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.


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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."

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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.

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Ecuadorians & Environmental Groups Provide Clean Water To Rainforest Residents Chevron Ignores

Ecuadorian indigenous groups and international environmental groups are doing what Chevron has refused to do in Ecuador’s oil-ravaged rainforest – provide clear, clean drinking water to people living near contaminated soil and water left behind by the oil giant almost 20 years ago.

The new effort, called ClearWater expands upon other initiatives to ensure rainforest residents have safe, unpolluted water.

Chevron has turned its back on the rainforest and its people. The ClearWater project is not the complete solution, but it is part of one, and we praise the indigenous and environmental groups for doing what Chevron should be doing.

From 1964 to 1992, Chevron, operating under the Texaco brand, explored for oil in the Ecuador rainforest. To maximize profits, the company used substandard practices and, as a result, intentionally dumped over 16 billion gallons of toxic water into waterways, used by local people to drink, cook, and bathe.

Chevron also built over 900 huge, unlined pits to store permanently pure crude oil. The pits remain there today and continue to leech into and contaminate the underground water and soil.

In 1993, Ecuadorian indigenous groups sued Chevron for the oil contamination, but the company has fought them at every turn. Eighteen years later, an Ecuador court finally awarded the groups $18 billion in damages. An Ecuadorian appellate court upheld the judgment, allowing the Ecuadorians to enforce it.

Because Chevron has no assets in Ecuador and has refused to pay, they are preparing to enforce in other countries’ courts, where Chevron has assets.

See this video for more information about the devastation caused by Chevron’s deliberate acts.

Supported by organizations such as like Saving an Angel, Groundwork Opportunities, Rainforest Action Network, Amazon Watch and the Amazon Defense Coalition, the ClearWater project will provide sustainable clean water to more than 2,000 indigenous and farmer families across 20 villages in the oil-ravaged areas of the northeastern Ecuadorian rainforest.

Emergildo Criollo, one of the plaintiffs in the lawsuit against Chevron and supporter of the CleanWater project, said despite the ongoing legal battle, “the rivers are still poisoned, and the water tests of oil and salt. This must change. Water is the source of life. Without clean water we cannot survive.” Two of Criollo’s children died as a result of the contamination.

In early October, 2011, the ClearWater pilot project broke ground in the community of Cofan Dureno with the community-led installation of 52 rainwater catchment systems, benefitting over 300 Cofan people.

According to the ClearWater web site these systems are relatively easy to install in villages and rural town homes, and if maintained properly, can last up to 50 years. Specially designed filtered catchment units will enable families, health clinics and schools to have clean water.

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Chevron to Ecuadorians: Drop Dead

Huffington Post Publishes Photos of People Who Have Died or Are Sick From Contamination

A lead Chevron lawyer has told an arbitration panel that the 30,000 Ecuadorian victims of the oil giant's contamination are "irrelevant" to the court case that led to an $18 billion judgment against the company.

Doak Bishop

Doak Bishop, a Chevron lawyer from the American firm King & Spalding, said the following before a panel of international investment arbitrators on February 15th: “The plaintiffs are really irrelevant. They always were irrelevant. There were never any real parties in interest in this case. The plaintiff's lawyers have no clients... There will be no prejudice to [the rainforest communities] or any individual by holding up enforcement of the judgment."

Meanwhile, the Huffington Post today published over a dozen photos of Ecuadorians who have died or have severe medical problems resulting from Chevron's contamination. See here for photos, taken by Lou Dematteis.

By arguing that no Ecuadorians had been harmed or were in danger of being harmed, Bishop was trying to convince the panel of arbitrators that they should block the Ecuadorians from enforcing their judgment against Chevron in other countries, a strategy which has failed for multiple reasons. See here.

Bishop has come under harsh criticism for his conflicts of interest with the arbitration panel.

Chevron has a long history of trying to dehumanize the Ecuadorians by denying their very existence, said Pablo Fajardo, the lead lawyer for the communities.

In 2010, Chevron tried to claim that the signatures of 20 of the 48 named plaintiffs in the lawsuit had been forged by their attorneys. The charge was quickly rebutted after the plaintiffs appeared before a public notary to affirm their signatures were legitimate. See here.

The existence and relevance of the Ecuadorians has been affirmed by multiple independent journalists, including 60 Minutes, The Sunday Night Show in Australia and multiple media outlets such as the New York Times and The Washington Post.

The $18 billion damage award, levied by an Ecuador court, will be used to clean up Chevron’s deliberate contamination of the rainforest and provide clean drinking water and health care to the residents of the company’s former concession area. The damage decimated indigenous groups and caused an outbreak of cancer, according to evidence relied on by the court in issuing the judgment. See this video for more information.

Chevron, under the Texaco brand, operated in Ecuador from 1964 to 1992. Chevron admitted dumping 16 billion gallons of toxic drilling fluids directly into waterways and streams relied on by local residents for their drinking water

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Chevron Says These People Don't Matter

These moving photos were taken by Lou Dematteis, a photographer and writer who documented the lives of many Ecuadorian indigenous people who have died, lost family members or are sick from diseases as a result of Chevron's intentional contamination of the Ecuadorian rainforest. A Chevron lawyer recently said these people are “really irrelevant.”

Luz Maria Marin holds the head of her husband Angel Toala one day before he died of stomach cancer in his home in Shushufindi.

Chevron says the people in these photos don’t matter.

The oil giant’s lawyer Doak Bishop of King & Spalding recently said:

“The plaintiffs are really irrelevant. They always were irrelevant. There were never any real parties in interest in this case. The plaintiff's lawyers have no clients... There will be no prejudice to [the rainforest communities] or any individual by holding up enforcement of the judgment."

Bishop is speaking of the Ecuadorian indigenous people who won an $18 billion judgment against Chevron for massive oil contamination in the rainforest – a judgment Chevron has refused to pay.

Chevron even went so far as to try and hire a journalist to spy on the Ecuadorians to see if they were telling the truth about being sick. Read this article about it.

Here are just a few of them, photographed and interviewed by Lou Dematteis. You can purchase his book at Lou Dematteis Photography.


At her home in Andina, Amanda Armijos stands in front of a photo of herself and husband Saul Apolo who died of stomach cancer at age 49.

Nine-year-old Jairo Yumbo shows his birth-deformed hand on the road in front of his home in Rumipamba.


Juana Apolo walks out of a cemetery in La Andina where her father, brother and sister are buried, all of whom died of cancer.


Uterine cancer victim Rosana Sisalima with her granddaughter at their home in San Carlos on November 24, 2004. Rosana succumbed to cancer in 2006.


Fifteen-year-old Myra Chicaiza sits with her mother Rosa Mercedes on the floor of their home in Dureno. Myra suffers from sever birth defects due to her mother's exposure to toxic hydrocarbon contamination when she was pregnant with Myra.

Maria Villasis shows the scars from four operations on her liver and gallbladder at her farm near Guanta oil well #8.

Miguel Mashumar and his wife Maria Claudia Antuash sit with a portrait of two of their two daughters who both died as a result of exposure to toxic hydrocarbon contamination.

Carmen Guaman with her fourteen-year-old daughter Veronica at their home in La Primavera. Veronica suffers from a neurological birth defect.


Her leg amputated because of a cancerous tumor, Modesta Briones sits in her house near Parahuaco oil well #2 in the Ecuadoran Amazon.



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High Court Has Dismissed Key Chevron Arguments Against Ecuadorians

See excerpts below from two separate U.S. Second Circuit Court of Appeals rulings concerning the Ecuadorians' lawsuit against Chevron. They counter Chevron's arguments that the $18 billion judgment should not be enforced and that its arbitration claim is binding upon the Ecuadorians.

On enforcement:
"The LAPs hold a judgment from an Ecuadorian court. They may seek to enforce that judgment in any country in the world where Chevron has assets."

Cite: United States Court of Appeals for the Second Circuit in Chevron Corporation v. Naranjo, Docket Nos. 11-1150-cv (L) 11-1264 (Con), (2d Cir. January 26, 2012), at 27. (emphasis added).

On Chevron's international arbitration claim:
“[Ecuadorian] Plaintiffs are not parties to the [Bilateral Investment Treaty], and that treaty has no application to their claims, their dispute with Chevron therefore cannot be settled through [Bilateral Investment Treaty] arbitration.”

Cite: United States Court of Appeals for the Second Circuit in Republic of Ecuador v. Chevron Corporation, Docket Nos. 10-1020-cv (L) 10-1026 (Con), (2d Cir. March 17, 2011), at 21. (emphasis added).

On Chevron's liability of Texaco's misconduct:

"Chevron Corporation claims, without citation to relevant case law, that it is not bound by the promises made by its predecessors in interest Texaco and ChevronTexaco, Inc. However, in seeking affirmance of the district court’s forum non conveniens dismissal, lawyers from ChevronTexaco appeared in this Court and reaffirmed the concessions that Texaco had made in order to secure dismissal of Plaintiffs’ complaint. In so doing, ChevronTexaco bound itself to those concessions. In 2005, ChevronTexaco dropped the name “Texaco” and reverted to its original name, Chevron Corporation. There is no indication in the record before us that shortening its name had any effect on ChevronTexaco’s legal obligations. Chevron Corporation therefore remains accountable for the promises upon which we and the district court relied in dismissing Plaintiffs’ action. Throughout this Opinion, we use the various corporate names that Chevron Corporation has employed during the course of this litigation only for purposes of clarity. In so doing, we do not attribute any legal significance to the nomenclature used. While the district court did not include Texaco’s promise to satisfy any Ecuadorian judgment in its stipulation and order, an express adoption of the prior inconsistent position is not required. The court need only adopt the position “in some manner, such as by rendering a favorable judgment.” Mitchell v. Washingtonville Cent. Sch. Dist., 190 F.3d 1. (2d Cir. 1999) (internal citation omitted); see also Maharaj v. Bankamerica Corp., 128 F.3d 2 94, 98 (2d Cir. 1997).

"Here, Texaco had been trying to convince the district court that Ecuador would serve as an adequate alternative forum for resolution of its dispute with Plaintiffs. As part of those efforts, Texaco assured the district court that it would recognize the binding nature of any judgment issued in Ecuador. Doing so displayed Texaco’s well-founded belief that such a promise would make the district court more likely to grant its motion to dismiss. Had Texaco taken a different approach and agreed to participate in the Ecuadorian litigation, but announced an intention to disregard any judgment the Ecuadorian courts might issue, dismissal would have been (to say the least) less likely. We therefore conclude that the district court adopted Texaco’s promise to satisfy any judgment issued by the Ecuadorian courts, subject to its rights under New York’s Recognition of Foreign Country Money Judgments Act, in awarding Texaco the relief it sought in its motion to dismiss. As a result, that promise, along with Texaco’s more general promises to submit to Ecuadorian jurisdiction, is enforceable against Chevron in this action and any future proceedings between the parties, including enforcement actions, contempt proceedings, and attempts to confirm arbitral awards.

"Chevron’s contention that the Lago Agrio litigation is not the refiled Aguinda action is without merit. The Lago Agrio plaintiffs are substantially the same as those who brought suit in the Southern District of New York, and the claims now being asserted in Lago Agrio are the Ecuadorian equivalent of those dismissed on forum non conveniens grounds."

Cite: United States Court of Appeals for the Second Circuit in Republic of Ecuador v. Chevron Corporation, Docket Nos. 10-1020-cv (L) 10-1026 (Con), (2d Cir. March 17, 2011), at footnotes 3,4 and 5. (emphasis added).


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Maria Aguinda: The Grandmother Who Beat Chevron

Below are two photos of Maria Aguinda, the indigenous woman who has achieved global fame as the grandmother who beat Chevron in the $18 billion environmental lawsuit in Ecuador.

The first photo shows Maria Aguinda in 1993, walking on an oil-slicked road near her community of Rumipamba in the Ecuadorian Amazon. At the time, she was a young mother. The historic lawsuit bearing her name was filed later the same year in New York federal court.

The second photo, taken last week, shows Maria Aguinda almost 19 years later on the steps of Ecuador's National Court of Justice in Quito, the court that is hearing Chevron's final appeal in the case.

According to Chevron, people like Maria Aguinda and thousands of other Ecuadorians who were harmed by the oil giant don't really exist. Chevron lawyer Doak Bishop said the following before an investor arbitration on February 15th: "The plaintiffs are really irrelevant. They always were irrelevant. There were never any real parties in interest in this case. The plaintiff's lawyers have no clients... There will be no prejudice to [the rainforest communities] or any individual by holding up enforcement of the judgment."

Here is a link to a Yahoo story about Maria Aguinda published in 2011, at the time Chevron was found liable for causing an ecological catastrophe and ordered to pay $18 billion in damages. Here is a background memo on the overwhelming evidence undergirding the trial court decision.

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Texaco Broke It; Chevron Bought It; Now Chevron Has To Fix It

Chevron executives continue to argue before anyone who will listen (and that’s mostly people who have been paid by Chevron to listen) that just because the company bought Texaco doesn’t mean Chevron is responsible for Texaco’s massive contamination of the Ecuador rainforest.

What Chevron neglects to mention is that not only have the Ecuadorian courts refuted that nonsensical argument, but the U.S. 2nd Circuit Court of Appeals has as well.

Here is what the U.S. appellate court judges wrote in a related ruling in footnotes 3, 4 and 5:

“Chevron Corporation claims, without citation to relevant case law, that it is not bound by the promises made by its predecessors in interest Texaco and ChevronTexaco, Inc. However, in seeking affirmance of the district court’s forum non conveniens dismissal, lawyers from ChevronTexaco appeared in this Court and reaffirmed the concessions that Texaco had made in order to secure dismissal of Plaintiffs’ complaint. In so doing, ChevronTexaco bound itself to those concessions.

“In 2005, ChevronTexaco dropped the name “Texaco” and reverted to its original name, Chevron Corporation. There is no indication in the record before us that shortening its name had any effect on ChevronTexaco’s legal obligations.

“Chevron Corporation therefore remains accountable for the promises upon which we and the district court relied in dismissing Plaintiffs’ action.

“Texaco had been trying to convince the district court that Ecuador would serve as an adequate alternative forum for resolution of its dispute with Plaintiffs. As part of those efforts, Texaco assured the district court that it would recognize the binding nature of any judgment issued in Ecuador. Doing so displayed Texaco’s well-founded belief that such a promise would make the district court more likely to grant its motion to dismiss. Had Texaco taken a different approach and agreed to participate in the Ecuadorian litigation, but announced an intention to disregard any judgment the Ecuadorian courts might issue, dismissal would have been (to say the least) less likely.

“We therefore conclude that the district court adopted Texaco’s promise to satisfy any judgment issued by the Ecuadorian courts, subject to its rights under New York’s Recognition of Foreign Country Money Judgments Act, in awarding Texaco the relief it sought in its motion to dismiss.

“As a result, that promise, along with Texaco’s more general promises to submit to Ecuadorian jurisdiction, is enforceable against Chevron in this action and any future proceedings between the parties, including enforcement actions, contempt proceedings,
and attempts to confirm arbitral awards.”

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Chevron's Tinker, Tailor, Soldier, Spy Thriller -- Even Better Than The Movie

Chevron is spying on the two lead attorneys for the Ecuadorians to intimidate and harass them,reports the Amazon Defense Coalition. The lawyers, Pablo Fajardo and Steven Donziger, helped the Ecuadorians win an $18 billion judgment against the company for massive oil contamination. See press release here.

During an eight-year trial in Ecuador, Chevron has operated a corporate espionage campaign out of its San Ramon, California and Quito offices, hiring no less than four private investigative firms to carry out various plots in an effort to derail the lawsuit, but with no success.

In January, an Ecuador appellate court upheld the lower court's $18 billion judgment for what is considered to be the world's largest oil-related environmental disaster. Under Ecuador law, the Ecuadorians may enforce the judgment now, but they will have to do so in other countries' court systems because Chevron has refused to pay and has sold its major assets in Ecuador.

A private investigator hired by the Ecuadorians told the two lawyers he has seen tapes of Donziger under surveillance, and another said he watched individuals in cars follow Donziger and his family in New York City, where they live. The license plates indicated the cars had been rented.

In Ecuador, Fajardo was physically assaulted by two individuals who said they were serving legal papers on him on Chevron's behalf, even though Ecuador does not "serve" papers, as in the United States. Other Ecuadorian lawyers and staff have reported that they are being followed and have had backpacks and other items stolen.

This is not the first time this has happened. The United Nations directed Ecuador to provide security for the Ecuadorians and their lawyers in 2005, when similar incidents took place. See here.

Chevron has long relied on corporate spies to try and undermine the Ecuadorians' lawsuit.

Remember Diego Borja and Wayne Hansen?

A Chevron contractor, Diego Borja, admitted to a childhood friend he was Chevron's "dirty tricks" operative in Ecuador. The company said it paid him to lift soil and water samples from oil sites during the trial. In a recorded conversation, though, Borja said, his real job was to undermine the trial, something he said Chevron's lawyers had never been able to do in court.

On audio tapes, Borja said that he tried to spy on the Ecuadorians' testing lab by pretending to be someone else; that he switched dirty samples for clean samples; and that could prove Chevron had "cooked" evidence in the case. See here.

Borja partnered with an American named Wayne Hansen, to secretly videotape one of the judges who heard the case. Hansen and Borja used a spy pen and spy watch to tape the judge. They tried to offer him a bribe on camera. When the judge prepared to leave the room, Hansen badgered him to admit Chevron was guilty. The judge never discussed much less accepted a bribe and repeatedly told the two that he could not comment on Chevron's guilt. See here and here.

Nonetheless, Chevron has paraded the tapes in front of the news media and U.S. courts to argue fraud.

The online legal publication, Courthouse News, obtained emails written by Hansen to two of Chevron's private investigative firms hired to "handle" the California man after the Ecuadorians revealed Hansen was a convicted drug felon, not a legitimate businessman looking for contracts in Ecuador, as Chevron claimed.

Hansen wrote to Chevron's private investigator Oliver Beard of Investigative Research Services, Inc., that he wanted a "deal" similar to what Borja had received for the secret videotapes of the judge. Hansen wrote: "I need to hear from a real player with a plan for Wayne Hansen."

Not long after, Chevron hired another private investigative firm, The Mason Investigative Group, to deal with Hansen who vanished from the U.S. after being subpoenaed in 2011 under federal court order. According to the Courthouse News emails, Hansen thanked Eric Mason, the firm's president, for helping him move to Peru where he was "living like a king."

Eric Mason, Chevron's Spy

Currently Chevron, Borja and The Mason Group are fighting the release of discovery documents to the Ecuadorians and the Government of Ecuador in a California federal court. Out of 700 documents, only 13 largely irrelevant documents have been turned over by Chevron, Borja and The Mason Group. The Ecuadorians and the Government of Ecuador have been trying for over a year to obtain the documents in the face of repeated obstruction by Chevron and lawyers for The Mason Group and Borja, all of whom are paid by Chevron.

Legal papers filed in the discovery action accuse all three of trying to hide Chevron's "involvement in concocting and executing a plan to undermine the environmental litigation in Ecuador by tainting the presiding judge with a manufactured scandal."

Remember Mary Cuddehe and Sam Anson?

Sam Anson, Chevron's Spy

In 2010, the Atlantic Monthly exposed yet another clandestine effort by Chevron to throw the case.

Mary Cuddehe, an Iowa-born graduate of Columbia University with a Masters degree in Journalism, published an article documenting that the investigative firm Kroll has been running an espionage operation in Ecuador on behalf of Chevron.

Sam Anson, an investigator for Kroll, offered Cuddehe $20,000 for six weeks of work to appear as an independent journalist while working as an undercover spy in Ecuador. Her job was to spy on sick Ecuadorians to determine if they really had an illness. Anson paid for Cuddehe to travel to Bogota where the case was explained and she was offered the money in the suite of a luxury hotel. She later declined the job and instead wrote an article for the Atlantic Monthly.

Chevron refused to comment on Cuddehe, but the company remains associated with Anson who spies for the oil giant full time.

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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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Chevron's Troubles

Chevron is facing troubles in a number of oil-rich countries, including Nigeria, Brazil, and, of course, Ecuador.

Here are three articles worth reading that appeared this weekend:

Chevron's Amazon-sized gamble on Latin America

The Chevron spill off the coast of Brazil is not so much about the amount of oil spilled but about Chevron's reckless behavior that results from the company's arrogance -- similar to its misconduct in Ecuador.

Excerpts: "The prosecutor told Reuters the more than $11 billion civil award sought against Chevron is not based on a clear assessment of damages from the spill. The figure is meant to send a message.

"'Energy companies operating here need to know that reckless behavior will cost them,' (the prosecutor) said.

"Chevron's worst-case scenario damages from Brazil and Ecuador could top the company's $26.9 billion in 2011 profits....

"Chevron's deputy comptroller, Rex Mitchell, warned in U.S. District Court last year that the Ecuadorians' collection effort could 'cause irreparable injury to Chevron's business reputation and business relationships.'

"Chevron may be spending $200 million per year in legal fees related to Ecuador alone, the plaintiff lawyers estimated. Chevron declined to comment on legal fees."

Chevron: Fire On Gas Rig Extinguished

Nigerians have been pleading with Chevron to help them following a fire on a gas rig that took over a month to put out, but Chevron has done very little.

Excerpts: "Residents here complained of air, water, and fish that taste of kerosene as the plume of smoke hovered within sight offshore.

"They're asking Chevron to relocate the approximately 10,000 people in the surrounding community--a request that cuts against long-standing religious ties to land in Nigeria's oil-rich marshland.

"Mostly, residents say their livelihood--fishing--has been spoiled by the gas fire.

"'The gas is inside the fish,' the youth chairman for the village, Bravely Salvage said. 'After eating the fish you feel like somebody who drunk diesel, you feel dizzy...some of us collapse.'"

Hits, and Misses, in a War on Bribery

The Ecuadorians believe Chevron is in violation of the Foreign Corrupt Practices Act by offering what is essentially a $1 billion bribe to the Government of Ecuador for the Yasuni project and a small cleanup effort -- but only if the Government steps in and blocks the enforcement of the $18 billion judgment against Chevron.

Excerpts: "Enacted in 1977, the Foreign Corrupt Practices Act prohibits American companies and foreign companies whose securities are traded on exchanges here from bribing foreign officials to attract or keep business. For many years, there were few prosecutions under the act. In 2003, for instance, not a single person was charged.

"But in the last four years, a total of 58 companies have paid a combined $3.74 billion to settle such corruption charges. Since 2009, some 67 people have been charged, 20 are still awaiting trial or are at large, and 42 have been convicted, some from charges prior to 2009. A total of 22 have been acquitted or had charges dismissed.

"Lanny A. Breuer, the assistant United States attorney general who has stepped up enforcement actions under the act, said he saw no reason to change course. In fact, he is expanding his staff — and his range of potential targets.

“'We have to be willing to take cases that we would be willing to lose,' Mr. Breuer said in an interview. 'We can’t just pick the easy cases.'

"Even more, he sees himself on the right side of history, especially given the outcry against government corruption in the Arab world and elsewhere.

“'This is not the time for the United States to be condoning corruption,' Mr. Breuer said. 'We are a world leader and we want to do everything to make sure that business is less corrupt, not more.'”



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