Chevron: A Fugitive From Justice In Latin America

Legal Battles & Threats Question Leadership of CEO Watson & General Counsel Pate

Chevron’s troubles in Latin America are escalating and calling into question the ability of its Chairman and CEO John Watson and General Counsel Hewe Pate to manage the oil giant in crisis.

Chevron CEO John Watson

General Counsel Hewe Pate

In Brazil, federal prosecutors filed criminal charges today against 17 Chevron executives for deploying substandard drilling practices and lying about the cause, safety plans and the cleanup of a November oil spill off its coast. An $11.2 billion civil lawsuit had been filed already.

In Ecuador, an appellate court upheld a lower court $18 billion judgment that found Chevron in violation of essentially the same charges -- dumping billions of gallons of toxic water of formation and pure crude throughout an area the size of Rhode Island, then lying about it and covering up a shoddy cleanup.

See here and here.

Surely Brazilian authorities had Ecuador in mind when they barred the Chevron executives from leaving the country earlier this week for fear the oil giant’s bigwigs would become fugitives from justice.

An “overreaction” is the way several U.S. analysts, covering the oil industry, have described Brazil’s reactions, but that’s only because they are weighing the relatively small size of the spill, not Chevron’s enormous disrespect for the rule of law in Brazil and in other Latin American countries.

Brazil is smart to recognize that Chevron is capable of doing anything to avoid being held accountable. It only has to look at Ecuador’s experience for evidence.

Chevron basically became a fugitive from justice when Watson, Pate and other high-level officials said that, regardless of the law and court decisions, it would never pay the Ecuador judgment.

Chevron’s refusal to post a bond while it appeals the judgment to Ecuador’s National Court allows the Ecuadorians to begin enforcement proceedings against the company, but they must do so outside the country because Chevron has sold most of its assets in Ecuador.

Confiscating the Chevron executives’ visas is wise, too.

In 2009, Chevron paid for the relocation of one of its Ecuador operatives and his family so he would not have to face a possible criminal investigation in Ecuador for secretly videotaping a judge and offering him a bribe.

Prior to Chevron’s public release of the videos, the company obtained visas for Diego Borja, a self-described “dirty tricks” operative, and his family and relocated them to San Ramon, California, its headquarters, and later to Houston, Texas.

Upon closer review of the tapes, the news media disputed the bribery charge. Later private investigations revealed that Chevron promised Borja and an accomplice payment for orchestrating the sting operation against the judge. Legal documents show that Borja has been paid $2.2 million since he left Ecuador in June 2009. Borja's partner, Wayne Hansen, is now out of reach of both Ecuador and U.S. authorities. With Chevron's assistance, Hansen now lives in Peru in an undisclosed location with no visible means of support, other than what Chevron is likely providing him.

Ecuadorian prosecutors would like nothing better than to question Borja and Hansen but, alas, they are not within their reach, thanks to Chevron.

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Potential Witnesses Into Chevron Misconduct Possibly Being Paid Hundreds of Thousands of Dollars By The Oil Giant

One Living “Like A King” In Peru

A Chevron dirty trickster is apparently enjoying the good life on the beaches of Peru after unsuccessfully trying to derail the historic Ecuadorian lawsuit against the oil giant for oil contamination. His partner, another Chevron operative, has been on the Chevron payroll since June 2009, receiving $10,000 to $15,000 a month but doing no legitimate work for the company.

Sounds like a great deal for the two of them, who are both potential witnesses into Chevron’s misconduct in an Ecuadorian court, which recently awarded a group of Ecuadorians an $18 billion judgment against the company for massive oil contamination.

Providing anything of value or benefit to potential witnesses is certainly unethical and could be illegal, if found to influence testimony. But, that hasn’t stopped Chevron.

Chevron operative and drug felon Wayne Hansen, who along with Chevron contractor Diego Borja tried to bribe an Ecuadorian judge in 2009, recently wrote he is living “like a king” on $1,200 a month in a beach town in northern Peru, according to a subscribers-only Reuters story that highlighted an email from Hansen to a private investigative firm hired by the oil giant.

Reuters obtained the email from discovery documents now under seal in the Northern District Court of San Francisco.

The Ecuadorians have been trying to locate Hansen to subpoena him about the bribery scheme. Hansen had been living in Bakersfield, California, while working in concert with the Chevron contractor and self-proclaimed “dirty tricks” operative Diego Borja to bribe a judge hearing the Ecuadorians’ oil contamination lawsuit.

It’s now known that Chevron has paid Borja around $340,000 (if not more), according to the San Francisco Daily Journal, which recently reported that Borja has been receiving payments since June 2009.

Borja and Hansen secretly videotaped the judge after meeting with Chevron’s lawyers in San Ramon, the company’s corporate headquarters. The judge never discusses a bribe and, in fact, leaves the meeting when Hansen mentions it.

A private investigation conducted by the Ecuadorians found that both Borja and Hansen have complained about Chevron not paying them adequately for their bribery sting operation. Borja threatened to reveal evidence it had about Chevron’s misconduct in the Ecuadorian trial if the company did not compensate him appropriately.

Earlier this year the Ecuadorians successfully subpoenaed and deposed Borja but the U.S. federal judge hearing their discovery motion sealed the court documents. Some reporters, though, obtained some of the documents and emails when they were filed in a related case in the Southern District Court of New York.

Information obtained from discovery and three days of depositions by Borja will be used by the Ecuadorians in their and Chevron’s appeal of the $18 billion judgment in Ecuador. It also will be used to defend the Ecuadorians in Chevron’s so-called “extortion” lawsuit in New York federal court.

It is not clear if the San Francisco judge will unseal the documents before the Ecuadorian and U.S. courts hear arguments expected late this year, but it will be interesting when he does.  Stay tuned.

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Did Chevron Lawyer Callejas Direct “Dirty Tricks” Operation?

Question: What role did Chevron's lead lawyer in Ecuador, Adolfo Callejas, have in directing the company's "dirty tricks" operation that was used to delay the multi-billion dollar environmental damages case?

Callejas has become Mr. Silent as evidence mounts that he was involved in a corruption scandal involving Chevron contractor (and member of the Callejas trial team) Diego Borja. Callejas has refused to answer even a single question about how Borja became embroiled – at Chevron's apparent behest – in a corruption scandal where he secretly videotaped a trial judge doing essentially nothing and then claimed the judge was involved in a bribery scheme (Chevron's allegations about the judge have been completely discredited).

As new evidence has implicated Chevron's legal team in a whole range of dubious activities – including "cooking" evidence submitted by the oil giant to the Court, creating dummy corporations to form "independent labs" that company lawyers would control, etc. – it would be appropriate for Chevron's General Counsel, Hewitt Pate, to step up and tell what he knows about possible misconduct from his own lawyers in Ecuador.

After Chevron posted the videos of the judge on YouTube and demanded an official "investigation", Callejas swore to the Ecuador Court that Borja was an independent third party who turned over the tapes to Chevron out of a sense of civic duty. We now know – through Borja himself – that he worked for Chevron on the environmental trial since at least 2004, supervising field sampling for the company, and that he shared an office building with Callejas and his Chevron colleagues in Ecuador's capital of Quito. Through at least the end of last year (and presumably to this day) Chevron was paying Borja the princely sum of $10,000 per month, a true millionaire's wage in Ecuador.

Borja also was caught on an audio recording telling a friend that he created a dummy company to make a Chevron lab appear "independent" when it was actually run by his wife. Borja's signature, and that of his wife, are on chain-of-custody documents for soil samples gathered during the trial at the direction of Callejas and the Chevron legal team.

Now Callejas has come under fire, and faces possible sanctions, in Ecuador for misleading the Ecuadorian Court when he told the judge that Borja was an independent third party when in fact he worked for the legal team being run by Callejas. Gives some insight into Chevron's peculiar brand of truth-telling, doesn't it?

One might wonder: What else did Callejas and Chevron lie to the court about relating to the dirty tricks operation? Why did Chevron, under false pretenses related to supposed "threats" against him, move Borja out of Ecuador and set him up in a luxury house paid for by Chevron's oil revenue only one mile from its world headquarters in San Ramon, CA?

One easy way to answer this question would be to ask Borja what happened in Ecuador. That's not possible now, because Chevron hired him a criminal defense lawyer and continues to pay him a salary (read: hush money) for sitting around his backyard pool which abuts a golf course.

This sort of delay, misdirection, and dishonesty is about par for the course for Chevron's legal team.

After all, two Chevron lawyers are currently under indictment in Ecuador (and fugitives from justice, living in the United States) for conspiring to falsify remediation results to induce the Government of Ecuador into "releasing" the company from further liability to the government for the company's actions in the area. Ten Ecuadorian government officials with whom they worked face the same charges.

Callejas needs to come clean and explain his relationship to Borja and the secret videos.

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Chevron’s Ready-Made Scandal Continues to Fall Apart

New post from Paul over at ChevroninEcuador.com:

Chevron's Ready-Made Scandal Continues to Fall Apart

A new Associated Press investigation revealed that the purported environmental remediation specialist, Wayne Douglas Hansen, who secretly filmed meetings meant to catch Ecuadorian officials in acts of corruption has never owned a remediation company—as claimed—nor does he have any relationship with Honeywell Inc. as claimed in one of the videos.

AP reporters interviewed Hansen on the phone earlier this month. When they asked him the name of his company, he refused to answer. He instead described water treatment projects he is working on in Mexico and Ecuador. When the reporters questioned him about details of these projects, he hung up.

The AP investigation also uncovered Hansen's repeated run-ins with the law, ranging from letting his pit bull go wild on a neighbor's dog, to conspiring to smuggle 275,000 pounds of marijuana from Colombia into the United States! (He was convicted and served time in federal prison.)

The investigation shatters Chevron's attempt to portray Hansen as a sincere, concerned citizen who hand delivered the supposed bribery videos out of a sense of civic duty.

A parallel plaintiffs' report on Hansen was also published today, going into exhaustive detail on the information recently uncovered.

What remains to be uncovered is: one, the extent to which Hansen's involvement in the video scandal constitutes a federal crime for violating the Foreign Corrupt Practices Act and two, whether Chevron knowingly participated with Hansen in illegal activity to get their hands on a "smoking gun."

– Paul

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Chevron’s “Good Samaritan” is a Drug Trafficker and a liar…

An article in the New York Times today outlines the latest findings about the American, Wayne Hansen, who supposedly owned a remediation company, and who Chevron claimed made secret videotapes to expose "corruption" out of the goodness of his heart. Well, turns out that almost everything the guy said about who he was and who Chevron claimed he was is a lie – he does not own a remediation company, he has never done any remediation, and he is a convicted felon (For trying to smuggle 275,000
pounds of drugs).

And this brings up a serious question: if the guy isn't who Chevron says he is, and if he wasn't actually looking for remediation contracts (since he didn't have a remediation business), what was he doing in meetings, asking leading questions, while he secretly videotapes it? Why was he in that room? More and more signs are point towards Chevron, the only party that benefited from Hansen's attempt to undermine the trial in Ecuador.

Read on, from the Times:

October 30, 2009

Revelation Undermines Chevron Case in Ecuador

By CLIFFORD KRAUSS

HOUSTON — An American whose secret recordings have placed him at the center of a $27 billion lawsuit against Chevron in Ecuador is a convicted drug trafficker, records show, throwing another complication into a case already tainted by accusations of bribery and espionage.

The lawsuit pits Ecuadorean peasants against Chevron over oil pollution in the Amazon and has been a major headache for the company for nearly a decade, producing a saga that underscores many of the hazards and ethical challenges of oil companies working in the developing world.

The company appeared to gain the upper hand in August when it revealed video recordings — captured on watches and pens implanted with bugging devices — that suggested a bribery scheme involving Ecuadorean officials, and possibly even the judge hearing the case.

But the company was put on the defensive again on Thursday, after lawyers for the peasants revealed that one of two men who made the tapes was a convicted felon. Court and other records provided by the plaintiffs show that Wayne Hansen, the American who helped make the recordings, was convicted of conspiring to traffic 275,000 pounds of marijuana from Colombia to the United States in 1986. He also was sued successfully in 2005 by a woman who accused him of unleashing his two pit bulls to attack her and her dog.

The disclosure adds more questions about what motivated Mr. Hansen and an Ecuadorean partner to record meetings for Chevron's use, which the company has characterized as an act of whistle-blowing by men offended by unethical behavior and evidence that the handling of the case had been flawed.

"It's another blockbuster development in a case that never runs short of them," said Ralph G. Steinhardt, a professor at George Washington University Law School. "It doesn't necessarily mean there was no bribery plan, but anything that undermines the credibility of the witness undermines the case of the party that would call that witness."

Trevor Melby, Mr. Hansen's lawyer, did not deny his client had a criminal history, saying, "The thing about felony convictions is they follow you to the grave, but even if he had 15 felony convictions it wouldn't change the tapes." Mr. Melby said he was not being paid by Chevron.

The origins of the case go back to the 1970s, when Texaco operated in partnership with the Ecuadorean state oil company to produce oil in the Amazon. Peasants filed suit in 1993, saying that the company, which had ceased to operate in Ecuador by then, had left an environmental mess that had caused illnesses among villagers. Chevron bought Texaco before the case could be resolved.

Chevron has long said that it could not receive a fair hearing in Ecuador before a hostile judge and government. That argument seemed to be reinforced by the recordings obtained by Mr. Hansen and an Ecuadorean man who had worked as a contractor for the company. They showed an Ecuadorean political go-between working to obtain $3 million in bribes for environmental cleanup contracts to be awarded after the case ended.

But it remained unclear why Mr. Hansen was involved in the discussions. The plaintiffs said that an inquiry into his background by a private investigator found that Mr. Hansen did not hold an engineering license, never finished college and showed no record of being qualified to remediate pollution as he portrayed to Ecuadorean officials in the tapes.

Chevron has said it had no involvement in the videotaping, and company spokesmen have said Mr. Hansen was never their point of contact. "We've had no association with this guy," said Donald Campbell, a Chevron spokesman. "This issue is the content on the video and the transcripts that we turned over to the prosecutor general of Ecuador and the U.S. Department of Justice, which shows inappropriate meetings by the judge in our case, extensive government interference in the trial and a bribe plot involving $3 million."

The other man involved in making the recordings, Diego Borja, has since been moved to the United States with his family at Chevron's expense, and he has been receiving an undisclosed amount of living expenses.

No bribes were shown in the tapes, but the plot supposedly included Judge Juan Núñez, who was presiding in the case. Mr. Núñez recused himself, though he says he did nothing wrong.

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Today’s Bribery Tale Very Different from the One Chevron Told Seven Weeks Ago…

The tale that Chevron told about how two men secretly recorded a bribery scheme in Ecuador is a very different tale today from the one Chevron unveiled seven weeks ago on YouTube and through the news media. Chevron's attempt to use the bribery scheme to derail a potential $27 billion lawsuit for oil contamination in the Ecuadorian rainforest could turn out to be as big of a corporate scandal as the pretexting debacle at Hewlett Packard.

Below is a quick comparison of Chevron's original version of the story and what we know today. For more information, take a look at this complete list of Chevron's unanswered questions about the purported bribery scandal, and this compilation of media reports about the purported bribery scandal.

What Chevron Said Seven Weeks Ago:

• Patricio Garcia is a government party official who met at the party's headquarters office in Quito with Borja and Hansen
  

  
  

• Diego Borja is [only] a former Chevron logistics contractor
  

  
  

• Wayne Hansen, is an American business man who was looking for remediation work in Ecuador.
  

  
  

• Borja and Hansen have not received any payment for secretly taping Garcia in meetings.
  

What We Know Today:

• Garcia is not even a registered party member, much less a party official. Government party officials know of no formal role Garcia has played with the party, except to hand out flyers or cater events.
  
  
• Garcia, Borja and Hansen did not meet at the party's headquarters office; they met at a house owned by Garcia and at Borja's office.
  
  
• Garcia said Borja's office is in the same building as Chevron's legal team in Quito and that Borja's family owns the office building.
  
  
• Borja is not just a "former logistics contractor" for Chevron. He worked on the lawsuit for Chevron, helping to obtain soil samples for contamination testing as recently as March, only a few weeks before the first meeting with Garcia was secretly recorded.
  
  
• If Hansen is a businessman with an expertise in oil clean-up work and who owns his own remediation company, he does not advertise his services. (Chevron has confirmed that the only "Wayne Hansen" listed on any internet search engine is not the same Wayne Hansen who filmed the meetings.)
  
  
• Nowhere on the video recordings do any government officials, the plaintiffs or the judge discuss or accept a bribe.
  
  
• Despite what Chevron said about not paying for their services, Chevron paid Borja relocation expenses for him and his family to move to the US and for "interim support." Chevron has offered to pay both men's legal fees for the two top criminal defense lawyers Borja and Hansen have hired. The lawyers work in San Francisco, only a few miles from Chevron's headquarters in San Ramon.
  

Note that Borja's attorney, Cristina Arguedas, represented Hewlett Packard's former general counsel Ann Baskin in the pretexting scandal.

Chevron should pay attention - they may end up needing Arguedas' help as well…

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