THE AMAZON POST

Cristóbal Bonifaz initiated the original Aguinda lawsuit brought by a larger but overlapping group of Ecuadorian plaintiffs. In 1993, he enlisted the support of Joe Kohn, of Kohn, Swift & Graf PC, and Steven Donziger to file the first lawsuit against Texaco in a New York federal court. When it looked like that lawsuit would be dismissed and sent back to Ecuador, Bonifaz, whose father was President of Ecuador in the 1930s, and his team worked with the Ecuador legislature to enact a new law that would allow individuals the right to sue for environmental remediation of government-owned land. In 1999, a year after Texaco completed its remediation and was granted a full release by the government, the law was passed. Today, the Lago Agrio plaintiffs and their attorneys are trying to apply the law retroactively, which is not permitted under Ecuador law.

• Despite no longer officially representing the Lago Agrio plaintiffs, stands to profit from any financial settlement or judgment against Chevron.
• Sued Chevron in 2006 in a US federal court for the Northern District of California alleging his new clients developed cancer as a result of Texaco’s operations.
• Was sanctioned and fined $45,000 in 2007 when the federal judge dismissed the cancer case after some of the plaintiffs admitted that they had never been diagnosed with cancer. The US Court also found that Bonifaz had not even obtained authority to file the lawsuit from all the plaintiffs.
• Agreed “in legal documents” not to pursue the Government of Ecuador or Petroecuador for their portion of any liability for possible contamination in the Amazon.

According to news sources, Bonifaz gave written assurances to the Ecuadorian Attorney General’s office that his clients would not sue Petroecuador over environmental damage in the Amazon if government officials threw their clout behind the plaintiffs.

• In a 1997 interview appearing in the Ecuadorian newspaper, Hoy, Bonifaz said, “There is no reason for the Government to worry because the plaintiffs and their lawyers have undertaken in legal documents to refrain from suing the Government if it is ultimately held to be jointly liable with Texaco for the environmental damage caused.”
• A week later, Bonifaz told the Ecuadorian newspaper El Comercio, “I delivered notarized documents to the Attorney General confirming the indigenous people’s commitment to refrain from suing the Government.”
• Bonifaz represented the Government of Ecuador and Petroecuador in a related US Federal Court action against Chevron in 2004.

Richard Cabrera was appointed by the Lago Agrio court to assess possible environmental damage in the former Concession oilfields, the cause and chronology of such damages, if any, and suitable remediation projects to be carried out to remedy those damages. Cabrera was given this task despite the fact that he is a mining engineer with no experience or training in oilfield remediation work. In addition to being patently unqualified for the limited task he was given, Cabrera ignored directions from the court and improperly expanded his work scope to invent suggested categories of damages that have nothing to do with the issues raised by the lawsuit or with environmental remediation of the former Concession area.

• Allocated nearly 90 percent of his $27 billion figure to issues unrelated to the actual claims in the case, as defined by the complaint filed by the Lago Agrio plaintiffs.
• Provided no medical records or death certificates to support his recommendation for more than $9.5 billion in compensation for “excess cancer deaths” and did not name a single victim or identify any family members as beneficiaries. Cabrera has no public health training and no expertise in diagnosing the epidemiology of cancer, nor can he point to anyone on his team who does. Rather than relying on an expert, Cabrera based his cancer claims on self-serving answers to ad hoc surveys administered to the local population in secrecy by unknown individuals or entities.
• Claims $1.7 billion in damages for improvement of oil infrastructure sites that have been operated exclusively by Petroecuador since Texaco Petroleum ceased operating in 1990, are the sole property of Ecuador, and are currently in use and even being expanded by the state-owned oil company.
• Assessed more than a billion dollars in soil remediation for sites he never visited and grossly inflated every factor in the calculation to arrive at a suggested per-pit remediation cost that is 25 times greater than the current costs for Petroecuador’s own remediation program, PEPDA.
• Assessed $428 million to improve the potable water system in the Oriente and $3.2 billion for groundwater remediation even though he did not take any samples of streams, rivers, municipal water sources or drinking water wells, did nothing to assess whether other factors (such as fecal contamination) were contributing to health problems, and states in his own report that he did not have enough data to develop a groundwater remediation plan.
• Calls for $320 million for the creation of an animal husbandry farm to raise and release wild animals for indigenous people to hunt, demonstrating the absurd degree to which he ignored the limitations on his mandate.
• Has refused to answer questions about his methodology, identify additional team members and explain their responsibilities and contributions, or produce supporting documentation, specifically with regard to the survey that supports his cancer-related damage assessment.

Further compounding his unscientific methods and the substantive errors in his report, Cabrera’s work was far from independent. Cabrera’s reports read more like an advocacy piece for the plaintiffs than a competent, impartial assessment of the evidence. A number of indicators suggest that Cabrera worked closely with the plaintiffs’ lawyers to prepare his report:

• Received payments of at least $200,000 for his work from Selva Viva, an Ecuadorian company that serves as the financial and logistical intermediary for the Amazon Defense Front. The checks were apparently signed by Luis Yanza, legal coordinator for the Amazon Defense Front and general manager of Selva Viva.
• Worked closely with members of the Amazon Defense Front during his field work, as demonstrated by photographs and video taken at the time, while Chevron observers were prevented from even observing Cabrera’s work.
• Copied sections of his supposedly independent report word-for-word from observations submitted to the court by the plaintiffs’ lawyers.

In his report, Cabrera absolves Petroecuador of any responsibility or remediation obligations associated with past or present oil operations. Instead, he exclusively attributes pollution in the Amazon region of Ecuador to Texaco Petroleum and even concludes that Chevron should buy hundreds of millions of dollars of new equipment for Petroecuador.

• Chevron recently revealed new information that Cabrera holds a substantial interest in a company that stands to gain financially from any judgment against the company. Cabrera knowingly hid his business relationship with this company.
• Public records show Cabrera is co-founder, general manager, and legal representative of an oilfield remediation company, CAMPET, which is registered to perform oilfield remediation services for Petroecuador.
• Not only did Cabrera hide his financial interests in the remediation company, he affirmatively represented to the court that he did not have any impediment or conflict that would affect his performance as an “independent” court-appointed witness. Moreover, Cabrera knowingly omitted and misrepresented his interests in CAMPET in his submissions to the court. In fact, Cabrera represents the CAMPET address and phone number on his resume as his place of business, but makes absolutely no disclosure about the company or his role as founder, general manager, and legal representative of the company. Finally, Cabrera further misled the court by accepting his appointment, which required an explicit acknowledgment of his duties to the court as an impartial analyst—something Cabrera could not have done in good faith, given his conflicting interests.

“[We] then received representatives of the Amazon Defense Front who have been for decades against ChevronTexaco and now have all the support of the national government. This is a legal problem, but they know they can count on the support given by the national government.”

Since assuming office in January 2007, President Correa has consolidated his power over all of Ecuador, including its political, financial, and media institutions:

• Consolidated political power when the Constituent Assembly, elected to draft a new constitution and dominated by Correa’s Alianza PAIS party, dissolved the National Congress and announced that its decisions were superior to any other rule in the judicial system.
• Threatened that “[j]udges and tribunals that process any action contrary to the decisions of the Constituent Assembly shall be dismissed from their post and subject to corresponding prosecution” and has since made clear that this threat extends to judges that rule against state interests.
• Claims that the “Executive Branch [can] exert pressure on the Judicial Branch to get the courts to “respond to the needs of the country” and that, as President, he “is not only the leader of the Executive Branch [but] of the entire State and the State is made up of the Executive, the Legislative, and the Judicial branches.”
• Cancelled foreign corporations’ contracts and seized their assets while simultaneously foreclosing their possibilities for a fair resolution of the disputes by rejecting the jurisdiction of international arbitral tribunals and refusing to comply with their orders.
• Reneged on Ecuador’s contractual obligations to service more than $3 billion in foreign debt despite having the means to pay it, while apparently orchestrating the Government’s repurchase of that debt at a significant discount once prices plummeted as a result of the announced default.
• Took steps to control the media, which Correa considers “a corrupt instrument of the oligarchy” and the main “enemy of change,” including threatening to revoke hundreds of radio and television licenses because of alleged “irregularities.”

There is evidence going back to previous administrations that the lawyers representing the Lago Agrio plaintiffs and the Government of Ecuador are working together to ensure a verdict against Chevron in the Lago Agrio lawsuit. The Correa Administration has maintained and furthered this arrangement, converting the lawsuit against Chevron from a legal matter to a political cause.

The Government of Ecuador could benefit greatly from a decision against Chevron, which would absolve it of its own remediation obligations and result in the transfer of an enormous amount of money to Ecuador (the proposed $27 billion judgment would represent half of Ecuador’s GDP). Politically, the Lago Agrio case diverts attention and responsibility for environmental conditions away from Petroecuador and allows Correa to blame all social ills in the Oriente on Chevron.

• Publicly prejudged Chevron’s liability in the ongoing case in Lago Agrio, even taking the unfounded and highly offensive position that Texaco Petroleum was guilty of “crimes against humanity.” Ecuador’s Attorney General confirmed that “the Correa administration’s position in this case is clear: ‘The pollution is [sic] result of Chevron’s actions and not of Petroecuador.’”
• Threw the support of the Government behind the Lago Agrio plaintiffs, even offering them “assistance in gathering evidence” against Chevron. In April 2007, just months after assuming office, President Correa took a media tour of the Amazon accompanied by the plaintiffs’ lawyers and representatives, calling plaintiffs’ attorney Pablo Fajardo and Amazon Defense Front leader Luis Yanza “real heroes…who have fought for years for their people, their Amazon.” He has also repeatedly referred to Fajardo and Yanza in Ecuador’s national press as “our compañeros” (“comrades”) and his “dear friend[s].”
• Correa has called on Ecuador’s Prosecutor General to initiate criminal prosecution against the Chevron attorneys who signed the settlement and release agreements on behalf of Texaco Petroleum. Two previous Prosecutor Generals serving the Correa Administration, called for the criminal charges to be dismissed on three separate occasions. However, the next appointee, Washington Pesántez, then issued baseless indictments despite three earlier opinions that charges be dropped, without pointing to any new evidence, and notwithstanding his earlier opinion, as a District Prosecutor, that found no evidence to support the criminal charges and affirmed the recommendation to dismiss the criminal complaint.
• Saw his legal advisor, Alex Mera, and his sister Pierina implicated in a $3 million bribery scheme aimed at guaranteeing remediation contracts that would result from a verdict against Chevron in Lago Agrio by one of the scheme’s organizers, Patricio García, who stated that he was a political operative for the ruling Alianza PAIS party. García also stated during one of the videotaped meetings that executive-branch lawyers would be sent to Lago Agrio to help Judge Núñez (who was also implicated in the scheme) draft his opinion.
• Confirmed his alliance with the plaintiffs in the aftermath of disclosure of the bribery scheme, stating unequivocally “[o]f course I want our indigenous companions to win.” And as further proof of the Government’s control over the Lago Agrio process, despite repeated claims that the Government has no role in the litigation, Prosecutor General Washington Pesántez announced that he asked Judge Núñez to excuse himself from continuing in the process in order to “ensure that the ruling will not be delayed any longer” and so as not to allow Chevron “to avoid paying the compensation we believe is more than fair because it caused a lot of damage in our country.” Pesántez then confirmed the estimate that “90% [of any judgment against Chevron] would be delivered to the State for remediation and bio-remediation activities.”

“They look at individual cases of cancer and say it can not [sic] be traced back to the oil that was spilled by Chevron…It’s true that the exact correlation cannot be proved…”

Pablo Fajardo became the lead Ecuadorian lawyer on the case in February 2006. He is also active in the PR campaign against Chevron – appearing frequently in both Ecudorian and international press and participating in media events, including press conferences, rallies, and demonstrations.

• Accompanied President Correa on a media tour of the Amazon in 2007 just weeks after the president had offered “the National Government’s full support” to the Lago Agrio plaintiffs, including “assistance in gathering evidence” to be used against Chevron. Since then, Correa has repeatedly referred to Fajardo and Amazon Defense Front leader Luis Yanza as “our compañeros” (“comrades”), his “dear friend[s],” and “real heroes.”
• Is a member of Selva Viva, an Ecuadorian company that serves as the financial and logistical intermediary for the Amazon Defense Front.
• Claims his desire is to have environmental damage remediated, but, to date, has refused to take legal action against the government of Ecuador or state-run oil company, Petroecuador, for damages related to their well-documented record of environmental mismanagement in the Amazon, despite the fact that Petroecuador has been the sole operator and exclusive owner of the former Concession fields for almost 20 years.
• Opposed Petroecuador’s efforts to remediate pits, claiming such actions might compromise the lawsuit against Chevron. For example, Fajardo was quoted in an interview with La Hora on October 20, 2006 demanding that Petroecuador stop its remediation because “[t]he trial is being altered.”
• Implied that Texaco was involved in the murder of his brother, despite having filed a statement with the District Prosecutor at the time of his brother’s murder that makes no mention of Chevron or Texaco, but instead alleges that three local men who had a history with his brother were responsible for the murder.

“In my case, in 2004 when we were starting the case, one of my brothers was killed. I cannot say Texaco is to be blamed for this, and neither can I say the opposite. This was never investigated. There have been a lot of things, a lot of pressure and persecution.”

Patricio García was recently caught on videotape as part of a bribery scheme in which he represented himself as an official with Alianza PAIS, Ecuador’s ruling political party. The bribery plot – which involved solicitation of a $3 million payment in exchange for environmental remediation contracts to be awarded once a decision comes down against Chevron in the Lago Agrio lawsuit – was brought to Chevron’s attention by an Ecuadorian citizen who was pursuing business opportunities in Ecuador with a US business associate. García appears in videos of two separate meetings and makes clear in the second of the two that he “took over the reins” of the scheme.

• Described how the $3 million bribe would work, explaining that $1 million would go to “the presidency”; $500,000 would go to the president’s sister Pierina; $500,000 would go to the plaintiffs; and $1 million would go to the presiding judge, Juan Núñez, who García confirmed was in agreement with the scheme.
• Held two of the videotaped meetings at the Alianza PAIS offices in Quito, during which he spoke of his contacts with individuals in the most inner circles of the Correa administration, including the president’s sister, Pierina, and Correa’s legal advisor, Alex Mera. García also stated during one of the meetings that lawyers from Ecuador’s executive branch would be sent to Lago Agrio to help the judge draft his opinion.
• Provided, via e-mail, the details for a bank account in Galveston, Texas, where the bribe money was to be deposited.

Gustavo Larrea was manager of Rafael Correa’s presidential campaign in the 2006 elections and, once Correa assumed power, was widely regarded as one of President Correa’s most influential cabinet members. In Correa’s first administration, Larrea was appointed Minister of Government and was tasked with preparing the referendum that led to the election of the Constituent Assembly, used by President Correa to consolidate his control over all branches of Ecuador’s government. Later, Larrea became the Minister of Security, a post he gave up in the early weeks of Correa’s second administration so he could run for the National Assembly on the Alianza PAIS ticket. Larrea’s congressional hopes were dashed shortly thereafter, however, when news reports broke linking his office to the Colombian terrorist group, Revolutionary Armed Forces of Colombia (FARC). Larrea himself has acknowledged meeting with Raúl Reyes, a FARC leader.

• Filed in July 2006, together with several other prominent Ecuadorian jurists, an amicus curiae brief urging the Lago Agrio court to accept the plaintiffs’ request to abandon the judicial inspection phase of the trial after inspection results proved favorable to Chevron.
• A few months later, and just days after President Correa assumed office, the court reversed its previous decisions and allowed the plaintiffs to terminate the judicial inspection process to which they previously agreed, effectively terminating the judicial inspection phase of the trial. This led to the appointment of Richard Cabrera, a mining engineer with no training or experience in oil-field remediation, to carry out the damage and causation assessment. Cabrera subsequently issued a pair of fraudulent reports that reached far beyond his mandate to urge the court to impose over $27 billion in damages against Chevron.
• Sent to Washington DC by President Correa in August 2008 to lobby the US Congress concerning extension of Ecuador’s ATPA (Andean Trade Promotion Act) trade preferences. Chevron has encouraged the US government to preserve Ecuador’s ATPA preferences but on the condition that Ecuador uphold its contracts with US investors. Chevron contends that Ecuador has taken numerous steps to repudiate or nullify the 1995 Settlement and 1998 Release Ecuador signed with Texaco Petroleum that release Chevron of any liability in the Lago Agrio trial.

Judge Juan Núñez is the current President of the Provincial Court of Lago Agrio, and it was expected that he would issue a ruling in the lawsuit against Chevron sometime in late 2009 or early 2010. However, Núñez excused himself from presiding over the case at the end of September 2009 after he was implicated in a bribery scheme linked to the Lago Agrio litigation.

The bribery scheme involved solicitation of a $3 million payment in exchange for environmental remediation contracts to be awarded once a decision comes down against Chevron in the Lago Agrio lawsuit. The bribery plot was brought to Chevron’s attention by an Ecuadorian citizen who was pursuing business opportunities in Ecuador with a US business associate. The two men were told that of the $3 million, $1 million would go to Núñez. In meetings with Núñez, as demonstrated by the videos, Núñez assured the two businessmen that the decision against Chevron was a done deal.

• Slated to receive $1 million of the bribe money, according to Núñez’s co-conspirators, including Patricio García who represented himself to be an official of President Correa’s ruling Alianza PAIS party.
• Participated in two meetings, both of which were videotaped, during which he explained that the verdict would be against Chevron, that the final damage amount could be more or less than the $27 billion recommended by Richard Cabrera, and that appeals by the company would be a mere formality.
• Confirmed that the Government of Ecuador, not the Lago Agrio plaintiffs, will receive the funds earmarked for remediation work that Chevron will be ordered to pay.
• Offered conclusions about the Lago Agrio trial to third parties unrelated to the proceedings, at a time when the evidentiary phase had not even concluded. This was in addition to similar indiscretions demonstrating Núñez’s bias, such as his numerous public statements to the Ecuador and international media expressing sympathy for the plaintiffs in the case, describing the lawsuit as a David vs. Goliath struggle, and prejudging Chevron’s guilt with statements about the obvious contamination in the Oriente region.
• Repeatedly rejected any motions of consequence presented by Chevron and ruled in favor of the plaintiffs without regard for the facts or the law. Núñez has also made numerous procedural rulings clearly aimed at expediting the trial at the expense of Chevron’s due process rights and its right of defense. In particular, and in violation of existing norms, he has refused to investigate Chevron’s claim that court-appointed expert Richard Cabrera’s reports, in which he recommended that Chevron be required to pay over $27 billion in damages, are riddled with “essential errors” that should result in the reports being rejected altogether.

Petroecuador, Ecuador’s state-owned oil company, was the majority partner in the Consortium with Texaco Petroleum. Today, Petroecuador still owns and operates the oilfields in the former Concession area as well as other fields in the Amazon. Petroecuador took over Consortium operations in 1990 and became the sole owner of the Consortium fields and installations when Texaco Petroleum’s concession contract expired in 1992. Since that time, Petroecuador has developed a widely acknowledged record of operational and environmental mismanagement, due to, among other things, widespread corruption, a lack of investment in or proper maintenance of its equipment and installations, and numerous spills.

• Bears responsibility for more than 1,400 spills between 2000 and 2008 alone.
• Spilled over 4.4 million gallons of oil at oil production and storage sites and along its various pipelines.
• Drilled more wells in the concession area than Texaco Petroleum did when it was in charge of Consortium operations.
• Dug more than 270 pits in the last 3 years alone.
• Admitted it needs to clean up 370 pits in the former Concession area that were its responsibility based on the remediation agreement with Texaco Petroleum.

Despite Petroecuador’s dismal environmental record, neither the Amazon Defense Front nor Amazon Watch has made Petroecuador a focus of their Oriente clean-up campaign, and the plaintiffs and their lawyers have never pursued any legal action against the state oil company. To the contrary, Petroecuador stands to benefit, directly and indirectly, more than any other Ecuadorian entity if the cost for widespread remediation is shifted to Chevron by:

• Forcing Chevron to pay for remediation work that is clearly the responsibility and obligation of Petroecuador, both under the Settlement and Release entered into by Texaco Petroleum, the Government of Ecuador and Petroecuador, and as the sole owner and operator of the former Consortium fields for the past two decades.
• Requiring Chevron to refurbish and upgrade Petroecuador’s deteriorating infrastructure even though Texaco Petroleum transferred all of that property to Petroecuador in good operating condition almost 20 years ago and has had no say in any of Petroecuador’s operational decisions since 1992.

“Texaco, in its own way, worked on the remediation of the respective pits; this was 33% of the total. However, for over 30 years, Petroecuador had not done anything regarding the ones that were of the state owned company’s responsibility to remediate.”

Selva Viva is an Ecuadorian company that serves as the financial and logistical intermediary for the Amazon Defense Front. The company was founded in 2004, and the original shareholders included Alberto Wray, who at that time was one of the lead attorneys in the lawsuit against Chevron. It is not clear what the current legal status of this company is; in a September 2009 review of the Ecuador business registry, Selva Viva was classified as “inactive.”

• Selva Viva paid at least $200,000 to Richard Cabrera, a mining engineer with no experience or training in oil field remediation work, who was appointed by the Ecuadorian court to assess the extent and cause of damages, if any, from oil operations in the former Concession area and to suggest appropriate remediation. Cabrera was directed by the court to produce an independent assessment.
• The checks to Cabrera were apparently signed by Luis Yanza, general manager of Selva Viva and legal coordinator for the Amazon Defense Coalition, the beneficiary of the lawsuit. Luis Yanza, the Amazon Defense Coalition’s legal coordinator, appears in company records as Selva Viva’s general manager.
• Steven Donziger, the lead US lawyer representing the Lago Agrio plaintiffs, appears in company records as the president of Selva Viva.
• Selva Viva received funds to pay for the plaintiffs’ data collection from Joe Kohn, of Philadelphia trial law firm Kohn Swift & Graf PC, according to an affidavit by David Russell, president of Global Environmental Operations, Inc. This affidavit was filed in a labor suit in Ecuador (case number 34-06 before the Fifth Labor Judge for Pichincha), brought against Steven Donziger by Edison Camino, once General Manager of the company and one of the Lago Agrio plaintiffs’ judicial-inspection experts.

• As noted above, Alberto Wray was one of Selva Viva’s original shareholders. During his tenure as the Lago Agrio plaintiffs’ lawyer, Wray communicated with Ecuador’s Attorney General in an attempt to nullify the 1998 Final Release granted by the government to Texaco Petroleum Company. In an email exchange between representatives of the plaintiffs and the Attorney General’s office, Wray wrote “If at some point we want the Government and the Attorney General to play for our side, we must give them some ability to maneuver.” Martha Escobar, an attorney in the Attorney General’s Office, responded:

  “I explained that the Attorney General’s Office and all of us working on the State’s defense were searching for a way to nullify or undermine the value of the remediation contract and the final acta and that our greatest difficulty lay in the time that has passed.”

Luis Yanza is a community activist with the Amazon Defense Front and appears in Ecuador’s business-registry records as general manager of Selva Viva, an Ecuadorian company that serves as the financial and logistical intermediary for the Amazon Defense Front. In 2008, Selva Viva paid at least $200,000 to Richard Cabrera, the court-appointed mining engineer who recommended that Chevron pay over $27 billion in damages in the Lago Agrio lawsuit.

• Accompanied President Correa on a media tour of the Amazon in 2007 just weeks after the president had offered “the National Government’s full support” to the Lago Agrio plaintiffs, including “assistance in gathering evidence” to be used against Chevron. Since then, Correa has repeatedly referred to Yanza and plaintiffs’ lawyer Fajardo as “our compañeros” (“comrades”), his “dear friend[s],” and “real heroes.”
• Yanza, together with the plaintiffs’ lawyers, representatives of indigenous groups that live in the Oriente region, members of Amazon Watch, a San Francisco-based activist group, and other supporters of the plaintiffs, makes regular appearances at Chevron’s annual shareholder meetings, in an effort to exert pressure on Chevron’s stockholders and board of directors.