Chevron's Troubles in Ecuador Continue to Mount with Fraud Indictment of High-level Executive

Ricardo Reis Veiga among Nine who Face Criminal Trial For Conspiring to Falsify Scientific Results of Clean-up

Amazon Defense Coalition

Amazon Defense Coalition
18 September 2008 - FOR IMMEDIATE RELEASE
Contact: Paul Paz y MiƱo: +1 510.281.9020 x302,

45 Chevron Pits That Were "Cleaned" Violate Norms

Quito, Ecuador – A fraud indictment in Ecuador against a Chevron executive and seven government officials is based on a theory by the country's national prosecutor that the accused conspired to lie about an environmental clean-up so Chevron could escape a potential multi-billion dollar civil liability then pending in a U.S. court, lawyers for Amazonian residents say.

"Chevron always cries ‘political interference' when it lacks a real defense" Chevron announced last week that Ricardo Reis Veiga, a vice president in charge of the company's legal affairs in Latin America and the Caribbean, was charged in Ecuador with fraud for his work in the mid 1990s on a purported environmental remediation in the country's Amazon rainforest. Also indicted was Rodrigo Perez Pallares, a Chevron lawyer in Ecuador, and a former Ecuadorian government oil minister.

Texaco (now Chevron) used the results of the purported remediation to secure a release in 1995 – oddly, before any clean up work was done - from Ecuador's government that was used at the time to try to dismiss a civil case over environmental damages then pending in U.S. federal court in New York. The U.S. judge in the case refused to accept Chevron's argument that the release applied to private claims of the type being pressed in the civil suit, and the case continued in the U.S. and later in Ecuador after Chevron succeeded in getting it transferred there in 2002.

Earlier this year, an independent court-appointed expert in the civil case working with a team of 14 scientists found Chevron is liable for between $7.2 and $16.3 billion for environmental damage in Ecuador's Amazon region. Texaco (now Chevron) was the exclusive operator of an oil concession in the area from 1964 to 1990 that dumped 18.5 billion gallons of toxic "water of formation" into Amazon waterways, according to the lawsuit.

A final decision in the case is expected in the coming months. The indictment of the Chevron officials is based on a wide body of scientific evidence generated by an independent government investigative agency and corroborated by three sources that have analyzed soil samples of waste pits that Chevron claims to have remediated, according to the lawyers.

When Richard Cabrera, the court expert, reviewed roughly 64,000 analytical results in the civil trial produced by these parties, he found that more than 80% of the pits supposedly "remediated" by Chevron have levels of toxins that violate the law.

Evidence in the civil trial shows "remediated" waste pits with Total Petroleum Hydrocarbons (TPH) of up to 206,512 parts per million (ppm), or 206 times higher than the Ecuadorian norm of 1,000 ppm, according to Douglas Beltman, a scientist at Stratus Consulting in Boulder who works with the plaintiffs. TPH are a body of toxic chemicals that include benzene, a known human carcinogen.

A complete list of the 45 so-called remediated pits that violate Ecuadorian norms – taken from the Cabrera expert report – can be found at The leaders of five indigenous groups in the area have alleged for years that the Chevron remediation was a fraud and was orchestrated by Reis Veiga to secure a release that could be used to dismiss the class action civil case then pending in U.S. federal court in New York. Texaco's lawyers at the time tried repeatedly to use the release – provided before any clean-up work was actually done – to persuade the U.S. court to dismiss the case.

An Atlanta-based firm, King & Spalding, represented Texaco at the time. The indictment is based largely on soil sampling of remediated pits and was performed in 2001 by an independent Ecuadorian government agency, called the Controlaria. The sampling by the agency, which is similar to the General Accounting Office in the U.S., is part of the civil trial's official record.

The indictment alleges that Reis Veiga and Perez Pallares signed documents certifying the remediation had been carried out when in fact it had not. Signing the documents violates various anti-fraud provisions in Ecuador's penal code, according to the indictment. The charges carry maximum sentences of ten years.

Chevron has charged the indictment results from "political interference" in the case, but the claim was rejected by lawyers for the plaintiffs.

"Chevron always cries ‘political interference' when it lacks a real defense," said Pablo Fajardo, the lawyer for 30,000 Ecuadorians who are suing Chevron.

The timing of the indictment appears to result from the fact the statute of limitations would have expired on Sept. 28, ten years to the day after the final documents were signed indicating the end of the clean-up.

The civil lawsuit alleges Chevron dumped 18.5 billion gallons of toxic waste water into Amazon waterways and abandoned hundreds of unlined waste pits gouged out of the jungle floor, causing a spike in cancer rates and forcing five indigenous groups to abandon most of their ancestral land. As the exclusive operator of a large oil concession, Texaco extracted more than one billion barrels of oil from the country between 1964 and 1990.

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