Monday, November 16, 2015

Chevron Paying Income Taxes and Salary of Corrupt Witness Who Committed Perjury in Ecuador Case

Reposted from The Chevron Pit

Without public disclosure, Chevron has re-upped its contract to pay $144,000 annually to former Ecuadorian judge Alberto Guerra after he admitted perjuring himself in a federal court during the company's RICO trial. The perjury happened after Chevron lawyers at the outside law firm Gibson Dunn coached Guerra on his false testimony for 53 consecutive days.

We have no choice but to call this what it is: a witness bribery scheme orchestrated by a major American oil company. Chevron's aim is to evade paying for the clean-up of what could be the world's worst oil disaster, caused deliberately on its watch when it operated in Ecuador (under the Texaco brand) from 1964 to 1992.

The discredited Guerra – who has admitted that he accepted bribes when he was a judge in Ecuador – has become a central figure in Chevron's campaign to evade paying the $9.5 billion environmental judgment in the South American nation. Chevron was found to have deliberately dumped billions of gallons of toxic waste into the streams and rivers of the rainforest. The dumping continues to decimate indigenous groups and has caused an outbreak of cancer, according to the findings of three layers of courts in Chevron's preferred forum of Ecuador.

The Chevron payments to Guerra seem to have earned the company and its ethically-challenged lawyers at Gibson Dunn a fraud and bribery complaint to the U.S. Department of Justice. Amazon Watch, an environmental group that has been fighting to hold Chevron accountable, said it will lodge a formal complaint over the witness payments and falsification of evidence.

Paul Paz y MiƱo, a director at Amazon Watch, said:
It is unethical, illegal, and utterly shocking that Chevron continues to pay huge sums to a completely discredited witness who has admitted to repeatedly lying and accepting bribes to testify falsely in court. This arrangement is worth of a criminal investigation and we are asking the Department of Justice to look into it. We consider Chevron to have engaged in witness bribery.
Luis Yanza, a winner of the Goldman Environmental Prize and the longtime leader of the rainforest communities affected by Chevron's pollution, said in reference to Guerra:
Chevron and its lawyers gave a key witness cash out of a suitcase to falsify evidence to taint the Ecuador judgment so the company does not have to pay for the clean-up of oil pollution that is causing grave harm to thousands of people. This is just one example of the company's plan to threaten judges and sabotage the proceedings in Ecuador.
Guerra stunned the legal community after he admitted during a recent international arbitration proceeding that he lied on the stand during the company's retaliatory civil "racketeering" (or RICO) case targeting the lawyers for the villagers who won the historic judgment. Chevron made a mockery of justice in that case after the judge (Lewis A. Kaplan) displayed intense personal animus toward the villagers while hiding his investments in Chevron despite calls for his recusal over bias.

(As background, a federal appellate court in New York unanimously reversed Kaplan in 2011 when he earned the scorn of the international legal community by trying to block enforcement of the Ecuador judgment anywhere in the world. Without a jury or a fair trial, Kaplan then tried to overrule the final decision of Ecuador's Supreme Court by refusing to consider any evidence of Chevron's contamination and claiming the Ecuador decision was the product of racketeering. In the meantime, the villagers recently won a unanimous decision from Canada's Supreme Court authorizing them to seize Chevron assets to enforce their judgment. Here is a summary of the overwhelming evidence against Chevron.)

Guerra also recanted key portions of his testimony in the RICO case claiming that the Ecuadorian trial judgment was ghostwritten by the plaintiffs, according to reports from Courthouse News and Vice. These developments emerged recently when transcripts from the arbitration finally were released after Chevron, in yet another violation of the ethical rules, tried to keep them under wraps for months.

The transcripts show Guerra admitting that Chevron extended his contract for another year. Guerra does no work for Chevron other than make himself available to testify on the Ecuador case – a fact that many observers believe violates federal law and the ethical rules, as this legal brief and this opinion from a prominent ethics expert explain.

Yet Chevron continues to make up its own rules. In 2012, company operatives Andres Rivero and Yohi Ackerman traveled to Ecuador and paid Guerra $38,000 in cash out of a suitcase for his "cooperation" with the company. That included a promise by Guerra to try to bribe the trial judge with a down payment of $1 million with the goal of getting him to recant his decision. "Money talks but gold screams," Guerra said to the Chevron operatives at the time.

Chevron then inked a two-year deal providing Guerra a $144,000 annual salary, full payment of all income taxes, payment for the fees of three personal lawyers, health care, a car, and immigration services. The immigration services have allowed several family members to become residents of the United States after some had been living here illegally for years.

We also believe that Guerra and his team lied to the Department of Homeland Security to legalize the status of himself and his family members. By not disclosing to the U.S. government the many crimes Guerra had committed in Ecuador and later in the United States, Guerra (and Chevron) arguably violated U.S. law and committed a felony. Our investigation of this aspect of the Chevron-Guerra subterfuge continues.

All told, we conservatively estimate Chevron's paid benefits to Guerra amount to at least $250,000 annually. The amount rises considerably when one takes into account benefits paid to Guerra's three adult children and their families. Not bad for a man who testified he had $146 in his bank account when he struck the deal with Chevron.

Even with these extraordinary payments, Guerra seems to have very little skill as a Chevron stooge. Like most liars, he gets twisted into knots during cross-examination. Eric Bloom, a lawyer for Ecuador's government, shredded Guerra on the witness stand during the arbitration proceeding. (See these transcripts for the evidence. For more background on Guerra's admissions as well as the larger implosion of Chevron's RICO case, see this press release.)

As said, Chevron lawyers Randy Mastro and Avi Weitzman (both at Gibson Dunn) coached Guerra for an interminable period of time before letting him testify. Guerra had been removed from the bench in Ecuador for misconduct and was facing criminal prosecution until Chevron spirited him out of the country. Mastro also personally negotiated Chevron's payments to Guerra as the same time he was preparing a sworn affidavit for Guerra that by Guerra's own admission contained multiple lies.

Guerra admitted in the arbitration that he lied when he told Judge Kaplan he had been offered a "bribe" from the plaintiffs to write the trial court judgment against Chevron. He also confessed that critically important shipping records had nothing to do with the Chevron case, contradicting his prior testimony. He confessed that there were no emails or documentary evidence that the trial court judgment had been drafted by the plaintiffs and then given to the judge on a flash drive, as he had told Judge Kaplan.

The entire saga might expose Mastro and Weitzman to criminal prosecution, according to respected environmental lawyer Marco Simons.

One of the main targets of Chevron's retaliation campaign, U.S. attorney Steven Donziger, has filed the latest evidence of Guerra's collapse before the federal appellate panel reviewing Judge Kaplan's flawed decision. Donziger also turned the tables on Chevron by demanding the company cease the destruction of all documents related to the dispute in anticipation of further litigation by the villagers over the company's worsening misconduct.

The more Chevron fights, the more the company and General Counsel Pate seem to lose ground. Chevron's jurisdictional shell game is getting more exposed. The larger question is when Chevron's top leaders will be held accountable for the destruction of the Amazon and their own gross misconduct in evading court orders to clean up the damage.


Wednesday, November 4, 2015

Businessweek's Paul Barrett Ignores Spectacular Implosion of Chevron's RICO Case

Reposted from The Chevron Pit

Businessweek reporter Paul Barrett is again taking Chevron's side in the Ecuador pollution litigation by failing to report on the spectacular implosion of the company's RICO case. Readers of Businessweek interested in the latest news on the litigation are getting shortchanged.

We previously reported how Barrett generally frames his stories about the Ecuador litigation in a way that apologizes for Chevron's corruption and betrays a deep animus toward U.S. attorney Steven Donziger, the advisor to the affected rainforest communities that obtained a $9.5 billion judgment against the oil giant. Barrett adopted his flawed narrative in his thinly-sourced book on the case (called Law of the Jungle), which is largely an ad hominem attack against Donziger and is replete with factual errors and made-up scenes.

This "notice of defamation" letter written by Donziger explains some of the details of Barrett's sloppy and unethical journalistic practices. Usually missing from Barrett's stories is that Ecuador's Supreme Court (in the country where Chevron insisted the trial be held) unanimously affirmed the liability against Chevron in a 222-page decision meticulously documenting extensive contamination at hundreds of former company well sites. (See this summary of the overwhelming evidence against Chevron and this affidavit documenting some of the company's corruption.)

Barrett is now refusing to report on explosive new evidence from a related arbitration proceeding that strongly suggests Chevron's retaliatory RICO case has imploded in spectacular fashion. Others are reporting this news fully, but not Barrett. (See this powerful analysis from Amazon Watch, this article from Vice, and this article from Courthouse News.)

Here are some recent developments that severely damage Chevron's litigation prospects but are ignored by Barrett:

  • Chevron's main claim that the trial court judgment in Ecuador was "ghostwritten" by lawyers for the villagers has fallen apart. There was scant evidence of this other than the testimony from a corrupt and impoverished Ecuadorian witness (Alberto Guerra) paid $2 million by the oil company after having only $146 in his bank account; now Guerra admits under oath he lied on the stand during Chevron's RICO case about critical elements of his story.
  • Barrett has completely underplayed evidence from a computer forensic examination requested by Chevron in the arbitration proceeding that found the Ecuador trial judge saved the Word file that became the judgment on his own computer more than 400 times. Guerra had claimed the judgment was given to the judge by the plaintiffs on a flash drive just before it was issued. This evidence has been presented to the appellate court that oversees Kaplan.
  • Barrett also ignored that Guerra testified in Kaplan's RICO proceeding that the Ecuador trial judge promised him 20 percent of an alleged $500,000 bribe. In his arbitral testimony, Guerra confessed it was a total lie.
  • Guerra claimed he played a key role in the so-called ghostwriting. But he admitted he lied before Kaplan by claiming he made two trips to Lago Agrio to work on the judgment; in fact, those trips had nothing to do with the Chevron case. Again, silence from Barrett.
  • Guerra also conceded in his arbitral testimony that there is no evidence corroborating his allegations that the lawyers for the affected communities bribed the trial judge and wrote the judgment, which is Chevron's defense to actions to seize company assets to satisfy the Ecuador judgment. Guerra admitted he lied to Chevron to obtain more money from Chevron. "I lied there," he said. "I recognize it. I wasn't truthful." Again, nothing from Barrett.
In Canada, a trial to seize Chevron assets is proceeding. The villagers have filed a motion for summary judgment to knock out all of Chevron's defenses on the grounds they already were litigated and resolved by the court in Chevron's preferred forum of Ecuador. Barrett has yet to report on this development.

We suspect Barrett's recent retreat into silence has much to do with the fact developments are turning against Chevron. The company's trumped-up "fraud" narrative is the central thrust of Barrett's book and his prior reporting. To report that his main narrative is unraveling would further damage Barrett's credibility and would not be in his commercial interest.

Want to get a sense of what Businessweek's readers who rely on Barrett are missing? Read Eva Hershaw's account in Vice News in an article titled "Chevron's Star Witness Admits to Lying in the Amazon Pollution Case":
In testimony given before the international tribunal... Guerra has now admitted there is no evidence to corroborate allegations of a bribe or a ghostwritten judgment, and that large parts of his sworn testimony, used by Kaplan in the RICO case, were exaggerated and, in other cases, simply not true.
Adam Klasfeld of Courthouse News reported that Guerra "repudiated much of his explosive testimony" and admitted to lying about a number of key facts. Marco Simons, an attorney with Earth Rights International, suggested that two Chevron lawyers, Randy Mastro and Avi Weitzman, might face criminal exposure for coaching Guerra for 53 days to present false testimony. (For more on how Chevron law firm Gibson Dunn has falsified evidence, see here.)

Chevron had no real answer for several days to these devastating setbacks. That's where Barrett stepped in to post a short story on the company's website that is nothing more than a tortured attempt to rehabilite the lying Guerra.

Barrett might be technically correct to point out that Guerra has not recanted his testimony that a bribe occurred, but Guerra has admitted to being such a serial liar about everything else that nothing he claims can be taken seriously. That's especially true when there is no corroborating evidence left to back up the central feature of his story.

Predictably, Chevron spokesperson Morgan Crinklaw has been pushing Barrett's latest defense of Guerra into social media as a surrogate statement for the company. Barrett's colleague Roger Parloff of Fortune -- himself silent about the unraveling of Chevron's "racketeering" case -- tweeted it. (For more on Parloff's own bias in favor of Chevron, see this blog and this analysis.) And Barrett took the extraordinary step of contacting another reporter via Twitter to challenge her reporting contesting Chevron's narrative.

Businessweek needs to assign a truly independent journalist to report this story. In the meantime, Barrett should consider joining Crinklaw in Chevron's public relations department. He could make a lot more money doing the same thing.