31 March 2015 - FOR IMMEDIATE RELEASE
Contact: Karen Hinton at +1.703.798.3109
New York, NY – A new forensic analysis appears to completely undermine the testimony of Chevron's star witness in the Ecuador pollution case and suggests the oil company falsified evidence about the authorship of the Ecuador trial judgment to evade paying its $9.5 billion liability, according to legal filings presented recently to an investor arbitration panel.
(For quick details, see page 144 of this legal brief filed in that arbitration proceeding by Ecuador's government.)
The new forensic report, prepared by the American J. Christopher Racich, found extensive evidence to support the testimony of Ecuador trial judge Nicolas Zambrano that he wrote the 188-page decision that found Chevron liable for the dumping of billions of gallons of oil waste into the waterways forests of the Ecuadorian Amazon. Ecuador's Supreme Court unanimously affirmed Zambrano's findings in 2013, but Chevron has refused to pay the judgment despite agreeing to litigate the matter in the South American nation.
The Racich Report – which was completed in 2014 for a related investor arbitration dispute between Chevron and Ecuador's government – concluded that the judgment was written painstakingly over a period of months on Zambrano's office computer, directly contradicting the claim of Chevron's witness that it was written elsewhere and then given to the judge on a flash drive just before it was issued.
Chevron's "evidence" was the oral testimony of crooked former Ecuadorian judge, Alberto Guerra, to whom the company paid more than $2 million in cash and benefits. The villagers and their lawyers have long asserted Chevron's payments were essentially a bribe in exchange for false testimony, violated federal law, and rendered Guerra's assertions not credible.
In the 224-page legal brief submitted to the arbitration panel, available here, lawyers for the Government of Ecuador blasted Chevron for its "smoke-and-mirrors" approach to evidence while providing devastating new details about how the contents of the Racich Report prove that Guerra was lying in federal court.
(The Ecuadorian government and Chevron have refused to release the full Racich Report but its contents have been described in detail in legal briefs. See here and here for letters from a lawyer for the villagers demanding the disclosure of the full report.)
According to Ecuador's legal brief, the Racich Report contradicts Guerra's testimony by concluding as follows:
- The document that became the 188-page trial court judgment was written on Judge Zambrano's computer after he took over the case in the Fall of 2010, contrary to Guerra's claim that it was given to Zambrano on a flash drive just before it was issued on February 14, 2011;
- The document containing the trial court judgment was saved and edited hundreds of times on Judge Zambrano's computer with increasing percentages of the text of the final judgment in the document as time passed;
- No sign of communication with the lawyers of the plaintiffs exists on Judge Zambrano's computer, contrary to Guerra's testimony that the judge was regularly in touch with the lead Ecuadorian lawyer for the plaintiffs;
- No flash drives were used on Judge Zambrano's computer during the time period when Guerra testified the plaintiffs gave him the final judgment.
Guerra is hardly a credible witness to begin with. He admitted under oath to taking bribes in violation of Ecuadorian criminal laws when he served as a judge in the country before being removed in 2009. (For background on Guerra's credibility issues, see here.)
The Racich Report is additional proof that Chevron likely knew or should have known Guerra was lying before putting him on the stand after rehearsing his testimony for a reported 53 days, said Karen Hinton, a spokesperson for Steven Donziger, a longtime U.S. legal advisor to the communities. Lawyers in Chevron's main outside law firm of Gibson Dunn & Crutcher – including primarily Randy Mastro and Avi Weitzman – were responsible for negotiating the payments to Guerra and coaching him to testify deceptively, she added.
"This latest report is the final nail in the coffin for Chevron's fraud narrative and begs the question of when Chevron's lawyers crossed the line from zealous client advocacy to actual falsification of evidence," said Hinton.
(The High Court of England recently determined that Gibson Dunn & Crutcher falsified evidence in another case while several courts in the United States have sanctioned the firm for its unethical litigation tactics. See here for background.)
The Racich Report is also a significant setback for Chevron both in its retaliatory civil "racketeering" case against the villagers in New York and in enforcement actions abroad where the Ecuadorians are trying to seize company assets to force compliance with their judgment. In New York, U.S. Judge Lewis A. Kaplan had ruled for Chevron in 2013 in a controversial non-jury proceeding largely based on Guerra's false testimony, but that decision is under appeal.
Judge Kaplan, who previously had been reversed by an appellate court in the same case after he issued an unprecedented ruling purporting to block worldwide enforcement of the Ecuador judgment, did not have the Racich Report during the proceeding. For background on how Chevron made a mockery of justice before Judge Kaplan, see here.
On April 20th, the Second Circuit Court of Appeals will hear oral arguments in the Ecuadorians' appeal of Chevron's fraud charges. In 2011 Second Circuit Judges Rosemary S. Pooler, Reena Raggi, and Gerard E. Lynch ruled against Chevron when the company tried to block enforcement of the Ecuador judgment anywhere in the world.
Guerra initially had been paid $38,000 out of a suitcase by Chevron representatives Andres Rivero and Yohir Ackerman for his "cooperation" with the company. Guerra later negotiated a contract where Chevron paid him $12,000 per month, provided a car and health care, and moved him to the United States with his entire family where his work seems to be limited to being a Chevron witness.
Guerra was so destitute after losing his judgeship in Ecuador that he only had $146 in his bank account before being paid the huge sums by Chevron to testify, according to the government's legal brief cited above.
The brief to the investment arbitrators from Ecuador's government also summarized the mounting scientific evidence pointing to Chevron's responsibility for the oil contamination in its former operating concession in the Amazon region just south of Colombia. Chevron was the exclusive operator (under the Texaco brand) from 1964 to 1990 of hundreds of well sites and production stations spanning an area of 1,500 square miles.
According to the court decision, five indigenous groups and dozens of farmer communities have been decimated by the pollution. Cancer rates have shown to be higher for people living closer to the oil pits, while rivers and streams relied on by local inhabitants for their drinking water have been poisoned.
The Ecuador government brief also points out four main categories of mutually corroborating scientific evidence that proves Chevron's culpability: Chevron's own scientific sampling during the trial; the same sampling by technicians working for the affected communities; independent third-party studies, including two done by Chevron's environmental auditors; and an extensive study of Chevron's so-called "remediated sites" performed by the U.S.-based Louis Berger Group.
All of the evidence of contamination and the Racich report "serves as a stark reminder that for years [Chevron] based its story on nothing more than snippets of documents and testimony, hoping that its smoke-and-mirrors approach would be enough to convince this Tribunal.
"They then jumped at the opportunity to obtain forensic evidence, confident that it would add to the confusion and thus work in their favor. Instead, it cleared the air by revealing [Chevron's] story for what it is – rank speculation.
"Turning on the lights to [Chevron's] haunted house revealed that ghostwriters were simply a figment of their imagination," said the brief.
The arbitration panel operates behind closed doors under a byzantine set of rules that prohibit the villagers from even attending the proceedings. In turn, the Ecuadorian villagers have criticized the panelists –who after sitting for five years have yet to decide if they have jurisdiction – as rife with personal conflicts with the proceedings themselves being a violation of international law. For background, see this document.
That said, the panel recently knocked out Chevron's main defense that it had been "released" from the private claims in the lawsuit via an earlier remediation agreement with Ecuador's government. Commentators believe the pro-corporate arbitrators might rule against Chevron on its underlying claims, something once thought unthinkable.