U.S. Oil Company Spies on Latin American Country to Escape Multi-Billion Court Judgment

By Karen Hinton, The Huffington Post
14 March 2013

Reports of China's involvement in spying on U.S. corporations have generated debate in this country about how to punish its government and prevent the theft of valuable American trade secrets. But what if it were the reverse? What if a U.S. corporation spied on a sovereign nation to undermine its government and judiciary to escape a $19 billion court judgment for massive oil contamination?

The Chevron Corporation has spied – and perhaps is still spying – on the Republic of Ecuador, fueling a fierce battle between the oil giant and President Rafael Correa, who is calling on other South American countries to hold Chevron accountable for the world's largest oil-related disaster in the Ecuadorian rainforest.

Fearing the loss of an historic, long-running environmental lawsuit in the Ecuadorian rainforest in 2009, Chevron secretly videotaped the judge hearing the case – with a spy pen and spy watch – in an effort to derail the trial by entrapping him, government officials and indigenous community leaders in a faked bribery scandal.

It goes without saying that if Chevron had been caught trying to secretly videotape a U.S. judge, it would be facing criminal charges.

More Maxwell Smart than James Bond, Chevron's covert action eventually blew up in its face, but the stunt bought Chevron precious time to manufacture a fraud narrative that its 2,000 lawyers and legal assistants are using in a U.S. court to seek revenge on one of the U.S. attorneys who has served as a legal adviser to the Ecuadorians for the 20 years the case has been litigated.

As with its lawyers, Chevron has not spared any expense for its spies, hiring at least three of the largest and most expensive private investigative firms in the world, including the San Francisco-based international firm Kroll Inc., to help the oil giant delay, if not completely dodge, paying the $19 billion judgment awarded by an Ecuador court in 2011.

Chevron has refused to pay, forcing the Ecuadorians to file lawsuits in Argentina, Brazil and Canada to seize Chevron's assets there. Chevron has few assets in Ecuador. If paid, the damage award will help remediate the impact of 16 billion gallons of toxic waste that Chevron intentionally emptied into the rainforest's waterways and soil and 900 huge, unlined oil pits full of deadly chemicals and pure crude oil that the company left behind when it exited Ecuador in 1992, after three decades of oil exploration. Over 1,400 have died and thousands more have suffered illnesses resulting from Chevron's deliberate acts.

Photo Credit: Amazon Defense Coalition

In 1993, a group of indigenous peoples sued Texaco, which later merged with Chevron. Texaco and then Chevron argued the case should be tried in Ecuador because the pollution was there, and Chevron's lawyers said they were confident they would get a fair trial. In 2002, a U.S. court agreed, requiring Chevron to accept Ecuador's jurisdiction, which it did. In 2003, the Ecuadorians filed the lawsuit again, this time in the heart of the rainforest. One of Chevron's first legal motions was to fight jurisdiction. It lost. The trial began, and when overwhelming evidence of guilt poured into the court suddenly Chevron exclaimed it could not get a fair trial after all. Chevron might have fared better in court, if the company itself, in the earlier stages of the trial, hadn't submitted test samples with contamination levels hundreds of times higher than the law allowed. See pages 42-48 in this court document.

Only a few weeks after the trial's evidentiary phase finally came to a close six years after it began, Chevron undertook a shocking sting operation, spying on Ecuador's government and court officials, Americans supporting the lawsuit and the Ecuadorians themselves, many of whom are among the poorest people on the planet and suffer today from cancer and other horrendous, oil-related diseases as well as an inability to farm and work their land.

Chevron Contractor Secretly Videotapes Ecuador Judge

In June 2009, a Chevron contractor from Ecuador and an American from California, where Chevron is headquartered, secretly videotaped the sitting judge with a spy watch and pen, an act that is against the law in Ecuador and in the U.S. The two men, Diego Borja and Wayne Hansen, hoped to capture the judge on camera accepting a bribe in exchange for a government contract. Pretending to be businessmen, the two also secretly videotaped another man who Chevron claimed to be the conduit for a bribe to government officials and the Ecuadorians. It has never been determined if the man was actually a party to the sting operation being carried out by Borja, the Chevron contractor, or someone that Borja duped.

Even though the tapes showed no bribes being accepted by anyone, Chevron – desperate to derail the trial – released them to the news media three months later, claiming they proved the courts were corrupt, and the lawsuit against it should be dismissed. Dow Jones, AP, Reuters and Bloomberg quickly swallowed Chevron's bait and carried news reports without carefully viewing the two-hour videotape. After doing so and after additional investigations by the Ecuadorians' legal team, the New York Times, the Financial Times and the Los Angeles Times all wrote the judge never discussed a bribe much less took one.

Through court discovery, the Ecuadorians later learned that Chevron has paid Borja at least $2.2 million to keep quiet about the whole sordid affair, financing a completely new life for him and his family, out of Ecuador and in Houston by way of San Ramon, California, home to Chevron's corporate office, where the Borjas lived for about a year. During that time, Borja communicated with a childhood friend via Skype about what he himself described as his "dirty tricks" against the indigenous peoples in Ecuador. Unbeknown to him, his friend – upset that Borja turned on his countrymen – taped him. On the tapes, Borja confessed that there was "no bribe" and, truth be told, he had evidence that could convict Chevron. One of Borja's jobs for Chevron was to collect contamination samples from well sites in the rainforest. He confessed that he switched toxic samples for clean ones before submitting them to the court.

Three and a half years later, Chevron continues to pay all of Borja's expenses in the U.S., and his wife "works" for Chevron, though, no one will say exactly what she does.

Chevron's Spies Whisk American Operative Out Of U.S.

After buying Borja's silence, Chevron had to deal with Hansen, who had become unpredictable. Though Chevron cast Hansen as a legitimate businessman, looking for work in Ecuador, the Ecuadorians found he actually was a convicted drug felon who had tried to smuggle drugs into the U.S. from Columbia and had served 18 months in federal prison. Even before the tapes' release, Borja had started to collect on his payback for recording the judge. Now Hansen wanted his.

Chevron hired The Mason Investigative Group, also based in San Francisco, and Investigative Research Services, Inc. of Houston to handle their drug felon. In emails obtained by the legal publication The Courthouse News, Hansen wrote to Chevron spy Oliver Beard of Investigative Research Services that he wanted a "deal" similar to what Borja had received.

In July 2009, during the sting operation, Hansen wrote:

I have been waiting for your call, you said you would call me. ... It seems that the oil co has cut a deal with Diego [Borja] and I have not heard a word from anyone but Diego. What am I to think? ... As I can see the window of life coming to a close I will not hold back. I need to hear from a real player with a plan for Wayne [Hansen]. If I do not hear from the oil co. by July 17, 09 I must think I have been left out and I am to do what and think what ... I have been dooped.

A year or so after sending this email and about two months after the Government of Ecuador obtained a subpoena in a U.S. court for Hansen, he wrote this email from Peru to Eric Mason, Chevron's top spy at The Mason Group:

I am in a nice place where you guys from (San Francisco) might like to visit or just hang it up and live like a king for 1200 a month. ... The little beach town is Moncora in northern Peru and the waves are the best I have ever seen. ... come on down. [L]ots of fish to cook up.... Best Regards and GOD Bless you Wayne Hansen." [Ellipses and brackets in original.]

Naturally, the Mason spies say they have no idea why Hansen wrote this email. Attempts to locate the mysterious Hansen in Peru have failed. More details are here, here and here.

We might know more about Hansen and his partner in crime, Borja, but a California judge has been sitting on legal motions filed by the Republic of Ecuador over 18 months ago to force Chevron and the private investigative firms to release discovery documents about both men.

San Francisco Federal Judge Nathanael Cousins, who once worked with Chevron's General Counsel Hewitt Pate at the Bush Administration's Department of Justice, has been in no hurry, despite the fact he promised to rule shortly, given that Ecuador needs the documents to defend itself in an international arbitration claim Chevron brought against Correa's government.

Out of 700 documents requested, only 13 largely irrelevant documents have been turned over to the Ecuadorians and the Government of Ecuador. Meanwhile, Chevron is paying the legal bills for Borja and its spies.

Chevron Hires Kroll To Spy On Sick Ecuadorians

On the heels of the Borja/Hansen spy debacle, one would think Chevron would have gone dark, as they say at the CIA. Think again. In early 2010, Chevron attempted another sting operation.

This time it hired the international firm Kroll to pay an unemployed journalist $20,000 to spy on people living in the rainforest who have cancer and other diseases resulting from the contamination.

At first, the unemployed journalist expressed interest, but later, after being wined and dined by Kroll spy Sam Anson at a luxurious hotel in Bogota, she wrote on Atlantic.com about Chevron's effort to use her as "a pawn":

Last February I got an offer from Kroll ... to go undercover as a journalist-spy in the Ecuadorian Amazon. At first I thought I was under qualified for the job. But as it turned out I was exactly what they were looking for: a pawn... I arrived after dark at the (Bogota) hotel, located on a quiet street in a modern, glassed-in building. I hadn't heard from Sam, my Kroll contact, in days. But not knowing where or when I would meet him only heightened the intrigue. Who were these shadowy people and what was this job that couldn't be discussed over the phone?

The job, it turned out, was to pretend to be a journalist and try to find someone who was lying about being sick.

Photo Credit: By Lou Dematteis

Chevron Spies On Ecuadorians' Lawyers & Supporters

During the eight-year trial, the Ecuadorians' legal offices were broken into and files taken. Threatening phone calls were placed to local community leaders. No one knows for sure that Chevron was responsible, but given what we do know now, it wouldn't be surprising.

Shortly before the award of the $19 billion judgment, Chevron undertook a U.S. legal effort to stop its enforcement. That effort failed when the Second Circuit Court of Appeals ruled the Ecuadorians had the right to enforce their judgment anywhere they wanted, but Chevron didn't shut down its spy operation.

An investigator hired by Steven Donziger, the New York attorney who is the long-time legal advisor to the Ecuadorians, confirmed that Donziger was being followed on a 24/7 basis by a team of six "investigators" believed to be connected to a U.S. law firm working for Chevron on the Ecuador case. At times, Donziger's wife, five-year-old son and friends were followed. An investigator also found that Kroll controlled an operation to secretly film Donziger when he travelled to Ecuador, streaming the footage live to Chevron's investigators in the U.S. To reporters, Chevron has only said, "no comment" when asked about its spying on the lawyer and his family. See here for more details.

In Ecuador, individuals have followed Pablo Fajardo, the lead lawyer for the Ecuadorians, openly taking photos of him. He also had his computer hacked on several occasions in recent months from an IP address in the United States. Luis Yanza, one of the Ecuadorians' community leaders, has been treated similarly. Donald Moncayo, a key member of the Lago Agrio team who is well-known to many journalists for his guided tours of Chevron's contaminated well sites, was the victim of an attempted robbery by a Chevron security official. The official tried to reach his hand into Moncayo's backpack and pull out papers while he was not looking. Moncayo stopped the official, but the same backpack was later stolen from his car along with an estimated 400 business cards of various journalists he had met over the last several years.

Most recently, Chevron subpoenaed the Google, Hotmail and Yahoo email accounts of 71 people, many of whom were summer college interns who worked on the case or environmentalists and law students interested in learning more about it. The Ecuadorians and the Electronic Frontier Foundation have filed motions to quash the subpoenas. It is before the same federal judge who is stalling on the Borja/Hansen discovery request.

Ecuador is a small country with a GDP less than Chevron's annual revenues. Very few U.S. policy makers care very much about what does or doesn't happen there. Even fewer can be bothered with problems facing the impoverished Ecuadorian indigenous groups who brought the lawsuit. They have had to fight for decades to gain influence even with their own government. Chevron counts on this apathy and its own enormous political influence with the U.S. government to protect the company from inquiries into its unethical and illegal activities in Ecuador.

Latin America, though, is changing. It's an economic and political force that is demanding respect from both the U.S. government and the multi-national corporations that do business there. As the Ecuadorians' legal battle moves from Ecuador to other Latin American countries, including Brazil, Argentina and possibly Columbia soon, the real threat of seizing $19 billion's worth of Chevron's assets grows, someone at the U.S. Department of Justice or the State Department might want to find out more about what the nation's second largest oil company has been up to in Ecuador.

Spying on judges and government officials is illegal and outrageous behavior by a multi-national corporation. But, more importantly, Chevron's spy tactics and its legal muscle have resulted in over a decade's worth of delay in the cleanup of one of the world's largest oil-related disasters, which continues to pollute the soil, the waterways and the people living in the Ecuadorian rainforest.

And, that remains Chevron's biggest crime.