging Chevron to file a racketeering and extortion case.  See this previous Chevron Pit.

To top it all off, Chevron lawyer Randy Mastro literally was laughed out of court when he couldn’t answer fundamental questions before the appellate panel. See here. Mastro’s effort to protect Kaplan was an utter failure.

Kaplan’s tendency to engage in judicial imperialism has once again reared its ugly head. He is now setting up Chevron’s so-called “RICO” case as nothing more than a show trial, stripping the ability of the plaintiffs to put on evidence of Chevron’s toxic dumping and fraudulent cover-up while purporting to rule (in defiance of the earlier Second Circuit order) on the legitimacy of Ecuador’s judiciary.

That’s the same judiciary that Chevron praised when it fought for ten years to venue the trial there after the Ecuadorians originally filed the case in New York.

A trial by jury has been set by Kaplan for October 15th. But we say that neither Chevron nor Kaplan really have the guts to risk a full-blown trial before a jury where the truth can come out. Kaplan and Chevron will try to figure out a way to prevent jurors from hearing the case – possibly by dropping monetary claims for damages, thereby allowing a bench trial.  If jurors do hear the case, Kaplan won’t let the Ecuadorians put on evidence of Chevron’s crimes and fraudulent cover-up.
 
But wait – isn’t a bench trial by Kaplan what the Second Circuit vacated the first time?

Kaplan and Chevron are now operating from a smaller and smaller box, with their options to impede a final recovery constricting almost weekly. Meanwhile, Mastro and his team of 114 lawyers at Gibson Dunn & Crutcher are on a roller coaster ride of unprecedented billing excess, subsidized by Chevron shareholders who themselves are being duped by Chevron management, as this devastating report by securities lawyer Graham Erion points out.
 
Gibson Dunn lawyers are laughing all the way to the bank while piling up a string of setbacks for their client, whose management is either too obtuse or personally conflicted to understand the peril they are facing.

In their petition, the Ecuadorians argue that in the earlier reversal the appellate court found that Kaplan did not have jurisdiction to rule on the Ecuador judgment unless the Ecuadorians sought to enforce the judgment in a New York court -- a legal move that the Ecuadorians have not taken and have said they will not take. Yet Kaplan continues to claim in various rulings he can still so dictate, in defiance of the appellate court.

We remind Judge Kaplan of the words written by the Second Circuit in 2011:

“The (Ecuadorians) hold a judgment from an Ecuadorian court. They may seek to enforce that judgment in any country in the world where Chevron has assets. There is no indication that they will select New York as one of the jurisdictions in which they will undertake enforcement efforts . . . . It is unclear what is to be gained by provoking a decision about the effect in New York of a foreign judgment that may never be presented in New York. If such an advisory opinion were available, any losing party in litigation anywhere in the world with assets in New York could seek to litigate the validity of the foreign judgment in this jurisdiction. . . . Chevron can present its defense to the recognition and enforcement of the Ecuadorian judgment in New York if, as and when the (Ecuadorians) seek to enforce their judgment in New York.”"

Become a follower of  The Chevron Pit.

Also follow us on Twitter at @ChevronPit and like us on Facebook

Visit and watch a video on ChevronToxico.com to find out more.
Support Amazon Watch and Rainforest Action Network.

Read More

Hell Froze Over As Argentina Embargoes Chevron's $2 Billion In Assets

Yesterday, hell froze over when an Argentine court embargoed or, in effect, froze up to potentially $19 billion in Chevron assets in the South American country.

Now it's time to fight it out on the ice.

Chevron, which now has about $2 billion in assets in Argentina, has sworn it will never pay a dime to cleanup the contamination it left behind in the Ecuadorian rainforest. Said former General Counsel Charles James: "Not till hell freezes over, and then we will fight it out on the ice."

Chevron has defied Ecuador's courts, refusing to pay an enforceable $19 billion judgment and forcing the Ecuadorians to file lawsuits to seize assets in Ecuador, Brazil, Canada and Argentina to obtain the damage award for one of the world's largest oil-related environmental disasters.

The Ecuadorians and their lawyers -- some of the top litigators in these four countries -- have their skates on.

See the press release below and read more details here and here in Kevin Koenig's Amazon Watch blog:

BUENOS AIRES, /CSRwire/ - In a major blow to Chevron’s effort to avoid paying a historic $19 billion environmental judgment in Ecuador, an Argentine judge today signed the first of what is expected to be many orders freezing billions of dollars of assets owned by the U.S. oil company.

The order, signed by Civil Judge Adrian Elcuj Miranda of the Commercial Court of Justice in Buenos Aries, freezes almost all Chevron assets in Argentina pending enforcement of the Ecuador judgment. The embargo applies to 100% of Chevron's capital in Argentina, 100% of dividends, all of Chevron's stake in pipeline operator Oleoductos del Valle SA, 40% of Chevron's oil sales to Argentine refineries, and 40% of the money Chevron has deposited in Argentine banks, said Enrique Bruchou, the lawyer who represents the indigenous and farmer communities in Ecuador who brought the lawsuit.

In 2011, Chevron was found liable in Ecuador for dumping billions of gallons of toxic waste into the Amazon rainforest, decimating indigenous groups and causing an outbreak of cancer and other oil-related health problems. 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.

Since Chevron has refused to pay the Ecuador judgment despite submitting to jurisdiction there, lawyers for the affected rainforest communities filed an action last week to seize the oil giant's assets in Argentina. The affected communities filed asset seizure actions against Chevron in the last few weeks in Canada, Brazil, and Ecuador.

Chevron has at least $2 billion worth of assets in Argentina, said Bruchou.  The freeze order applies to the entire $19 billion amount of the Ecuador judgment, meaning that Chevron will effectively be barred from investing further in Argentina unless it wants to risk seizure of those assets as well.

“We are now on the fast track to collection in our two-decade struggle to force Chevron to clean up its awful environmental disaster,” said Luis Yanza, the Ecuadorian community organizer and driving force behind the lawsuit since it was filed in 1993.

“We are committed to holding Chevron fully accountable for the crimes it has committed against our indigenous peoples,” he added.

The move by the Argentine judge is the first time the plaintiffs have been successful in freezing assets outside their home territory of Ecuador.  The assets will remain frozen until the court rules whether it will enforce the Ecuador judgment, which is expected to be relatively smooth given that the nation has signed a reciprocal enforcement treaty in the region that includes Ecuador.

The legal action in Argentina 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 not ratified it.

In all, the amount of Chevron assets in the four countries where enforcement actions are pending are worth at least $10 billion based on the latest estimates, said Pablo Fajardo, the lead Ecuadorian lawyer.  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 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 last week in Buenos Aires, 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.

The area of Ecuadorian rainforest affected by Chevron’s toxic dumping was once one of the most bio-diverse ecosystems on the planet.  It is home to hundreds of plant and animal species but has been pockmarked with more than 900 open-air toxic waste pits left by Chevron, which operated in Ecuador under the Texaco brand.

Soil tests of Chevron wells sites during the Ecuador trial indicated the oil giant left massive quantities of cancer-causing hydrocarbons, sometimes at levels hundreds of times higher than permissible norms.  Approximately 9,000 people are expected to contract cancer as a result if there is no immediate clean-up, according to a study by Dr. Daniel Rourke, former of the Rand Corporation.  See here.

"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 decision of the Argentine judge proves that the sentence in Ecuador is legitimate and will be enforced in any country that observes the rule of law."

The action in Argentina comes just weeks after the U.S. Supreme Court denied Chevron’s attempt to block enforcement of the judgment and the oil giant itself suffered a devastating series of courtroom setbacks. 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.

Watson’s former lawyer, Charles James, has said Chevron will fight the Ecuador judgment “until hell freezes over, and then skate it out on the ice.”  However, Chevron Comptroller Rex Mitchell recently testified in New York fedeal court that the seizure actions filed by the Ecuadorians would cause “irreparable harm” to company operations.

Become a follower of The Chevron Pit.

Also follow us on Twitter at @ChevronPit and like us on Facebook.

Visit and watch a video on ChevronToxico.com to find out more.

Support Amazon Watch and Rainforest Action Network.

Read More

Ted Olson Loses a Big One for Chevron Before the U.S. Supreme Court

Ted Olson needs to learn that it’s hard to put lipstick on Chevron’s pig in Ecuador.

In yet another setback for Chevron, the U.S. Supreme Court this week declined a petition signed by Olson to restore the unprecedented global “injunction” obtained last year by the company purporting to block enforcement of the $19 billion Ecuador court judgment.  That injunction – imposed by controversial federal Judge Lewis A. Kaplan – provoked an uproar in the international legal community and was unainmously reversed by the Second Circuit Court of Appeals. 

Chevron General Counsel R. Hewitt Pate then brought in his friend Olson, the former Solicitor General of the United States and the mastermind behind more than 50 Supreme Court arguments (including the winning side in Bush v. Gore).  Olson asked the Court to take the radical step of summarily reversing the Second Circuit ruling without argument or briefing.

Instead of acceding to Olson’s unusual request, the Court decided not even to ask for briefs or argument as it would in a typical case.  It just flat out rejected the original request, and also rejected Olson’s backup plan to file briefs -- all without as much as a comment.

This is the ultimate rebuke not only to Chevron and Olson, but also to Judge Kaplan.  Kaplan's global injunction --  the crown jewel of Chevron's defense to enforcement -- is now officially dead.

One must ask if Olson really understands the extent to which his new client committed human rights violations against indigenous groups on a mass scale in Ecuador's rainforest.  To understand the extent of Chevron’s misconduct in Ecuador, see this video, this 60 Minutes segment, and this report from a highly-rated Australian news show.

The disaster in Ecuador was not an accident, like BP’s Deepwater Horizon spill in 2010.  Chevron designed its system of oil extraction in Ecuador to pollute, and pollute it did – to the tune of 4 million gallons of toxic waste dumped daily in to Amazon waterways for roughly two decades.  (Chevron operated in Ecuador from 1964 to 1992 under the Texaco brand.)  Environmental lawyer Robert Kennedy visited the area in the late 1980s and wrote of witnessing an apocalyptic environmental disaster.  

In his petition, Olson presented the Justices with Chevron’s "blame the victim" narrative that the indigenous groups and their U.S. counsel somehow defrauded the oil giant by filing the lawsuit.  After reading the reply of the Ecuadorians -- where Chevron is hung by evidence from its own corporate files that it committed gross wrongdoing -- the Justices clearly were not moved by Olson's pleading.

By denying Chevron, the Justices now have joined with 18 U.S. federal trial court judges and four federal appeals courts who have rejected Chevron's fraud claims in whole or in part in various litigations over the last two years.

The Supreme Court decision is also the latest blow to Olson’s law firm, Gibson Dunn & Crutcher.  Chevron hired the firm in 2009 to “rescue” it from the impending Ecuador liability.  Not only did Gibson Dunn lose the largest environmental case ever, it has continued to pile up losses for Chevron in various trial and appellate courts in the U.S. and Ecuador.  It's fast approaching Tebow Time for Chevron but there appears to be no Tebow on the roster.

Another big loser with the Supreme Court decision is Gibson Dunn’s self-anointed “mob prosecutor” Randy Mastro, who now has lost every argument he ever made on behalf of Chevron before a U.S. appellate court.  Mastro, the leader of the Gibson Dunn rescue mission, had found a willing audience in Judge Kaplan in New York.  But Kaplan now lacks any power to block the judgment, thus severing the rescue operation's last lifeline in the U.S.

At this point, Kaplan’s open biases against the Ecuadorians are so well-documented that they could well provoke a backlash against Chevron in foreign courts being asked to enforce the judgment.  Judges generally don't like to be told by courts of other countries what they can and cannot do.  That's not good for comity, international relations, or the image of the U.S. judiciary as a whole.

Gibson Dunn also has provoked fierce criticism for trying to help Chevron pry into the private emails of the company’s critics; for sending 11 lawyers to court to cover a minor hearing related to the Ecuador judgment; and for being involved in efforts to offer inducements (e.g., bribes) to Ecuador officials to violate their country's Constitution and quash the case.  The law firm itself was found by courts to have committed ethical violations on behalf of Chevron.

Much of Chevron's misconduct and fraud in Ecuador is documented in chilling detail in the affidavit of Juan Pablo Saenz and the lawsuit filed against Chevron by the longtime legal counsel for the Ecuadorians, Steven Donziger.  These documents provide a taste of how desperate the company has become to avoid being held accountable for the wanton destruction it caused in Ecuador.

Look for Olson and his partners to continue to exploit the billing opportunities provided by their increasingly futile legal odyssey  -- one that also has sparked a shareholder rebellion against their ultimate client, Chevron CEO John Watson.  Let's not forget as well the calls by shareholders and a U.S. Congresswoman for an SEC investigation to determine if Watson is lying to downplay the Ecuador risk.

Ted Olson is without question a brilliant lawyer.  Watson will certainly pay for the next batch of lipstick for Gibson Dunn to try to smear over the lips of the Ecuador judgment.  But that pig is not getting prettier.

Become a follower of The Chevron Pit.

Also follow us on Twitter at @ChevronPit and like us on Facebook.

Visit and watch a video on ChevronToxico.com to find out more.

Support Amazon Watch and Rainforest Action Network.

Read More

Chevron Lawyer Hew Pate Earned $7.8 Million for Losing $18 Billion Ecuador Case

Chevron's Board of Directors recently awarded its General Counsel R. Hewitt Pate a 75% raise -- bringing his 2011 salary to a whopping $7.8 million -- for losing the landmark $18 billion environmental lawsuit in Ecuador, according to a recent public filing of the company.

In reaching the $18 billion judgment -- the largest ever in an environmental case (see here and here)  -- the Ecuador trial court used Chevron's own admission that it deliberately dumped billions of gallons of toxic oil waste into Amazon waterways from 1964 to 1992, when the company operated in Ecuador under the Texaco brand.  The dumping decimated indigenous groups and caused an outbreak of cancer and numerous deaths, according to several peer-reviewed studies.

“Only in America could a major oil company give a 75% raise to a lawyer who lost an $18 billion case to a legal team with a fraction of the resources,” said Karen Hinton, the U.S. spokesperson for the dozens of rainforest communities who sued the oil giant.

Chevron’s 2012 proxy statement reported that Pate’s salary jumped “in part because of his 'outstanding management of Ecuador (lawsuit).'" See pages 28 and 43.

Pate's 75% salary increase also is out of line with the 16.6% increase in Chevron's 2011 year-end stock valuation - a key metric for investors in deciding to support annual 'say-on-pay' votes. Chevron CEO John Watson received an even more ludicrous 65% raise to $24.7 million in 2011 compensation.

"Chevron's enormous executive pay raises are way out of step with shareholder returns and the company's dismal handling of its liability in Ecuador," said Graham Erion, a securities lawyer advising the rainforest communities.

In the latest of a series of legal setbacks on the Ecuador matter, a panel of appellate judges in affirmed the $18 billion judgment in January.  The same month, a U.S. federal appeals court sharply rebuked Chevron for trying to use an illegal injunction to block the Ecuadorians from enforcing their judgment.

A new report published last week also found that under Pate's leadership Chevron has continually misled its own shareholders about the Ecuador liability.  Some shareholders have criticized company management for mishandling the Ecuador litigation while others have asked for an investigation by the Securities and Exchange Commission.

Pate recently reported that Chevron has used 483 lawyers and legal assistants on the Ecuador case from at least 39 different law firms.  The rainforest communities are led by Pablo Fajardo, a 40-year-old Ecuadorian man who grew up in poverty and recently was award a CNN "Hero" prize. See this CNN piece and Vanity Fair article.

A former Bush Administration antitrust lawyer with little experience in the oil industry, Pate took over Chevron's legal department in 2009.  Since that time, the oil giant has suffered multiple legal setbacks in Ecuador and elsewhere: 

• Part of the $18 billion judgment in Ecuador is to compensate the rainforest communities for harm caused by Pate’s hyper-aggressive and unethical litigation tactics, including the repeated filing of frivolous motions and the threatening of the presiding judge with jail time if he didn't rule in favor of the company.

• Last September, jurists from across the world blasted Pate's strategy for trying to illegally use a U.S. trial court to block the international enforcement of the Ecuador judgment.  Chevron's lead attorney on that case, Randy Mastro of Gibson Dunn & Crutcher, was harshly criticized by the appellate panel. See page 19 of this transcript.

• Chevron in 2009 orchestrated a video entrapment scheme against a sitting judge in Ecuador which backfired against the company and prompted an investigation of the company's attempts to corrupt the country's justice system. The incident has created potential exposure for Chevron under the Foreign Corrupt Practices Act.

• U.S. courts have repeatedly sanctioned Pate's lawyers for engaging in unethical behavior. Recently a U.S. federal judge fined Chevron after finding that Gibson Dunn lawyer Kristin Hendricks (an associate working under Mastro) abused the discovery process to harass a respected environmental organization. A Colorado judge in 2010 rebuked Gibson Dunn lawyer Andrea Neumann for trying to intimidate a witness.

• Under Pate’s leadership, reports recently surfaced that Chevron floated a $1 billion bribe offer to Ecuador's government to kill the legal case, made via an official in charge of an environmental project; that Chevron lied to its own expert witnesses so they would defend the use of deceptive sampling practices during the trial; and that the company used a secret lab to hide evidence of contamination from the court.

During Pate's tenure, Chevron faces a $22 billion lawsuit in Brazil after it appeared to mislead investigators about the impacts of an offshore spill; paid a $600,000 penalty for environmental violations at approximately 100 storage tanks in Puerto Rico; paid $24.5 million to California for violations of laws governing the disposal of hazardous materials; and suffered a horrific pipeline spill in Utah which resulted in a $4.5 million fine and ongoing lawsuits. The company, as part of an oil consortium, also faces a $64 million fine in Kazakhstan for releasing airborne toxins.


Become a follower of The Chevron Pit.

Follow us on Twitter at @ChevronPit and like us on Facebook
Visit and watch a video on ChevronToxico.com to find out more.
Support Amazon Watch and Rainforest Action Network.

Read More

European Investors Concerned About Chevron’s Amazon Disaster

Ecuadorian indigenous leaders meet Church of England's Investment Department

Read this great blog by Mitch Anderson of Amazon Watch, focusing on concerns by European investors about Chevron’s environmental crimes in the Ecuadorian rainforest.

"London, England – Ecuadorian indigenous leaders Humberto Piaguaje and Guillermo Grefa began a one week European tour today, where they will be educating major institutional investors in Chevron Corporation, including prestigious funds such as the Church of England Investment Fund and the Central Finance Board of the Methodist Church, about the oil giant’s grim environmental and human rights legacy in the Amazon. The fact that European investors are concerned about the American oil major’s growing multi-billion liability over its Amazon disaster comes as no surprise."

Become a follower of The Chevron Pit.
Follow us on Twitter at @ChevronPit and like us on Facebook.
Visit and watch a video on ChevronToxico.com to find out more.

Support Amazon Watch and Rainforest Action Network.

Read More

Another Bad Day In Court For Chevron

Chevron had another bad day yesterday in one of the most powerful courts in the United States, proving again that when the Ecuadorians' attorneys are allowed to present their case, the oil giant's arguments quickly deflate.

See this Greenwire article below about how the Ecuadorians’ lawyer Jim Tyrrell of Patton Boggs dominated the oral arguments against top Chevron lawyer Ted Boutrous of Gibson Dunn before the D.C. Circuit Court of Appeals.

Randy Mastro Benched By Chevron

Gibson Dunn lawyer Randy Mastro usually argues for Chevron, but Tyrrell threw him deadly punches before the 2^nd Circuit Court of Appeals that later threw out a lower court decision purporting to stop enforcement of an $18 billion judgment against Chevron. See here.

Mastro also recently stumbled over his words and struggled to answer questions, even before Chevron’s favorite judge, Lewis Kaplan, about the oil giant’s latest and most preposterous scheme to attach its own assets to block the Ecuadorians from obtaining funds to cleanup its mess in the rainforest.

Yes, that’s right, attach its own assets. Even the pro-Chevron Kaplan was scratching his head. If you dare, read it about it here.

Yesterday, though, Chevron benched Mastro, and Boutrous took charge but apparently to no avail.

Court considers Chevron's request for documents in Ecuador litigation

Lawrence Hurley, E&E reporter

Published: Tuesday, April 17, 2012

A federal appeals court today seemed inclined to rule that a lower court judge acted too hastily in allowing Chevron Corp. access to documents prepared by a consulting firm working for Ecuadorean plaintiffs in a high-profile case that has dragged on for almost 20 years.

The oil giant wants documents from the Weinberg Group, a scientific consulting firm that the plaintiffs had hired to prepare a report on the alleged environmental damages in the eastern part of Ecuador.

Last year, a judge in Ecuador ruled that Chevron was liable for up to $18 billion for contamination caused by Texaco Petroleum Corp. Chevron acquired Texaco in 2001.

Chevron believes the Weinberg documents could help it in a racketeering case it has filed against the plaintiffs and their American lawyers.

But a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit appeared unconvinced that U.S. Magistrate Judge John Facciola correctly ruled that Chevron could get access to about 1,000 documents. The judges seemed to agree with the plaintiffs that Facciola did not correctly follow precedent in determining whether Weinberg should hand over the material.

The judges strongly indicated they would remand the case to Facciola but would likely not dismiss it altogether, as the plaintiffs hope.

Today's argument was a sideshow to a legal battle that is playing out in various venues around the world.

In an effort to undermine the Ecuadorean court's judgment, Chevron has alleged that the plaintiffs committed fraud, going as far as to file the racketeering suit in New York.

As part of that strategy, Chevron has sought to question as many people as possible, including Steven Donziger, the American lawyer who masterminded the effort to sue the oil company in Ecuador.

The Weinberg Group is another target. It claims that it should not have to hand over documents because it is covered by the attorney-client privilege.

But Chevron maintains, as did Facciola, that the privilege is trumped by what is known as the "crime-fraud exception" that forces production of documents if there is evidence that a crime or fraud took place.

Weinberg was hired by the plaintiffs after Chevron attacked the credibility of the Ecuadorean court-appointed scientific expert, Richard Cabrera. The consulting group's job was to bolster the plaintiffs' case by rounding up new experts to weigh in on the evidence of environmental damage.

Among Weinberg's arguments is the claim that Facciola inappropriately deferred to the findings of the judge in the Southern District of New York, Lewis Kaplan, who is overseeing the racketeering case and consistently ruled in favor of Chevron.

In March 2011, Kaplan issued an extensive opinion in which he granted Chevron's request for an injunction that would have prevented the plaintiffs from enforcing the Ecuadorean judgment in U.S. courts. On appeal, the 2nd U.S. Circuit Court of Appeals lifted the injunction, saying it had been imposed prematurely.

James Tyrrell, the Patton Boggs attorney representing Weinberg in court today, seized on the 2nd Circuit's decision, noting that Facciola made no independent findings of fact on which to base his decision.

Chevron's attorney, Theodore Boutrous of Gibson Dunn & Crutcher, faced a uniformly skeptical panel.

Chief Judge David Sentelle noted that all of Facciola's findings were "intertwined" with the recitation of facts in Kaplan's opinion.

He also said that most judges would have taken a look at the documents to gauge their relevance.

"Wouldn't that have been a nice thing for the judge to have looked at?" he said.

Likewise, Judge Brett Kavanaugh asked whether it would be "prudent" to remand the case because Facciola's findings were "heavily, if not completely, influenced" by Kaplan's opinion.

Questioning Facciola's approach, Judge David Tatel pointed out that under court precedent, the magistrate judge was required to make a finding that the Weinberg documents were created "in furtherance of a fraud," which he failed to do.

"Our cases are very clear about that," Tatel said.

The ongoing tussle in the racketeering case is just one strand of a tangled web of litigation over the $18 billion judgment.

Chevron's final appeal in Ecuador is currently before that nation's highest court while, separately, an international arbitration panel is considering a 2009 claim brought by Chevron against Ecuador in which the oil company claims the Andean nation violated a bilateral trade agreement between it and the United States (E&ENews PM, Feb. 28).

The case is infamous in part because of the now notoriously frosty relationship between the opposing parties, which Sentelle referenced when asking them to focus on the legal issues.

"We have heard the vitriol that both sides want to spill on each other," he said.

Become a follower of The Chevron Pit.
Follow us on Twitter at @ChevronPit . and like us on Facebook.
Visit Chevron Toxico.com to find out more. Support Amazon Watch andRainforest Action Network.

Read More