By Adam Klasfeld, Courthouse News Service
22 September 2011
Chevron tried to shake off multibillion environmental claims in Ecuador by lobbying government officials, even as it blasted opponents for allegedly playing to the courts' corrupt and political side, according to diplomatic cables released by Wikileaks.
A provincial court in Lago Agrio, Ecuador, slapped Chevron with an $18.2 billion penalty in February to remediate decades of damage to the Amazon caused by oil drilling. Chevron's predecessor, Texaco, had drilled there from 1964 to 1992, and the court found it had decimated the rainforest and groundwater by dumping billions of gallons of oil in a region home to 30,000 people.
Chevron was pulled into a decade-old lawsuit over the spill when it acquired Texaco in 2001.
About seven years later, in a cable to the U.S. secretary of state, former U.S. Ambassador Linda Jewell wrote that Chevron had begun to "quietly explore" a deal with the government of Ecuador (GOE) to make the case disappear.
"Chevron had begun to quietly explore with senior GOE officials whether it could implement a series of social projects in the concession area in exchange for GOE support for ending the case, but now that the expert has released a huge estimate for alleged damage, it might be hard for the GOE to go that route, even if it has the ability to bring the case to a close," Jewell wrote on April 7, 2008.
Karen Hinton, a spokeswoman for the Ecuadoreans suing Chevron, said the oil giant has "consistently tried to end run" the court case through government negotiations, in defiance of the official separation of powers in Ecuador.
Though Chevron has previously decried a lack of separation in Ecuador's "politicized" courts, it defended past political maneuvers.
Chevron spokesman Justin Higgs confirmed that the oil giant spoke to Ecuador but did not address whether the oil giant asked the government to pressure its judiciary to dismiss the case.
Higgs focused on Chevron's domestic ties, which he said the company needs to contest the verdict.
"Chevron has indeed had discussions with U.S. Embassy officials and the USG [U.S. government] more broadly to secure its support in ensuring that Chevron's contractual and treaty-based rights in Ecuador are protected," Higgs said in an email to Courthouse News.
The Wikileaks cables also show that Chevron did not always have misgivings about the Ecuadorean courts. One rallying cry Chevron has used to undermine the Lago Agrio trial is a video that allegedly implicates the presiding judge, Juan Nuñez, in $3 million bribery scheme. Chevron has claimed it received videos unsolicited and published them over the Internet on Aug. 31, 2008.
But two years earlier, Chevron had nothing to report about the Ecuadorean judiciary when speaking to Charge d'Affaires Jefferson Brown. "Chevron had not had any real complaints about the judge in the Lago Agrio case," Brown said in a March 21, 2006, cable to the State Department.
Two days after Chevron published the Nuñez footage, then-U.S. Ambassador Heather Hodges sent a cable to the secretary reporting that Chevron lawyers phoned the Embassy to give diplomats a "heads up" about the disclosure. Ecuador ultimately expelled Hodges this past April for disclosures she made in unrelated cables obtained by Wikileaks.
While denying wrongdoing, Nuñez stepped down from the case to avoid the appearance of impropriety. But cracks quickly surfaced in Chevron's allegations.
Summarizing hours of footage, The New York Times later reported, "No bribes were shown on the tapes."
Hodges explained in the cable that the "tapes were recorded clandestinely by Diego Borja, an Ecuadorian who had performed work for Chevron as a logistics contractor, and Wayne Hansen, a U.S. citizen with no ties to Chevron."
Although Chevron has distanced itself from the cameramen, Courthouse News discovered emails currently under a court seal that show Hansen contacted the company's investigator months before the release of the videos.
Hansen claimed in the email that Chevron duped him, and he threatened to ask Judge Nuñez for forgiveness if the company did not contact him.
More than a year later, he sent another email to Borja's investigative firm. Hansen claimed that he was in Peru, to which he had apparently fled in defiance of a subpoena that would compel an explanation of the videos.
Hodges, the ambassador, told Washington that Ecuadorean government officials were immediately skeptical and indignant about the recordings.
President Rafael Correa's Legal Secretary General Alexis Mera "pointed out that Chevron's disclosure was based on illicitly obtained recordings and called it a disgraceful attempt to influence the outcome of the judicial proceeding," Hodges wrote.
In a follow-up cable sent about a week later, Hodges said that Ecuador's prosecutor general called on the attorney general to "initiate proceedings against Chevron in the United States, presumably for violations under the Foreign Corrupt Practices Act."
The Ecuadorean government has not backed off from allegations that Chevron orchestrated a "judicial entrapment" scheme, and it continues to ask a U.S. federal judge to unseal the Borja and Hansen communications.
Meanwhile, the Ecuadoreans' spokeswoman hopes that the cables will turn the tables on which party allegedly committed misconduct in Ecuador.
"These diplomatic cables reveal a shocking level of misconduct on the part of Chevron's lawyers to undermine the rule of law in Ecuador," Hinton said. "They also demonstrate the company's extremely close ties to U.S. embassy officials in Ecuador who seemed open to helping Chevron shut down the legal case."
In one of the first discovery proceedings Chevron initiated last year in New York, U.S. District Judge Lewis Kaplan interrupted counsel for the Ecuadoreans as the lawyer assailed Chevron's litigation strategy.
"I am not naïve," Kaplan said. "I don't assume that anyone's hands in this are clean."