Key Witness Testifies that Chevron Paid Bribes, Switched Soil Samples in $27b Ecuador Lawsui
Communities Urge Ecuadorian Prosecutors to Interview Chevron Contractor Diego Borja over Massive Fraud by Oil Giant
Amazon Defense Coalition
11 June 2010 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
Quito, Ecuador – A Chevron contractor bragged that he participated in a wide-ranging fraud by Chevron to pay bribes, fake court-ordered soil samples and doctor evidence to cover up the company's culpability in a $27.3 billion environmental lawsuit, according to sworn testimony from a key government witness.
Santiago Escobar, the whistleblower who recently released taped conversations with long-time Chevron contractor and friend Diego Borja, testified on June 8 before the Ecuadorian equivalent of a Grand Jury that Borja admitted that test results submitted by Chevron to the court were doctored. Escobar and Borja, both now in their 30s, are childhood friends from Quito.
Escobar appeared with his father at a press conference in Quito on Wednesday to say he had received a death threat contained in an email sent the day he testified. The prosecutor's office is investigating an incident in 2009 where Borja secretly taped the trial judge overseeing the case – an act that the plaintiffs charged was part of Chevron's "dirty tricks" operation to undermine a trial it is losing.
Escobar said that Borja told him that, during dozens of court-supervised inspections of Chevron well sites that took place from 2004 to 2008, he and technicians on Chevron's trial team conspired to submit fake samples. Borja told his friend that the Chevron team would lift soil samples from contaminated well sites and put them in bottles. They would then drive 10 to 30 kilometers away from the sites and replace the bottles with clean soil taken from areas that had nothing to do with oil production.
Chevron's technical team would then turn in the clean samples to a laboratory with markings indicating they had been lifted from the contaminated well sites, Escobar said.
"If true, this testimony is powerful proof of Chevron's ongoing fraud in the Ecuador trial – fraud that appears to have been orchestrated by Chevron's legal team given that Borja was paid by that legal team and worked under its control," said Steven Donziger, an American legal advisor to dozens of indigenous and farmer communities suing the oil giant.
"The kind of scientific fraud, if committed by Chevron, would be the equivalent of BP taking water samples in the Indian Ocean to determine if the Gulf of Mexico is being polluted," Donziger said.
Chevron is accused in the lawsuit of dumping more than 18.5 billion gallons of toxic waste directly into the rainforest, abandoning more than 900 unlined toxic waste pits, and leaving a legacy of poisoned air and water that has led to an outbreak of cancer and the decimation of indigenous groups.
The potential liability has been a major irritant to Chevron for years, threatening to consume 20% of its market value and prompting new CEO John Watson to order the arrest of five critics at the company's annual meeting last month. Watson himself has been embroiled in charges he did not perform adequate due diligence when Chevron bought Texaco in 2001.
Experts estimate that the amount of oil waste deliberately discharged by Chevron to cut costs when it ran an oil concession in Ecuador surpasses the BP spill by at least ten times. An area of rainforest roughly the size of Rhode Island and home to five indigenous groups has been poisoned, according to the lawsuit.
According to Escobar's testimony, Borja said he was involved in a series of "clandestine operations" on behalf of Chevron to pay bribes, manipulate the court and undermine the trial. One bribe was paid in 2005 to Ecuadorian military officials to produce a false report that alleged a security "threat" to Chevron lawyers.
That report was then presented by Chevron's lawyers to the trial judge, who immediately used it as a basis to suspend a critical judicial inspection of Chevron's Guanta well site where indigenous Cofan leaders were set to testify. Several international media outlets, including The New York Times and the Los Angeles Times, were in the Amazon to cover the inspection as was Chevron's chief American lawyer overseeing the trial, Ricardo Reis Veiga.
An investigation by Ecuador's high military command later revealed the security threat was fabricated and the report was false, and sanctioned the local base commander. During the investigation, it was disclosed that Chevron had signed a private contract with the base commander to pay him a monthly fee without revealing it to the trial court; uniformed and armed soldiers from the same base were often seen carrying equipment for the Chevron lawyers during the trial.
Borja also told Escobar that he had arranged the "biggest business deal of his life" and that he had received a "ton of money" for his actions on behalf of Chevron in undermining the lawsuit. Chevron has admitted paying Borja a large salary and moving him and his family to a luxury house in California, where he cannot be questioned by Ecuadorian investigators.
Borja has refused to answer demands from the Ecuadorian government that he testify regarding his role in Chevron's scam. He is being represented by a prominent Bay Area criminal defense attorney Chris Arguedes, whose fees are being paid by Chevron.
"It is now clear that what the plaintiffs have long alleged is true: Chevron has systematically lied, falsified scientific testing results, and engaged in malfeasance to try to undermine the trial because it knows that the actual evidence shows the extent of the contamination in the region," said Pablo Fajardo, the lead Ecuadorian attorney for the plaintiffs.
"Borja is clearly at the center of a massive fraud. If he refuses to return to Ecuador, he should be extradited to answer the critical questions about the fraud being committed by Chevron's legal team," Fajardo said. "Chevron needs to stop hiding Borja and make him available to the investigating authorities."
Escobar was ordered to testify in Ecuador after he provided over six hours of audio recordings and more than 25 pages of chat transcripts of conversations between Borja and himself. Escobar said he made the recordings because he was disgusted that Borja was accepting money to try to undermine Ecuador's justice system.
At one point in the recordings, Borja is heard laughing and says "crime does pay" before detailing that Chevron is paying $6,000 a month in rent for his large home with a swimming pool that abuts a golf course in a gated community near Chevron's headquarters in San Ramon.
On the audiotapes, Borja told Escobar that Chevron hired him to create four dummy companies so his work would appear "independent." He went on to state that he was paid by Chevron to collect samples from contaminated sites while working Chevron's supposedly independent testing laboratory for the trial, Severn Trent Laboratory (STL), at the same time.
On those recordings, Borja indicated that he and Reis Veiga lied to gain entry into the independent laboratory that was processing the soil and water samples for the plaintiffs during the trial. Reis Veiga, who works for Chevron in Miami, was indicted in Ecuador in 2008 for his part in a fraud connected to a 1995-98 sham remediation carried out by the company.
More information on Borja and the secret recordings can be found here.