Chevron Accused of $2 Million Witness Bribery Plot in Ecuador Pollution Case

Activists at a "True Cost of Chevron" protest at a Chevron gas station in San Francisco, May 24, 2011.
Photo Credit: Liana Lopez via TonyaHennessey/Flickr

Indigenous and farmer communities living in Ecuador's rainforest have sent the U.S. Department of Justice what they say is evidence of Chevron's fabrication of witness testimony and fraud during a RICO case in which U.S. federal judge Lewis A. Kaplan ruled in favor of the oil giant. In his decision, Kaplan, who sits on the U.S. District Court for the Southern District of New York, said multiple court rulings in Ecuador ordering Chevron to pay $9.5 billion in damages were the product of "egregious fraud." In 2016, Kaplan's ruling was affirmed by an appellate court.

But, according to the Ecuadorians and their longtime human rights lawyer Steven Donziger, Kaplan's RICO ruling relied on fabricated testimony of judicial bribery delivered by a witness bribed by Chevron. They are demanding that the DOJ launch a criminal probe into Chevron and the company's law firm in New York.  

"The only fraud in the RICO case is Chevron’s fraud,” Donziger told AlterNet.

"As the lawyer for the affected communities, we have presented credible evidence that suggests Chevron presented false testimony to a U.S. federal court to undermine the Ecuador judgment against the company," said Patricio Salazar, a lawyer in Ecuador representing the affected communities. "This is a strong test of the capacity of U.S. prosecutorial authorities to address claims against a powerful U.S. company that was found to have caused grievous harm to vulnerable indigenous groups in the rainforest."

In the letter, the Ecuadorian communities urge the DOJ to investigate "facts suggesting a conspiracy by the Chevron Corporation and certain of its counsel and executives to engage in witness bribery, perjury, and obstruction of justice to defraud a United States federal court and the Department of Homeland Security." The move is the latest salvo in nearly quarter-century legal battle between Ecuadorians trying to protect their ancestral lands and traditional way of life, and one of the world's largest fossil fuel companies, which they say owes them billions for the environmental damage that it caused, known around the world as the "Amazon Chernobyl."

"Chevron systematically polluted our Amazon communities with toxic waste and then used its lawyers to manufacture fake evidence to try to evade paying a legitimate court judgment," said Carmen Cartuche, president of the Front for the Defense of the Amazon (FDA), the grassroots community-based group that brought the lawsuit against Chevron and which is executing the judgment against the company in Canada.

"This type of behavior is not only outrageous, it appears to have crossed the line into criminality and it certainly warrants a serious investigation by the U.S. government. The investigation should encompass why a U.S. judge seems to have done nothing to stop what appears to be the corporate-led corruption of the judicial system."

Texaco Strikes Black Gold in the Amazon Rainforest

The story has its origins in 1967 when the U.S. oil company Texaco struck "black gold" in the country's northeastern province of Sucumbíos. Texaco dubbed the well "Lago Agrio" (Spanish for "sour lake"), after the company's first big oil discovery in Texas in 1903. And while the discovery made the province economically important to Ecuador—producing 1.7 billion barrels of oil over two decades—the name "Sour Lake" proved to be painfully ironic for the region's indigenous tribes, including the Cofan, Siona, Secoya, Huaorani, Quichua and Achuar, who have had to deal with the devastation of their ecosystem.

Though Texaco packed up its operations in Lago Agrio in the early 1990s, the company left the area an ecological mess, with polluted waters, contaminated soil and bulldozed forestland. In a 2008 Los Angeles Times op-ed about the legal battle, author and former public defender David Feige wrote that Texaco's environmental legacy in the region "includes as many as 16 million gallons of spilled crude—50 percent more than the Exxon Valdez dumped in Prince William Sound, Alaska, in 1989; hundreds of toxic waste pits, many containing the chemical-laden byproducts of drilling; and an estimated 18 billion gallons of waste, or 'produced,' water, which some tests have shown to contain possibly cancer-causing polycyclic aromatic hydrocarbons at levels many times higher than those permitted in the U.S. All these pollutants were discharged in one of the most sensitive ecosystems in the world—the Amazon rainforest."

Crude oil contaminates an open toxic pool in the the Ecuadorean Amazon rainforest near Lago Agrio. It was abandoned by Texaco (now Chevron) after oil drilling operations ended in 1990 and was never remediated. Photo taken on April 15, 2010, by Caroline Bennett / Rainforest Action Network (Flickr)

For the local residents, the drilling activity has also meant a disruption of their lifestyle and culture.

Texaco agreed to spend $40 million to clean up some of the waste pits, but according to the local tribes, the remediation amounted to outright fraud. Some waste pits were simply covered up with dirt, while toxic chemicals continued to seep into groundwater and streams that local inhabitants rely on for their drinking water and fishing. Other waste pits filled with oil waste continue to discharge their contents via pipes into nearby streams.

Members of the Cofán Dureno community in northern Ecuador have suffered numerous problems from oil production on their lands. Laura Mendo, 59, recalls a time when the Cof·n wandered freely and lived off the land. Now the rivers are contaminated, crops don't grow, and new illnesses and cancer have been introduced. Photo taken April 18, 2010, by Caroline Bennett / Rainforest Action Network (Flickr)

Residents still bathe and wash clothes in a river they claim is contaminated near San Carlos, Ecuador. The community in the Amazon rainforest has suffering some of the highest cancer rates in all of Ecuador because of decades petroleum production and water pollution by Texaco (now Chevron). Photo taken April 17, 2010, by Caroline Bennett / Rainforest Action Network (Flickr)

RICO Laws as Corporate Tools

Since 1993, the affected communities have turned to the legal system to compel Texaco—and now Chevron, its parent company since 2000—to clean up the area and care for the people who have been sickened by the oil operations. The plaintiffs secured a landmark victory in February 2011, when Judge Nicolás Zambrano of an Ecuadorian court ordered Chevron to pay $8 billion in compensation. David M. Uhlmann, director of the Environmental Law and Policy Program at the University of Michigan, called the ruling "one of the largest judgments ever imposed for environmental contamination in any court." Chevron had insisted the trial be held in Ecuador and had accepted jurisdiction there.

Chevron officials threatened the villagers with a "lifetime of litigation" unless they dropped their case. When they did not, Chevron retaliated by launching the RICO attack in the United States against the Ecuadorian plaintiffs and their lawyers, suing them personally for an estimated $60 billion. (The use of federal racketeering laws, most commonly used against organized crime, has emerged in recent years as a tool corporations use to silence activist groups.) Donziger told AlterNet that the potential judgment against him "represented the largest potential liability in U.S. history against a single individual." Chevron ended up dropping the damages claims "to avoid having a jury of impartial fact finders," he said.

Activists at a True Cost of Chevron protest at a Chevron gas station in San Francisco, May 2011. (credit: Liana Lopez via Tonya Hennessey/Flickr)

In May 2011, a worldwide coalition of activists held a press conference during Chevron's annual shareholder meeting, demanding "multiple resolutions on corporate accountability, climate change, political funding and environmental protection."

In a statement, the group said:

Chevron's corporate actions are contrary to a healthy planet, healthy communities and a just world. We stand opposed to Chevron's choices to pollute our communities, our land, and our water, to use their toxic influence to buy political power, fuel climate disruption, abuse the justice system and attack its critics and victims of its contamination. We support shareholders calling for a change in Chevron’s culture of deception, corruption and destruction.

Elias Isaac of the Open Society Initiative for Southern Africa-Angola, speaking at the Teach-In, as part of the True Cost of Chevron event, held at the David Brower Center in Berkeley, May 2011. (credit: Tonya Hennessey/Flickr)

In March 2014, Judge Kaplan ruled in favor of Chevron's retaliatory RICO case, saying that Judge Zambrano's verdict was obtained through "coercion, bribery, money laundering and other misconduct."

But just months after the end of the trial, evidence emerged that largely undermined Kaplan's core findings. It turns out that Chevron paid $2 million to its star witness, who later admitted lying repeatedly about key facts on the stand. The appellate court did not review Kaplan’s factual findings, only examining the legal issues in play.

Dickensian Farce

The Ecuadorians have now gone to Canada, where Chevron has an estimated $25 billion in assets, to enforce the Ecuador environmental judgment by seizing company assets. Already, they have won three consecutive unanimous appellate decisions while Canadian courts have completely ignored Kaplan, despite the fact Chevron has tried to "export" his decision and have it accepted by Canadian judges.

Donziger is hopeful. "Chevron has tried to take the RICO decision into Canada and try to influence Canadian courts to look at the case negatively," he told AlterNet. Judge Kaplan's RICO ruling "has zero credibility and zero legal impact in Canada.… Ultimately, we believe they're going to have to pay the full amount of the Ecuador judgment via the Canadian Enforcement Action."

But enforcing the ruling is just one key aspect of this saga. Another critical element is the apparent lack of impartiality and integrity demonstrated by Judge Kaplan, who owned shares in Chevron at the time of his RICO ruling. That may help explain why he exhibited a stupefying level of bias toward Chevron and against Donziger and his clients.

In February 2011, during the case, Kaplan said:

[W]e are dealing here with a company of considerable importance to our economy that employs thousands all over the world, that supplies a group of commodities, gasoline, heating oil, other fuels and lubricants on which every one of us depends every single day. I don’t think there is anybody in this courtroom who wants to pull his car into a gas station to fill up and finds that there isn’t any gas there because these folks [Steven Donziger and the Ecuadorian contamination victim plaintiffs] have attached it in Singapore or wherever else [as part of enforcing their final Ecuadorian judgment].

In describing the company’s plan to evade liability in the Ecuador case, Chevron’s lead PR consultant said, in 2009, "[O]ur L-T [long-term] strategy is to demonize Donziger."

"This is an extraordinary case that has degenerated into a Dickensian farce," said John Keker, an attorney who represented Donziger in the RICO case but withdrew in protest of Kaplan’s handling of the litigation.

Lying Under Oath

Another major point of legal and public interest has to do with the alleged criminal actions taken by Chevron to avoid paying the fine—specifically, bribing a witness in the RICO case.

According to the letter sent to the DOJ:

Beginning in 2011 and continuing to this day, evidence indicates that Chevron has paid at least $2 million and likely much more in cash and benefits to a former Ecuadorian judge, Alberto Guerra, in exchange for false testimony and for maintaining his ongoing silence involving possible criminal misconduct by Chevron and its outside counsel. … Guerra later admitted under oath in an international arbitration proceeding to having lied repeatedly before a United States district court in a civil racketeering case directed against the undersigned and representatives of the Ecuadorian indigenous groups. In that proceeding, Guerra admitted that he testified falsely regarding key facts related to claims that the environmental judgment issued against Chevron was the product of "bribery" and "ghostwriting" orchestrated by the lawyers for the plaintiffs.

"[Chevron] paid this guy $20,000 in cash when they first met him," Aaron Marr Page, a member of Donziger's legal team, told AlterNet. "They kept paying him lump sums of $10,000, $20,000. They emigrated and his entire family, his wife, his kids, his kids' family, his grandchildren, his entire clan gets moved to the United States, gets put up in houses. Given cars, given health insurance. This elaborate scheme of payments totals upwards of a million dollars by the time you add it all together. And they say that that is basically equivalent to copying fees and stuff like that. So it was sort of an outrageous thing, but it was just on a punch list of a thousand outrageous things about that trial."

Guerra was the star witness in Chevron's RICO argument, as his testimony was the only direct evidence that the company was able to put forward alleging that Judge Zambrano's judgment was procured by way of a bribe. In 2013, Guerra testified that he ghost-wrote rulings for Zambrano. But then, in 2015, Guerra recanted his accusations. "Yes sir, I lied there... I wasn't being truthful," he said when asked about his accusation that plaintiffs' legal team offered him a $300,000 bribe to rule in their favor.

Attorney Keker described the Chevron RICO case before Kaplan this way: "Through scorched-earth litigation, executed by its army of hundreds of lawyers, Chevron is using its limitless resources to crush defendants and win this case through might rather merit. … Encouraged by this court's implacable hostility toward Donziger, Chevron will file any motion, however meritless, in the hope that the court will use it to hurt Donziger."

Considering President Trump's support of fossil fuels and the fact that he has stacked his administration with a rogue's gallery of climate deniers, it's easy to assume that the Department of Justice won't look into the allegations of Chevron's witness bribery and fraud. After all, the oil and gas industry gave more than $91,000 in contributions to the campaign committee of Attorney General Jeff Sessions, who heads the Justice Department.

Lawless Areas

But for Donziger, this case—and his letter to the DOJ—is part of something larger.

"It is important to illustrate to the world the lengths to which Chevron will go to lie, fabricate evidence and commit criminal violations before a U.S. court, as a way to evade an environmental judgment in Ecuador," Donziger told AlterNet.

It also goes beyond malfeasance in the private sector, to the ethics underlying the U.S. court system. "We believe it's incumbent upon us to force U.S. institutions to deal with challenges related to the protection of the integrity of our judiciary, and all of our institutions," he said. "You see this going on in a broader sense with Trump and the Mueller investigation. There are a lot of activities in our society now that are really undergoing what I would call a stress test. This is one of them. We believe the DOJ should respond to this because it's a legitimate complaint with an ample evidentiary basis. It is an extremely disturbing turn of events for all Americans who care about the integrity of the federal judiciary."

"Chevron's dumping of toxic waste and ongoing violations of indigenous rights in Ecuador has lit the entire indigenous movement of the country on fire," said Domingo Peas, a leader of the Achuar tribe in Ecuador. "Chevron needs to comply with the rule of law in Ecuador and pay what it owes to the indigenous peoples it harmed, or we are going to call on all indigenous groups around the world to not cooperate with the company's projects. The environmental destruction Chevron caused in Ecuador is destroying our communities and natural world and actually killing people. The world must pay attention to this crisis and bring pressure to bear on the company."

A pipe to drain crude oil from an open toxic waste pit into waterways near Lago Agrio, Ecuador. Texaco (now Chevron) abandoned hundreds of oil waste pits that continue to leach carcinogens into the rainforest. Photo taken on April 15, 2010, by Caroline Bennett / Rainforest Action Network (Flickr)

In a 2013 security brief, U.S. Army Colonel John A. Conway urged the U.S. government to make Lago Agrio a target for "intelligence collection and further analysis," saying it was "a hidden ungoverned territory," an "almost lawless area... serving as a major hub in pipeline that moves not only cocaine and weapons, but also humans, precursor chemicals, and hundreds of millions of dollars each year." But Lago Agrio has also been a major hub for another kind of pipeline—one that moved nearly 2 billion of gallons of oil, and in doing so, wrecked an ecosystem. Now it appears that this "lawless area" has stretched far beyond Ecuador's jungles, reaching a boardroom at Chevron and a courtroom in the Southern District of New York.

Watch the video of the True Cost of Chevron press conference, held at the San Francisco offices of the Sierra Club on May 26, 2015: