Thursday, September 11, 2014

How Chevron's Scientists Misled Courts and Public About Death and Disease in Ecuador

Reposted from the Huffington Post

"Scientists ... involved in developing public health and environmental protections recognize we do not need (and we almost never obtain) proof beyond a reasonable doubt. Waiting for absolute certainty is a recipe for failure: People will die, and the environment will be damaged if we wait for absolute proof ... Out of all scientific uncertainties, few are more complex than understanding the causes of human disease. Scientists cannot feed toxic chemicals to humans to see what dose causes cancer."

Doubt Is Their Product, Dr. David Michaels, 2008

This is how Dr. David Michaels, a leading epidemiologist and former U.S. government scientist, begins a chapter in his seminal and groundbreaking book, Doubt Is Their Product.

The book describes in depressing detail how industries, their scientists, corporate lawyers and large PR firms have "shaped and skewed" science to create doubt about the dangers of chemicals and other toxins industries produce.

The chapter is aptly named: "Tricks of the Trade: How Mercenary Scientists Mislead You."

Michaels published his book in 2008 three years before an Ecuador court awarded a group of Ecuadorian villagers $9.5 billion in damages, resulting from Chevron's intentional contamination of the Amazon rainforest. The oil giant admitted to substandard drilling practices by dumping 16 billion gallons of untreated, toxic "formation water" into waterways relied on by the local population for drinking water as well as building over 900 huge unlined pits to serve as permanent storage for pure crude and water laced with known carcinogens, such as benzene and cadmium.

Comparing the amount of contamination and the amount of time it has remained in the environment with other similar disasters, Ecuador's is one of, if not the, worst environmental disasters in the world.

Since losing the Ecuador trial, Chevron has been trying to discredit the judgment through a series of retaliatory lawsuits in the U.S. Along the way, Chevron has been plying its own special "tricks of the trade" with America's judiciary and the news media – tricks that noted U.S. experts have called "fundamentally flawed" and "grossly exaggerated."

Chevron's goal has been to create doubt about the contamination's impact, arguing no proof exists that its oil and its operations harmed the environment or an Ecuadorian villager ever, even though Chevron's predecessor Texaco explored for oil exclusively in the concession area and was the only operator of all of the well sites from 1964 to 1990.

Let me repeat. During that 26-year-period – according to Chevron and its scientists – the company's admittedly substandard drilling practices did nothing to harm the environment or one single person.

This is part of their "proof": Chevron argued that Mother Nature had "weathered" the oil so much it was harmless and, as a result, no cleanup was needed. Problem is Chevron cheated on its weathering test. The oil giant's scientists found weathering – or degradation of oil – even in fresh oil. Chevron's inaccurate use of the test, USEPA Method 8014, "grossly exaggerated the magnitude of weathering." (See more of Chevron's "tricks of the trade" below.)

With its high-priced attorneys, scientists and academics, Chevron has bamboozled one activist U.S. judge and some legal reporters into believing that to prove causation of death and disease the villagers must all but exhume dead bodies and examine them until finding drops of oil inside with the Texaco brand.

Nothing less is good enough, they argue. But such nonsense has never been the standard of proof in a court of law for damages.

American Lawyer's Michael Goldhaber and Businessweek's Paul Barrett have twisted the legal standard of causation in their individual books about the lawsuit, holding the Ecuadorians to a much higher standard than they would face even in U.S. courts, which have a long history of rejecting industry demands of absolute certainty.

As Michaels points out in his book, it is scientifically impossible to prove direct causation of a health problem with absolute certainty. Making that the standard would allow Chevron and indeed the entire oil industry off the hook for every health problem they cause.

Michaels wrote: "Epidemiologists cannot state that a specific chemical exposure has definitely caused the cancer of a specific patient. The lung cancer from asbestos is indistinguishable from the lung cancer from smoking."

But, that hasn't stopped cancer victims and the U.S. government from winning damages for health impacts from tobacco and chemical companies. And, it didn't stop the Ecuadorians in their historic case. Academic studies (here and here) have been conducted that show the closer the villagers live to the oil sites, the higher the rates of cancer among them. Uterine cancer victim Rosana Sisalima with her granddaughter are shown here at their San Carlos home in 2004 near Chevron's well sites. Rosana succumbed to cancer in 2006. (Photo by Lou Dematteis/Redux)

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Despite Chevron's efforts to discredit the studies, [scientists from across the world criticized those efforts; see here], the Ecuador courts accepted the evidence and ruled accordingly. In fact, three layers of courts in Ecuador – a total of nine judges, including a five-judge panel from the country's highest court - found against Chevron on precisely this legal theory.

Yet Chevron's manipulation of the evidence continues in collateral legal proceedings where Chevron hopes to discredit the Ecuador judgment and evade paying for a clean up. The oil giant's scientists, led by Dr. Sarah McMillan, are helping the company in this regard. (See here and here.)

But Chevron's antics are being more and more exposed.

Dr. Jeffrey Short, recently retired from a 31-year career as a research chemist at the U.S. National Oceanic and Atmospheric Administration, reviewed the reports of Chevron's scientists from the Ecuador case and shot holes all through them. So did Dr. Edwin Theriot, the former director of environmental programs for the U.S Corps of Engineers, no bastion of liberal-leaning environmentalism.

Dr. Short, whose report was commissioned by Ecuador's government, concluded that findings by Chevron's scientists – one of whom I know has been paid millions for his work over the years – are based on "fundamentally flawed," "grossly exaggerated," and "fundamentally inappropriate" testing methods. (See page 3.)

He wrote of Chevron's scientists: "(Their) bias toward underestimating the amount of residual crude oil in a field sample ... is well understood by Chevron's own experts."

In other words, Chevron's experts know their evidence is bullshit.

It's manufactured science – the kind Michaels warned us about – designed to produce doubt and create uncertainty, even when it's right before your very eyes.

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Chevron's Tricks of the Trade:

For a scientific explanation of these testing methods, see Dr. Jeffrey Short's study.

  • Chevron used the wrong test to measure toxins in soil – kind of like putting a stethoscope in someone's mouth to see if they have a fever. Chevron's test, though, sounded so, well, scientific: Toxicity Characteristic Leachate Procedure or TCLP. Only problem is it doesn't measure toxins in soil. (I guess Chevron thought no one would notice.)
  • Chevron undercounted the most hazardous hydrocarbons – kind of like a kid showing his or her parents only those tests with high scores and shredding the rest. Eventually, though, it catches up with the student and it did with Chevron, too. See here.
  • Chevron argued that Mother Nature had "weathered" the oil so much it was harmless and, as a result, no cleanup was needed – kind of like justifying a decision to leave date-expired bottles of poison around for kids to play with. But Chevron cheated on its weathering test. They found weathering – or degradation of oil – even in fresh oil. Chevron's inaccurate use of the test, USEPA Method 8014, "grossly exaggerated the magnitude of weathering."

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Wednesday, September 10, 2014

Chevron Racism Toward Ecuador Highlighted by Court Decision in BP Case

Reposted from The Chevron Pit

A legal decision handed down last week by U.S. federal Judge Carl Barbier found that BP's "gross negligence" caused the Deepwater Horizon blowout in the Gulf of Mexico.

The decision increased the company's liability to roughly $50 billion. For our purposes, Judge Barbier's decision – which sets an important benchmark for corporate accountability – has a deeper meaning.

Judge Barbier's finding underscores the obvious racism behind Chevron CEO John Watson's claim that the company's $9.5 billion judgment in Ecuador represents some sort of gouging by that country's courts. While BP pays for its spill, Chevron has managed to obtain effective impunity for decades of contamination resulting in disease and death in the rainforest of Ecuador.

Chevron has steadfastly refused to pay any part of the judgment whatsoever. The company chooses instead to spend countless millions on law firms to carry out its threat of a "lifetime of litigation" for the villagers.

It gets worse. BP's liability for the less impactful Gulf spill in the U.S. is now five times higher (and still growing) than Chevron's in Ecuador. Yet Chevron's contamination in Ecuador is more widespread, has lasted far longer, was deliberate, has severely impacted indigenous groups, and is afflicting the world's most delicate ecosystem. Further, responsibility was adjudicated after an eight-year trial.

So what gives?

Well, let's speak the unpleasant truth about environmental racism in the oil industry today.

The truth is that in Ecuador, the victims of Chevron's contamination are Ecuadorian indigenous peoples and poor villagers. In the U.S., the victims are Americans. While there is certainly extensive environmental racism in our country, the discrepancy between BP's payout and Chevron's extraordinary conceit and greed in the face of intense human suffering is a clear illustration of something gone profoundly awry.

This is not to take away from the loss of 11 lives on the Gulf Coast. At the same time, at least 1,400 Ecuadorians have died from cancer and other diseases linked to the contamination and thousands more have had serious illnesses. Far more will likely die if there is no clean-up.

We would submit there is no way on God's Earth that CEO Watson and the members of the Chevron Board of Director would dare to treat American victims of the company's pollution as viciously as they continue to treat their victims in Ecuador. If they did, they would be booted out of their country clubs, banished from their churches, and personally shamed in the town square.

Here's another illustration of this phenomenon. At the same time that Chevron's predecessor company Texaco was systematically discharging billions of gallons of toxic waste into Amazonian waterways, in the U.S. the company was properly re-injecting the same waste into deep underground wells. This was to ensure there were only minimal environmental impacts in the U.S. But clearly the company felt it could away with NOT doing it in Ecuador where there was little oversight.

Chevron also proposed that the Ecuador court adopt a clean-up standard for oil field hydrocarbons 100 times greater than that used in its home state of California. Put another way: in Chevron's universe, an Ecuadorian life is worth 100 times less than an American life in California.

Of course, Chevron's victims in Ecuador are indigenous and Latino farmers in an isolated region of a Third World country. Unlike the American victims, they do not have a law like the Clean Water Act that if used properly can lead to a penalty that begins to fit the magnitude of the transgression.

Nor do they have an elected president willing to call out the corporate polluter publicly in the strongest possible terms. President Obama, just days after the spill in the Gulf began, said repeatedly that BP would pay dearly – and that's exactly what happened. When Ecuador President Rafael Correa did the same to Chevron decades after the fact, Chevron's legal and public relations machine attacked him mercilessly for "interfering" with legal proceedings.

Chevron has spent years trying to sabotage the trial that it wanted to take place in Ecuador precisely because it thought it could manipulate the result through corrupt means. (For some examples of Chevron's corruption and delaying tactics in Ecuador, see this declaration by Ecuadorian lawyer Juan Pablo Saenz.)

Judge Barbier's finding triggers up to $18 billion in additional penalties for BP under the Clean Water Act. That's on top of the $28 billion BP already has doled out to clean up the environment and to compensate its victims.

Chevron's executives must read that number and get down on their knees to thank the gods of corporate greed for their good fortune. Chevron has yet to clean up properly even one of its estimated 1,000 waste pits sitting on the jungle floor in Ecuador that to this day continue to contaminate soils and groundwater and cause untold suffering to the people living there.

CEO Watson knows Chevron is getting off easy in Ecuador. But he still presses on with a scorched-earth strategy that includes 60 law firms and 2,000 legal personnel. He wants to send a broader message to restless natives the world over who might have claims against the company. The case will end, he told Fortune magazine, when the lawyers "give up" and go home. That's an effort to buy impunity.

BP still faces lawsuits from various Gulf states such as Alabama and Mississippi that could increase its liability for the Gulf spill to $75 billion or more. To underscore how profitable the oil majors are – and how easily Chevron could pay the Ecuador judgment – BP is still producing profits and dividends for its shareholders.

When Watson and Chevron General Counsel R. Hewitt Pate claim the Ecuadorian verdict is too high, what they mean is it is too high for the particular people who won it. Consider these facts:

  • Chevron lawyer Rodrigo Perez Pallares admitted during the Ecuador trial that the company deliberately discharged 15 billion gallons of toxic water into fresh water sources in the Amazon rainforest. The amount is an estimated 85 times more oil waste than BP discharged into the Gulf.
  • Chevron's dumping in Ecuador was done by design to increase profits. BP's spill – even though the result of gross negligence – was still an accident.

Another case involving Anadarko's recent settlement over 2,700 contaminated sites in the U.S. also underscores Chevron's inexcusable double standard. In that case, Anadarko inherited the polluted sites from Kerr McGee when it bought the company, just like Chevron inherited Texaco's pollution liabilities when the companies merged in 2001.

Like Chevron has done with Texaco, Anadarko tried to spin off the environmental liability into a separate shell company that had little capital. A U.S. bankruptcy judge rejected Anadarko's subterfuge and ordered it to clean the sites. In Ecuador, three layers of courts rejected Chevron's use of the same legal trick to evade liability.

But in Ecuador, according to Chevron, that amounts to a violation of "due process" and is an example of "fraud" against the company.

Watson and his army of lawyers have ruthlessly attacked Ecuador's government for not cleaning up their own contamination in Ecuador. Now we see that the U.S. government did not lift a finger for decades to address Kerr McGee's contamination – largely because the issue of liability was still being contested. In the end, Kerr McGee settled the matter for $5.6 billion, further underscoring how major polluters routinely pay out billions of dollars for their liabilities.

Unless you are Chevron.

Let's sum up.

In one country (Ecuador), a U.S. oil major has refused for almost 50 years to clean up its contamination, compensate its victims, or engage in meaningful settlement discussions with the affected communities. In another country (the United States), a British oil major put up $20 billion within days of its spill to compensate its victims and engaged in settlement discussions with lawyers for the victims that resulted in further liability.

We might also add that BP has put aside $40 billion in cash to deal with the Gulf spill. Chevron has put aside zero to pay off its Ecuador liability.

Watson and Chevron's Board of Directors owe the people of Ecuador – not to mention their own shareholders – an explanation for this thoroughly disparate treatment.

Friday, September 5, 2014

Rolling Stone Nails Chevron for Corrupt Acts in Ecuador Litigation

Reposted from The Chevron Pit

None other than Rolling Stone (with its 4 million Twitter followers) has now weighed in on Chevron's environmental catastrophe and cover-up in Ecuador. The picture is not pretty for company management and shareholders.

The detailed story by Alexander Zaitchik that appeared last week on the magazine's website nails Chevron for trying to sabotage and corrupt the eight-year trial that ended in 2011 with a devastating $9.5 billion judgment against the company. The judgment was later affirmed unanimously by two appellate courts, including Ecuador's highest court. In any event, we are happy to recognize good journalism when we see it.

Even though it wanted the case tried in Ecuador, Chevron now has sour grapes and is refusing to pay up. Thousands of lives are at risk due to the refusal of Chevron management to address the company's legal obligations.

For those counting, a total of nine judges in Ecuador who reviewed the scientific evidence ruled against the company. Contrast that to the ruling in New York by one activist trial judge (Lewis A. Kaplan) who refused to hear any of the scientific evidence of Chevron's contamination and who openly mocked and denigrated the Ecuadorians and their U.S. legal advisor, Steven Donziger.

One might assume that Kaplan – who denied Donziger and his clients a jury trial – knows far less about Ecuadorian law than the judges on the Ecuadorian Supreme Court, which affirmed the decision against Chevron. Deepak Gupta, Donziger's esteemed U.S. appellate lawyer, called Kaplan's trial a shocking example of "judicial imperialism" designed to dictate to all of the world's court how they should view the judgment against Chevron.

The Rolling Stone article, which gives Donziger and the Ecuadorian lawyers kudos (calling Donziger a "warhorse lawyer") for standing up to Chevron's intimidation campaign, can be read here in full.

Next up for Chevron is argument before the Supreme Court of Canada on December 11. That court will determine whether the rainforest communities can try to seize a sizable portion of the $15 billion worth of Chevron assets in Canada. A separate enforcement action in Brazil is also moving at a far faster clip than Chevron CEO John Watson is disclosing to his company's shareholders.

The immediate objective of these actions is to obtain the funds necessary to fix the massive environmental damage in Ecuador where the lives of thousands of affected villagers hang in the balance. The larger issue is for courts worldwide to show Chevron and its army of 2,000 lawyers that they are not above the law, as company lawyer Sylvia Garrigo famously asserted to Scott Pelley of 60 Minutes. (Garrigo: "We didn't want to get sued, period. We don't want to be in any court, much less a court with respect to this kind of claim, which we consider to be frivolous.")

None of this sprawling litigation would be necessary had Chevron lived up to its original promises.

Chevron fought from 1993 (when the case was filed in New York) to 2001 to have the trial moved to Ecuador. At the time, it filed 14 separate affidavits praising the fairness of Ecuador's judicial system and promised to abide by any adverse judgment in Ecuador. The promises went out the window when the scientific evidence during the trial pointed to the company's guilt and Chevron realized Ecuador's courts were able to resist its efforts to corrupt the process.

Chevron's big problem in 2015 is that the rule of law is catching up to it. Not only are two foreign courts proceeding against Chevron's assets with a third (Argentina) and possibly others waiting in the wings, but Judge Kaplan's ruling is at great risk of being reversed by a three-judge panel on appeal as Donziger's appellate brief makes clear. Aside from trying to meddle in the judiciary of a foreign country, Kaplan let Chevron pay a corrupt fact witness about $2 million in cash and benefits.

Given Chevron's diminishing returns, is a settlement between the parties now possible?

After two decades of Chevron's litigation abuse, the villagers are publicly insisting that they will not stop until they collect the entirety of the $9.5 billion judgment. We can understand why. For one thing, interest is running on the judgment. For another, Chevron won't be able to pressure or corrupt the courts of Canada like it thinks it can do in Latin America.

The other factor working against Chevron is that the amount of the Ecuador judgment is miniscule compared to BP's enormous liability (now approaching $50 billion) for the far smaller Deepwater Horizon spill in the Gulf of Mexico. Unlike BP's raging spill, what Chevron did in Ecuador was intentional and not an accident. And it has lasted for almost five decades, not five years.

The reality is that Chevron has gotten off easy in Ecuador given the magnitude of what it did.

We hear that CEO Watson is emitting smoke signals about some sort of exit strategy. We can't say we blame him. If Chevron really wants lasting peace, we strongly suggest to Watson that he not make the same mistake Texaco made in the 1990s by trying to "settle" with Ecuador's government while ignoring the communities.

That mistake by Texaco led only to endless litigation and Chevron's worsening reputation as a leading rogue actor in the oil industry. It also led to huge legal fees – estimated at $2 billion over several years – and major distractions for upper-level management. There is also potential exposure down the road for conspiring to interfere with court proceedings. (Watson himself was deposed under oath in the case while two high-level Chevron officials were indicted in Ecuador for fraud.)

While on the topic of journalism, we want to give a big shout out to William Langewiesche, the writer for Vanity Fair whose brilliant 2007 article on lead Ecuadorian lawyer Pablo Fajardo was the first by a major American magazine to capture the context of Chevron's awful track record in Ecuador.

Like the Rolling Stone article, the earlier Vanity Fair piece is must reading for anybody who wants to understand the reality of Chevron's venality in Ecuador.

Thursday, July 31, 2014

Conflict of Interest: Businessweek's Paul Barrett Now an Advocate for Chevron in Ecuador Dispute

Reposted from The Chevron Pit

With his track record of bias in favor of Chevron already part of the historical record, Businessweek's Paul Barrett appears to have become a full-blown public advocate for the oil giant in its legal dispute with Ecuadorian villagers over the massive contamination of their ancestral lands.

Just this week, Barrett testified about his take on the litigation before the House of Representatives in a hearing that was arranged in part by Chevron lobbyists. He appeared at the side of a lawyer from the oil giant's controversial outside law firm, Gibson Dunn & Crutcher. And he repeated the usual Chevron talking points about the Ecuador case that have been rejected by three layers of courts in Ecuador, including that nation's highest court in a unanimous opinion last November.

Barrett's testimony in favor of Chevron – completely improper for any independent journalist – follows multiple reports that Chevron is quietly helping to promote his forthcoming book about the case, Law of the Jungle. We can't say we are surprised after reviewing an advance copy from a source who indicated Barrett is trying to flog it in Hollywood.

The effort by Barrett to cash in on the misery of Ecuadorian villagers by promoting Chevron's campaign to evade accountability is hardly surprising. His book falls far short of fact-based responsible journalism. Barrett adopts wholesale most of Chevron's fraudulent plot points and ignores the overwhelming scientific evidence – most provided by the oil company itself during an eight-year trial in the court of its choosing in Ecuador – that was relied on to determine liability for the dumping of billions of gallons of toxic waste into the rainforest.

(For background on the overwhelming evidence against Chevron relied on by the Ecuador courts, see this document; for an explanation of Chevron's human rights abuses in Ecuador, see this video; for how Chevron deliberately discharged toxic waste, see this 60 Minutes segment; for a letter signed by 43 civil advocacy groups criticizing Chevron over Ecuador, see here.)

Barrett's obsession with (and personal animus toward) Steven Donziger, the main U.S. legal advisor to the villagers and the principal target of Chevron's demonization campaign, drips off the cover jacket and permeates almost every chapter.

Law of the Jungle suffers from some of the same egregious flaws often found in Barrett's reporting on the Ecuador litigation: sloppy or non-existent research resulting in numerous factual errors; cribbing material from other journalists and court filings; creating fictional scenes that never happened; and demonstrating a shocking disregard of the extensive scientific evidence that contradicts Chevron's self-serving narrative.

The book reads like a novelist's re-purposing of Judge Lewis A. Kaplan's deeply flawed 487-page RICO decision, which is currently hanging on life support during the appellate process. Barrett's book is as much an affront to serious journalism as Kaplan's decision is to serious legal reasoning.

A more comprehensive critique of Barrett's book is forthcoming. Here is a preview of some of its flagrant flaws:

  • Barrett did almost no independent reporting. He let Chevron's lawyers do almost all of his work for him, effectively letting the oil giant subsidize his so-called "independent" research. Most of the book re-writes Chevron's court filings and adopts almost wholesale the oil giant's narrative that it was "victimized" by the very indigenous groups that held it accountable.
  • Barrett spent almost no time reporting on conditions in Ecuador. He never interviewed a single member of the legal team for the villagers. He does not quote any current Ecuadorian government officials. He never attended even a day of the eight-year trial that resulted in a judgment against Chevron. According to his source notes, Barrett never read the 220,000-page Ecuador trial record. Barrett also spent no more than a few days reporting from Ecuador, the epicenter of the two-decade legal dispute and the place Chevron's predecessor company Texaco operated for decades. The book epitomizes secondhand armchair journalism.

  • Barrett's book reads as though the Ecuadorian people do not exist. Consistent with Chevron's imperialist and arrogant behavior in Ecuador, there is virtually no mention by Barrett of a single Ecuadorian other than Cofan indigenous leader Ermegildo Criollo, with whom he spent a few hours. In Barrett's eyes, the people who matter most are Americans like Donziger, Judge Kaplan, and the activists at Amazon Watch. He scarcely mentions lead Ecuadorian attorney Pablo Fajardo (who won the CNN Hero Award for his work on the case) and he ignores Luis Yanza (winner of the prestigious Goldman Environmental Prize). Yanza has been the lead community advocate on the case for over two decades. Almost none of the thousands of affected villagers were even interviewed.
  • Barrett misleads the reader about his sources. In a shocking display of poor journalistic ethics, Barrett repeatedly misleads the reader by cribbing material without citation from journalists who did firsthand reporting. One example: Barrett frequently describes scenes from the award-winning documentary film Crude without mentioning in the text that his source is the film. By so doing, Barrett leaves the reader with the false impression he was reporting firsthand from events that happened years ago and where he was not present. (Some of these suspect narrative techniques seem oddly similar to what got James Frey in trouble in his supposedly non-fiction memoir, A Million Little Pieces.)
  • Barrett fictionalizes events and leaves the false impression he interviewed Donziger. Barrett asked Donziger repeatedly for interviews for the book but Donziger refused to cooperate, acting on advice of counsel and for other reasons related to Barrett's lack of scruples. So Barrett now pretends that Donziger cooperated with him anyway. Barrett quotes Donziger from private notes turned over in discovery and relays what he thinks is on Donziger's mind, leaving the reader with the false impression that he interviewed Donziger for the book or had some special access to his private thoughts. Barrett also creates fictional scenes involving Donziger – including one where the lawyer supposedly was trailed by Chevron undercover operatives while riding his bike in Manhattan, which did not happen.
  • To create his fictionalized story, Barrett ignores key evidence. Consistent with Chevron's self-serving version of events, Barrett completely ignores or distorts key scientific evidence to try to claim that the Ecuadorians could not prove their case. This narrative is contradicted by Chevron's own evidence submitted to the Ecuador court; by three layers of court decisions in Ecuador; and by the recent analysis but a prominent group of U.S. scientific consultants, the Louis Berger Group. He also ignores persuasive evidence that Chevron tried to cheat during the trial to hide evidence of its own contamination. He ignores the fact that more than 35 scientists – including those hired by both litigants and third parties – have confirmed the oil giant's pollution.
  • The book is skewed by Barrett's obvious personal animus toward Donziger. Consistent with Chevron's strategy to "demonize" Donziger, Barrett subjects the main U.S. legal advisor for the villagers to a host of juvenile epithets. Barrett calls Donziger a "loudmouthed gatecrasher," "master showman," and describes him as a lawyer "who'd stop at nothing" to win. He then ignores Donziger's own narrative about what took place in Ecuador by failing to even mention (much less cite) the attorney's comprehensive 130-page appellate brief that exposes a good number of Chevron's lies, misdeeds, and unethical litigation practices. Barrett also ignores Donziger's own lawsuit against Chevron, which comprehensively documents the company's deceit in U.S. courts and its plethora of criminal and unethical acts in Ecuador.

Perhaps more disturbingly, we have numerous emails from the last two years or so that show Barrett becoming unhinged over Donziger's refusal to cooperate with his book. Many people also witnessed a bizarre incident in open court recently where Barrett lost his cool and blew up at Donziger's lawyers. At times, Barrett made explicit threats to those working for the Ecuadorians that he planned to use his book to "take down" Donziger. He warned other lawyers they should stop working with the New York attorney or they would risk damaging their careers.

We have long suggested that Businessweek editor Josh Tyrangiel has let Barrett get away with this unprofessional behavior for far too long. While Barrett was writing a book that is little more than a continuation of Chevron's hit job on Donziger, he also was reporting "independently" for Businessweek on Donziger's role in the litigation. That's a blatant conflict of interest. Businessweek continues to let Barrett use its web platform to promote the themes of his flawed book and to make snarky attacks against Donziger.

All of this might explain why Chevron's public relations flaks are pushing Barrett's book and arranging for his congressional testimony. Granted, it's only a small part of the company's gargantuan public relations campaign to distract attention from its ecological calamity in the Amazon. But we have seen how Chevron has convinced other formerly reputable advocates, such as human rights academic Douglas Cassel, to take up arms for a corporate polluter in exchange for money. Cassel has so damaged his reputation that his faculty colleagues at Notre Dame ordered his diatribes about the Ecuador case removed from the law school's official website.

Barrett is the latest bit player to try to boost his profile and make a buck off of Chevron's billion-dollar retaliation campaign against the Ecuadorian villagers. The company's strategy to "demonize" Donziger – outlined explicitly in internal Chevron emails dating back five years – is now a cottage industry that includes no fewer than 60 outside law firms, 2,000 legal personnel, ten investigations firms, at least six public relations firms, and now Barrett. It has to be the most robustly financed corporate retaliation campaign in history.

While Barrett hustles his book, the indigenous people of Ecuador continue to suffer. This is partly because a compromised American "journalist" has now made it a little bit easier for Chevron's management team to evade its court-mandated responsibilities to the people it harmed.

Businessweek's readers and the public deserve better.

So do the affected communities in Ecuador.

Thursday, July 24, 2014

False Testimony Forced Chevron to "Prep" Its Million-Dollar Witness for 50 Days in Ecuador Case

By Karen Hinton | Reposted from the The Huffington Post

Just when you thought the long-running and bitter Chevron/Ecuador legal battle could not get any more bizarre, it does.

Legal briefs recently filed in a U.S. court revealed that for 50 days Chevron lawyers prepped their million-dollar star witness about a bribe alleged in the oil giant's retaliatory RICO lawsuit against a group of Ecuadorian indigenous peoples and their U.S. lawyer. (See page 61 of this legal brief.)

It took Chevron that long to try and get Alberto Guerra's story straight.

Turns out even that attempt failed, as appellate briefs filed by the Ecuadorians and their attorney, Steven Donziger, make clear.

Guerra is a former Ecuador judge who got kicked off his country's legal bench in 2009.

Under oath, Guerra admitted to taking up to 40 bribes (See page 2.) in other, unrelated cases.

Guerra also admitted, under oath, that his original testimony to Chevron was "not true" about the alleged bribe of the Ecuador trial judge, Nicolas Zambrano, who ruled against Chevron in 2011, awarding the Ecuadorians $9.5 billion for oil contamination damages in the Amazon rainforest.

By the time Chevron had finished with him, he had changed his testimony three times, and the changes were not minor. (See pages 55-57.)

Story No. 1: Guerra alleged the Ecuadorians' attorneys "ghostwrote" the Zambrano judgment and hired Guerra to edit it, which he said he did on his home computer. But when Chevron couldn't find the judgment on his computer, Guerra recanted.

Story No. 2: Actually, Guerra said, the verdict was on a flash drive that Zambrano gave him at the Quito airport. But when Chevron couldn't find the judgment on any flash drives, Guerra changed his story yet again.

Story No. 3: Actually, Guerra said, he traveled to the jungle on a bus and edited the judgment there on a laptop owned by one of the Ecuadorian attorneys.

As each story unraveled and evolved, Chevron agreed to pay Guerra more money for testimony the company desperately needed for its RICO trial to "prove" Guerra's claim that lawyers for the villagers sought to bribe Zambrano with a $500,000 payment for their $9.5 billion judgment.

Last count, Chevron had committed to paying Guerra at least $1 million (See page 160.) for his testimony, with another million likely to come if one counts the cash and benefits going forward.

Under oath, Guerra admitted he "exaggerated" the evidence to jack up the money or, in his words, "for the purpose of bettering or improving my (financial) position" with Chevron. (See pages 55-57.)

Based largely on this tainted testimony – fraught with hearsay problems described below – U.S. Federal Judge Lewis Kaplan ruled that the Ecuador judgment was fraudulent; that Ecuador's entire court system is corrupt through and through, and the Ecuadorians and their attorneys are prohibited from collecting the damage award ever in any country in the world.

Why Kaplan thinks he can block collection of an Ecuador judgment as well as sit in judgment of another country's judiciary is too complex a story for this post. (You can read more here and here about Kaplan's bias and his flawed findings.)

Let's just say no U.S. judge that we know of other than Kaplan ever has tried to do such a thing. And the last time Kaplan did it – in this very case, without as much as an evidentiary hearing --- the 2nd Circuit Court of Appeals in New York unanimously reversed him one day after oral argument. The Ecuadorians and Donziger have appealed once again.

But Kaplan's decision to allow these payments – what Kaplan himself called a "private witness protection program" – was central to proving Chevron's case.

The huge sums Chevron is paying Guerra go way beyond "reasonable" compensation, as allowed by New York law, according to this affidavit written and filed pro-bono by a leading legal ethics expert at the University of California/Irvine School of Law.

Prior to the RICO trial, the Ecuadorians and Donziger filed a motion to have Guerra's testimony struck.

The motion, which Kaplan denied, began to lay out how Guerra's testimony evolved as Chevron paid him ever-increasing sums to change his story as his previous versions became discredited. The appellate brief nailed it.

  • Guerra swore he had emails proving the Ecuadorians' lawyers wrote the judgment and agreed to pay Zambrano $500,000. Guerra gave Chevron's world-class computer forensics team full access to all his computers, flash drives, and online accounts - yet they could never find the promised emails. Indeed, while Chevron obtained virtually every email and document ever written and received by Donziger in the litigation, Chevron never produced any correspondence between Guerra and Donziger or anyone else on the Ecuadorian legal team, regarding the writing of a judgment or a bribe.
  • Guerra claimed the Ecuadorians' attorney Pablo Fajardo gave him a so-called "memory aid" document allegedly to help him write the judgment. Guerra first said Fajardo emailed this document to him. Chevron asked for the email, but Guerra suddenly had email problems and couldn't produce it. Later, he changed his story: Fajardo, he said, had given it to him in person. Guerra never found the document, later claiming it had been "stuck" to another document, but Chevron paid him $10,000 for it just the same.

  • Guerra claimed that the Ecuadorians' lawyers offered him $300,000 to keep the bribe a secret. Later he admitted under oath that this story was "not true" and "exaggerated" to convince Chevron to pay him more money.
  • Guerra also claimed he met with Donziger in Quito in late 2009 to finalize their deal. Immigration records actually produced by Chevron for other reasons showed that Donziger was not in Ecuador during this time. Donziger was with a family member suffering from a terminal illness.
  • And, if that wasn't enough to discredit his testimony, Guerra failed to identify Donziger in the courtroom when he was on the stand, mistakenly pointing to one of Donziger's attorneys.

The only evidence Guerra produced was largely third-party, hearsay evidence. For example, a deposit slip that purported to prove the Ecuadorians' lawyers deposited money into Guerra's bank account was not an original, only a supposed copy that Guerra said he obtained from the bank. Chevron and its legions of lawyers and investigators never attempted to obtain the original or a copy or confirm the authenticity of the deposit slip from the bank, even though they have looked under every rock possible in this case.

Guerra also kept a daily planner – he had for years, if not decades. Yet when it came time to produce the planners to Chevron, he claimed he "lost" the volumes for 2009 and 2010, the two critical years, which would have corroborated his testimony. But he was more than happy to provide later years, after the judgment was issued and during the time when he would have been plotting on how to sell his testimony to Chevron for the highest dollar.

It would be easy to write that Guerra played Chevron for money, but Chevron knew better.

Company lawyers in Quito already had experienced firsthand Guerra's willingness to sell his services. In 2009, after being kicked off the Ecuador court, Guerra told Chevron lawyers he could, for $1 million, arrange for Zambrano to write a favorable judgment. Curiously, the lawyers met and spoke with Guerra several times but took no action, other than to prepare affidavits detailing the conversations.

More curious is the fact that Chevron never exposed the Guerra bribery offer to the oil giant until a few months before the RICO trial four years later, even though the company was lobbying the U.S. Congress furiously in 2009, accusing the Ecuador judiciary of corruption. And in 2011, when Zambrano was preparing the judgment, Chevron said nothing about Guerra's claim that he could turn Zambrano.

During the RICO trial, Guerra testified that Miami-based Chevron lawyer Andres Rivero offered Zambrano $1 million if he would back up Guerra's bribery allegations against the Ecuadorians' lawyers, but Zambrano refused and later took the stand in Kaplan's court, denying all of Guerra's bribery charges, even though he was under no legal obligation to do so.

When Guerra handed over a few of his documents to Rivero and an investigator from Kroll, Rivero recorded their conversation, later obtained through discovery. What follows is only some of what was said: (See page 54.)

GUERRA: "[A]ctually, actually ... I have some attachment to that (the documents), right? All the information I have there.

CHEVRON LAWYER ANDRÉS RIVERO: That can be fixed.

[CHEVRON] KROLL INVESTIGATOR 5: You will become more attached to what you can buy with the money we pay you. [LAUGHS]

RIVERO: Yes, sure, true, true.

GUERRA: It helps, but, but it's so little.

KROLL INVESTIGATOR 5: "[W]e'll make a deal on the way to your house. This is what we have in cash. Between now and afternoon's end we'll have managed to have a little more. How much is it?

RIVERO: How much? Not when. I said how much. [LAUGHS]

GUERRA: Make it fifty thousand.

At one point, Guerra said his story was "worth a million dollars." (Guerra clearly likes the sound of a million dollars.)

And, presto, that is what he has been paid in cash, monthly payments, services and benefits as described in a two-year contract with Chevron that leaves open the option of renewing it for a longer period of time. In fact, the total could easily top $2 million as the legal battle plays out: (See page 33.)

In addition to payments, Chevron also granted Guerra and his extended family the golden pot at the end of the rainbow: a free pass to America. Chevron obtained U.S. visas for Guerra, his family and his son's family in Ecuador and is paying for all of his family's immigration legal bills.

Chevron also reunited Guerra with a second son, who was living in the U.S. illegally with his family. Chevron is now paying for this son and his family's immigration attorney, a benefit not disclosed initially.

In its contract with Guerra, Chevron said "[n]o payment is contingent on the content of Guerra's statements or testimony" but this thinly-veiled inducement of favorable testimony makes a mockery of our justice system.

It should be noted that the U.S. judge who declared Ecuador's courts corrupt – Lewis Kaplan – allowed Chevron to pay Guerra $1 million plus for the testimony it needed to win in his courtroom in a "trial," where Kaplan denied the Ecuadorians and Donziger a jury at the last minute so he could rule alone.

Today Chevron argues Guerra is no longer safe in Ecuador, but the only thing Guerra has to fear in his home country is being arrested for admitting on the stand in a U.S. court he took up to 40 bribes when he was an Ecuadorian judge.

Instead, he and his family will enjoy a new life, financed by Chevron in the latest tortured and unjust attempt by the company to evade accountability for its environmental disaster in the Amazon rainforest as confirmed by three layers of courts in Ecuador.