Ecuadorians Beat Back Chevron's Effort To Evade Justice In Massive Contamination Lawsuit

Earlier this week, the Second Circuit Court of Appeals affirmed what the Ecuadorians have said all along: Chevron has abused not only the laws in Ecuador but in its own country, and Federal Judge Lewis Kaplan jumped the gun in issuing a preliminary injunction against enforcement of the $18 billion judgment the Ecuadorians sought and won.

Han Shan of Amazon Watch captured the emotions of the day best in his blog here:

Huge Victory for Ecuadorians Fighting for Justice from Chevron as Oil Giant's Legal Strategy Derails,

Yesterday, a 3-judge panel from the 2nd Circuit Court of Appeals dealt a stunning blow to Chevron's abusive and deceitful efforts to evade accountability for its oil disaster in Ecuador.

The appeals court threw out U.S. District Court Judge Lewis Kaplan's injunction that purported to prohibit the Ecuadorian plaintiffs from enforcing the $18 billion judgment against Chevron delivered by an Ecuadorian court in February. It also indefinitely stayed a trial that Judge Kaplan had scheduled for November over a preposterous countersuit filed in his court against the Ecuadorians and their attorneys, at which Chevron hoped to have the Ecuadorian verdict against the company declared unenforceable. The preliminary order from the 2nd Circuit came just one business day after a hearing before the panel on Friday, Sept. 16th, and said that a full ruling looking at the various issues will come "in due course."

Amazon Watch founder and Executive Director Atossa Soltani appears on Democracy Now! with Amy Goodman to discuss the implications of the Ecuadorian plaintiffs' victory in the appeals court.

As legal reporter Alison Frankel writes in her On the Case column:

Monday's stunning two-page order from the panel gave the Ecuadorean plaintiffs their first victory in two years of battling in New York's federal courts. But it was a huge win.

The appeals court order constitutes a harsh rebuke to Judge Kaplan's over-reach in the case, making him Chevron's most valuable legal asset in the company's dirty fight to avoid responsibility for its pollution in Ecuador. The appeals panel didn't remove Judge Kaplan, as requested by the Ecuadorian plaintiffs, but as Marco Simons, legal director for EarthRights International writes on his blog:

"... the appeals court declined to remove Judge Kaplan, who the Ecuadorians believe is biased against them, from the case. But it's possible that, after the court issues its opinion, there won't be any case left for Kaplan to preside over."

The ruling also dealt a humiliating rebuke to the strategy driven by outside law firm Gibson Dunn, and Crutcher law firm and lead counsel Randy Mastro, who was literally laughed out of court at the hearing which led to the order.

After attending hearing after hearing at which Mastro made sweeping fraud and conspiracy allegations against the Ecuadorians and their lawyers supported by the flimsiest of fantasy, theory, and conjecture, it was truly a breath of fresh air for this author to watch the Gibson Dunn lawyer wither at questions from the appellate panel based in logic, common sense, and the rule of law.

Pablo Fajardo, lead lawyer for the plaintiffs, told the Associated Press:

"We can now at least dream there will be justice and compensation for the damage, the environmental crime, committed by Chevron in Ecuador."

More than anything, the order from the appeals court represents the most stinging rebuke to the arrogant and deceitful strategy employed by the cabal of lawyers, spinmasters, and seriously-conflicted executives running a mini Orwellian empire within the company devoted to characterizing the Ecuadorian plaintiffs as criminals, and painting the company that poisoned them as victims. They thought overwhelming evidence of the company's crimes in Ecuador could be beaten back with shameless cynicism and an astonishing outlay of cash.

Even 2nd Circuit appeals court Judge Richard Wesley wondered aloud how much money had been spent by Chevron to pursue its legal strategy, and at what cost to shareholders.

Regulators, politicians, institutional investors, and shareholders who have heard Chevron management deny that the company faces any significant liability in Ecuador are going to be asking the most difficult questions that Chevron's lawyers and leadership (if one can call it that) have yet heard, now that the 2nd Circuit has affirmed the rule of law over Chevron's deceptive sensationalism.

Will Chevron management "face reality" as New York State Comptroller Thomas DiNapoli—trustee of the New York State's Pension Fund with $780 million in Chevron stock—demanded during this past May's Chevron shareholder meeting? Or will CEO John Watson, architect of Chevron's takeover of Texaco and the company's toxic legacy in Ecuador, and other senior management allow the entire company to be driven off a cliff by outside lawyers who have no interest in ending a legal saga that continues to line their pockets?

Secoya indigenous leader Humberto Piaguaje (L) and campesino communtiy leader Servio Curipoma (R)—who have both worked tirelessly to demand justice from Chevron—outside of a courthouse in New York on Sept. 16.

Either way, this decision brings the people of the Ecuadorian Amazon one step closer to justice, and we call on Chevron's management to do the right thing by meeting the company's moral, legal and fiduciary obligations to clean up its contamination in Ecuador. Of course, justice delayed is justice denied, and the men, women, and children of the Ecuadorian Amazon have suffered for far too long already.

More coverage:

BBC: 'US court rules against Chevron in Ecuador oil case'

Global Post: 'Chevron must pay for Amazon damage: court'

The Guardian (UK): 'Chevron loses latest stage of Amazon pollution battle'

The San Francisco Chronicle: 'U.S. court rules against Chevron in Ecuador case'
– Han

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How Big A Lie Will $8 Million Buy?

Han Shan of Amazon Watch answers the question of how big a lie $8 million will buy. He writes an interesting blog about a Chevron consultant who says the oil giant has never harmed the environment or human health in its oil exploration. Chevron has paid him at least $8 million, of which $5 million was for reports that said none of Chevron's contamination in the Ecuadorian rainforest is harmful to humans and environment.

FRIDAY, NOVEMBER 5, 2010

John Connor: Chevron's Well-Paid Liar in Ecuador

Along with our campaign allies at RAN & the tricksters at The Yes Men, we've been having some fun exposing Chevron's widely-panned new 'We Agree' ad campaign for the insulting greenwash it is.

But now, I want to turn back to some serious matters in the ongoing legal battle to hold Chevron accountable for massive devastation in Ecuador's Amazon rainforest region.

The Amazon Defense Coalition (ADC) issued a press release a few weeks back that highlighted a legal judgment against Chevron in Mississippi this past Spring. A jury verdict says that Chevron must pay $19 million dollars to five plaintiffs who were exposed to leaded gasoline fumes from leaking underground gas tanks owned by the company. According to the Associated Press, the daughter of the lead plaintiff in the lawsuit was born "severely mentally disabled, and the children of the other women suffer from respiratory conditions and learning disabilities."

What does this have to do with Ecuador and the mothers and children there who say Chevron is poisoning them?

Well, it was Chevron’s lead American expert in the Ecuador case John Connor who also testified in this recent Mississippi case. The U.S. jury rejected Connor's testimony, and a reading of the court transcriptunveils some very damning information.

An excerpt from the ADC press release:

In the trial -- which took place in Jefferson County, Mississippi -- Connor conceded on cross-examination that over almost two decades of work for Chevron he has never once concluded that the impact of his client’s operations has harmed even a single person, according to the court documents. Connor testified that he knew of no circumstance where “there were any injuries of individuals that were the responsibility of Chevron or Texaco.”

Connor also tried to exonerate Chevron by testifying that any contamination must have been caused by leaks from three storage tanks owned by a smaller company in the area, not the larger tanks owned by Chevron. But when confronted on cross-examination by evidence that he had misidentified the site from a state database, Connor admitted that he had never taken any steps to definitively verify that the gas tanks actually existed on the smaller company’s property.

John Connor: "Chevron paid me well to tell you this oil poses no danger to anyone."

Connor's testimony in Mississippi is very similar to his under-oath spin in the Ecuador case, intended to shore up Chevron's ludicrous argument that Ecuador's state oil company Petroecuador is responsible for all of the oil contamination in the region. This, despite Chevron admitting that it dumped more than 18 billion gallons of toxic wastewater into Amazon waterways depended upon by thousands of local people for drinking and bathing. This, despite the fact that Chevron (in the form of its subsidiary Texaco, of course) dug every one of the 900+ toxic waste pits that the company abandoned, many of which continue to leech poisons into the soil and ground water [see this video to understand exactly how that happens].

Under cross-examination in Mississippi, Connor also admits that Chevron has paid him "at least" $8 million over the years and estimates that $5 million of that has been for his work in Ecuador.

Ordering Chevron to pay $19 million in damages, a jury in Mississippi rejected his ludicrous and laughable testimony and concluded that this guy has no credibility. And I encourage you, dear reader, to read the transcript. Even on paper in a format as weird as a court transcript, he sounds evasive and slippery at best, and like he's simply lying through his teeth at other times.

Now, people who are following the monumental class action in Ecuador will know that Chevron has been in a legal frenzy over the last few months, filing legal actions against more than 20 people on the plaintiffs' side demanding 'discovery' ranging from turning over footage and files to sitting for depositions conducted by Chevron lawyers.

The plaintiffs, busy dealing with this legal onslaught by a company with nearly bottomless resources, have yet to be able to truly fight fire with fire and seek discovery from Chevron in the same way.

In September, a U.S. judge granted a request by the government of Ecuador to subpoena Chevron's self-avowed 'dirty tricks guy' Diego Borja. Borja, of course, was captured by a friend-turned-whistleblower talking about how the company "cooked evidence" in the trial in Ecuador, and suggesting that his "bosses" at the company were directing him.

Now, it's time for the plaintiffs to drop some subpoenas on some of these Chevron "bosses" so we can learn the truth about the dirty tricks and lies that Chevron has been employing to evade accountability for its devastation in Ecuador.

But the more I learn about Chevron's highly-paid and deceitful "expert" John Connor, I think he may be the perfect place to start.

– Han

Han Shan is the Coordinator of Amazon Watch's Clean Up Ecuador Campaign

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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 Marketwatch.com 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.

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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.

Background:

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

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