The Amazon Post

The U.S. District Court for the Southern District of New York today ruled that the $9.5 billion judgment against Chevron Corporation in Ecuador was the product of fraud and racketeering, finding it unenforceable.

In response, Chevron issued the following statement:

“This ruling is a resounding victory for Chevron and our stockholders. It confirms that the Ecuadorian judgment against Chevron is a fraud and the product of a criminal enterprise. Steven Donziger and his associates can now be held accountable and will not be allowed to profit from their illegal acts. Any court that respects the rule of law will find the Lago Agrio judgment to be illegitimate and unenforceable.”

Chevron presented overwhelming evidence of fraud during the civil RICO trial that concluded in November 2013. Evidence of the Ecuadorian plaintiffs’ and their agents’ fraud includes:

  • A former Ecuadorian judge has admitted his role in orchestrating the fraudulent judgment against Chevron in exchange for a half-million-dollar bribe from Donziger and his associates.
  • Stratus Consulting, the lead environmental consultant to the Ecuadorian plaintiffs’ lawyers, provided sworn declarations (here and here), highlighting its and Donziger’s role in ghostwriting the reports of a purportedly “independent” Ecuadorian court expert and the lack of scientific merit to the plaintiffs’ environmental claims.
  • Another of the plaintiffs’ lawyers’ environmental consultants, Dr. Charles Calmbacher, has testified that plaintiffs falsified environmental evidence in Ecuador.
  • Litigation funder Burford Capital has provided sworn testimony outlining the firm’s knowledge of the plaintiffs’ lawyers’ misconduct, testifying that the proceeding is irredeemably tainted by fraud.

The court’s opinion is here, the judgment as to Donziger defendants and defendants Camacho and Piaguaje is here, and the appendices to the opinion can be found here.

During a six-week federal trial in New York, Chevron introduced overwhelming evidence of fraud, extortion and other misconduct as part of a civil lawsuit against Steven Donziger and his associates.

Read Chevron’s post-trial brief:

Using Internet Explorer, click here to read a comprehensive summary of Chevron’s claims and supporting evidence against Steven Donziger and his associates. The post-trial brief contains citations that are hyperlinked to the respective exhibits.

The hyperlinked post-trial brief may also be read by opening this link in Adobe Reader: http://theamazonpost.com/post-trial-brief-pdfs/brief/01ChevronPostTrialBr.pdf

Since late 2013, Ecuador’s government has invited actors, politicians, journalists and many others to the Oriente region of the Amazon to see oil contamination allegedly caused by Texaco.  The government claims these pits are evidence of Chevron’s environmental liability in the region.  Their favorite tour stop is a site called Aguarico-4 (AG-4).  Through scripted media spectacles at this site, the Republic of Ecuador is assisting Steven Donziger in advancing his fraudulent case, while attempting to distract public attention from the government’s own environmental and social obligations in the region.

But here are a few details about AG-4 that they conveniently exclude from their tour:

  • Texaco Petroleum (TexPet), which became a subsidiary of Chevron in 2001, was a minority partner in an oil-production consortium in Ecuador along with the state-owned oil company, Petroecuador, from 1964 to 1992.  After TexPet turned its remaining share of the oil operations over to Petroecuador in 1992, pursuant to an agreement with Ecuador, the company agreed to conduct a remediation of selected production sites, while Petroecuador committed to perform any remaining cleanup.  The government of Ecuador oversaw – and certified – the successful completion of TexPet’s remediation and fully released the company from further environmental liability.  Petroecuador, however, failed to conduct the cleanup it promised and has continued to operate and expand oil operations in the former concession over the past 20 years – including AG-4.
  • The soil at AG-04 was remediated by TexPet between September and October of 1996, and inspected by the government of Ecuador.  Inspectors from the National Hydrocarbons Bureau and Petroproduccion certified TexPet’s soil remediation at AG-04 was successful on March 14, 1997, and on March 20, 1997, the Ecuador Ministry of Energy and Mines approved TexPet’s work at AG-04 as complete.
  • In 2006, Petroecuador identified AG-04 as a pit it was responsible for remediating under a government remediation program.  But representatives of the plaintiffs in the lawsuit against Chevron met with members of President Rafael Correa’s administration to try to stop the remediation program and developed a plan to halt the remediation fearing it would hurt their case.
  • While they continue to publicly claim to work in the interests of the environment, their actions tell a different story. Privately, as shown here, they have pressured Petroecuador to halt its remediation program. Fearful that Chevron would, in Fajardo’s words, “say that the State finally assumed its duty and is going to clean up what it ought to,” Steven Donziger instructed Fajardo “to go to Ecuadorian President Rafael Correa to put an end to this shit once and for all.”

A recent BusinessWeek report aptly summarized the Republic’s efforts: “By focusing celebrity and popular ire on Chevron, Correa hopes to distract his own people and anyone else who’s paying attention from the harsh reality that poor Ecuadorians in the jungle have their own government to blame…”

And the Economist stated: “Petroecuador’s own corporate documents suggest a long-standing interest in Aguarico-4. Its statistical report of 2007 lists Aguarico-4 as a “production recovery” site; its 2011 report refers to “reconditioning work” going on at the pool.  That seems to confirm that Petroecuador has for some time regarded Aguarico-4 as its responsibility. It also seems to deny Mr Correa’s claim that the site has been neglected since 1986. Perhaps Mr Correa should tell all of humanity about that.”

Human Rights Watch, an independent organization “dedicated to defending and protecting human rights” which “give[s] voice to the oppressed and hold[s] oppressors accountable for their crimes,” published a letter that it wrote to Ecuador’s President of the Council of the Judiciary. The letter pointed to serious breaches of judicial independence, citing examples of Ecuador President Rafael Correa’s administration’s interference in that country’s judiciary and bias in the judicial appointment process. Chevron has long raised concerns in the Lago Agrio case about the integrity of Ecuador’s judiciary.

The letter pointed specifically to concerns about the integrity of the National Court of Justice, the same court that ratified the fraudulent Lago Agrio judgment against Chevron in December 2013. The National Court of Justice took that action despite overwhelming evidence of fraud, bribery and corruption in the case, once again violating the nation’s international obligations and the rule of law. The letter pointed to other misconduct that occurred at the same time as Chevron’s appeal of the 2011 verdict worked its way through the judicial process.

Human Rights Watch said that “corruption, inefficiency, and political influence have plagued Ecuador’s judiciary for years,” and that in 2011, “the administration of President Rafael Correa initiated an ambitious judicial reform process to address these chronic problems.”

Unfortunately, the organization wrote, this “reform” process has led to anything but actual reform. While the organization said the government took some positive steps, its formation of a temporary Transitional Council of the Judiciary and a five-member permanent Council of the Judiciary, both charged with appointing judges, raised new concerns about executive interference in the judiciary:

“The Council of the Judiciary has also overhauled the composition of the judiciary by appointing and removing hundreds of judges, including all magistrates of the National Court of Justice, through highly questionable mechanisms that we believe severely undermine judicial independence in the country.”

The letter continued:

“In 2012, the Transitional Council of the Judiciary appointed all 21 members of Ecuador’s highest court, the National Court of Justice, as well as all its substitute judges, through mechanisms that lack the objectivity and transparency provided for in international standards on judicial independence.”

Similar to President Correa’s statements and actions in support of the Lago Agrio plaintiffs, the letter said that, “when President Correa launched his justice reform initiative, he made public statements that further undermined the credibility of the judiciary as an independent branch of government.”

The letter said that additionally, “the overhaul of the judiciary was carried out by former government officials who, with one exception, served under President Correa,” and that “these appointments, together with Correa’s statements, run counter the Bangalore Principles of Judicial Conduct, which state that, “[a] judge shall not only be free from inappropriate connections with, and influence by, the executive and legislative branches of government, but must also appear to a reasonable observer to be free there from.”

Human Rights Watch urges Ecuador to “adopt measures to ensure that Ecuador complies with international standards on judicial independence.” Chevron will continue to seek redress under international law for the ongoing denial of justice in Ecuador.

Chevron has filed Post-Trail Reply Brief as part of the federal racketeering trial against Steven Donziger and his associates.

Click here to read about the unrefuted evidence of fraud, bribery and extortion uncovered by Chevron in the case.