New revelation of a conflict of interest for the author of a report recommending that Chevron pay $27 billion in damages in the long-running trial in Ecuador has prompted a deliberately misleading response from the Amazon Defense Front, which is the named financial beneficiary of any judgment in the case.
Cabrera has a previously undisclosed majority ownership interest in a company registered to do business with Petroecuador. Petroecuador is the state owned oil company, chief polluter in the region, and beneficiary of Cabrera’s “findings.” This evidence raises additional, serious questions about Cabrera’s independence and completely undermines the integrity of his report.
Seeing its potential payday at risk, the Amazon Defense Front scrambled to respond via press release. While attempting to sidestep the issue, the Amazon Defense Front does not deny that Cabrera improperly failed to disclose his conflict of interest at the time of his appointment or thereafter. Nor does the Amazon Defense Front deny that had Cabrera’s ownership interest been properly disclosed, it would have been disqualifying. Below is a response to four of the many misleading and inaccurate statements from the Amazon Defense Front press release:
“Cabrera disclosed to the court that he owned a clean-up company before his appointment as Special Master. This fact was properly cited by the court as one of the reasons he was qualified to do the damages assessment.”
This is a yet another of the Amazon Defense Front’s blatant attempts to mislead the public.
Exhibit 4 from the filing contains everything that Cabrera has disclosed. Nowhere does Cabrera disclose the fact that he was a co-founder, general manager, majority stockholder, and legal representative of CAMPET at the time of his appointment as an “independent” technician or during his work for the court. CAMPET is a soil remediation company and preapproved contractor to Petroecuador. Cabrera affirmatively swore to the court that he had no conflicts of interest. This has shown to be untrue by virtue of his financial interests in CAMPET.
The Amazon Defense Front’s statement is intended to misrepresent Cabrera’s disclosure about working for a different remediation company, CONGEMINPA, prior to his appointment. Cabrera disclosed that his work with CONGEMINPA ended in 2003, and Cabrera had also sold all of his stock in GONGEMINMPA in 2003, years before his 2007 appointment in this case. This past connection to a remediation company did not present a conflict of interest at the time of his appointment. The Amazon Defense Front’s statement is meant to create the false impression that Cabrera disclosed his interest in CAMPET, the company he continued to own, manage, and legally represent during his entire tenure as a supposedly “independent” expert in the case. But he did not make any such disclosure. In fact, German Yanez, the judge who appointed Cabrera, told Dow Jones Newswires Feb. 9 he didn’t know about CAMPET or whether the company’s registration as a bid contractor for Petroecuador constituted any conflict of interest.
“All I know is what I saw in his curriculum (vitae),” said Yanez. “If there’s missing information, I don’t know why.”
“Chevron thought so highly of Cabrera’s qualifications that it accepted him as a court-appointed expert in an earlier part of the case and paid his fees as required by court rules.”
This is factually incorrect.
Cabrera was appointed by the court in an earlier phase of the trial, but he performed no work and at no time has Chevron paid Cabrera for anything. On the contrary, the plaintiffs paid Cabrera more than $200,000 for his subsequent work.
Chevron has repeatedly and unwaveringly questioned Cabrera’s qualifications since his original involvement in the case, has opposed his report, and has repeatedly told the court that his damages assessment is without basis, is biased, and was developed with and co-written by the plaintiffs. At no time has Chevron ever “thought highly of Cabrera’s qualifications” to be an expert in this case.
“The fact Cabrera’s company is qualified to bid on clean-up contracts offered by Ecuador’s state-owned oil company is irrelevant. That company, Petroecuador, is not a party to the case against Chevron and would have no role in any eventual cleanup.”
This is factually incorrect.
Petroecuador was the majority partner in the consortium and is responsible for every site in question. Moreover, no remediation work in the oil producing region could occur without Petroecuador’s active involvement, participation, and authorization. Simply put, nothing could happen in Petroecuador’s oil fields, including a remediation ordered by the court, without Petroecuador.
Meanwhile, the government of Ecuador has already acknowledged that it expects to participate in any prospective remediation work. At a September 2009 press conference, Ecuador’s Prosecutor General, Washington Pesantez said, “Although I don’t have the exact figures, 10 percent would go to the plaintiffs if Chevron is found guilty; 90 percent would be delivered to the State for remediation or bio-remediation activities that would serve to correct biologic and chemical mechanisms…”
In addition, “the fact Cabrera’s company is qualified to bid on clean-up contracts offered by” Petroecuador is extremely relevant: — Cabrera’s report attempts at every turn to exonerate Petroecuador for 20 years of sloppy practices. In his report Cabrera exonerates Petroecuador of the current environmental conditions in the region, grossly inflates the scope of remediation and costs of the work, and even calls on the court to award $375 million to upgrade Petroecuador’s infrastructure. Cabrera’s company’s registration to do work for Petroecuador provides the perfect incentive for Cabrera to go to such absurd lengths to lavish benefits on Petroecuador in his report, and the perfect opportunity for Petroecuador to return the favor.
“Cabrera by virtue of his role in the case would be barred from having a role in a future clean-up.”
This statement is inherently contradictory and is made without any factual support. First the Amazon Defense Front says there is no conflict at all, and then it says that Cabrera does indeed have a conflict of interest. His financial stake in remediation explains why Cabrera, on at least ten different occasions, concealed from the court his conflict of interest — a violation of Ecuador law. Accordingly, Cabrera’s report should be rejected and Cabrera’s connection to Petroecuador should be investigated.
Chevron has consistently argued that it is not getting a fair trial in Ecuador. Evidence presented to the court shows Texaco Petroleum’s remediation was thorough and complete. Amazon Defense Front has teamed up with the government of Ecuador to try to shift the liability of Petroecuador to Chevron by pressuring the company into an unjust settlement using a biased and improperly influenced court and a partisan and unqualified “independent” analyst.