Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Chevron's Story on Ecuador Bribery Scandal Continues to Unravel

News Outlets Expose Discrepancies in Chevron Account; Ecuador Calls for DOJ to Investigate Possible Criminal Violations

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Quito, Ecuador – Questions are mounting over Chevron's continued refusal to respond to new facts that suggest the company manufactured secret videos to undermine a civil trial in Ecuador where it faces a $27 billion environmental liability as Ecuador's top lawyer called on the U.S. Justice Department to investigate the oil giant for possible criminal violations, according to news reports and representatives of the plaintiffs.

(A complete list of Chevron's unanswered questions about the purported bribery scandal, compiled by the plaintiffs in the underlying civil case, is available here.)

The New York Times on Saturday exposed a number of discrepancies in Chevron's initial account of a purported $3 million bribery scheme that the company claimed implicates an Ecuador trial judge overseeing the civil lawsuit, which will determine whether the oil giant will be forced to pay for the clean-up of billions of gallons of toxic waste in the Amazon.

The article also reported that Ecuador's Attorney General, Washington Pesantez, has called on the Department of Justice (DOJ) to investigate Chevron for possible violations of the Foreign Corrupt Practices Act (FCPA), a U.S. law that prohibits American businesses from bribing foreign officials. Chevron's current management team already pled guilty to an FCPA violation in 2007 in Iraq, paying a $30 million fine.

"As more and more facts become available, it looks increasingly like Chevron's ‘smoking gun' videos could be part of an elaborate hoax designed by the company," said Andrew Woods, an American legal advisor to the 30,000 plaintiffs in the underlying civil lawsuit. Woods, in light of the new evidence, again called on the Department of Justice to conduct a full investigation and interview all key witnesses in the case that are located in the U.S. and out of reach of the government of Ecuador, which is conducting its own investigation.

Chevron's potential damages in Ecuador were determined by a court-appointed Special Master who reviewed more than 200,000 pages of evidence and tens of thousands of chemical sampling results, most provided by Chevron. The costs mostly cover remediation for the dumping of billions of gallons of toxic waste by Texaco (which Chevron bought in 2001) into Ecuador's Amazon from 1964 to 1990, along with compensation for 1,401 cancer deaths related to the contamination.

The trial against Chevron is taking place in Ecuador at the company's request after it filed 14 sworn affidavits praising Ecuador's judicial system, thereby convincing a U.S. judge to transfer the case to the South American nation. Once the Ecuador trial began in 2003 and produced evidence that pointed to Chevron's guilt, the company launched a campaign to discredit Ecuador' courts of which the video saga appears to be just the latest chapter, according to the plaintiffs.

Chevron is using three major public relations firms – Edelman Worldwide, Hill & Knowlton, and Sard – to try to discredit Ecuador's courts.

On August 31, just weeks before a final decision was expected in the trial, Chevron posted the videos on YouTube that showed one of its contractors trying to arrange a bribe with a person who claimed he was a member of Ecuador's ruling party to secure a clean-up contract in the event Chevron were to lose the trial. Chevron claimed that the contractor, Ecuadorian Diego Borja, and an American businessman, Wayne Hansen, shot the videos from micro-cameras hidden in a watch and a pen and that they made the recordings on their own.

However, media outlets that have begun to dig further into the facts surrounding the bribery scandal have raised several disturbing questions that seem to point to Chevron's deepening involvement in the planning and execution of the operation.

The New York Times noted that there is no apparent motivation for why Borja and Hansen would secretly record themselves engaging in conduct that exposes them to criminal liability if not to assist Chevron's attempt to discredit the judge in exchange for compensation or some other benefit, which in Borja's case involved, at a minimum, being relocated to the United States at Chevron's expense. The article also pointed out that Chevron's initial claim that the trial judge was implicated in a bribe was not clearly backed up by the contents of the tapes, which the judge says were edited in a manipulative fashion.

Hansen, the so-called American businessman, asserted in the tapes that he owned a remediation company but no evidence has been found to back up the claim. Hansen also was in Ecuador continuously for several weeks during the bribery scandal, and left the country the day after the final video was shot, according to immigration records.

"The lack of credibility of Hansen and Borja is becoming more apparent by the day as gaping holes threaten to swallow Chevron's entire story," said Karen Hinton, a representative of the plaintiffs.

Bloomberg News Service and other media outlets previously reported that many of Chevron's representations about the scheme were not fully disclosive or were outright misleading. For instance, Chevron never revealed that Borja worked for the oil giant as a field technician during the civil trial mere weeks before the filming of the secret videos and that the former Chevron contractor has an office in a small building where Chevron's local Ecuadorian legal team also maintains its offices. Nor did the company reveal that it had secured both men criminal lawyers and were paying their fees, apparently to ensure they were not questioned, said Hinton.

Similarly, Chevron's claim that Patricio Garcia (the Ecuadorian seen on the tapes discussing the bribe with Hansen and Borja) was a government official appears to be false. Garcia, according to several news accounts, is actually a car salesman and his name is not among the 350,000 registered on the voter rolls of Alianza Pais, the ruling political party in Ecuador. Garcia also has stated to media outlets in Ecuador that he met with Borja in Chevron's local law office and that he was entrapped by the company.

Some of the key unanswered questions about Chevron's role in the bribery scandal are:

  • What contacts did Borja and Hansen have with Chevron's lawyers in Ecuador and the United States in planning the secret video recordings?
  • How much has Chevron, or its local law office, paid Borja for his services?
  • Who paid Hansen's expenses when he was in Ecuador for several weeks to shoot the video recordings?
  • What was the involvement of Chevron's U.S.-based legal department in planning the videos, particularly the fourth taped meeting which by Chevron's admission occurred after it received the first three video recordings?
  • Why did Chevron ensure that Borja and Hansen are represented by criminal lawyers? What is the company's analysis of the criminal exposure faced by these individuals?
  • Why did Chevron ensure that Borja and Hansen were unavailable for questioning when the company released the videos on YouTube and said it would make all information public?
  • Why has Chevron refused to release the full recordings or explain how and who edited them?