Criminal Investigation of Chevron Sought in Ecuador by Indigenous Leaders over Rainforest Contamination

Evidence of Fraud from $6 Billion Lawsuit Prompts Letter to National Prosecutor Seeking Quick Action

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Quito, Ecuador - Leaders from Ecuador's largest indigenous federation, which represents millions of people, today called for a criminal investigation of Chevron and two of the company's lawyers for allegedly defrauding Ecuador's government during a botched environmental remediation in the mid-1990s.

The letter, signed by Luis Macas, President of Ecuador's national indigenous federation, CONAIE, asserts that laboratory results from an ongoing $6 billion-class action environmental trial against the oil giant in the Amazon rainforest town of Lago Agrio prove that Chevron's lawyers committed a fraud punishable by jail-time.

Those targeted for investigation include Rodrigo Perez Pallares, Chevron's legal representative in Ecuador, and Ricardo Reis Veiga, currently a Chevron Vice-President in charge of downstream operations, in Miami. Both are lawyers and the pair oversaw the controversial remediation in the 1990s, which Chevron has tried to use as a defense in various lawsuits arising out of its Ecuador disaster.

The lawsuit in Ecuador alleges that Texaco (now Chevron) dumped 18.5 billion gallons of toxic waste into Ecuador's rainforest between 1964 and 1992, when the company operated a concession that contained 350 well-sites. The suit also claims Chevron abandoned roughly 1,000 open air toxic waste pits in the rainforest.

The letter uses evidence from the environmental trial, which began in 2003, to demonstrate that the remediation consisted of simply bulldozing soil and organic debris on top of the waste pits rather than cleaning them of lethal toxins. Chevron spent about $40 million on the remediation, or less than 1% of the alleged damages according to outside experts.

Perez Pallares and Reis Veiga negotiated and signed the remediation agreement with Ecuador's government and oversaw the use of false laboratory tests that severely underestimated the amount of toxins in the soil, with the goal of securing a legal release from future government claims, according to the letter.

Thus far, the evidence at the Lago trial points to Chevron's culpability. Of 45 oil production sites inspected by court-appointed technical experts, many of which were part of the earlier remediation, all show concentrations of carcinogenic chemicals at hundreds and sometimes thousands of times higher than U.S. norms.

The only independent damage assessment, by the U.S. firm Global Environmental Operations, estimates clean-up to cost at least $6.14 billion. If personal damages are factored in, the final toll could exceed $10 billion, according to lawyers for the plaintiffs.

The trial recently was fast-tracked by Judge German Yanez, who canceled 64 field inspections because the results were becoming redundant. The final phase of the trial, which will produce a damages claim, is expected to start within weeks and finish by this summer. A final decision could come in 2008.

In addition to Macas, the letter seeking the criminal investigation was signed by Justino Piaguaje, President of the Secoya indigenous group; Ivan Piaguaje, of the Siuna indigenous group; Luis Narvaez, of the Cofan indigenous group; and Eduardo Delgado, a former priest who is the President of Ecuador Decides, a prominent civic group.

Chevron claims the toxins being found pose no risk to human health.

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