Justice Delayed But Not Denied: Corrupt Ecuadorean Process Fails In International Arbitration – Forbes
Every time I write about the battle pitting Chevron Corp. against a corrupt Ecuadorean-American effort to extort billions, the usual suspects “comment” by launching accusations. I am a lackey of Chevron, they say (no, I’m not — I’m a lackey of the Rule of Law). I accept money from them (never have). I have no compassion for Ecuadorean peasants harmed by oil pollutions (Untrue: I hope the Ecuadorean government will one day compensate them for the awful pollution it has caused). And I am unmoved by the US movie stars, including Mia Farrow, who jetted to Ecuador to dip their hands in oil deposits (as part of a campaign that reportedly cost the Ecuadorean government’s PR firm $500K) (I plead guilty as charged on that count).
Well, folks, the book is closing on this massive conspiracy, and I for one am glad that Chevron didn’t cave, didn’t agree to settle, and never “bought the peace” from attorneys Donziger and Fajardo. For on September 7, 2018 an international tribunal administered by the Permanent Court of Arbitration in The Hague unanimously issued an award in favor of Chevron and its indirect subsidiary, Texaco Petroleum Company (TexPet). The award found that Ecuador violated its obligations under international treaties, investment agreements and international law, and that the $9.5 billion judgment rendered against Chevron in Lago Agrio, Ecuador in 2011 was procured through fraud, bribery and corruption. The tribunal concluded that the fraudulent judgment “should not be recognised (sic) or enforced by the courts of other States.” It reserved for a future date the calculation of the amounts Ecuador must pay to Chevron to compensate for the damages occasioned by its perfidy.
Among the findings of fact in this UNANIMOUS arbitration panel decision (one member of the three-member panel was appointed by Ecuador, and he helped appoint a second member, let us not forget) are these, which I have asserted over years of reporting on this scandal:
• Ecuador received $22.67 billion (97.3%) of the revenues generated by the consortium between Ecuador’s national oil company and Chevron’s ancestor, Texaco Petroleum (TexPet). (¶ 4.64)
• TexPet spent approximately $40 million on environmental remediation and community development in Ecuador under various settlement agreements and releases before leaving Ecuador in 1995, after which PetroEcuador continued to exploit the oil deposits in Lago Agrio. (¶ 4.68)
• Ecuador, PetroEcuador and TexPet all agreed that TexPet had performed all of its obligations under the 1995 Settlement Agreement. (¶ 4.69)
• While TexPet had completed its remediation obligations, PetroEcuador, over more than three decades, continued to pollute in Lago Agrio. (¶ 4.181)
• The Lago Agrio Plaintiffs (LAP) blackmailed then-presiding Judge Yánez, who improperly terminated judicial inspections of the area and appointed one Richard Cabrera as the court’s purportedly independent global assessment expert.. (¶¶ 4.261, 4.295, 5.248)
• The LAPs and their environmental experts ghostwrote Mr. Cabrera’s Report. (¶¶ 4.277, 4.378)
• Mr. Cabrera colluded with the LAPs and accepted bribes. (¶¶ 4.300-4.303, 5.245)
• The LAPs paid bribes to former Judge Guerra to draft then-presiding Judge Zambrano’s orders. (¶¶ 4.357, 4.360, 4.378)
• Unlawful conduct from the plaintiffs’ legal team included: the bribing of Messrs Reyes and Pinto (falsely portrayed as “independent experts”); the blackmailing of (then presiding) Judge Yánez; the corrupt collusion with Mr Cabrera (court-appointed environmental expert); the ‘ghostwriting’ of Mr Cabrera’s Report; the bribes paid to former Judge Guerra for drafting orders for (then presiding) Judge Zambrano; the inappropriate private meetings with several judges of the Lago Agrio Court, the collusive and extortionary criminal proceedings against Mr Veiga and Dr Pérez (TexPet’s lawyers) and the covert plan for ‘ghostwriting’ the Lago Agrio Judgment. (¶ 4.378)
• The Tribunal rejected Judge Zambrano’s testimony as “incredible” and “unreliable.” It was not physically possible for him to have actually written his purported decision. (¶¶ 5.11-5.17, 6.109)
• Judge Zambrano actively solicited bribes from both sides. Chevron refused, but not the LAPs. (¶ 5.230)
• Ecuador’s Appellate, Cassation, and Constitutional Courts did not address Chevron’s fraud allegations in “any significant manner.” (¶ 5.234)
• Ecuador’s prosecutors “actively co-operated” with the LAPs to initiate criminal investigations and prosecutions against Chevron’s Ecuadorean attorneys Veiga and Perez. (¶ 5.239)
• Forensic evidence is consistent with the finding that the LAPs ghostwrote at least material parts of the Lago Agrio Judgment. (¶ 6.111)
• The evidence of fraud is “the most thorough documentary, video, and testimonial proof of fraud ever put before an arbitral tribunal.” (¶ 8.54)
Chevron is an American company that has survived a vile attempt to destroy it. The criminal enterprise extended to Brazil, Argentina, Gibraltar, Canada and the United States. It involved RICO violations by a now-suspended American attorney and by Ecuadorean officials. Chevron has valiantly stood its ground throughout, and for this deserves praise from all those who value the Rule of Law.
More must now be held to pay for their perfidy. As one of many examples, Robert Kennedy’s daughter (and New York Governor Cuomo’s ex-wife) Mary Kerry Kennedy is president of Robert F. Kennedy Human Rights. She was reportedly offered a contingency payment in return for a condemnation of Chevron. The New York Post reports that Ms. Kennedy traveled to Ecuador in 2009, after which she blasted Chevron in the Huffington Post, invoking the term “genocide.” Shortly after her Huffington Post pieces, the plaintiffs’ lead American lawyer reportedly paid Ms. Kennedy $50,000 in February 2010, and the law firm budgeted $10,000 per month for her services, plus $40,000 in expenses in June 2010. Kennedy was also allegedly promised a 0.25 percent share of any money collected from Chevron, or US$40 million if the full amount of the ghost-written judgment were collected. Ms. Kennedy responded that she was “paid a modest fee for the time I spent on the case,” but denied that she had a financial interest in the outcome. Does Ms. Kennedy have any comment on the International Arbitration tribunal’s findings? Who’s guilty of genocide now?
Chevron has validated my predictions and held itself high. Will the company ever recoup from Ecuador (whose President has admitted that the country is “bankrupt”) the hundreds of millions it has likely paid to defend itself? This author fears Ecuador won’t have to pay. But it should. Leviticus 19:15 reminds us, “Do not pervert justice; do not show partiality to the poor or favoritism to the great, but judge your neighbor fairly.”