In the News
Human Events – Ecuador’s $27 Billion Shakedown of Chevron
Wednesday, March 17th 2010
Ecuadorean President Rafael Correa’s $27 billion environmenal lawsuit against Chevron has all the characteristics of a corrupt banana republic:
Judicial intimidation, bribery and bogus studies by paid-off experts.
In the long-running, government-backed suit against the giant American oil company, which vows it will never give in to what it calls a “shakedown” by the government and its political cronies, Chevron rejects that it is liable for any claims of environmental damage in the country’s Amazon region.
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Financial Times – Habeas corporation
Tuesday, March 16th 2010
Asked why he robbed banks, Willie Sutton famously explained: “Because that’s where the money is.” American attorneys working on a contingency basis have long embraced similar logic when suing corporations on their clients’ behalf. But even in the hyperlitigious US, companies are able to defend themselves against frivolous claims. That is not always the case in the developing world, which is why multinationals are cheering a recent US legal ruling.
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San Francisco Chronicle – Chevron wins bid for Ecuador arbitration
Friday, March 12th 2010
Chevron Corp. won a round Thursday in the long legal fight over oil-field contamination in Ecuador, with a U.S. judge ruling that the company can pursue arbitration in the case.
But the final outcome of the fight, which could cost Chevron $27.3 billion, remains very much in doubt.
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Associated Press – NYC judge allows Chevron arbitration to proceed
Friday, March 12th 2010
A judge ruled Thursday that Chevron can proceed with an international arbitration claim against Ecuador related to a 17-year-old court battle over rain forest contamination in that South American nation.
U.S. District Judge Leonard Sand in Manhattan rejected an attempt by Ecuador to block the arbitration but also said his decision was limited in scope and left the arbitration panel to decide what, if anything, it will hear and when.
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San Francisco Chronicle blog – Chevron Ecuador issue: Chevron wins court victory against Ecuador
Friday, March 12th 2010
In the ongoing court battle between Chevron and the Country of Ecuador, Chevron won a court victory against Ecuador today. According to Reuters, A U.S. District Court Judge in U.S. District Court for the Southern District of New York, granted Chevron the right to pursue an order to have via Ecuador to complete environmental cleanup work it and the state-run Petroecuador Oil Company were to have done when it took over oil production from Chevron-Texaco in 1992. Chevron will seek to have this done under the “U.S. – Ecuador Bilateral Investment Treaty.”
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Corporate Counsel – KEEP That Home Court: Chevron Gets Forum Shopper’s Remorse
Friday, March 12th 2010
Judge Juan NÚñez was getting up to leave the Holiday Inn conference room in Quito, Ecuador. It was June 5, 2009, and he was meeting with an American who wanted information.
Specifically, Wayne Hansen wanted to know if Núñez was going to hold Chevron Corporation liable for $27 billion for polluting the Amazon Basin. Hansen was posing as a contractor who stood to receive large sums for cleaning up the jungle. The judge probably did not know that Hansen had once been convicted of conspiring to sell 137 tons of marijuana.
He certainly did not know that Hansen was capturing their conversation with a Spy Pen video camera, which retails online for $149.99.
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San Francisco Chronicle blog – Chevron Ecuador issue: video showing Judge talking bribe authentic
Wednesday, March 3rd 2010
Ecuador Ministry of Justice Engineer Hugo Rekalde issued a statement today, Tuesday, that the video taken of an Ecuadorian Judge named Juan Evangelista Nunez involved in a conversation over an alleged bribe that the Judge would get part of if he were to rule against Chevron in their case against Ecuador (and note, not the indigenous people, because Ecuador’s a party to the lawsuit).
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San Francisco Chronicle – Chevron, plaintiffs seek gains as verdict nears
Tuesday, March 2nd 2010
In other recent developments:
– A report last month from another court-appointed expert showed that water in the area is heavily contaminated with fecal bacteria. Chevron has long argued that contamination from bacteria – not oil – is responsible for health problems in the region.
– An investigation into one of the case’s previous judges found Monday that clandestinely recorded videos of the judge, released by Chevron last year, were authentic and unaltered. The videos show Judge Juan Nunez discussing the case with two men seeking oil field cleanup contracts. At one point, the judge agrees with a statement from one of the men that Chevron is the “guilty party” in the case. The incident prompted a government investigation.
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The Daily Caller – Latin America’s future depends on the rule of law
Monday, March 1st 2010
Over the course of good years and bad, the countries of Latin America have recently been taking diverging paths to very different futures.
In one camp are countries such as Chile, Colombia and Panama, which are actively promoting the rule of law. By fostering an investment climate that supports job creation and economic growth, they have advanced the prosperity of their citizens.
In another camp are countries such as Bolivia, Ecuador and Nicaragua, which have taken stances inimical to the rule of law and hostile to international investment. Unsurprisingly, they have seen growth and investment collapse.
The difference in outcome is stark. The UN’s Economic Commission for Latin America and the Caribbean has for several years reported that countries in the second group have attracted almost no foreign direct investment, and economic growth and job creation have suffered.
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Dow Jones – Ecuador Court Names Another New Judge In Chevron Case
Tuesday, February 23rd 2010
The provincial court of Sucumbios has picked a new judge, Leonardo Ordonez Pina, to preside over the Court.
The new judge will take up the case involving a multi-billion-dollar lawsuit against Chevron Corp. (CVX).
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Reuters – Ecuadorean judge changed on Chevron pollution case
Tuesday, February 23rd 2010
The provincial court in Ecuador’s Amazon region that is hearing a $27 billion environmental damages case against Chevron Corp (CVX.N) has changed the judge in charge of the case, court officials said on Monday.
The change was described as an administrative matter not expected to impact the outcome of the case.
Leonardo Ordonez, the newly named president of Sucumbios provincial court, was named to replace outgoing court president Nicolas Zambrano. Local law says the court’s chief judge must hear environmental damages cases in the northern province.
“I see no problem with Ordonez continuing the process,” plaintiffs’ lawyer Pablo Fajardo told Reuters.
“It is an administrative matter, a routine rotation of the presidency of the Sucumbios provincial court,” said Chevron spokesman James Craig. “On the face of it, it should not have any impact on Chevron’s case.”
Zambrano took over the case last year when the previous judge, Juan Nunez, stepped down after he was secretly taped discussing the suit with two mysterious men who recorded the conversation with secret cameras stuck inside a wristwatch and a pen.
Plaintiffs accuse Texaco, which was bought by Chevron in 2001, of polluting the Amazon with faulting drilling practices in the 1970s and 1980s. Chevron denies the accusations.
Ecuador’s leftist leader Rafael Correa has said publicly that he sides with the plaintiffs, sparking charges by Chevron of government interference in the case. The initial ruling is expected by both sides to go against Chevron.
But the company vows to appeal any decision for the plaintiffs, ensuring the case will probably stretch for years more.
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San Francisco Sentinel – CASE AGAINST CHEVRON IN ECUADOR CONTINUES TO UNRAVEL – Expert Finds No Oil Contamination In Amazon, Amazon Defense Plaintiffs Freak Out
Monday, February 22nd 2010
The faux walls that have supported the fraudulent $27 billion legal case against Chevron in Ecuador came tumbling down this month with the revelation that the “independent court appointed expert” Richard Cabrera stands to gain financially from any judgment against the oil company.
The ‘independent’ expert had hid his conflict of interest from the court–and is now discredited by the fact that he had a vested personal interest in finding Chevron guilty. In any courtroom that follows the rule of law, the entire case against Chevron would be dismissed. But this is Ecuador, where justice is as slippery as the banana republic itself.
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Reuters – Ecuador says Iran ties landed it on laundering list
Monday, February 22nd 2010
Ecuador’s inclusion on an international list of nations accused of lagging in the fight against money laundering is a hypocritical punishment for its relations with Iran, Ecuador’s president said on Saturday.
“What arrogance! And why? Because we have relations with Iran. That’s it,” Rafael Correa said at his weekly town hall meeting. “This is imperialism in its most base form. … This has nothing to do with the struggle against money laundering.”
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Washington Times Editorial – Fighting Ecuadorean graft
Wednesday, February 17th 2010
The Obama administration has made a habit of kowtowing to Latin American leftists. But new information out of Ecuador ought to make the White House finally take a stance against that nation’s anti-American regime.
For years, the radical Ecuadorean government led by President Rafael Correa has been backing a massive and spurious lawsuit, sponsored by American trial lawyers, against the California-based Chevron oil company. In what amounts to a state-enforced shakedown, the plaintiffs seek a whopping $27 billion for purported environmental and health damages, all related to oil projects that Texaco – now owned by Chevron Corp. – stopped operating in Ecuador in 1990. Before it was taken over by left-wingers, the Ecuadorean government in 1998 certified that Texaco had cleaned up its old drilling sites. The new government ignores that certification.
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pajamasmedia.com – Stacking the Deck Against Chevron in Ecuadoran Lawsuit
Wednesday, February 17th 2010
Richard Cabrera, author of a report upon which a 16-year-old $27 billion lawsuit against Chevron Corporation in Ecuador is based, was the subject of a court filing recently in Lago Agrio, Ecuador. It seems that officials at the oil giant based in San Ramon, California, found new “dirt” on the Ecuadoran businessman.
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Big Government – Chevron Witch Trial Yields Bizarre $27 Billion ‘Environmental’ Claim
Thursday, February 11th 2010
Chevron oil company is being sued in Ecuador for $27 billion. It’s a big number. The gross domestic product (GDP) of Ecuador in 2008 was $54 billion. So $27 billion is 50% of the GDP of the entire country. And the $27 billion claim is sheer fantasy. The damage claim against Chevron is based on a gigantic scam.
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Dow Jones Newswires – Ecuador Court Biologist Finds Bacterial Contamination In Oil Areas
Wednesday, February 10th 2010
QUITO (Dow Jones)–A court-appointed biologist said in a report that there’s no hydrocarbon contamination in Ecuadorean rivers near where Chevron Corp. (CVX) is being sued for alleged environmental damages.
But the expert said he found high levels of bacterial contamination from fecal matters that could be the source of the local population’s health problems. Heavy metals were also found in local fish – which could come from crude or other sources, court-appointed biologist Jorge Bermeo said.
The document, recently reviewed by Dow Jones Newswires, further muddles the already murky environmental lawsuit, in which plaintiffs from the region sued Texaco for environmental damages allegedly done decades ago that they claim resulted in health problems. Chevron, which bought Texaco in 2001, denies the allegations.
Both sides have criticized the report. Plaintiffs dispute the findings, accusing Bermeo of being manipulated by the company’s lawyers. Chevron said that it didn’t interfere with either the expert’s work or with the final report.
“What has been found in fish has direct relation to the oil activity, and yet, the expert is trying to provide a tool to Chevron’s defense,” said Pablo Fajardo, an attorney for the plaintiffs who asked the court to dismiss 50% of the report.
Bermeo said denied the allegation. “No representative of the company has ever pressured me or tried to influence my report,” he said in an interview.
Asked about the heavy metal in fish tissues, Chevron spokesman James Craig said the result is likely a “false positive” that stems from improper sample preparation and analytical methods.
Bermeo said that he used the best technology available.
The report was based on analyses done last September in five of 16 towns that plaintiffs claim were affected by Texaco’s oil operations. Judge Juan Nunez, who formerly oversaw the case, asked Bermeo to assess how much of the pollution in the region’s waterways was caused by the region’s fishing techniques. Around 60% of the population in the Sucumbios and Orellana provinces, where the study took place, are dedicated to agriculture and fishing activities.
“According to the laboratory results, there are not significant quantities of metals in the water to say that there are hydrocarbon contamination problems,” Bermeo said.
The report said that water and aquatic life have been impacted by direct discharge of untreated sewage and by destructive fishing practices that include the use of dynamite, chemicals and poison.
Laboratory analysis of fish tissue found a higher-than-allowed presence of hydrocarbons and heavy metals such as phosphorus, barium, potassium, and lead, among others, according to report.
The hydrocarbons and metals found are the result of being exposed to contaminants of organic and mineral origin, the report said. The metals could come from agriculture, oil and mining activities near the rivers, as well as natural causes, the report said.
It’s unclear whether the findings will weigh in the court’s decision, which is expected for the first half of 2010. In November 2008 the court-appointed geologist Richard Cabrera told the court that Chevron should pay more than $27 billion in compensation for alleged environmental damages. Chevron has repeatedly criticized the report.
Associated Press – Chevron Says Expert Biased in Cleanup Case
Wednesday, February 10th 2010
“Chevron Corp. has stepped up its offensive against a group that says the oil giant poisoned sections of the Amazon rain forest.
After spending months discrediting the political and legal system in Ecuador, where a court is considering a fine against the company, Chevron now claims that a court-appointed expert gave biased testimony in the case.”
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Dow Jones Newswires – Ecuador Asks US Court To Pause Chevron Arbitration Bid
Wednesday, February 10th 2010
NEW YORK (Dow Jones)–Ecuador asked a U.S. court to pause international arbitration of a dispute with Chevron Corp. (CVX) while the judge considers the country’s request for a permanent halt to the proceedings.
In a petition for preliminary injunction filed late Tuesday with the U.S. District Court for the Southern District of New York, Ecuador’s government said that allowing the international arbitration proceedings to continue would impose an undue burden on the country’s finances.
“It simply makes no sense to force the Republic to expend its public resources to engage in a multi-year, multi-billion dollar arbitration,” the filing said.
The arbitration is tied to a lawsuit taking place in Ecuador in which inhabitants of the country’s Amazon region seek to make Chevron pay $27 billion for environmental damages allegedly caused by Texaco Inc.
San Ramon, Calif.-based Chevron inherited the lawsuit when it acquired Texaco in 2001, and denies the allegations.
In September, Chevron requested arbitration under international law, arguing that the Ecuadorean government should be held responsible for any environmental damage and pay any penalties. Chevron says the Ecuadorean government is interfering in the environmental lawsuit, and is violating an agreement releasing the company from environmental claims.
The Ecuadorean government denies any interference and says the release agreement didn’t cover lawsuits filed by third-parties. In December, Ecuador filed a lawsuit at a U.S. District Court in New York asking it to stop the arbitration, saying that it violated a promise made in 1999 by Texaco to the court to accept the ruling of the Ecuadorean courts in the case. Chevron maintains it is not a party to that lawsuit and that in the final ruling there’s no stipulation from the U.S. court that it must comply with the decision of an Ecuadorean court.
A Chevron spokesman said that Ecuador “wouldn’t need to spend anything defending an arbitration if it had lived up to its contractual obligations.”
Financial Times Blog – Fear of precedents drives Chevron fight against Ecuador claims
Wednesday, January 20th 2010
Chevron’s high-profile defense against a lawsuit seeking $27bn for environmental damages in Ecuador has ranged from YouTube postings to secretly-taped videos of the judge discussing the case in what it claims is evidence of political interference and corruption in the country. The nature of Chevron’s defence, which has included keeping those who did the secret taping away from media and the authorities, certainly is uncharacteristic of an oil major.
Typically these companies settle cases or do whatever else they can to avoid drawing negative attention to themselves. But, then again, this is no ordinary lawsuit. The damages being sought are extremely high – roughly a quarter of Chevron’s market capitalisation of $140bn or a fifth of its $160bn in assets.
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