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The Fraudulent Case Against Chevron in Ecuador

Chevron has uncovered undeniable evidence of fraud by the Lago Agrio representatives, much of which is captured on film, documented in their correspondence and detailed in sworn declarations by their own experts, who have turned against them. In the process, Chevron has exposed the plaintiffs’ lawyers’ plot to intimidate judges, pressure scientific experts to “find contamination” where none existed and ghostwrite supposedly independent damage reports as well as the $18 billion judgment itself. Ecuador’s judiciary has failed to address this misconduct, and the plaintiff’s continued their strategy of extortion by filing enforcement actions against Chevron subsidiaries in three countries -Canada, Argentina and Brazil- even as U.S. federal courts, reviewing the same evidence, concluded that: “the concept of fraud is universal, and that what has blatantly occurred in this matter would in fact be considered fraud by any court.” In fact, eight federal courts have found that the Lago Agrio trial was marred by the plaintiffs’ representatives’ fraud. In the latest and most devastating development for the plaintiffs’ case, on April 12, 2013, the plaintiffs’ chief environmental consultants filed sworn statements detailing their knowledge of the plaintiffs’ lawyers’ misconduct and testifying that there is no scientific merit to the allegations against Chevron.

Recent Enforcement Action Updates:

  • And in May of 2013, the Ontario Superior Court of Justice declined to consider the plaintiffs’ enforcement attempt, noting that there is “no basis in law or fact” to pursue Chevron Corporation’s assets in Canada.
  • On June 5, 2013 Argentina’s Supreme Court lifted a freeze on Chevron’s assets, rejecting any tie to the Ecuador litigation: “The appealing parties have not participated in the case against Chevron Corporation (in Ecuador) and are legally distinct units.”

Judicial Misconduct and Forgery

María Aguínda, the lead plaintiff in the initial 1993 case brought against Texaco in New York, and later in the 2003 Lago Agrio litigation against Chevron, admitted on video that she didn’t knowingly sign onto the lawsuit.  Rather, she signed a document in return for promises of “free medicine.”  Months later “her” attorneys informed her that she was the lead plaintiff in the case.  In the Lago Agrio lawsuit, the lawyers cut even more corners: They simply forged the names of at least twenty of the forty-eight “plaintiffs.”

No Evidence and Falsified Expert Reports

  • Plaintiffs’ lawyers’ experts Dave Russell and Dr. Charles Calmbacher repeatedly told their employers that testing results did not support the allegations of environmental contamination by Texaco.  In November 2004, Russell told plaintiffs’ lawyers that their testing was “self- defeating” and “counterproductive.”  He went on to admit that Texaco’s environmental clean-up was “performing as designed.”  Russell continued with admissions that testing for cancer-causing chemicals was proving fruitless; the carcinogenic compounds were simply “not there.”  Two months later, Russell provided another update in which he explained: “From the data I have seen so far, we are not finding any of the highly carcinogenic compounds one would hope to see when investigating the oil pits.”
  • Russell later disavowed his own $6 billion remediation estimate, telling the plaintiffs’ lead American lawyer, Steven Donziger, that the “estimate is no longer valid and if subpoenaed to testify, I will state that the costs are much lower based upon the knowledge available to me at the time I was released from the project.”
  • In a sworn declaration, Russell also testified that he had “personal knowledge that [lead plaintiff attorney] Steven Donziger and the plaintiffs’ representatives” were “lying about the environmental conditions” in Ecuador. Russell outlined how Donziger instructed him to stop testing for standard oil spill markers because the findings suggested that the oil was too fresh and not likely a result of Texaco’s operations. He further noted that by late 2004, the plaintiffs had become unhappy because “the analytical data was turning up blank for both the soil and the water samples” and they “could not prove their claims.”

Dr. Calmbacher, the plaintiffs’ expert who inspected the first four sites in 2004, found that none required further remediation.  As environmental testing failed to show the necessary contamination, the plaintiffs’ lawyers began falsifying evidence.  In 2005, plaintiffs’ lawyers filed reports in Dr. Calmbacher’s name claiming he had concluded that two of the sites were contaminated and required millions of dollars of remediation. When subpoenaed by Chevron, Dr. Calmbacher testified under oath that “I did not reach these conclusions and I did not write this report.”

The Cabrera Fraud: Ghostwriting Supposedly Neutral Damage Reports

The plaintiffs’ lawyers blackmailed the judge presiding over the Lago Agrio trial to cancel the court-ordered site inspections plaintiffs’ experts Dave Russell and Dr. Calmbacher condemned.  Their solution was to force the court to appoint an “independent” global damages expert, who would work covertly for them, by threatening the judge with a sexual harassment complaint.

  • On June 13th, 2007, Richard Stalin Cabrera Vega (Cabrera) was officially sworn in as the global damages expert.  The Lago Agrio court required Cabrera to “perform his duties . . . with complete impartiality and independence vis-á-vis the parties.”  But privately, Cabrera – and his official conclusions – had already been predetermined and paid for by the plaintiffs’ lawyers. The plaintiffs’ lawyers opened a “secret” bank account (see here, here and here) to pay at least $100,000 bribes and hush money to Cabrera.  These secret payments were in addition to the $263,000 plaintiffs acknowledged paying Cabrera for the work he was supposed to do independently for the court, but which plaintiffs were secretly doing for him.
  • Former co-counsel and litigation funder, Joseph Kohn, told the plaintiffs that he was “shocked by recent disclosures concerning potentially improper and unethical, if not illegal, contacts with the court-appointed expert.” The plaintiffs’ Ecuadorian lawyers admitted in an email that if evidence of their collusion and fraud was exposed, “all of us, your attorneys, might go to jail.”
  • But the plaintiffs’ lawyers doubled-down on the fraud, seeking, as stated by a plaintiffs’ lawyer at Patton Boggs, to “cleanse” the Cabrera Report by obtaining reports from new experts, who in less than a month—without even visiting Ecuador—repackaged the fraudulent Cabrera Report and increased the damages claim by another $86 billion.  Several federal courts have found this “cleansing” operation to be evidence of additional fraud.

Ghostwriting the $18.2 Billion Judgment

  • The ultimate $18.2 billion judgment against Chevron was not written by the presiding judge Nicholas Zambrano.  Two prominent forensic linguists (see here, here and here) compared the February 14, 2012 judgment to Judge Zambrano’s known writings and found substantial differences in writing characteristics.  They concluded that the judgment was not written by Judge Zambrano alone.
  • As has now become a pattern in Ecuadorian courts, the evidence shows that the $18 billion judgment itself was ghostwritten.  Individuals with access to plaintiffs’ unfiled work product contributed to the judgment:  Almost one whole section of the judgment is copied from a private plaintiffs’ lawyer memorandum.  The shared text, including common errors, cannot be explained by the record and the plaintiffs’ lawyers have pointed to no document openly provided to the court explaining the overlap.
  • The United States District Court for the District of Maryland found that it is more probable that the judgment was secretly ghostwritten by someone other than the presiding judge and that it incorporated the Lago Agrio plaintiffs’ confidential, unfiled work product.

Opposing Ecuador’s Remediation

  • After failing to clean up their oil operations for years, Ecuador’s state-owned oil company, Petroecuador, finally began to “fulfill[] their contract, their cleanup contract, with Texaco,” but plaintiffs’ lawyers worried that the cleanup efforts would “undermine [their] legal position.”  They worried that the realistic budget of the Petroecuador remediation would undercut their ability to force a large judgment in the case.  In an email with the subject line “WORRISOME,” Pablo Fajardo, the plaintiffs’ lead Ecuadorian counsel, warned that a newspaper was reporting that the remediation (encompassing an area far larger than the area at issue in the case), would cost an “extremely low” $96 million.  Even this estimate was too high—Petroecuador recently announced plans to remediate all the existing sites in the entire Ecuadorian Amazon and estimated the cost would be only $70 million.
  • Fearful that Chevron would, in Fajardo’s words, “say that the State finally assumed its duty and is going to clean up what it ought to,” plaintiffs’ attorney Steven Donziger instructed Fajardo “to go to Ecuadorian President Rafael Correa to put an end to this shit once and for all.”
  • The plaintiffs’ lawyers recognized that they could not publicly oppose Petroecuador’s cleanup because they would “just look like a bunch of bigots[:] we claim that we are just looking for an environmental restoration and we are opposing it.” So they once again lied, submitting a letter to the Lago Agrio court over the “independent” expert’s signature requesting that the court order the government to halt remediation activities.

The plaintiffs’ own documents show that the lawyers have no plans to use any damages they receive for remediation, but rather long ago formulated a plan to “keep the proceeds out of Ecuador.”  Chevron recognizes that the people of Ecuador face real challenges, but using Ecuador’s corrupted courts to advance a fraud is simply wrong.