Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Chevron's $1 Billion Bribe Offer to Quash Legal Case Rocks Ecuador

Company Officials Not Denying That It Tried To Sabotage Historic Environmental Litigation

Amazon Defense Coalition

Amazon Defense Coalition
23 December 2011 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109

Quito, Ecuador – Chevron is remaining silent in the face of mounting evidence that the company tried to bribe Ecuador's government to quash an $18 billion environmental judgment and that a Chevron official ordered the destruction of documents as part of a broad scheme to duck responsibility for causing extensive pollution in the Amazon rainforest, according to documents and news reports.

On Thursday, Chevron spokesman James Craig refused to address the issue of the bribe in an interview with The Miami Herald, which reported extensively on evidence that Ecuadorian government official Ivonne Baki was floating a plan where Chevron would pay $500 million under the guise of a "donation" to an environmental project and another $500 million for environmental clean-up. The money would be given in exchange for Ecuador's government agreeing to interfere with the country's independent courts and illegally quash the 18-year litigation.

The Chevron bribe offer was first outlined in a blog published Monday by the Huffington Post.

Baki directs Ecuador's internationally-celebrated Yasuni project, which seeks to keep more than one billion barrels of crude oil permanently in the ground in a biodiverse area of Ecuador's Amazon rainforest in exchange for payments to Ecuador's government of $350 million annually for ten years. The money would come from governments and international donors, but the Miami Herald article indicated only $2.1 million in actual cash had been raised.

Ecuador President Rafael Correa set December 31 as the deadline for the government to obtain a down payment of $100 million for the Yasuni project. Baki has been scrambling to meet the deadline and appears to have worked with Chevron to direct money into the project, according to the Huffington Post as well as information from sources in Ecuador's government. See here and here.

In a statement Baki denied having contact with Chevron, but Chevron's own legal filings in a related litigation in U.S. federal court outline a series of meetings between Baki and Chevron lawyers related to the case. See here and here.

Separately, government officials in Ecuador who wished to remain anonymous have indicated to lawyers for the plaintiffs that Baki was floating the offer on behalf of Chevron in an effort to end the case.

The latest news about Baki has created a media firestorm in Ecuador, with unflattering articles about her role, appearing here, here and here.

There is no evidence anybody with authority in Ecuador's government considered accepting the proposal, which would have violated the legal rights of the 30,000 plaintiffs and run afoul of the country's Constitution which guarantees the independence of the judiciary, said Pablo Fajardo, the lead lawyer for the communities that won the judgment against the oil giant.

"Chevron and Baki apparently think Ecuador is a banana republic where officials would be willing to sacrifice the rights of their own citizens for a small bribe," said Fajardo. "Chevron just doesn't get that in the modern world it cannot bribe government officials and get away with it."

Separately, a memorandum from Texaco (Chevron's predecessor company in Ecuador) from 1972 ordered that all reports related to oil spills "are to be removed from the Field and Division offices and destroyed." The memo was disclosed via a U.S. discovery action; Chevron has not denied its authenticity nor disavowed its contents.

The memo ordering the destruction of documents was written by R.C. Shields, at the time the director of production in Latin American for Texaco and Chairman of the company's Ecuador subsidiary. The memo directs Chevron personnel to report only oil spills that are "major events" which are defined as those that "attract the attention of press and/or regulatory authorities."

The directive also orders that no reports are to be kept on a "routine basis."

Texaco reportedly caused hundreds of oil spills in Ecuador, many of which were "remediated" by setting them on fire, according to the book Amazon Crude, which was published in 1989 and which documented Texaco's substandard operational practices. The company also has admitted to pouring sludge from the waste pits along dirt roads.

The Shields memo ordering the destruction of documents infuriated members of the legal team representing 30,000 Amazon residents who are suing the oil giant.

"This memo is a vivid illustration of the culture of deceit that characterizes Chevron's destruction of Ecuador's Amazon over a period of decades," said Fajardo, the lead Ecuadorian lawyer. "Deception remains the operating principle for Chevron in Ecuador even today as the company continues to flout its legal obligations to remediate toxic pollution that threatens thousands of innocent lives."

Karen Hinton, the U.S. spokesperson for the Ecuadorians, said the memo was part of a "pattern of corrupt activities" by the company that include a fraudulent remediation in the 1990s, the fabrication of scientific evidence, attempted entrapment of a trial judge and threats to put judges in jail if they didn't rule in the company's favor .

"Chevron acted like the Mafia in Ecuador," she added. "This repugnant memo and Baki's bribe attempt are but small pieces of the company's long running scheme to defraud Ecuador's government and its people.

"If Chevron's shareholders understood the depth of the depravity to which the company has sunk in Ecuador they would use pitchforks to oust the members of the company's Board of Directors," she added.

From 1964 to 1990, Chevron used the Texaco brand to operate a large concession in Ecuador's Amazon region that included an extensive network of pipelines and hundreds of wells and separation stations. In February, an Ecuador court found Chevron liable for dumping billions of gallons of toxic waste, decimating indigenous groups and causing a dramatic increase in cancer rates.

The court set damages at $18 billion. The impact of the disaster in Ecuador – which has haunted the local population for almost fifty years – dwarfs that of the BP spill in the Gulf of Mexico, according to experts.