In a Document Now Under Seal, Plaintiffs Say Payments Were Excessive and Suspect
By Rebecca Beyer, The Daily Journal
8 March 2011
San Francisco, CA – New court documents released briefly last week revealed that Chevron Corp. – in part through one of its law firms, Jones Day – paid at least $169,000 to a man who secretly videotaped one of the original judges in a massive environmental case against the oil company in Ecuador.
When Chevron announced in August 2009 that it received the video recordings, which the company claims show the Ecuadorean judge was preparing to rule in the plaintiffs' favor in exchange for a bribe, the company also announced it was paying to relocate the man who made the recordings to the United States.
"Because of concern for [Diego] Borja's safety, Chevron has assisted him and his family with relocation expenses and other interim support," the San Ramon-based company announced.
But, according to court documents filed Friday, which were ordered sealed Monday pursuant to a protective order, Chevron paid for far more than moving expenses. Since August 2009, Chevron paid Borja each month: a stipend of at least $5,000; more than $1,600 for rent and at least $700 in automobile payments. The company also apparently paid more than $45,000 in taxes for Borja and it has continued to pay the Berkeley law firm Arguedas, Cassman & Headley LLP to defend Borja in proceedings related to the litigation. It is unclear from the documents if Borja also received a monthly stipend of $10,000, which would bring the total to nearly $340,000.
At least some of the payments have been facilitated by Jones Day, one of the firms representing Chevron in litigation stemming from the Ecuadorean case.
Information about the payments was revealed as the plaintiffs battle against a New York federal judge's order barring them from enforcing the $8.6 billion judgment they won against Chevron last month, which has grown to $9.5 billion to include an award to the plaintiffs' team. The plaintiffs filed the information about the payments Friday in opposition to Chevron's request for a preliminary injunction barring enforcement of the judgment. But on Monday, U.S. District Judge Lewis A. Kaplan issued the injunction.
A Chevron spokesman declined to comment on the filings about the payments, citing the protective order.
The plaintiffs claim Borja has information that would benefit their case, pointing to a recorded conversation between Borja and another person in which Borja said, "I have correspondence that talks about things you can't even imagine, dude ... I can't talk about them here, dude, because I'm afraid, but they're things that can make the Amazons win this just like that."
The plaintiffs claim Chevron's payments to Borja are hush money and proof of the company's "unclean hands." They cite case law that says when one party in litigation seeks to enjoin another party because of fraudulent conduct, the party seeking relief cannot also have committed fraud.
Attorneys for the plaintiffs referred questions to their spokeswoman Karen Hinton who said the payments were an effort "to buy [Borja's] silence" on the evidence against Chevron, which the plaintiffs hope to uncover through discovery.
"There is no other way to characterize paying an enormous salary and taxes to someone who is not doing any work and who is a potential witness against Chevron and its lawyers in regard to the company's grave misconduct in Ecuador," Hinton said.
Although Chevron maintains Borja's relocation was necessary because of legitimate threats to his safety, at least one ethics expert questions the propriety of the payments, especially in light of the fact that Borja is a potential witness in ongoing litigation.
"Generally fact witnesses can only be minimally compensated for their time and reasonable expenses in providing testimony," said Catherine A. Rogers, a professor at The Dickinson School of Law at Pennsylvania State University and an expert in international arbitration and professional ethics. "Rent does not seem to be at all within the boundaries of those parameters." One of Chevron's attorneys, Robert A. Mittelstaedt, partner-in-charge of Jones Day's San Francisco office, declined to comment. Mittelstaedt has been one of the partners facilitating Chevron's payments to Borja.
Attorneys for the Ecuadorean plaintiffs obtained the information about the payments in response to discovery requests connected with their efforts to depose Borja in San Francisco federal court.
"Chevron and its attorneys apparently have taken Mr. Borja's threats to expose their apparent misdeeds very seriously," wrote New York attorney Julio C. Gomez and New Orleans attorney Carlos A. Zelaya II. "Based upon the documents obtained from Mr. Borja on March 3, Mr. Borja's personal happiness appears to be priority number one for Chevron and its lawyers at Jones Day."