Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Chevron Trying to Suppress Expert Report that Undermines Company's Star Witness in Ecuador Pollution Trial

Hinton Communications
Contact: Karen Hinton at +1.703.798.3109

New York, NY – As its much-vaunted racketeering verdict over a $9.5 billion Ecuador liability faces likely reversal, Chevron is now trying to suppress a new expert report that appears to provide yet more evidence that the oil giant's star witness was corrupt and lied to the U.S. judge who presided over the racketeering case.

The Chevron witness, Alberto Guerra, is a former Ecuador judge who admitted he accepted bribes while serving on the bench in his native country. In exchange for his testimony in U.S. federal court that lawyers for the villagers bribed trial judge Nicolas Zambrano in Ecuador to rule against Chevron – a claim the villagers vigorously contest – Chevron paid Guerra more than $2 million in cash and benefits and relocated him and his extended family to the U.S. Chevron also provided Guerra and family members with a housing allowance, car, medical care, monthly stipends, and an immigration lawyer.

Chevron lawyers also spent at least 53 days with Guerra to rehearse his testimony before putting him on the stand to testify about the supposed bribe in a controversial bench trial before Judge Lewis A. Kaplan. Evidence also shows that Guerra changed his story several times as he was paid more money by Chevron. (For background on the many flaws with Guerra's testimony, see here and here.)

The existence of a new report about Guerra emerged in a legal brief filed in a related dispute between the government of Ecuador and Chevron that is being heard in secret by a private investor arbitration panel. That brief, available here, redacts long sections (for example, see pp. 32-40) describing details of an apparent scientific analysis that proves Guerra's story of a purported bribe "has been shown to be false," according to lawyers for Ecuador's government.

Lawyers for the villagers believe, based on information from persons familiar with its content, that the report concluded that Guerra lied about information he claimed was on his computer and Judge Zambrano's computer after a technical analysis, said Steven Donziger, the U.S. legal advisor to the Ecuadorian communities and the primary target of Chevron's RICO case.

The redactions in the legal brief appear to be the result of an undisclosed agreement between lawyers for Chevron and Ecuador's government. Chevron is using the private arbitration action to try to shift its $9.5 billion liability to Ecuador's government and obtain what the villagers allege is a taxpayer-funded bailout of its pollution problem.

"Claimants (Chevron) are now in their third decade of litigation in which they seek to avoid responsibility for the degradation of the Ecuadorian Amazon," lawyers from the American firm Winston & Strawn wrote in the brief, available here. "The thousands of sample results, the scores of judicial site inspections, the dozens of expert reports, and the vast evidentiary record ... convincingly demonstrate their culpability."

For the last several years, Chevron consistently tried to block the release of information about its own corruption and misdeeds in Ecuador – including internal company videos that show Chevron technicians trying to hide extensive soil contamination from the Ecuador court. Judge Kaplan --r epeatedly criticized for favoring the oil giant during the racketeering case – had granted Chevron a broad confidentiality order to prevent most of its embarrassing documents from being made public.

Lawyers for the Ecuadorians called on Chevron and the government of Ecuador to release the full contents of the legal brief and the forensic report so the information can be considered by the federal appellate court hearing their challenge to Judge Kaplan's decision. Courts in Canada, Brazil, and Argentina that are being asked to enforce the Ecuador judgment against Chevron's assets also will be interested in the information, said Pablo Fajardo, the lead lawyer for the Ecuadorian communities.

"Courts must not allow Chevron to mask damaging evidence that proves the company tried to tamper with witnesses and corrupt legal proceedings," said Fajardo.

"If Chevron does not release the report, the arbitrators should order its release," he added. "Secret proceedings do not serve the cause of justice and accountability."

Fajardo said he was formally requesting that his own country's government release the information.

Guerra has been the linchpin to Chevron's weakening racketeering case. During the trial, Judge Kaplan denied the defendants a jury and repeatedly made disparaging comments about Ecuador and the villagers, calling their case "a giant game".

During the discovery phase of the case, Chevron released a taped conversation indicating that one of its lawyers, Andres Rivero, tried to persuade Guerra to offer a $1 million payment on Chevron's behalf to the trial judge (Nicolas Zambrano) to recant his finding that the company was liable for extensive toxic contamination when it operated in Ecuador from 1964 to 1992.

In the meantime, Chevron's defense to the Ecuador liability award seems to be tottering. Judge Kaplan's decision is likely to be reversed on appeal, according to the latest briefing before a federal appellate court.

In his final brief in the case, lawyers for Donziger outlined eleven separate legal hurdles the oil company must clear to survive appeal. Among Chevron's problems: Kaplan lacked jurisdiction over the matter, he violated international law by trying to overrule Ecuador's Supreme Court, and that he let Chevron misuse the RICO law to illegally attack a foreign judgment.

"We are highly confident that Chevron's desperate attempt to use a controversial U.S. trial judge to try to overturn a Supreme Court decision of a foreign nation will be vacated in full," said Donziger, whose reply brief is available here.

The filing of the latest briefs comes as focus in the two-decade litigation is starting to shift to Canada, a country where the villagers are seeking to seize billions of dollars of Chevron's assets to force the company to comply with the Ecuador judgment. Canada's Supreme Court is scheduled to hear argument December 11 to determine whether the Ecuadorians can go forward with their action, which could lead to an enforcement trial in Toronto in 2015 where the entirety of the Ecuador judgment could be collected.

The Brazil Supreme Court is also hearing an enforcement action targeting all of Chevron's assets in that country.

An Ecuador court in 2011 found Chevron guilty of violating environmental laws after its lead executive admitted openly the company systematically dumped billions of gallons of toxic waste into the rainforest. Evidence before the Ecuador court demonstrated that the dumping decimated indigenous communities and caused an outbreak of cancer and other oil-related diseases. (For background on the cancer, see this summary and this photo essay by journalist Lou Dematteis.) The case against Chevron originally was filed in the U.S. in 1993, but it shifted to Ecuador in 2001 at Chevron's request after the company praised Ecuador's courts as the most appropriate forum to adjudicate the dispute.

For background explaining how Chevron made a mockery of justice in the Kaplan proceedings in U.S. federal court, see this document.

A diagram from Donziger's brief illustrating the 11 legal hurdles facing Chevron in the appeal of the racketeering is on pp. 3-4 of this brief. Donziger's 130-page opening appellate brief – which has a comprehensive summary of the facts of the case with cites to the evidentiary record – can be read here.

(A summary of the overwhelming evidence against Chevron relied on by the Ecuador court can be found here. A video explaining Chevron's human rights violations in Ecuador can be seen here. A recent article in Rolling Stone explaining Chevron's unethical litigation tactics can be read here. A profile in Vanity Fair of Fajardo, the winner of a CNN Hero award, can be read here.)>