Chevron in Ecuador

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Chevron's Star Witness in $9.5 Billion Ecuador Oil Pollution Claim Admits: "I Lied"

By Paul Paz y Miño, The Ecologist
28 October 2015

It was all going so well for Chevron – a New York court had ruled that a $9.5 billion judgment against it set by Ecuador's supreme court for massive pollution deep in the Amazon was corrupt and fraudulent. But then its star witness broke ranks and admitted, in another court, that he had lied, and the only bribes were coming from Chevron. Will Ecuador's pollution victims finally get justice?

In 2009, faced with a likely multi-billion dollar verdict against it for massive, deliberate pollution at Lago Agrio in the Ecuadorian Amazon with oil spills and oil production wastes, Chevron began fabricating an elaborate story of bribery, corruption and ghostwriting to strike back.

Sure enough, the lawsuit went against Chevron. On 14th February 2011, the Ecuadorian courts ordered the company to pay $9.5 billion dollars and to offer a public apology for the damage – failing which, the compensation would double. The ruling was upheld in January 2012 and in November 2013.

In the end, the company failed to apologise, and Ecuador's supreme court left the damages at $9.5 billion. But by then Chevron had fled Ecuador – and the problem was, how to collect the money. Ecuador resorted to the US federal courts in New York in its bid for justice.

Chevron had its story ready. It claimed everyone and everything against it was part of a scheme – the evidence, the contamination, the Ecuadorian villagers, all the environmental and human rights organizations – everyone.

The company spent millions to concoct its cover story. And it worked. In March 2014, New York federal judge Kaplan ruled that Chevron's conviction in Ecuador's courts was "fraudulent" – making the $9.5 billion uncollectable.

In his decision, based on violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, Kaplan found that the plaintiffs' lawyer, Steven Donziger, committed mail fraud, engaged in coercion, and paid bribes in order to win the judgment.

There was only one big problem: the verdict hinged upon the testimony of a completely non-credible witness – who has now admitted on the stand that he lied about it in exchange for payments from Chevron.

It all looked like a slam dunk

Back in 2009, someone at Chevron was probably jumping up and down exclaiming 'slam dunk!' The company had found someone they could buy who was willing to say what they needed to pull together their fabricated fraud story in Ecuador.

How did they 'find' him? Easy, he came to Chevron asking for a bribe to help Chevron get out of its massive legal problems in Ecuador. That should have been a red flag, but fueled by their own arrogance and legal hubris Chevron moved forward with Guerra as their star witness.

It turns out that rather than a Bond-esque spy thriller with intrigue and a sophisticated plot, the story for Chevron is more like 'Harold and Kumar go to White Castle'.

Alberto Guerra, who we explained before is a corrupt ex-judge, claimed that the legal team for the Ecuadorians offered him a bribe to ghostwrite the judgment against Chevron. Guerra said he asked Chevron for a bribe first, and they turned him down, so then he went to the Ecuadorians.

Despite the fact that Guerra was acknowledged by judge Kaplan himself to be less than credible, his testimony was allowed to stand. And yes, this is the same judge that forbade evidence of actual contamination.

The argument was that Guerra's testimony fit the 'circumstantial evidence' against the Ecuadorian legal team. Except that evidence has also evaporated.

The lies unravelled as Chevron tried to sue Ecuador in a trade tribunal

The sweetest irony is how this has all come about. Chevron brought a separate case to the International Arbitration Tribunal in The Hague under the US-Ecuador Bilateral Investment Treaty. In obvious forum shopping (which has been called out by the Second Circuit Court of Appeals) they were hoping to pin their financial liability on the Ecuadorian tax payer.

Only their entire effort is backfiring – like when that body recently denied Chevron's claim that an agreement with the government of Ecuador released them from civil liability. Much like the actual evidence it presented in Ecuador, Chevron is hanging itself with the very action it hoped to use to escape justice.

Guerra claimed that the bribe of $300,000 he was offered (at one point he also said it was $500,000) was to work with the presiding judge Zambrano to ghostwrite the judgment. When asked about it before the Hague Tribunal he said: "Yes sir, I lied there...I wasn't being truthful."

Zambrano has denied this from the beginning and all the forensic evidence backs it up. You see, also as part of Chevron's Hague action, the government of Ecuador hired the world's top computer forensic analyst to review the document. As Courthouse News reported this week:

" ... forensic expert Christopher Racich testified that he found a running draft of the judgment against Chevron on Zambrano's hard drives. Ecuador now argues that this forensic evidence – which Courthouse News reported exclusively early this year – proves Zambrano painstakingly wrote the ruling and saved it hundreds of times throughout the case. Chevron has not been able to produce emails between Guerra, Zambrano and the purported ghostwriters, Donziger and Fajardo, Ecuador's forensic expert says."

The seemingly never ending stream of Guerra lies doesn't stop there. At first Guerra said that he had thumb drives with the judgment on it to prove his claim. Then later he admitted that he didn't. Then he said he has calendar entries of his meetings with the Ecuadorian legal team. Then he admitted that he didn't. Guerra also claimed he had agreed with Zambrano to cut him in for 20%. Now he admits that too was a lie.

Chevron claims evidence of meetings with Guerra and Zambrano backs up their claims. But no, Guerra now says no meetings he ever had with Zambrano had anything to do with Chevron. Oops.

As Donziger put it: "Chevron has now been busted by the lying testimony of its main witness. The latest iteration of Guerra's testimony proves clearly that Chevron paid its star witness huge sums of money to present false evidence to frame the very people in Ecuador the company poisoned."

The only bribe was the one that Chevron paid

Indeed there is evidence of a bribe – Chevron bribed Guerra to make up this story. And unlike the lie about ghostwriting, there's actual evidence to back this bribe up.

Guerra, a man with less than $200 in his bank account at the time, admits that he said all these things to get more money out of Chevron. He and his entire family now live in a house Chevron bought for him, drives a car they gave him and live on $12,000 per month from the oil giant. How's that for evidence?

At this point, I'm sure you are asking yourself: How on Earth did Chevron get this witness on the stand in a NY Federal Court in the first place, and what did they think would happen once his true story came out? (The Ecuadorians tried to save Judge Kaplan from the embarrassment.)

Well, they were certainly worried about how Guerra would do – which is why they coached him for 53 straight days before his testimony. It clearly wasn't enough.

Chevron's polluted house of cards has come crashing down around them. Guerra is a liar – and he freely admits it. Chevron can either double down and insist Guerra was "before it before he was against it" or denounce him now – in which case they can never argue he's credible by any stretch.

There's a lot of provably unethical and illegal behavior here – all of it from Chevron's camp.

Now they should face racketeering charges

"We intend to bring these significant developments to the attention of the Second Circuit panel in New York", said Deepak Gupta, appellate lawyer for Steven Donziger.

In addition to what he calls "overwhelming evidence of pollution on the ground", Gupta believes the tribunal members "have also been presented with far more thorough evidence rebutting Chevron's corruption allegations ... There's a very real possibility that the arbitrators will reject Judge Kaplan's findings."

The Federal Appeals Court should completely throw out Kaplan's verdict. It depends entirely on Guerra's false testimony and the judgement against Chevron has been conclusively proven to be legitimately written by Zambrano – as the Ecuadorian appeals court had already determined.

Chevron and their lawyers should be investigated and brought up on charges. They have intimidated judges in Ecuador, bribed othersfalsified evidence, and coached Guerra to submit false testimony in US Federal Court and made a complete mockery of the our judicial system, not to mention the mis-use of a trade agreement to go after the government of Ecuador.

Amazon Watch will be calling for such an investigation. We know Chevron is never likely to admit they lied and schemed to create this false RICO attack. Nor will they stop trying to attack us and our funders. They need to be held to account.

Chevron: 'We're going to fight this until hell freezes over'

We look forward to the day they try to peddle this always preposterous and now utterly discredited RICO verdict in Canada, where Ecuador last month won the right to pursue its claim. Perhaps we will all get a chance to see Guerra take the stand once again. If so, it can only get worse for Chevron.

"This is no longer just a cause in Ecuador – this is a cause for any country where the same thing could happen. We have a responsibility beyond our own interests", said Ecuador's environment minister, Lorena Tapia.

"We know this isn't an easy path, but we are very convinced of our arguments, and there is no way we will step down or stop doing everything we can to get the oil company to respond."

A Chevron company spokesman once said that it would fight this case to the bitter end: "We're going to fight this until hell freezes over. And then we'll fight it out on the ice."

That looks like what is about to happen.


Paul Paz y Miño is Director of Outreach and Online Strategy at Amazon Watch. Paul is also an Associate Fellow at the Institute for Policy Studies and served on the board of Peace Brigades International USA. Follow Paul on Twitter: @paulpaz

This article is an extended (by The Ecologist) version of one originally published on Amazon Watch.