Chevron Ecuador Case | The Chevron Ecuador Lawsuit Trial & Chevron's Views & Opinions | The Amazon Post

This article explores the evidence of fraud in the Chevron Ecuador case:

Ordinarily, an allegation that plaintiffs lawyers may have been clandestinely involved in the writing of a judge’s $18.2 billion ruling in favor of their clients would be getting a lot of attention. But in the environmental case against Chevron taking place in Lago Agrio, Ecuador, it’s hard to raise eyebrows anymore.

That is the latest disturbing allegation that’s been leveled in this monumentally troubled lawsuit.

This is the case that seeks to hold the oil giant liable for damage to the Ecuadorian Amazon rainforest and its inhabitants from Texaco’s oil drilling there between 1964 to 1990. Chevron (CVX), which acquired Texaco in 2001, maintains that, among other things, Texaco settled its Ecuadorian environmental issues in 1998.

Many readers are probably thinking that they read about this scandal last year. But that was actually a different scandal. That was the one in which the Lago Agrio plaintiffs lawyers allegedly ghostwrote a key evidentiary report that was then passed off as the work of Richard Cabrera, a purportedly independent court-appointed expert, to Ecuadorian and U.S. courts, government officials, and media. That alleged scheme stretched from early 2007 until mid-2010, when Chevron finally went to federal court in Denver and pried English-language drafts of key portions of the so-called Cabrera report out of the files of the plaintiffs’ U.S. consulting firm. This March U.S. District Judge Lewis Kaplan found “ample evidence” that certain Lago Agrio plaintiffs lawyers, including lead U.S. counsel Steven Donziger, had, in fact, perpetrated a scheme to ghostwrite “all or much of” the Cabrera report. For that and other reasons Kaplan entered a preliminary injunction barring the Lago Agrio lawyers from enforcing the judgment outside Ecuador. That ruling is now on appeal.

The new scandal is different—or at least a variation on a theme. This one revolves around the Lago Agrio court’s 188-page judicial opinion itself, the one that imposed the $18.2 billion award in February. The plaintiffs lawyers have heralded this opinion, signed by Ecuadorian judge Nicolas Zambrano, as untainted by any conceivable earlier fraud since, by its terms, it purports to disregard the Cabrera report in reaching its conclusions. (Judge Kaplan found that, despite Zambrano’s protestations, the ruling actually still relies on the Cabrera report.)

Chevron has now submitted declarations from two forensic analysts that assert, with examples, that Zambrano’s ruling cribs both anomalous data and lengthy passages of text verbatim from sources that Chevron claims aren’t to be found anywhere in the official court record, but which can be found in the plaintiffs team’s internal files.

How would Chevron know that? Well, in the course of investigating the Cabrera scandal, U.S. judges permitted Chevron lawyers to subpoena files from the plaintiffs that would ordinarily have been protected by various privileges. Lo and behold, Chevron’s experts say, those files appear to be the source for both the anomalous data and the plagiarized text—indeed, the only apparent source for them. That, in turn, seems to suggest some sort of clandestine interaction between someone close to the plaintiffs lawyers and someone close to the judge. (Judge Zambrano did not respond to two detailed phone messages seeking comment.)

Here’s an example. There is a passage on page 24 of Zambrano’s ruling that reads in Spanish as follows:

Es cierto que por norma general una empresa puede tener subsidiarias con personalidad juridica completamente distinta. Sin embargo, cuando las subsidiarias comparten el mismo nombre informal, el mismo personal, y están directamente vinculadas con la empresa madre en una cadena ininterrumpida de toma de decisiones operativas, la separación entre personas y patrimonios se difumina bastante, o incluso llega desaparecer. En esto caso, se ha probado que en la realidad Texpet y Texaco Inc. funcionaron en el Ecuador como una operación única e inseparable. Tanto las decisiones importantes como las triviales pasaban por diversos niveles de ejecutivos y órganos de decisión de Texaco  Inc. …

Of this 103-word passage, 98 words (the ones shown in bold) track verbatim an internal legal memo authored in 2007 by one of the plaintiffs team’s Ecuadorian attorneys—a memo whose content, Chevron says, was never introduced into the court record. In all, Chevron’s forensic expert finds 15 such passages in the Zambrano ruling that appear to be lifted virtually verbatim from that same memo.

Similarly, according to Chevron’s forensic analysts, Zambrano’s ruling incorporates data that contain a variety of telltale errors that were not present in tables that were part of the court record, but which were present in data contained in the plaintiffs’ internal database. For instance, in multiple instances the ruling cites levels of contamination measured in “milligrams per kilogram” rather than “micrograms per kilogram”—overstating the contamination a thousand times—repeating an error that allegedly existed in the plaintiffs internal database but not in the test results submitted in the court record.

Chevron brought the apparent data irregularities in the Zambrano ruling to light on April 5—eight weeks ago—in a filing in a federal court proceeding in Vermont, in which both Chevron and the Lago Agrio plaintiffs are involved. The Lago Agrio plaintiffs’ lawyers filed a response—of sorts. It did not deny that the alleged anomalies existed, nor did it postulate any innocent explanation for them. Instead, it sniped that Chevron’s forensic analyst didn’t speak Spanish and suggested that his conclusions might have been “fed to him” by Chevron.

On May 2, Chevron filed in a Manhattan federal court proceeding the forensic report concerning the 15 passages of text in the Zambrano ruling that appear to have been cribbed from a plaintiffs attorney’s internal memo. (This time the Chevron analyst did speak Spanish.) The Lago Agrio plaintiffs’ lawyers have so far made no reply at all to those accusations.

The Lago Agrio plaintiffs spokeswoman does squarely deny Chevron’s allegations. “The plaintiffs submitted evidence to experts who adopted our language in reports filed with the court,” Karen Hinton said in a statement in mid-April. “It’s not surprising that the judgment would include similar language. This happens all the time in court rulings in the United States.”

Nevertheless, Hinton did not provide any examples of documents filed with the Lago Agrio court that could have served as legitimate sources for any of the data or textual irregularities that Chevron has highlighted. In mid-May, a month later, I checked back in with her to see if the plaintiffs team had located any yet.

“Honestly, we’ve not had the time or resources to go through everything and pull out sources,” she said, emphasizing that the Ecuadorian court record was 200,000 pages long and undigitized. She suggested that the burden of proof should be on Chevron to prove that the anomalous data and text isn’t in the vast record somewhere, and not on the plaintiffs to show where legitimate sources do exist in it.

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An update on the Chevron Ecuador case from Hot Air:

Over the winter we brought you up to date on the efforts of agents inside the nation of Ecuador, in collaboration with environmental groups and law firms here in the United States, to shake down Chevron. They have been seeking payments to to the tune of tens of billions of dollars for “environmental damage” allegedly caused by Texaco – later absorbed by Chevron – in spite of the fact that the government of Ecuador is the only entity having done any drilling there in decades.

The case has been moving along at a snail’s pace, but Chevron has been gaining ground. We’ll cover a few of the details below, but first there is a video to catch you up on what’s been happening.

American lawyers have been helping the “environmentalist” groups and the government of Ecuador, currently attempting to pick Chevron’s perceived deep pockets. This continues despite the fact that, “Five US federal courts have found evidence that the Ecuador trial has been compromised by plaintiff’s lawyer’s fraud.”

Steven Donziger, attorney for the plaintiffs, was caught on tape and in court obtained documents providing the following memorable quotes,

“Because at the end of the day, this is all for the courts. This is a bunch of smoke, mirrors and (expletive.) It really is.”

“The only language that I believe this judge [in Ecuador] will understand is one of pressure, intimidation and humiliation.”

“This is Ecuador, OK? You can say whatever you want, and at the end of the day, there’s a thousand people around the courthouse and you’re going to get what you want.”

“… the problem, my friend, is that the effects are potentially devastating in Ecuador. (Apart from destroying the proceedings, all of us, your attorneys, might go to jail.)”

“The business of getting press coverage is part of a legal strategy. The business of plaintiff’s law is to make (expletive) money.”

Lovely, eh? After this video was released, Hot Air contacted Chevron for a comment. Justin Higgs, Media Advisor to Chevron, responded with the following:

Chevron will continue to vigorously defend itself, and the interests of the company’s shareholders against the fraudulent lawsuit being pursued by American trial lawyers in Ecuador. Through discovery proceedings in the United States, Chevron has obtained thousands of documents that memorialize the plaintiffs’ lawyers’ efforts to pressure judges to rule in their favor, corrupt expert reports, and manufacture evidence. Chevron recognizes that the people of Ecuador face real challenges, but using Ecuador’s courts to advance a fraud is simply wrong.

If I can take a brief moment to rant here, regular readers already know that we have spent a great deal of time focusing on the issues of jobs and the economy. And I, for one, am willing to grant that there are a number of areas where Washington is unable to substantially affect these challenges in the short term. But when it comes to developing domestic energy resources, Washington actually could do something to restore lost jobs and increase domestic productivity. President Obama, so frequently fond of enacting policy through the executive branch without the benefit of the legislative branch, could do it with the stroke of a pen. (Or, if he’s out of the country, an autopen, apparently. ) They have failed to do so.

In this case, I have to ask… where are the “friends of the court” filings from the Justice Department? Where is the support for one of our largest employers and the people who can reduce our dependence on foreign suppliers – as both parties claim to wish to do – when rip-off artists look to pilfer tens of billions of dollars from an American company in a clearly fraudulent attempt to make a quick buck at the expense of a company with deep pockets?

Silence from Washington. Thanks for nothing, guys.

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This blogger writes about the Chevron annual meeting:

Apparently deciding he’s had enough, Chevron CEO John Watson came out and, according to the blog Fuel Fix.com, gentlemanly challenged activists, telling one heavily involved in the Chevron Ecuador legal issue “You know very well, personally, that we’re being victimized by the plaintiffs’ lawyers, referring mostly to the work of Steven Donziger.

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Shopfloor weighs in on the recent developments in the Chevron Ecuador case:

Activists and apologists for the shakedown litigation over supposed environmental damage in Ecuador once again tried to turn Chevron’s annual stockholders’ meeting in San Ramon, Calif., into a circus today. By now the Amazon Watch theatrics are old hat, and the cause they support — a lawsuit orchestrated by U.S. trial lawyers — has been revealed as fundamentally corrupt. Flying a banner off a bridge to promote a contingency-fee lawsuit demonstrates only witless fanaticism.

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This article discusses the fraudulent litigation and public relations campaign against Chevron:

Chevron’s annual shareholder’s meeting today will be attended by about 25 shareholders claiming to represent indigenous peoples in Ecuador, but they are all shilling for attorneys and alleged environmental groups that have been part of a fraudulent lawsuit against the oil company.

The organizations claiming to represent Chevron shareholders include Rainforest Action Network, AmazonWatch, Earthrights International, Amazon Defense Coalition, and other groups. Some have been named in a Racketeering Influenced and Corrupt Organizations (RICO) lawsuit by Chevron for their support of a lawsuit that accuses Texaco (Chevron purchased Texaco in 2001) of alleged pollution while drilling for oil in Ecuador.

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The New York Times writes about Ecuador’s judiciary in this profile of the Chevron Ecuador case. It says, “Even Ecuadoreans, most of whom are at least vaguely familiar with the Lago Agrio case, tend to agree the system can be corrupt and easily swayed by political agendas.”

QUITO, Ecuador — Gathered in front of the presidential palace in the Spanish colonial quarter of the Ecuadorean capital, the crowd held aloft green and yellow signs that screamed one word: “Sí.”

Possibly with a nudge from the leftist government of President Rafael Correa, the demonstrators were showing their support for a referendum held here earlier this month.

Among the 10 issues up for a vote were reforms of Ecuador’s much-criticized judicial system, which has faced the international spotlight due to Chevron Corp.’s efforts to fight a judgment that could cost the oil giant up to $18 billion.

Chevron has launched a broadside assault on the Ecuadorean judiciary in an effort to persuade courts outside the country not to enforce the ruling, in which a judge found the company responsible for environmental pollution in the oil fields around the town of Lago Agrio.

Texaco Petroleum Corp., which Chevron acquired in 2001, was the major player in the area from the 1960s until it pulled out in 1992.

In attacking the integrity of the judicial system, Chevron has found what appears to be a soft target.

Even Ecuadoreans, most of whom are at least vaguely familiar with the Lago Agrio case, tend to agree the system can be corrupt and easily swayed by political agendas.

“We hope that we have enough strength in this referendum in order to change the justice system,” said Patricio Reyes, a member of a road workers union who attended the rally with several of his colleagues. “There is a lot of corruption.”

Justice on trial

This fall, the Ecuadorean justice system is scheduled to go on trial before a federal judge in New York.

U.S. District Judge Lewis Kaplan has agreed to determine whether the Ecuador court’s judgment against Chevron should be recognized in U.S. courts and possibly elsewhere.

It is all part of a federal racketeering lawsuit Chevron filed against the plaintiffs, in which it alleged that the entire case in Ecuador was a shakedown.

What Kaplan and other overseas judges think is vital as Chevron has no assets in Ecuador.

Therefore, the plaintiffs’ lawyers — representing indigenous people who live in and around Lago Agrio — have no option but to look elsewhere for the oil company’s cash.

There is a sense of unease within the legal community here that a U.S. judge will be casting judgment on their country.

“This is very serious, very unpleasant,” said Fabian Corral, a conservative lawyer and law professor in Quito.

Some legal experts say Chevron has no right to criticize the Ecuadorean courts because it was Chevron that asked the case to be transferred here in the first place.

The original complaint was filed in the Southern District of New York, the same court where Kaplan sits, in 1993.

Texaco argued that a U.S. court was not the proper venue for deciding the case and that Ecuador would be the appropriate forum.

That was then.

Julio Cesar Trujillo, a constitutional law professor and former left-leaning congressman, said Kaplan’s intervention “represents a serious damage to justice around the world.”

Courts regularly enforce rulings handed down by overseas judges, he added.

Indeed, Trujillo says he has successfully sought enforcement of U.S. court rulings in Ecuador.

Kaplan could set a bad precedent because “a judge here could decide not to execute a judgment from the U.S. for whatever reason,” he added. “If a U.S. judge has the capability of judging our institutions, then why can’t we do the same?”

‘State of severe institutional crisis’

Most experts nevertheless agree that there are problems with the judicial system in Ecuador.

Long before Correa came into power in 2007 the executive branch had been known to meddle in the judiciary, but it has only become more common.

The judiciary “has been in a state of severe institutional crisis for some time,” Kaplan wrote in his March opinion in which he ordered the preliminary injunction. “Matters have deteriorated recently.”

Kaplan based his conclusion on expert witnesses put forward by Chevron, but few lawyers in Ecuador would disagree with him.

Concerns about how long it takes to resolve cases and perennial angst about the independence and integrity of the courts have not been helped by constant changes to the way judges are appointed and other reforms to the system, experts say.

Between 1998 and 2008, the constitution required that judges on the Supreme Court — then the nation’s top court — serve life terms and the court would itself appoint replacements.

In 2004 and 2005, the Ecuadorean Congress replaced 27 of the 31 Supreme Court justices with new justices picked by lawmakers, at the urging of then-President Lucio Gutierrez, who was elected as a leftist but quickly lost the backing of his supporters for supporting free-market economic policies.

Under even more pressure, Gutierrez removed all the Supreme Court justices before he was ousted from office in 2005.

Upon taking power, Correa ordered the creation of a new Constituent Assembly to draft a new constitution.

The Supreme Court was renamed the National Court of Justice and, for the first time, its rulings could be subject to review by a “constitutional court” that the government exerts control over.

Not content with those reforms, the two referendum questions relating to the judiciary put before voters May 7 would set up a temporary council of three to restructure the justice system over the next 18 months and then replace the judicial council that oversees the judiciary with a new five-member group.

Critics say the government is likely to have a major say in who is appointed.

Corral, who says he has seen corruption in the justice system firsthand, doesn’t think the reforms will improve matters.

“Has anything been solved?” he said. “No.”

The Correa factor

Despite Chevron’s role as the foreign multinational seeking to evade the jurisdiction of local courts, some influential figures in Ecuadorean society are generally supportive of some of the company’s pronouncements.

One is Rene Ortiz, who, admittedly, as a former secretary-general of the Organization of Petroleum Exporting Countries, is an oil industry insider.

From his perspective, it’s not so much the institution of the judiciary that should raise questions about whether the Lago Agrio ruling should be enforced but rather the actions of Correa’s government.

“This got very political,” he said in an interview.

Correa “should trust the institutional framework” that is already in place, but instead he “practically intervened” in the Chevron case by indicating his support for the plaintiffs’ plight, Ortiz said.

“He is a crook, in my opinion,” he added.

In response to these accusations, the plaintiffs have sought to distance themselves from the president, who has visited some of the affected sites that have been litigated over.

“We suffer every time Correa opens his mouth,” said Donald Moncayo, a member of the Amazon Defense Coalition.

The Ecuadorean government now finds itself forced into a position where it has to defend the judiciary against Chevron’s attacks even while Correa himself has been calling for further reforms.

It’s a task left to Diego Garcia, Ecuador’s attorney general.

In an interview in his Quito office, closely watched by advisers, Garcia carefully defended Ecuador from Chevron’s attacks while admitting that improvements could be made.

“What we cannot accept is that the Ecuadorean justice system is not the right forum to guarantee litigants the handling of their cases or that it is a justice system that only favors the Ecuadorean state,” he said.

The government’s position does not, though, “imply that Ecuador is not conscious and is not looking for an improvement of its justice system,” he added.

He also claimed Chevron has not made any formal complaints of illegal acts relating to the Lago Agrio case.

“The reality is that Chevron knows perfectly the legal system in Ecuador. It knows perfectly that in order to file a formal complaint, it would have to appear in front of the prosecutor general and file it, and it has never done that,” he said.

Chevron disputes that statement. Spokesman Jim Craig said the company has made numerous complaints to various government officials, including the prosecutor general.

To suggest otherwise, he added, “ignores the facts and the law and amounts to nothing more than excuse-making on the part of a government that has worked hand-in-glove with the plaintiffs to railroad Chevron in the hope of obtaining a multibillion-dollar windfall.”

The Lago Agrio plaintiffs, of course, are scornful of Chevron’s attempts to undermine the judgment.

“There has been no intimidation,” said attorney Pablo Fajardo. “We have strong evidence of what Chevron doesn’t want to talk about, which is the damage to the people and the Amazon.”

Judge Kaplan, he added, is “a victim of Chevron’s lies.”

Judicial reform

After a lengthy vote-counting process, Correa won on all 10 questions put to the Ecuadorean people in the referendum.

The tinkering with the judicial appointment process is further evidence to some of an attempt by the president to increase control over the judiciary.

Ortiz described it as “clear intervention in the judicial system.”

Corral believes the government should stop introducing reforms and instead focus on investing more money in the judiciary, which he says is chronically understaffed and unfunded.

“It’s the Cinderella of the state,” he said, referring to its neglected status compared with other branches of government.

It is a fact recognized by those sympathetic to the plaintiffs, such as Trujillo, who revealed that he initially advised them to sue in the United States.

“I said that in that case, it was better to bring it in the U.S., because it was a very big suit and in the Amazon region there isn’t the same infrastructure you can find in the States,” he said. “The lack of infrastructure would make it take longer.”

Back at the sun-drenched rally in Quito, Gustavo Cachimuel — who used to work for Petroecuador, the state-owned oil company — said he isn’t so sure Correa’s reforms to the judiciary will work, either.

But he does believe something needs to be done.

“History will tell whether the referendum can change this problem,” he said. “Changes are necessary. It is undeniable.”

http://www.nytimes.com/gwire/2011/05/23/23greenwire-chevron-allegations-about-justice-system-strike-5160.html?pagewanted=all

This blogger writes about the environmental record of Petroecuador, Ecuador’s state run oil company:

Lost in the entire Chevron Ecuador PR and legal battles is a little known report that between 2002 and 2010, Petroecuador – the state-owned oil company that took over the oil fields owned by Texaco, just after that company was purchased by Chevron – was responsible for an estimated 1,415 “environmental accidents” according to the Ecuadorian newspaper El Universo.

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In the second part of his discussion of the Chevron Ecuador lawsuit, this blogger writes about the trial’s legal developments in the United States:

This is not, repeat not, just a question of one company fighting off a lawsuit. This is a question of American companies being badly abused by a foreign court system, at the urging of American lawyers about whom several judges have raised the specter that they have acted fraudulently. This should be a matter where the U.S. government, through the White House and State Department, should weigh in diplomatically to protect American interests. That they have not done so should be a mark of shame for the Obama administration.

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