$27 billion
Monday, May 24th 2010
Chevron Corp. (NYSE: CVX) has uncovered new evidence that Ecuadorian court appointee Richard Cabrera, the so-called “independent expert” claiming that Chevron should pay $27 billion in damages, has had ongoing and surreptitious contacts with plaintiffs’ representatives and that a substantial portion of Cabrera’s court-ordered analysis is based on materials that could only have been provided by the plaintiffs’ representatives outside of the court proceeding. Additional new evidence shows that Cabrera allowed his supposedly independent assistants to work directly with the plaintiffs’ lawyers. Chevron made a filing in Ecuador on Friday informing the court of this new evidence of misconduct.
“This direct evidence of fraud and ex parte contacts further demonstrates the illegitimacy of the fictitious $27-billion number the plaintiffs’ lawyers have created for the purpose of extracting money from Chevron and its shareholders,” Chevron Vice President and General Counsel Hewitt Pate said. “Despite years of denial by Mr. Cabrera and the plaintiffs’ lawyers, one of their own consulting firms has now admitted in a U.S. court proceeding that they dealt directly with Mr. Cabrera. We also now know that Cabrera himself was previously employed by one of the plaintiffs’ lawyers in another case prior to being appointed in Lago Agrio and that he never disclosed that fact to Chevron or the Lago Agrio court.” In his November 2008 damages report, Cabrera exclusively attributed pollution and associated impacts in Ecuador’s Amazon to Texaco Petroleum Company while absolving state-owned Petroecuador. Cabrera was appointed in 2007 to serve as an officer of the court to perform an independent, impartial, and transparent investigation of the environmental effects of oil operations. He repeatedly asserted under oath that he was independent and had no relationship or links with plaintiffs’ lawyers:
- In a June 13, 2007 sworn statement, Cabrera declared that “he is not under any legal impediment whatsoever and swears to perform his duties faithfully and in accordance with science, technology, and the law, with complete impartiality and independence vis-à-vis the parties.”
- In a July 23, 2007 sworn statement, Cabrera declared, “I should clarify that I do not have any relation or agreements with the plaintiff, and it seems to me to be an insult against me that I should be linked with the attorneys of the plaintiffs.”
- In an October 8, 2008 sworn statement, Cabrera stated, “I am an honest man with nothing to hide, and my conduct as an expert in this case has been as professional, impartial and objective as possible, as can be seen from my expert report.”
The evidence newly discovered by Chevron and admitted by plaintiffs’ consultants in court filings, however, shows that Cabrera violated his legal duties and worked directly with the plaintiffs’ lawyers and consultants:
- Documents filed in Colorado federal court last week reveal that consultants working for the plaintiffs’ lawyers have had direct ex parte communications with Cabrera. Lawyers for Stratus Consulting, paid litigation consultants working for the American trial lawyers directing and funding the Lago Agrio case, retracted their prior denials and admitted that “there were communications between Cabrera and two Stratus representatives.” Cabrera incorporated virtually verbatim portions of undisclosed “studies” furnished by Stratus employees and subcontractors in his damages assessment.
- In a separate proceeding in Texas federal court seeking related evidence from a Stratus subcontractor, 3TM Consulting, the judge presiding over the matter concluded last week that it was clear from the record that “plaintiffs provided some or all of 3TM’s report to Cabrera” even though “it appears Cabrera denies this occurred.” Such collaboration clearly violates the Lago Agrio court’s order that Cabrera work independently and “be responsible for all information and conclusions contained in the expert report.”
- Chevron recently has learned that at the time that he became a court appointee in the Lago Agrio litigation, Cabrera was already in the employ of the plaintiffs’ original counsel, Cristóbal Bonifaz (Bonifaz was dismissed from the Lago Agrio case and was sanctioned for presenting separate, false cancer claims against Chevron in federal court in California) . Specifically, Cabrera served as a paid expert in litigation (Arias v. DynCorp) that Bonifaz and other lawyers brought in Washington, D.C. federal court on behalf of a group of Ecuadorian plaintiffs. The DynCorp plaintiffs assert that they were harmed by herbicide spraying in the same region of Ecuador at issue in the case against Chevron, and Cabrera’s DynCorp report concludes that herbicide exposure is the primary cause of alleged harms in the region. In the Chevron case, however, Cabrera’s report attributes many of those same harms exclusively to alleged petroleum exposure. Cabrera never disclosed his prior relationship with plaintiffs’ counsel to the Lago Agrio court, nor did he disclose the existence of his DynCorp report which contradicts important parts of his supposedly independent report in the case against Chevron.
- The U.S. federal court proceedings in which Chevron seeks hidden evidence of corruption and misconduct captured by filmmaker Joe Berlinger have also centered on evidence of collusion in connection with the Cabrera’s damages report. Parts of Berlinger’s film Crude show plaintiffs’ lawyers Steven Donziger and Pablo Fajardo working with Carlos Beristain, one of the supposedly neutral experts on Cabrera’s team, at a focus group meeting related to Beristain’s supposedly independent “health survey.” Cabrera relies on Beristain’s survey for his assessment of $9.5 billion in damages for “excess cancer” claims. While, at the direction of the plaintiffs’ lawyers, Berlinger edited the DVD version of Crude to conceal Beristain’s involvement with the lawyers, the unedited scene remains in a recently released internet version of the film. This documentation of collusion supported Chevron’s successful argument to a federal court in New York that other Crude outtakes should be reviewed for further evidence of misconduct. In its recent order, the New York court ruled that the fact that this scene was cut from the final version of the DVD at the direction of plaintiffs’ lawyers is “a fact suggestive of an awareness of questionable activity.”
“It is clear from the evidence that Cabrera’s claims of neutrality and independence in the Ecuadorian court are false,” added Chevron’s Pate. “The misconduct of the plaintiffs’ lawyers and Cabrera constitutes a fraud against Chevron, against the Ecuadorian court system, and against the Government of Ecuador. Courts in the U.S. are beginning to expose this fraud, and authorities in Ecuador should want to do the same.”
In its filing with the Lago Agrio court, Chevron is seeking the dismissal of Cabrera as a court appointee as well as the rejection of the entirety of his work. Chevron has also requested that the court initiate a full inquiry into the conduct of Cabrera and the plaintiffs’ lawyers to determine the full extent of the collusion and fraud that has been perpetrated.
Chevron is one of the world’s leading integrated energy companies, with subsidiaries that conduct business worldwide. The company’s success is driven by the ingenuity and commitment of its employees and their application of the most innovative technologies in the world. Chevron is involved in virtually every facet of the energy industry. The company explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.
Monday, April 5th 2010
In Sworn Deposition, Expert Denies Authoring Reports Submitted in His Name
SAN RAMON, Calif., Apr. 5, 2010 – Lawyers for the plaintiffs suing Chevron Corp. (NYSE: CVX) submitted fraudulent reports to an Ecuadorian court claiming dangerous contamination was found at Amazon oil well sites, the original technical expert for the plaintiffs revealed in sworn testimony last week.
Charles W. Calmbacher, Ph.D, a U.S. biologist and industrial hygienist who was the first expert appointed on behalf of the plaintiffs in the litigation pending against Chevron in Lago Agrio, Ecuador, testified in a court-ordered deposition last week that reports associated with inspections of the Sacha 94 and Shushufindi 48 well sites were submitted in his name without his knowledge or consent. Dr. Calmbacher said he had never concluded the sites posed a risk to human health or the environment and that his opinions were known to the plaintiffs’ legal and technical teams in Ecuador. Nevertheless, the plaintiffs’ lawyers submitted reports contradictory to Dr. Calmbacher’s conclusions, fraudulently using his signature months after he ceased his participation in the case.
“Their own expert has testified that two of the plaintiffs’ earliest reports are fraudulent, confirming that the trial in Ecuador has been tainted from the outset,” said Hewitt Pate, Chevron vice president and general counsel. “Chevron will petition the Lago Agrio court to strike the plaintiffs’ false Sacha 94 and Shushufindi 48 reports and call on authorities to investigate the misconduct.”
After the lawsuit was filed against Chevron in 2003, the plaintiffs’ lawyers nominated Dr. Calmbacher, and the court appointed him to conduct judicial inspections of oil well sites in the former Petroecuador-Texaco Petroleum Co. concession area to assess alleged environmental damage. Dr. Calmbacher led those inspections for the plaintiffs, supervising the taking of soil and water samples, from August to October 2004.
The fraudulent reports were filed in February and March 2005, and later used by Lago Agrio court appointee Richard Cabrera in his $27 billion damage assessment against Chevron. Cabrera never investigated Sacha 94 or Shushufindi 48, yet specified more than $101 million damages based on the fabricated findings. Dr. Calmbacher also inspected Sacha 6 and Sacha 21, yet the plaintiffs’ lawyers failed to submit reports containing his conclusions regarding those well sites. Dr. Calmbacher testified that he did not find a risk to human health or the environment, or a need for further clean-up, at any of the Texaco Petroleum-remediated sites he inspected. He also said he never concluded that Texaco Petroleum’s remediation in Ecuador in the 1990’s was not successful.
In his March 29 deposition ordered by a U.S. federal court, Dr. Calmbacher said he sent signed signature pages and initialized blank pages to the plaintiffs’ legal team by overnight courier in late 2004 for the submission of reports he thought would contain his true findings. Dr. Calmbacher also testified that the plaintiffs’ lawyers never informed him that the Lago Agrio court had ordered him to answer questions on the reports after they were submitted under his signature in 2005.
Chevron has long claimed the lawsuit is baseless and tainted by scores of irregularities and fraud. The company last September filed a demand for arbitration with the Permanent Court of Arbitration at The Hague asserting that Ecuador’s handling of the Lago Agrio litigation amounts to a breach of the U.S.-Ecuador Bilateral Investment Treaty.
To view Dr. Calmbacher’s full sworn deposition, see www.chevron.com/ecuador/depo.pdf. Additional information on the Ecuador lawsuit can be found at www.chevron.com/ecuador.
Chevron is one of the world’s leading integrated energy companies, with subsidiaries that conduct business worldwide. The company’s success is driven by the ingenuity and commitment of its employees and their application of the most innovative technologies in the world. Chevron is involved in virtually every facet of the energy industry. The company explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.
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Monday, October 19th 2009
And they’ll keep telling their story over and over again with more and more embellishment until someone either confronts them with the truth or pays them to stop.
Here is one of the major myths the US-based trial lawyers and environmental activist groups have spun in a naked attempted to tarnish Chevron’s reputation in the U.S. and pressure the company into an unjust settlement in the lawsuit against Chevron in Ecuador:
Myth 1: Chevron is responsible for $27 billion worth of damages to the Amazon.
The $27 billion assessment against Chevron was concocted by Richard Cabrera, a mining engineer with no experience or training in oilfield remediation work.
Cabrera was appointed by the court to assess possible environmental damage in the former Concession oilfields, if any, the cause, and remediation projects to remedy those damages. His selection was fully supported by the Amazon Defense Coalition over the opposition of Chevron.
In addition to being unqualified for the task he was given, Cabrera ignored directions from the court and improperly expanded his work scope to invent categories of damages that have nothing to do with the issues raised by the lawsuit or with environmental remediation of the former Concession area.
Nearly 90 percent of his $27 billion figure is allocated to issues unrelated to the actual claims in the case:
- Cabrera provided no medical records or death certificates to support his recommendation for more than $9.5 billion in compensation for “excess cancer deaths” and did not name a single victim or identify any family members as beneficiaries. He has no public health training or expertise in diagnosing the epidemiology of cancer, nor can he point to anyone on his team who does. Rather than relying on an expert, Cabrera based his cancer claims on self-serving answers to ad hoc surveys administered to the local population in secrecy by unknown individuals.
- Cabrera also claims $1.7 billion in damages for improvement of oil infrastructure sites, which have been operated exclusively by Petroecuador since Texaco Petroleum ceased operating in 1990. The sites are the sole property of Ecuador, and are currently in use and even being expanded by the state-owned oil company.
- He assessed more than a billion dollars in soil remediation for sites he never visited and grossly inflated the calculation to arrive at a suggested per-pit remediation cost that is 25 times greater than the current costs for Petroecuador’s own remediation program.
- He assessed $428 million to improve the potable water system in the Oriente and $3.2 billion for groundwater remediation even though he did not take any samples of streams, rivers, municipal water sources or drinking water wells, did nothing to assess whether other factors (such as fecal contamination) were contributing to health problems, and states in his own report that he did not have enough data to develop a groundwater remediation plan.
- He also calls for $320 million for the creation of an animal husbandry farm to raise and release wild animals for indigenous people to hunt.
So far, Cabrera has refused to answer questions about his methodology, identify additional team members, explain their responsibilities and contributions, or produce supporting documentation, specifically regarding the survey that supports his cancer-related damage assessment.
Cabrera’s work was far from independent.
HisHA number of indicators suggest that Cabrera worked closely with the plaintiffs’ lawyers to prepare his last report:
- He received payments of at least $200,000 for his work from Selva Viva, an Ecuadorian company that serves as the financial and logistical intermediary for the Amazon Defense Coalition. The checks were apparently signed by Luis Yanza, legal coordinator for the Amazon Defense Coalition and general manager of Selva Viva.
- He benefited from the assistance of members of the Amazon Defense Coalition during his field work, as demonstrated by photographs and video taken at the time, while Chevron observers were prevented from even observing Cabrera’s work.
- He even copied sections of his $27 billion report word-for-word from observations submitted to the court by the plaintiffs’ lawyers.
Wednesday, October 7th 2009
A recent article in El Comercio, a major Ecuadorian newspaper, exposes a telling increase in the number of lawsuits filed against the country of Ecuador. These lawsuits are being put forward by foreign companies that have invested millions in the South American nation.
It was not until 2001 that the country of Ecuador was sued for the first time by a foreign company. By 2008, the year after President Rafael Correa took office, a large number of foreign companies began to file lawsuits. Currently, Ecuador is 2nd in the world in terms of pending international arbitration claims against the country; so much so that the cumulative sum of the 11 pending lawsuits would now equal nearly one-half of the country’s budget of approximately $21 billion.
It’s no coincidence that the election of Ecuadorian president Rafael Correa coincides with the skyrocketing number of lawsuits being filed. Many of these lawsuits concern breach of contract and denial of justice. Mr. Correa has made no secret of his indignation towards foreign companies with operations in Ecuador. Consequently, he announced on May 30 that his country would be denouncing the International Center for Settlement of Investment Disputes (ICSID), calling the World Bank’s arbitration facility an “atrocity”. Moreover, he has defaulted on debt, seized companies’ assets and attacked businesses with antagonistic rhetoric and draconian regulations. He has even gone as far as tightening government control over dissident media outlets.
Further, in an attempt to divert blame for pollution created by Petroecuador, Mr. Correa has on a number of occasions vocally taken the side of the U.S. trial lawyers suing Chevron for $27 billion in environmental damages.
The hostile business environment detailed above, Ecuador’s inequitable and politically prejudiced judicial system and the serious judicial misconduct and political influence caught on tape has made it impossible for Chevron to receive a fair trial in Ecuador. For this reason, Chevron is the latest to file an international arbitration claim against the government of Ecuador citing violations of the country’s obligations under the United States-Ecuador Bilateral Investment Treaty, investment agreements, and international law.
