By Eva Hershaw, VICE News
26 October 2015
In March of last year, California-based oil giant Chevron hailed a sweeping victory in a two-decade long legal battle in the Ecuadorean Amazon. A New York federal judge, Lewis Kaplan, ruled that a $9.5 billion Lago Agrio judgment leveled against the company by the small Andean country's highest court, was obtained by way of fraud and coercion.
In his decision, based on violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, the judge found that the plaintiffs' lawyer, Steven Donziger, committed mail fraud, engaged in coercion, and paid bribes in order to win judgment against Texaco, which Chevron brought in 2001.
The case largely hung on Chevron's star witness, Alberto Guerra, a former Ecuadorean judge who has admitted to receiving substantial amounts of money and other benefits to cooperate with Chevron. In New York, Guerra testified that he had struck a deal between the plaintiffs and the presiding judge, Nicolas Zambrano: Guerra would ghostwrite the verdict, Zambrano would sign it, and the two would share an alleged $500,000 in kickbacks from the plaintiffs.
In the RICO case ruling, Judge Kaplan stated that the "evidence leads to one conclusion: Guerra told the truth regarding the bribe and the essential fact as to who wrote the Judgment."
But in testimony given before the international tribunal, released today by the government of Ecuador and provided to VICE News in advance, Guerra has now admitted that there is no evidence to corroborate allegations of a bribe or a ghostwritten judgment, and that large parts of his sworn testimony, used by Kaplan in the RICO case to block enforcement of the ruling against Chevron, were exaggerated and, in other cases, simply not true.
For those who have followed the case closely, including the environmental group Amazon Watch, Guerra's admissions could amount to "game over" for Chevron, whose star witness has admitted to lying under oath and who has produced no evidence of the allegations that Chevron used to discredit the Ecuadorean ruling.
"This is the sinking of the Titanic of Chevron's RICO case," said Paul Paz y Miño, a spokesperson for the watchdog group. "Guerra was not credible from day one, and he has now admitted under oath that he lied about the entire case and the principal charges in the case, of a bribe and of a ghostwritten verdict, have now been proven by the very witness that brought them forth to be a lie."
Donziger and his legal team have repeatedly denied any wrongdoing in the Lago Agrio case, and have threatened a retaliatory lawsuit against Chevron for fraud and obstruction of justice. The admissions by Guerra have acted, according to Donziger, as further evidence that Chevron is willing to engage in criminal conduct to "sabotage legal proceedings in Ecuador and the United States" that seek to hold the company accountable.
"Chevron has now been busted by the lying testimony of its main witness," said Donziger, responding to the transcripts released from the international tribunal. "The latest iteration of Guerra's testimony proves clearly that Chevron paid its star witness huge sums of money to present false evidence to frame the very people in Ecuador the company poisoned."
But in the eyes of Chevron, the 13-day trial, which included thousands of pages of testimony, has once again cleared the company, estimated to be worth $201 billion, of any wrongdoing.
"These transcripts make clear that Chevron proved its case before the International Arbitration Tribunal," said Morgan Crinklaw, spokesperson for Chevron. "Witness and expert testimony confirmed that the Ecuadorian judgment against Chevron was ghostwritten by Steven Donziger and his team and that the Ecuadorian government is responsible for any further remediation."
When asked about Guerra, Crinklaw deferred to Judge Kaplan, who wrote in his judgment that "Guerra on many occasions has acted deceitfully and broken the law […] but that does not necessarily mean that it should be disregarded wholesale."
In 2009, Chevron initiated international arbitration against the Ecuadorian government under the US-Ecuador Bilateral Investment Treaty. The case will decide whether or not the $9.5 billion judgment leveled against Chevron in 2011 has merit, but statements made during the hearings will likely have an impact on the pending RICO case and, as a result, impact the likelihood that Lago Agrio plaintiffs will collect a piece of the billions owed by Chevron.
The cross-examination of Guerra took place over two days in a 13-day hearing held in Washington DC between April and May of this year. Responding to direct questioning from Eric Bloom, a lawyer representing the Republic of Ecuador, the embattled Guerra details a complicated tug-of-war that unfolded between him and the company over the course of several years.
Guerra admits that he first approached Chevron in 2009, when Zambrano had been appointed as the presiding judge, and then again in 2010. While he admits that Zambrano had no knowledge of these meetings, he made the company an offer to "speed up the process," in 2009, and "to specifically draft the draft judgment" in 2010, offers he told the company came under the authorization of Zambrano.
As a bargaining strategy, Guerra cited alleged counter offers made by the plaintiffs in the case, suspecting that Chevron would be able to pay more.
"Can you recall how you tried to increase your negotiating position with the Chevron representatives?" Bloom asked Guerra, referring to these meetings before the three-panel tribunal in April of this year.
"I must recognize that I did exaggerate about [some things], yes," said Guerra. "When we are looking for a job, you say, how much experience do you have, and in fact you really don't have any experience, and you say, well, I have ten years of experience really. It's a situation just like that."
"And among the ways you tried to leverage your position was to falsely tell the Chevron representatives that the Plaintiffs had offered you $300,000; isn't that right?" Bloom asked.
"Yes, sir. I lied there," Guerra responded. "I recognize it."
Guerra said that these attempts to broker a deal with Chevron were not fruitful, but that after the final ruling was issued, in 2012, the company approached him ahead of the RICO case. His understanding of the meeting, Guerra said, was for Chevron "to request my cooperation for me to be the liaison with Mr. Zambrano."
During their meeting, which took place in a hotel in Quito, the company's star witness remembers Chevron representatives pointing him towards a pile of cash and asking for his cooperation.
"One of them took me by the arm and said, 'Look, look, look what's down there. We have $20,000 there,'" Guerra explained in his testimony before the tribunal. "Specifically, one of them was the one that led me to take a look at it. It was inside a safe."
In testimony before the tribunal, Guerra admitted that at this point he tried to get more money from Chevron. "At some point, I said, well, why don't you add some zeroes to that amount, and then later on I said, 'I think it could be 50,000.'"
After lunch, he said, Chevron representatives accompanied him to his house and that "an American man who was a computer technician" reviewed his computer, where Guerra claimed he had kept a draft of the final judgment that he had ghostwritten for Zambrano.
"At the end, when the technical person said that he did not find the draft Judgment … amongst other things, then at around 5:00 or 6:00pm, they told me, look, we have $18,000 to give you for this. We were unable to find the document," Guerra explained. "Had we been able to find it, we would have been able to offer you a larger amount."
In January of 2013, Chevron moved Guerra to the United States, a fact that neither he nor the company disputes. Citing safety concerns in his home country, the company paid for immigration lawyers for him and his family, and currently pays him a monthly salary of $12,000 for housing and living expenses.
During the 14-month period between September 2012 and November 213, both parties confirm that Guerra has had at least 53 meetings with Chevron representatives.
Prior to the RICO case, Donziger and his legal team sought to have Guerra's testimony stricken from the record, arguing that, "Even if Guerra were an upstanding citizen, his testimony would be so tainted by Chevron's payments and benefits that it would need to be thrown out."
"I don't know whether or not this will cost him his $12,000 a month," said Paz y Miño, referring to the payment currently made by Chevron to Guerra. "But I wouldn't be surprised if it did — why should they continue paying him if he's not going to continue lying for them anymore?"
A Chevron lawyer told the court that " attested that Guerra has risked his life to "facilitate the truth" in the Lago Agrio case, the country's foreign minister, Ricardo Patiño, believes that his concessions confirm what the government has long suspected to be true, and further affirms the compromised nature of his testimony.
"He became an impartial witness in exchange for money, and this testimony became the basis that a North American judge used to determine there was corruption in this case," Patiño said. "It is unbelievable, really unbelievable than an ex-judge would accept resources directly from Chevron to speak in favor of the company, and to denounce the Ecuadorean justice system that he himself was part of."
One of the most important claims held up by Chevron in the RICO case was the accusation, confirmed by Guerra, that the Ecuadorean lawyer Pablo Fajardo, working with Steven Donziger, had given Zambrano a draft of the Lago Agrio judgement, which Guerra in turn reviewed and edited for him before it was issued. For this and other services, Guerra alleges that he received $1,000 a month in payments from the plaintiffs.
While he admits in testimony before the tribunal that he has never been able to produce any evidence of these payments, forensic experts from both parties agree that the draft judgment was never found on either Steven Donziger's or Guerra's computer.
The transcripts, which were made public today, contain thousands of pages of dialogue between dozens of expert witnesses brought by Chevron and the government of Ecuador. With the Second Circuit of Appeals of New York looking on, all parties await a final ruling from the international tribunal, which could be filed at any moment.
In the meantime, Amazon Watch has said that it intends to call for a US Department of Justice investigation into Chevron's actions, which they believe served to manipulate the US justice system. And they are not the only ones who think these transcripts could be of serious consequence.
"We intend to bring these significant developments to the attention of the Second Circuit panel in New York," said Deepak Gupta, appellate lawyer for Steven Donziger. In addition to what he calls "overwhelming evidence of pollution on the ground," Gupta believes the tribunal members "have also been presented with far more thorough evidence rebutting Chevron's corruption allegations."
"There's a very real possibility that the arbitrators will reject Judge Kaplan's findings," he added.
Ecuador's minister of the environment, Lorena Tapia, is confident that the impact of the ruling will be felt far beyond the borders of her small country.
"This is no longer just a cause in Ecuador — this is a cause for any country where the same thing could happen. We have a responsibility beyond our own interests," Tapia said.
"We know this isn't an easy path, but we are very convinced of our arguments, and there is no way we will step down or stop doing everything we can to get the oil company to respond," she added.