Chevron Knows No Bounds In Ecuador Case, New York Times Article Shows

In a blog on The Huffington Post, the former U.S. spokesperson for the Ecuadorians who won a $19 billion judgment against Chevron for oil contamination argues a recent  New York Times article clearly shows that Chevron knows no bounds in its legal attacks to avoid being held accountable for the destruction it caused in the Ecuadorian rainforest.

Read the blog, written by Karen Hinton, here.

The New York Times article, written by energy reporter Cliff Krauss, is a balanced look at the 20-year-old lawsuit, but neglects to point out some key facts about the case:

1 -- Most importantly, it incorrectly states that the Ecuadorians filed their lawsuit against Texaco, now owned by Chevron, after Texaco entered into a remediation agreement with the Government of Ecuador. They filed their lawsuit in 1993 in a U.S. court. Not long after, Texaco appealed, lobbied, and probably bribed Ecuador's government to get the lawsuit dismissed. It would not and that led to the 1995 remediation agreement, which the U.S. court ignored. Equally important is the fact that the agreement carved out the Ecuadorians' lawsuit, stating that the third-party complaints were not covered by the agreement.

2 -- Chevron has never denied that it has spied and possibly continues to spy on one of the Ecuadorians' attorneys, Steven Donziger, a human rights lawyer whose reputation Chevron is clearly trying to destroy, if not his entire ability to make a living to support his family.

3 -- Chevron charges that the Ecuadorians' lawyers "ghostwrote" an Ecuador court report and two judgments, but have any reporters taken a close look at U.S. Judge Lewis Kaplan's recent rulings on Chevron's fraud countersuit? Kaplan's rulings are only slight re-writes of legal briefs filed by Chevron lawyers. U.S. judges often take arguments written in briefs, submitted by one side or the other, and use them in their briefs. In Ecuador, it's no different.

4 -- Krauss quotes Chevron saying that Donziger's "confidents" have turned against him, but everyone involved in the case knows that the individuals in question have been threatened and pressured by Chevron. For more than four years, Chevron pressured clients of Stratus Consulting, the environmental engineering firm for the Ecuadorians, to dump the firm. On the verge of bankruptcy resulting from the Chevron litigation against it, Stratus succumbed to the pressure with an affidavit disavowing the process for writing one of the court reports on contamination at the Chevron oil sites. Chevron dropped its lawsuit against Stratus; however, Stratus continues to stand by its findings of contamination. See here and here.

5 -- Another of Stratus' environmentalists is quoted from a video, saying that the contamination had not spread beyond the oil sites. Had Chevron allowed the reporter to see the entire video, he would have seen that she was concerned about the number of tests taken so far and was arguing for more testing to determine the impact of the contamination beyond the pits. Donziger was arguing that the Ecuadorians only had so much money to spend on tests; that contamination was evident at the oil sites, and that was enough to prove Chevron's guilt. Regardless, there is contamination at the well sites; people live near them; they should be cleaned.

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Interesting Reads: BP Owes $192 Billion On Gulf Coast & Chevron's Secret Deal With Ivonne Baki

Interesting reading on The Huffington Post and The Business Insider. See below.

BP Owes $192 Billion for Gulf Oil Disaster, Not $15 Billion Settlement It's Seeking

On Friday, the Financial Times reported that BP is hoping to reach an agreement with U.S. authorities which would require it to pay under $15 billion to settle all criminal and civil penalties arising from the 2010 Gulf oil disaster. The Department of Justice is reportedly seeking $20 to $25 billion. Negotiations between the DOJ and BP are accelerating and "an agreement could be reached before the Democratic party's convention in September," the FT reported.

While $15 billion sounds like a lot of money -- and it is -- it is a far cry from what BP owes for the many costs associated with the largest offshore oil spill in history. To date, a full accounting of exactly what BP should owe for its crimes in the Gulf has not been made public. Such an accounting is vital if we are to ensure that justice and restoration are delivered to the Gulf Coast and that such a catastrophe never occurs again.

A straightforward application of just the most pertinent U.S. laws yields a fine of $192 billion. (For simplicity sake, I only address BP's fines.)

Sound high? Here's why it's not. (read more)

Why Chevron Fired Ogilvy


Chevron knew full well that an executive at its PR agency, Ogilvy PR, had ties to the Andean parliamentary president in Ecuador, Ivonne Baki, and fired the shop because the agency failed to bend the Ecuadoreans to its will, not because it was a conflict of interest: That, in a nutshell, is the conspiracy theory alleged by The Chevron Pit, a blog maintained by rain forest activists who successfully sued Chevron for its pollution of the Latin American jungle.

Chevron ostensibly fired Ogilvy after it discovered that one of its executives, Felipe Benitez, had given advice to both the Ecuadorean government and environmental groups hoping to preserve the Amazon. We pointed out that the move seemed weird because Benitez's LinkedIn profile listed the fact that he had those clients dating back to 2008, so this shouldn't have come as a surprise.

Chevron Pit now alleges that Chevron knew about Benitez all along and was hoping that he could sway the government to not enforce an $18 billion judgment environmental activists won against the company for polluting the forest:

There is simply no way Chevron could not have known that the firm of its lead lobbyist on the Ecuador matter was also representing Ecuador's government. In fact, we suspect that was all part of the "value" Ogilvy was offering Chevron for its fee of $600,000 per year.

(read more)

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.

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Chevron's Corporate Bullying

Two interesting perspectives on Chevron’s efforts to turn the victims of its misconduct into criminals. One is from a Huffington Post blogger, Joanna Zelman, who concludes her piece with:

“The finger pointing, intimidation, lawsuits, and countersuits all blur into what might appear to be just a big game. But at its core, there are human beings seeking justice, and a company terrified of what justice might find.”

The second blog is by Marco Simon of EarthRights International who notes:

“For me, the take-home message is that, regardless of whether any (or all) of what Chevron alleges is true, it doesn't (or shouldn't) absolve them of their responsibility to clean up the mess in Ecuador, and it doesn't give them any reason to proceed against the Lago Agrio plaintiffs themselves.”

Chevron Countersues In Ecuador Pollution Case, Accused Of 'Corporate Bullying’

The Huffington Post
Joanna Zelman

Is Chevron's countersuit against Ecuador's plantiff lawyers legitimate or an act of intimidation? Chevron's recently filed Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit suggests that the oil company may be resorting to threats in a last ditch effort to derail a historic case that has dragged on for nearly 20 years - the original lawsuit was first filed back in 1993.

Chevron's subsidiary, Texaco Inc. used to run several Ecuadorian oil fields until the 1990's, when Petroecuador took over. The plaintiff reports that when Chevron operated the oil fields, the company engaged in acts harmful to the local health and environment.

Specifically, the plaintiff claims that Chevron dumped billions of gallons of toxic waste into rivers, spilled thousands of oil barrels, and abandoned 900 toxic waste pits.

Chevron meanwhile has stated that after a $40 million cleanup, any remaining contamination is Petroecuador's responsibility. R. Hewitt Pate, Chevron's vice president has stated that the company "has no intention of giving these plaintiffs' lawyers the payday they seek."

Now, as judgment nears, Chevron has made some bold moves. This past Tuesday, Chevron filed a countersuit against Ecuador's lawyers and consultants. Chevron accused the consultants of ghost-writing an expert's report and fabricating a peer review. With these claims of fraud, Chevron asks the court that any judgment against the company be deemed unenforceable.

Meanwhile, plaintiff spokeswoman Karen Hinton has deemed Chevron's countersuit an act of "corporate bullying." A press release from the Amazon Defense Coalition claims that Chevron has also recently threatened the trial judge with criminal liability, sued each of Ecuador's 47 impoverished indigenous plaintiffs in New York federal court, tried to bar any American lawyer from enforcing a judgment outside of Ecuador (an unprecedented injunction), and may have broken the record for the longest deposition of a lawyer on a sitting case.

According to The New York Times, the recently filed RICO lawsuit makes sense, as it "fits squarely within Chevron's strategy of seeking to turn U.S. courts against the plaintiffs."

While Chevron's recent conduct has come under scrutiny, the company's past conduct in Ecuadorian courts has also been questioned. The Amazon Defense Coalition's press release accuses Chevron of undercounting toxins in the soil and water with their field sampling methods, forcing an Ecuadorian judge's recusal through entrapment, and exposing more locals to toxins while obtaining a legal release from claims. A Chevron contractor also reportedly accused the company of cooking the books, switching out contaminated samples for clean ones.

Karen Hinton claims that Chevron's recent civil RICO suit was filed out of concern over Wall Street and shareholder reactions. With tens of billions of dollars on the line for Chevron's shareholders, it would certainly make sense for the company to try and pull out all the stops. Ultimately though, Ecuador's lead attorney Pablo Fajardo believes, "Irrefutable scientific truth will triumph over Chevron's intimidation tactics and desperation."

The finger pointing, intimidation, lawsuits, and countersuits all blur into what might appear to be just a big game. But at its core, there are human beings seeking justice, and a company terrified of what justice might find.

The Kitchen Sink Defense: Chevron Files Retaliatory Lawsuit Against Indigenous Ecuadorians Seeking Amazon Cleanup
By Marco Simons

Chevron, facing a landmark lawsuit in Lago Agrio, Ecuador, over pollution left in the Amazon by its predecessor, Texaco, has increasingly gone on the offensive against the Amazonian communities bringing the lawsuit. Chevron has accused the plaintiffs, their lawyers and supporters of all manner of dirty tricks, and even denounced the awarding of the Goldman Environmental Prize to the two leading Ecuadorian lawyers. The plaintiffs in turn allege that Chevron's personnel have admitted tampering with evidence, and that Chevron hired a convicted drug trafficker to attempt to entrap the presiding judge in a bribery scheme, among other things [1].

But on Tuesday Chevron's efforts to discredit the case reached a new level, as Chevron sued the Ecuadorian plaintiffs themselves in federal court in New York, accusing them of fraud, interfering with contracts, trespass, unjust enrichment, and conspiracy. Chevron has also levied even more serious charges against the lawyers, expert witnesses and affiliated organizations, accusing them of racketeering under the Racketeer Influenced and Corrupt Organizations Act (RICO).

Most of Chevron's allegations arise out of a court-appointed expert report in Ecuador, over which theplaintiffs allegedly had improper influence, and various statements by the plaintiffs' lawyers and allies which Chevron contends are false and are calculated to force Chevron into a settlement. I have no idea whether there is any truth to Chevron's allegations, though it wouldn't surprise me if some of what has happened in the Ecuadorian court proceedings would seem unusual or even outrageous by US standards. Indeed, the plaintiffs themselves originally filed this case in New York, and wanted to litigate in the US--they didn't want the case moved to Ecuador because they feared the court system was subject to political influence and not up to the task of hearing a case like this. (At one stage when the case was in the US, ERI filed an amicus brief [2] supporting the plaintiffs.)

But three extraordinary things jumped out from my quick look at Chevron's complaint. First, while Chevron seeks orders that would prevent the plaintiffs from enforcing any judgment against them, nothing in their complaint establishes that Chevron is not responsible for environmental damage in the Ecuadorian Amazon. What Chevron is trying to do is to use alleged misconduct by the plaintiffs' lawyers to absolve them of any responsibility; a sort of judicial get-out-of-jail-free card. In fact, Chevron probably can't ask the US court to decide whether they're responsible for the environmental damage--the plaintiffs filed that case in New York fifteen years ago, and it was Chevron (or Texaco, at the time) that successfully moved it to Ecuador. One telling fact here is that Chevron only sued some of the plaintiffs' lawyers--they did not, for example, sue Patton Boggs, which is now heading up the U.S. team supporting the Lago Agrio litigation. That seems like an acknowledgement that the Lago Agrio litigation itself is not fraudulent, even if Chevron thinks some of the tactics employed by some of the lawyers have been.

Second, Chevron admits that it doesn't even have any evidence that the plaintiffs themselves had any part in the allegedly fraudulent conduct, but simply alleges that they might benefit from it: "Whether or not the individual Lago Agrio Plaintiffs were or are aware of the fraud... [they] cannot benefit from the fraud and corrupt conduct ostensibly perpetrated on their behalf." That's usually not enough to sue someone over, especially before they actually have benefited. And it doesn't at all explain why Chevron has named the plaintiffs themselves as defendants on claims of--you guessed it--fraud. Chevron needs the plaintiffs in the case because just suing the lawyers (i.e., the people who are allegedly responsible for the misconduct) won't get them a ruling that prohibits the plaintiffs from enforcing a judgment against Chevron, but the complaint against them is pretty thin. (Arguably, so is the case for jurisdiction in New York over Ecuadorians litigating a case in Ecuador.)

Third, Chevron has put the lawsuit in front of a judge who apparently suggested that Chevron should file it. I don't know Judge Lewis Kaplan, and I have no idea if he's biased or not. But Judge Kaplan did preside over two earlier cases filed by Chevron seeking discovery from the filmmaker who made the documentary "Crude" and from one of the plaintiffs' lawyers himself, and issued rulings favorable to Chevron. Chevron's own complaint states that in one of these hearings, Judge Kaplan stated, after summarizing his view of the evidence: "Now, do the phrases Hobbs Act, extortion, RICO, have any bearing here?" Whether Judge Kaplan's earlier decisions were correct or not, it certainly looks bad to have him presiding over a case that he suggested should be filed--it could give the kind of appearance of impropriety that the judicial system is supposed to avoid. Furthermore, in order to put the case in front of Judge Kaplan, Chevron used a "related cases" mechanism--they suggested that the case was related to the two other discovery cases. But they also said that no similar case had ever been filed in New York, which ignores the fact that the original case filed by the plaintiffs was in the same court. Acknowledging that might have led to the case being assigned to a different judge, however--possibly Judge Jed Rakoff, who presided over the original case.

For me, the take-home message is that, regardless of whether any (or all) of what Chevron alleges is true, it doesn't (or shouldn't) absolve them of their responsibility to clean up the mess in Ecuador, and it doesn't give them any reason to proceed against the Lago Agrio plaintiffs themselves. If I were representing the Lago Agrio plaintiffs, my first response would be to seek dismissal of the plaintiffs from this case and probably to seek sanctions against Chevron's lawyers--filing a complaint that admits that there's no evidence they engaged in fraud, yet sues them for fraud anyway, is a pretty dubious tactic, even for Chevron.

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Evidence Shatters Chevron's Defense in World's Largest Oil Contamination Case

Enviro Bloggers Focus Attention on Oil Giant’s Misconduct

The Ecuadorians suing Chevron for the world’s largest oil contamination disaster have submitted the first part of their final written argument to the Ecuador court, outlining the evidence that clearly demonstrates Chevron's liability in the $113 billion environmental damages lawsuit and the fraud behind the company's primary defense of remediation.

The court filing -- called an "alegato" in Ecuador -- details in exacting detail how evidence gathered by independent experts, the plaintiffs, and from Chevron itself proves the case against the oil company. Read the summary and press release about the argument. The lawsuit was first filed in U.S. federal court in 1993 but was shifted to Ecuador at Chevron's request. The plaintiffs are tens of thousands of persons who live in area of Ecuador where Chevron operated several large oil fields from 1964 to 1990, reaping excess profits by using substandard practices.

Meanwhile, several environmental bloggers are shedding some much-needed light on the oil giant’s misconduct. Read the Huffington Post blog Huffington Post blog, Mother Jones, the WonkRoom and ChevroninEcuador.

Joanna Zelman of the Huffington Post wrote:

“Could there be enough "overwhelming" evidence against Chevron to merit a payment of over $100 billion? Tens of thousands of Ecuador's residents are the plaintiff in an environmental damages lawsuit against Chevron, and they believe the evidence speaks loud and clear….”

Responding to Chevron’s efforts to distract attention away from the contamination with accusations of corruption against the Ecuadorian court, Han Shan of ChevroninEcuador wrote:

“But here we are with the final arguments, and the judge deliberating on a decision that is widely expected to be delivered this year. The plaintiffs have brought on DC mega law firm Patton Boggs and high-profile lawyer James Tyrrell, who vows that the plaintiffs will be able to enforce a judgment against Chevron and win major damages to be put to environmental cleanup and healthcare in their communities.”

Wonk Room's Brad Johnson headlined his blog with, "Chevron, Under Pressure For Destruction of Amazon, Was Top Lobbyist Last Quarter," He wrote: "Chevron, responsible for a multi-billion-dollar environmental disaster in Ecuador, is instead spending millions to shore up political support and to evade the clean up." Senate disclsoure forms reveal that oil giant Chevron spent $2.9 million lobbying the federal government last quarter, eclipsing even Exxon ($2.6 million) and BP ($2.2 million)."

Chevron has long argued, as its primary defense at trial, that a "remediation" conducted between 1995-98 released it from any responsibility. Despite Chevron’s claims, a summary of the plaintiff’s alegato concludes the legal release used by Chevron as a result of that remediation is "null and void" because it was based on numerous false and misleading representations by the company. Instead of actually cleaning up the waste in the area, the limited “remediation” was largely accomplished by simply covering a small number of waste pits with dirt and then using an inappropriate laboratory test that counted only a fraction of the actual contamination to “prove” that the remediation had been effective.

"The evidence makes it clear and unmistakable that Chevron is guilty," the summary of the alegato concludes. "Guilty of polluting the rainforest with toxic sludge from lucrative oil drilling operations, guilty of a shoddy and haphazard cleanup operation, guilty of letting toxic waste continue to devastate the rainforest and its inhabitants' lives, and perhaps worst of all, guilty of trying to cover it all up by destroying documents and making false accusations of fraud before courts in the U.S. and Ecuador."

The document concludes that Chevron is responsible for ongoing contamination that is harming the environment and human health to this day, even though the company fled Ecuador in the early 1990s and stripped its assets out of the country. The main arguments are as follows:

• Chevron treated the environment "recklessly" and deliberately disposed of billions of gallons of toxic waste into rivers and streams over the 26-year period that it operated a large oil concession in Ecuador's Amazon region. "These lax operational practices have had a devastating impact on the rainforest ecosystem and its inhabitants," according to the document.


• Chevron dumped more than 16 billion gallons of chemical-laden "produced water" into streams and rivers over 70 years after the industry had stopped the practice in the United States due to its damaging environmental impacts.


• Chevron built and then abandoned more than 900 toxic waste pits filled with oil drilling byproducts such as barium, heavy metals, chloride, and acid -- all of which need extensive remediation.


• Chevron polluted the air by flaring gas with no controls, spilled thousands of barrels of oil, had no spill response plan, and ordered the destruction of records documenting oil spills.

The plaintiff’s "alegato" also found that "there is irrefutable evidence of contamination" at every one of Chevron's 45 well and oil production sites inspected by the parties during the trial phase of the case in the affected area, which is 1,500 square miles in size and covers a swath of rainforest roughly the size of Rhode Island. The chemicals and compounds found -- all of which are toxic and some of which are known carcinogens -- include barium, benzene, cadmium, chromium, copper, etheylbenzene, polycyclic aromatic hydrocarbons, vanadium, xylene, and zinc.

The alegato also explains how it is Chevron -- not PetroEcuador -- that is responsible for the contamination given that the vast majority of pollution occurred at the time Chevron's 356 well sites were drilled and operated by the American company. The legal concept of "joint and several liability" also imposes on Chevron responsibility for 100% of the damage it caused because of the substandard system it built and operated.

The submission is the first of three parts. The second and third parts -- which deal with damages and issues relating to due process -- will be released in the coming days. Earlier damages assessment reports submitted by the plaintiffs found the company could be liable for up to $113 billion in costs.

Chevron submitted its alegato to the Ecuador court in early January.

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