Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Ecuador vs. Chevron: Evidence of a Fix, or Video Entrapment?

By Stephan Küffner, TIME Magazine
3 September 2009

The lawsuit, the largest of its kind, has lasted 16 years, pitting U.S. oil giant Chevron against residents in the Amazon jungle of Ecuador. They accuse the company of massive petro-contamination of their communities in the late 20th century and seek $27 billion in damages, an amount that has turned nervous corporate heads worldwide.

But now, three months before a verdict is expected to be handed down, Chevron is doing the accusing, filing its own action with Ecuador's prosecutor general. It charges that the Ecuadorian judge in the case should be removed because, it claims, secretly recorded videos captured him admitting that he has already decided that Chevron is guilty — and they allegedly implicate him in a scheme to snag $3 million in bribes from firms hoping to win oil-cleanup contracts after his ruling. Also implicated are high-ranking officials in the government of leftist Ecuadorian President Rafael Correa, an outspoken critic of the U.S.

The videos, recorded in June, show Judge Juan Nuñez in meetings with two men, an American and an Ecuadorian, who are allegedly soliciting cleanup deals. Nuñez appears to be merely explaining to them the judicial process involved in the Chevron suit. But at one point he is asked by the American, businessman Wayne Hansen, if Chevron is el culpable — the guilty party. Nuñez, off camera, answers, "Sí, señor" — "Yes, sir." Says Charles James, executive vice president of Chevron, which posted the videos on the Internet on Aug. 31: "No judge who has participated in meetings of the type shown on these tapes could possibly deliver a legitimate decision."

It is certainly questionable conduct for Nuñez or any judge to be discussing the landmark case with Hansen and the Ecuadorian, Diego Borja, in such cavalier fashion. In a newspaper interview, Nuñez denied that he told Hansen a predetermined verdict; his supporters say it's unclear in the videos, especially given Hansen's tortured Spanish, what exactly Nuñez is responding to. "This is a total trap on the part of Chevron," Nuñez said in an interview with Ecuadorian network Teleamazonas on Sept. 1. He acknowledged the meetings but said the secret videotaping was a setup, and he insisted that bribes were never discussed.

Although Chevron insists that it had no part in the secret videotaping, it turns out that Borja has worked for the company as a logistics contractor. "This entire episode reeks of a Nixon-style dirty-tricks operation, and Chevron's fingerprints are all over it," says Steven Donziger, a New York lawyer and adviser to the Ecuador plaintiffs. In his TV interview, Nuñez said that if Chevron "sent an employee" — the contractor Borja — that may mean a crime has been committed, since the law forbids him from meeting the parties in the lawsuit.

Nuñez is not present at another meeting in the videos in which men claiming to be influential members of Correa's ruling Alianza País Party lay out a brazen bribery conspiracy. They tell Hansen and Borja that $3 million in payoffs will be required to land a cleanup contract, divided evenly among Nuñez, Correa's office (including, said one of the men, the President's sister) and the plaintiffs. The Chevron complaint also fingered Correa's chief legal adviser, Alexis Mera, in the scheme. At a press conference on Sept. 1, Mera denied being involved and suggested that Chevron was simply trying to divert attention away from a case it knows it will probably lose. "The government won't succumb to these types of provocations," he said.

The Correa administration said Tuesday that while it had thus far seen no evidence of government corruption in the videos, it would investigate the matter "thoroughly, aggressively and fairly." On Wednesday, Ecuadorian justice officials announced they were opening an investigation into the possible government corruption, as well as whether the videotaping had violated laws. In any event, the scandal promises to delay the completion of a trial that has already spanned two decades and two continents. It began in the early 1990s in New York, after settlers and indigenous tribes in the Amazon oil towns of Coca, Lago Agrio and Shushufindi accused Texaco — which was bought by Chevron in 2002 — of recklessly dumping crude and wastewater into their lakes and rivers, seriously damaging the public health and livelihoods of tens of thousands of people. A court-appointed expert estimated the total damage to be a remarkable $27 billion, a figure Chevron says is baseless.

Ironically, Chevron in 2003 requested that the trial be moved to Lago Agrio, believing the conservative Ecuadorian government at the time would be more sympathetic. Indeed, in 1998 the government had declared that Texaco's $40 million cleanup of the sullied Amazon area was satisfactory. But three years later, Correa was elected, and Chevron has complained ever since that his administration has interfered in the case and prodded the judges overseeing it — including Nuñez, who took over last year — toward the plaintiffs.

Chevron executives have been under increasing pressure from shareholders who are fearful of an unfavorable verdict. But the scandal probably has the Correa administration chafing as well, especially since a tainted legal system could compromise its efforts to win most-favored-nation trade status from the U.S. Congress this year.

Either way, says Chevron spokesman Kent Anderson, Nuñez "needs to [recuse himself], and his past rulings need to be annulled." The plaintiff's lawyer, Pablo Fajardo, says the videos are an entrapment of Nuñez and show Chevron attempting to "undermine the trial process so the company can avoid paying a judgment." Says Donziger: "The bottom line [remains] that Chevron is responsible for wrecking Ecuador's rain forest. Nothing Chevron has presented in these videos changes these underlying facts one bit." Chevron's bet is that the videos will at least change international opinion about the court that's weighing those facts.