Tuesday, September 14, 2010

Enough to Make You Sick: Chevron's Successful Spin & Toxic Lies in Ecuador

Yesterday, I began my workday drinking coffee and reading over a brutal article on Fortune.com by legal reporter Roger Parloff, entitled Evidence of fraud mounts in Ecuadorian suit against Chevron.

My hopes that the article would help to highlight Chevron's long history of corruption and fraud were quickly dashed... it was not exactly the start to the week I had hoped for.

As I read Parloff's review of the latest in the titanic legal battle to force Chevron to clean up its poisonous legacy in the Ecuadorian Amazon, my chest tightened as it occurred to me how good Chevron has become at making this case about everything except for the ravaged rainforest and the men, women, and children who have suffered over the decades due to the oil giant's greedy, reckless, behavior.

The article begins:

Over the past ten months, Chevron's outside lawyers at Gibson, Dunn & Crutcher have filed 11 civil actions in federal courts across the United States, each designed to pull back the curtain on what they say is an elaborate, two-year-long charade in which plaintiffs lawyers covertly planned and ghostwrote a crucial report on damages that was ostensibly being authored by an independent expert appointed as an "auxiliary" to the Ecuadorian court. The expert's final report, issued in November 2008, recommended that Chevron pay the plaintiffs $27.3 billion.

And throughout the article, Parloff does an exceptional job at presenting the story as if it wasn't lifted almost entirely from a bunch of Chevron talking points. The gist of Chevron's claim is that the lawsuit against the company is a giant baseless swindle concocted by contingency fee lawyers looking to get at the oil giant's deep pockets. And now, as Parloff's writes, Chevron's multiple discovery actions – most notably its successful subpoena of hundreds of hours of outtakes from Joe Berlinger's documentary film CRUDE – have produced evidence that the plaintiffs attorneys have engaged in fraud.

Except that neither Parloff, nor any of the federal judges who have opined about the case in rulings granting Chevron's motions for discovery, have any basis upon which to draw their conclusions except for Chevron's self-serving, dishonest, and, apparently, superbly-made arguments.

In fact, as the lawyers for the Ecuadorians noted in a response to Parloff's article:

"...Parloff has never been to Ecuador, never examined the 200,000-page trial record, never seen an original lab report from the 64,000 sampling results at trial, never talked to any witnesses who have testified in the case, and utterly fails to understand either the enormous quantum of evidence or the procedural rules that govern trials in Chevron’s preferred forum of Ecuador."

A major focus of Chevron's latest legal & PR blitz is the relationship between the plaintiffs and court-appointed expert Richard Cabrera. Unsurprisingly, this is also the major focus of Parloff's article.

Richard Cabrera is the court-appointed expert who was asked to come up with an overall damages assessment – in the end, $27.3 billion – to assist the judge overseeing the trial in Lago Agrio to make a final ruling about Chevron's liability for massive oil contamination across a vast swath of the Ecuadorian Amazon.

Parloff rolls with Chevron's cynical narrative:

Chevron claims that the logs already prove that the plaintiffs' consultants ghostwrote Cabrera's report, and the plaintiffs lawyers do not deny that they and their consultants provided materials to Cabrera.

He then goes on to detail the ex parte contacts between the plaintiffs side and Cabrera as if it's a smoking gun (ex parte is a Latin legal term that in this context refers to contacts between one party and the court or experts without the opposing party present).

But, as the plaintiffs explain in a legal filing in U.S. Federal Court opposing a subpoena served upon the lead U.S. attorney in the case (an extraordinary over-reach unto itself):

Ex parte” contacts with Mr. Cabrera remain at the heart of this petition, yet (i) the matter of contacts between Plaintiffs and Cabrera is undisputedly before the Lago Agrio Court, and that court has given no indication that such contacts are improper; (ii) Chevron has still not denied it that also had ex parte contacts with court experts in Lago Agrio; and (iii) Chevron still cannot point to a single order, rule, regulation, or law prohibiting such contact; to the contrary; it is reduced to relying on lengthy expert opinions to resolve what it had claimed was a cut and dry example of fraud under Ecuadorian law.

Chevron complains about the “ghostwriting” of expert reports, yet it has become clear that Chevron’s private expert, John A. Connor, ghostwrote part of the report of another independent, neutral court expert in Lago Agrio: Mr. Barros. Attached as Exhibit 67 is a report Chevron’s private expert, Mr. Connor, prepared dated June 16, 2005 titled Pr├ícticas y Reglamentos Internacionales Para el Uso y la Remediaci├│n de Piscinas de Campos Petroleros. Apparently without any attribution, the neutral and independent expert appointed by the Lago Agrio Court, Mr. Barros, copied entire pages of Chevron’s report, word for word.

The legal memorandum continues:

Nowhere does Barros appear to acknowledge that he has cut and pasted Chevron’s expert’s materials into his own avowedly neutral and independent report. Does Chevron deny it had ex parte conduct with Barros? It does not.

Is it a miraculous coincidence that an entire section of the Barros report is a clever cut and paste of disparate portions of Chevron’s work product? It is not.

By Chevron’s argument, this is fraud on the court, collusion with a neutral, independent expert, and criminal conduct that should send the people at Chevron who engineered the fraud to jail.

Chevron also fails to refute the now-undisputed declarations that Chevron’s lawyers met secretly and repeatedly not just with experts, but with the Court, and specifically discussed the Lago case. When this ex parte conduct was exposed, Chevron’s security guards tried to keep plaintiffs’ representative away. This secret contact was pursued by Chevron’s counsel, yet counsel is completely silent in Chevron’s opposition: not one declaration, not one response on the facts. If it is acceptable for Chevron’s lawyers to meet ex parte with the Court itself, why is it unacceptable for plaintiffs to meet “ex parte” with an expert? Chevron does not and cannot explain.

Evidently, Parloff has chosen the convenient path of simply ignoring the plaintiffs' thorough debunking of Chevron's breathless accusations.

In a brief aside, Parloff writes:

It should be noted that the fraud claims -- even if true -- do not necessarily impugn the legitimacy of the Indians' underlying cause, or even the genuineness of their lawyers' belief in that cause..."

But as Parloff also notes, to the certain gratification of Chevron and its highly-paid American corporate lawyers, legitimacy of the indigenous communities' cause – and the reality of their continued suffering – won't necessarily secure them justice in court.

I'm not sure what is more devastating about an article like this, but either choice is just a different side of the same coin. Yesterday, I was saddened that a man as smart as Parloff can be so completely taken in by the dishonest narrative that Chevron has spun. Today, I'm sickened by how astonishingly good at their devious task the Chevron lawyers and spinmasters have grown to manipulate a man as smart as Parloff.

Chevron has scored another PR victory, yes. But the truth, as I've said before, has a way of bubbling to the surface like crude in the Amazon.

Concluding their response to Parloff's article, and to Chevron's increasingly dishonest and abusive legal tactics, the lawyers for the communities in Ecuador write:

Chevron’s problem in Ecuador is that it is losing the case based on the evidence and that its own officials are under criminal indictment for fraud related to a sham remediation. The real story is that the evidence convincingly demonstrates that an American company went to a foreign nation and deliberately devastated the Amazon rainforest environment out of greed. The destruction was done in violation of Ecuadorian laws, industry standards, Chevron’s own operating contract, and all sense of basic decency. Chevron’s allegations of “fraud” are themselves part of an elaborate scheme to cover up the company’s pervasive illegality in its Ecuador drilling operation and in its advocacy during the trial.

– Han

Han Shan is Coordinator of Amazon Watch's Clean Up Ecuador Campaign.

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