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Chevron Ecuador Lawsuit News

Chevron Ecuador: Plaintiffs’ Experts Say “No Evidence” For Billions In Damages Against Chevron

Chevron today unveiled a pair of affidavits from environmental consultants who say attorney Steven Donziger ordered them to cover up evidence that they wrote the report an Ecuador court relied upon to assess $19 billion in damages against the oil giant. That report was riddled with improper assumptions and highly inflated estimates of the costs of remediation, the consultants said.

In a 28-page statement he gave March 22, Douglas Beltman, an executive vice president with Stratus Consulting, says his firm wrote the environmental report that was submitted to the court in Ecuador under the name of a supposedly independent expert Richard Stalin Cabrera Vega. Beltman says he kept that information secret under orders from Donziger, even withholding the true author of the report from other lawyers involved in the case as well as Karen Hinton, a former spokesperson for the Ecuadorian villagers suing Chevron over pollution left over from decades of drilling in the jungle there.

Compounding the deception, Beltran says, his firm then drew up “comments” upon the report they had authored, suggesting Cabrera had omitted evidence of contamination that would have increased the damages against Chevron to $27 billion. Texaco drilled in Ecuador from the late 1960s until it was ejected from the country in 1992, under a joint venture with state-owned Petroecuador. Chevron inherited the toxic mess after it bought Texaco in 2001.

“I never before or since have been involved in a situation where I have participated in drafting a report and after that report was adopted by the court’s expert, commented on it,” Beltman says, in a statement filled with specific allegations of deceptive behavior directed by Donziger.

Donziger referred a call to attorney Craig Smyser in Houston, who is also representing the villagers in Ecuador in their U.S. court battles. He said Beltman’s testimony in the statement, submitted under penalty of perjury, directly contradicts what he told Smyser under oath in a 2011 deposition.

“I took Doug Beltman’s deposition in Denver and he testified repeatedly that Texaco had used substandard drilling practices in Ecuador,” Smyser said. He accused Chevron of placing financial pressure on Stratus, which does environmental consulting work for oil companies as well as government agencies, by spreading allegations of wrongdoing with its clients.

“Chevron gets testimony two ways:  they pay for it or they intimidate people until they give in,” Smyser said.

Beltman’s affidavit appears carefully constructed to inflict the maximum damage upon Donziger, a former journalist who initiated the lawsuit in 1993 after graduating from Harvard Law School. Chevron filed a civil racketeering suit against Donziger and Stratus, accusing them of fabricating the evidence in the Ecuador case as part of a multibillion-dollar shakedown scheme. The Stratus executives submitted their statements as part of a settlement ending the lawsuit against them.

In his statement, Beltman describes a process orchestrated by Donziger and financed by Joseph Klein, a Philadelphia plaintiffs’ attorney who poured millions of dollars into the case only to quit in disgust in 2010, saying Donziger’s misconduct made it “highly unlikely that any court in the United States or elsewhere would ever enforce any judgment” he might obtain.

Kohn was just the first of a series of financial backers who have been disappointed by Donziger’s Fitzcarraldo-like quest for riches in the jungles of Ecuador. He’s also enticed law firms including Motley Rice and Patton Boggs in Washington to sign on to the case, although Chevron has thus far refused to negotiate the settlement that would reward all the participants with a significant chunk of any money they obtain.

A second affidavit by Ann Maest, managing scientist at Stratus, backs Beltman’s allegations that Donziger orchestrated the process of constructing the damages estimate. Maest says there was no evidence of petrochemicals migrating from waste pits at the abandoned drilling sites, undermining Donziger’s claim that villagers were being poisoned by chemicals in their drinking water.

In his statement, Beltman says those claims were constructed out of whole cloth, as were claims by the plaintiffs of cancer levels 30 times higher than normal and an outbreak of childhood leukemia. All were used to bolster the estimate of $19 billion in damages.

“Stratus is not aware of any scientific evidence that people in the former concession area are

drinking water contaminated with petroleum,” he said. “To the contrary, none of the drinking water samples I have seen exceeded the drinking water standards” set by the World Health Organization or the U.S. EPA.

Beltman says Donziger lied about contamination levels before a Congressional committee and ordered him to withhold evidence of his firm’s involvement with the Cabrera report from potential backers including Patton Boggs. After the firm learned of a court-ordered investigation into potential fraud, he says, Stratus turned over all relevant documents to its lawyers but was pressured by Donziger and Patton Boggs to delay requests for the evidence from Chevron for “several months.” Stratus’s lawyers considered the delay unethical, he says.

Beltman also sheds some light on a mystery that has always surrounded this case: Why isn’t Donziger suing Petroecuador, which was the majority owner of the drilling venture for most of its existence and took over all operations in 1992?

The Stratus executive says Donziger specifically instructed him not to try and calculate how much of the pollution in the jungle was on Petroecuador drilling sites, or how much of it had been released since 1992. Petroecuador was still polluting heavily when he visited the area in 2007, Beltman says. Donziger also refused to incorporate the known costs of Petroecuador’s remediation efforts and ordered Stratus to lower the levels of petroleum products in the soil required in a projected cleanup to 100 parts per million even though Petroecuador was only cleaning to 2,000 parts per million. That change alone raised the damages estimate from $1.7 billion to $2.7 billion, Beltman says.

Smyser said Chevron’s release of the affidavits to journalists before he’d even had a chance to look at them fits with the company’s policy of aggressive public-relations attacks against Donziger, partly because Chevron executives are embarrassed that they allowed the Texaco merger to go through despite the Ecuador litigation.

Beltman also expressed regret about being involved in a public-relations campaign.

“I am a scientist. I have learned from this experience that I should stick to science and leave public relations to others,” he said. “I regret that I allowed myself to be pressured by Donziger to make those public statements.”

By Daniel Fisher-Forbes, April 12, 2013


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