Chevron Lawyers Indicted by Ecuador in Oil-Pit Cleanup Dispute

By Carlyn Kolker, Bloomberg
13 September 2008

Two lawyers for Chevron Corp., the second-largest U.S. energy company, were indicted in Quito, Ecuador, over allegations stemming from a cleanup of oil pits that's now the subject of a multibillion dollar lawsuit.

Texaco Inc., which Chevron acquired in 2001, drilled for oil in the Amazon region of Ecuador through the early 1990s, when it engaged in remediation of the oil pits. The Ecuadorian government released the company from liability. Thousands of citizens are suing Chevron over claims pollution left by Texaco caused cancer and birth defects.

The cleanup wasn't properly performed and certificates releasing the company from liability weren't properly obtained, according to a translated version of the Aug. 26 indictment provided yesterday by Chevron. The indictment also names seven other defendants, including Ecuador's former Minister of Energy and Mines.

"The certificates set forth statements as true facts when they actually are not true, which suggests the possibility of a punishable act," according to the indictment.

In April, an environmental consultant in the pollution lawsuit said Chevron should pay as much as $16 billion to clean up the contaminated land in the Amazon region. A judge hasn't issued a final ruling on damages.

An analysis of the oil wells cited in the indictment "found that they indicate work as having been performed when in fact it was not performed or not completed."

'Politically Motivated'

In a statement yesterday, San Ramon, California-based Chevron called the indictments "politically motivated."

"We will certainly defend our attorneys," Chevron spokesman Kent Robertson said yesterday in a phone interview. "They are honorable men. We will not allow them to be persecuted."

Robertson said that previous Ecuadorian governments declined to prosecute the case and that this administration decided to pursue it because the plaintiffs suing Chevron urged it to.

"We don't have a dog in this fight," said Steven Donziger, a New York-based lawyer representing the Ecuadorian plaintiffs. "Our intention is to win a recovery in the civil case."

Donziger said there was a "sufficient legal basis to bring indictments based on a fraudulent remediation."

The Chevron attorneys named in the indictment are Ricardo Reis Veiga, who is described as "a U.S. citizen: married, residing in Miami," and Rodrigo Perez Pallares, an Ecuadorian citizen who lives in Quito, according to the indictment.