Wikileaks Cables Expose Chevron's Lobbying of Ecuador Government to Kill $18 Billion Environmental Case

Newly Released Cables Raise Questions About Chevron Ties to U.S. Embassy and Misrepresentations

New York, NY – Chevron engaged in a clandestine lobbying campaign of Ecuador's government to improperly shut down the historic environmental case brought by thousands of indigenous persons where the oil giant was found to have contaminated the rainforest and ordered to pay $18.2 billion to clean up the damage, according to a series of cables written by U.S. government officials and recently disclosed by Wikileaks.

The diplomatic cables (see here, here, here and here) also reveal that Chevron and U.S. embassy officials in Ecuador enjoyed such a close relationship that the oil giant's lawyers were tipping off U.S. ambassadors about their legal strategy before it would be revealed in court, said Karen Hinton, the U.S. spokesperson for the 30,000 Ecuadorians who recently won an $18.2 billion judgment for clean-up, despite efforts by Chevron to undermine the case.

The Ecuador court found that Chevron, from 1964 to 1992, dumped billions of gallons of toxic waste onto the ancestral lands of indigenous groups, causing an outbreak of cancer and other oil-related diseases.

Ecuador's Constitution prohibits government interference in the judiciary, so Chevron's lobbying in effect was trying to coax Ecuador's President Rafael Correa to violate the country's laws to benefit the oil giant in a private litigation. The company offered to fund "social projects" in exchange for a government agreement to shut down the trial.

"These diplomatic cables reveal a shocking level of misconduct on the part of Chevron's lawyers to undermine the rule of law in Ecuador," said Hinton. "They also demonstrate the company's extremely close ties to U.S. embassy officials in Ecuador who seemed open to helping Chevron shut down the legal case."

The Wikileaks cables reveal that Chevron left no stone unturned in its efforts to stop the proceedings, which represented the only hope for indigenous groups and farmer communities to secure a clean-up after decades of stonewalling by the oil giant.

The cables, primarily authored by U.S. Ambassador Linda Jewell or U.S. Ambassador Heather Hodges, reveal that:

  • In April of 2008 Chevron tipped off U.S. embassy officials that during the ongoing trial it had offered to set up social programs in the Amazon "in exchange for GOE [Government of Ecuador] support for ending the case". Chevron consistently tried to end-run the plaintiffs and settle the case directly with Ecuador's government, despite Ecuadorian laws prohibiting government officials from settling private claims, said Hinton. Chevron convinced Jewell to attempt to intervene on behalf of two Chevron employees who faced a criminal investigation for signing off in 1998 on a sham remediation of oil sites in exchange for a government release from liability. Jewell said the embassy "will consider how it can help Chevron resolve" the case, and that she contacted a former Supreme Court President of Ecuador as part of that strategy. The charges against the two, Richard Reis Veiga and Rodrigo Perez Pallares, were later dismissed on a technicality despite overwhelming evidence of fraud, said Hinton.
  • In August of 2009, Chevron lawyer Ricardo Reis Veiga called the then-U.S. ambassador to provide a "heads up" that the company was releasing secret videotapes taken by Chevron contractor Diego Borja that the company claimed implicated the judge in a bribery scandal. The move backfired after it became clear that the tapes did not actually show the judge taking a bribe and after Borja later admitted to being Chevron's "clandestine operative" in Ecuador, and that Chevron paid him for his work, said Hinton.
  • The cables also suggest that Chevron officials were misrepresenting facts about the Lago Agrio case to embassy officials. In a cable written in September 2009 by Ambassador Heather Hodges, Chevron claimed it had not sought the Borja tapes when in fact Borja worked for Chevron and was meeting with Chevron lawyers in the United States about the entrapment of the judge in Ecuador, said Hinton.
  • Another cable from March of 2006, written by Charge d'Affairs Jefferson Brown, said that Chevron executive Jamie Varela told embassy officials that "Chevron had not had any real complaints about the judge" or the "administration of the case" in Lago Agrio. Chevron later argued before various U.S. courts that Ecuador's judicial system was unfair at that time, contradicting these private statements to the embassy, said Hinton.
  • Varela also tipped off Brown that Chevron was planning on filing an international arbitration case against the Government of Ecuador in a move to gain leverage over the Lago Agrio case, according to the cables. Varela also indicated that Chevron would not publicly disclose the filing for fear the plaintiffs would use it against the company.
  • Additionally, Brown wrote that U.S. embassy officials were "surprised" that Varela did not ask for U.S. government "intervention in the case" to help Chevron, as had other Chevron officials. Nevertheless, Brown wrote that the embassy "will continue to raise the [Chevron] matter with [Ecuador's government] when we discuss other commercial disputes" but he also concluded that Chevron's complaints were "being fairly and adequately addressed in the courts or in arbitration and require no direct [U.S. government] action at this time."

"Chevron was sharing intimate details of its supposedly private legal strategy with the U.S. embassy," said Hinton. "Chevron lawyers clearly felt that embassy officials were part of their team," said Hinton.

Hinton said, "The U.S. State Department should make it clear that no U.S. embassy official should interfere with ongoing private lawsuits brought by local residents against American corporations that commit environmental or human rights abuses in their countries. Hinton said such actions "have the effect of undermining a primary objective of U.S. foreign policy which is to support the development of democratic institutions and the strengthening of civil society."

The trial against Chevron in Ecuador began in 2003 in the town of Lago Agrio and ended in February of this year with the judgment, which both sides are appealing. Chevron had heaped lavish praise on Ecuador's court system to move the case to Ecuador out of federal court in New York, where the action was filed in 1993.

During the Ecuador trial and in recent legal efforts in the U.S. to stop enforcement of the judgment, Chevron has characterized meetings between the Ecuadorian citizens suing Chevron and their government officials as a "criminal conspiracy" even though the newly released cables and other memos prove that Chevron also met repeatedly with numerous Ecuadorian government officials to pressure them to illegally intervene in the lawsuit.

On multiple occasions since 2006, Chevron has tried to interfere with the environmental case by using its Washington lobbyists to try to press the Bush and then Obama Administrations to cancel Ecuador's trade preferences in retaliation for the lawsuit, even though Chevron wanted the case to be held in Ecuador.

Chevron's efforts to undermine the case were extraordinary, Hinton added. During the nine years of litigation in Ecuador, Chevron also sought to recuse every judge who presided over the case, threatened judges with jail time if they did not rule in favor of the company, and took out paid newspaper advertisements criticizing judicial officers and adversary counsel. Two Chevron lawyers were also sanctioned for filing frivolous motions, including 18 in one 30-minute period in 2010.

In recent years the company has stripped all assets from Ecuador, forcing the plaintiffs to consider lawfully enforcing their judgment in the many countries around the world where the oil giant operates. On Monday, a U.S. federal appeals court in New York lifted an injunction barring Americans from enforcing the Ecuador judgment, clearing the way for collection actions to commence if the Ecuador appellate court affirms the trial court judgment.

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