Chevron "Dirty Tricks" Operative Diego Borja Could Face Criminal Liability for Obstructing Ecuador Trial, Lawyer Concedes
Borja Claimed Chevron Tried to Corrupt Process That Led to $18 Billion Judgment Against Oil Giant
- October 21, 2011
- FOR IMMEDIATE RELEASE
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San Francisco, CA – Chevron's self-proclaimed "dirty tricks" operative Diego Borja – accused of trying to orchestrate a bribe to an Ecuador judge to undermine the environmental lawsuit against Chevron – could face potential criminal liability in the U.S. for his actions, according to an unusual admission in federal court made recently by his own lawyer.
The San Francisco-area lawyer Ted Cassman, who is paid by Chevron to represent Borja, conceded that his client could face potential criminal charges in the U.S. for orchestrating a sting in 2009 against a sitting judge in Ecuador just before the trial was about to end in what both parties expected to be a verdict against Chevron, according to a transcript of recent proceedings in federal court in San Francisco.
Cassman is the partner of powerhouse Bay Area criminal defense lawyer Cris Arguedes, who represents baseball start Barry Bonds and other high-profile clients.
As a result of the publicity surrounding the Borja sting operation, the judge in Ecuador was forced to withdraw from the case to avoid the appearance of impropriety, delaying the proceedings for approximately two years until they finally ended in February with an $18 billion verdict against the company, said Karen Hinton, the U.S. spokesperson for the Ecuadorians who are fighting Chevron to clean-up their ancestral lands.
"We believe the delay caused by this Chevron-orchestrated sting operation created untold suffering for thousands of people who live in a poisoned environment due to the company's reckless operational practices," said Hinton. "It is imperative that Chevron immediately make public all documents related to this scheme."
Borja, who Chevron moved to the United States just before the scandal became public in August 2009, is already under investigation by criminal prosecutors in Ecuador. He lives in an undisclosed location in Houston, where Chevron pays him a salary to maintain his loyalty while he does no work, said Hinton.
Cassman made the comments about Borja's potential criminal liability in the U.S. on September 28th in San Francisco during a discovery hearing where Chevron's lawyers are fighting feverishly to prevent the release of documents related to the entrapment scheme. The Ecuadorian plaintiffs believe Borja's actions on behalf of Chevron could violate the U.S. Foreign Corrupt Practices Act, which prohibits American businesses from bribing foreign officials, said Hinton.
The plaintiffs also believe Chevron helped Borja secure political asylum in the United States under false pretenses so he would be out of reach of Ecuadorian investigative authorities, Hinton added.
The plaintiffs assert that the documents sought from Borja and the Mason Investigative Group will shed light on what they call Chevron's Nixon-style "dirty tricks" campaign to undermine the Ecuador trial. In phone conversations taped by a friend after the sting became public, Borja confessed that he had set up dummy corporations for Chevron, doctored scientific sampling results that were submitted to the court, and had information that would allow the plaintiffs to win the litigation immediately. He also bragged to his friend on the tapes that "crime does pay."
Evidence demonstrates that while living in the U.S. Borja has received regular payments from Chevron and enjoyed extensive contact with Chevron's U.S. lawyers, including Chevron in-house counsel Jamie Moyer and Robert Middlestadt, who heads the San Francisco office of the prominent law firm Jones Day.
The documents sought also could show that the Mason investigators played a role in helping a former Borja partner and convicted drug felon, Wayne Hansen, move out of the U.S. to avoid subpoenas that would have required him to testify about the illegal Chevron scheme, according to James Tyrrell who argued the case for the plaintiffs. Both Borja and Hansen were in meetings in Ecuador in May and June of 2009 where they secretly taped the trial judge presiding over the environmental case under the guise of asking how a remediation would work if the plaintiffs won.
Chevron falsely claimed at the time that the trial judge, Juan Nunez, said during the taped meetings that he had decided the case against Chevron before the close of evidence. But the tapes, which Chevron posted on YouTube as part of a public relations push, actually showed the judge making no such comments, according to several media outlets that reported on the episode, including the New York Times and Los Angeles Times.
At the discovery hearing in San Francisco, Cassman and Chevron lawyer Ethan Dettmer argued before Magistrate Judge Nathaniel Cousins that the documents sought are privileged and therefore should not be turned over. To support their argument, Cassman said it was the assessment of the Arguedes firm that Borja faced potential criminal liability in the U.S. and Ecuador.
"It was clear to us – and to Ms. Arguedes in particular, who met with [Borja] at that time – that there was a potential for a criminal investigation and prosecution in Ecuador… and in the United States of America" of Borja, Cassman said in open court.
Of 700 documents from Borja and the Mason Group relating to the scheme, only 13 largely irrelevant documents have been turned over to the plaintiffs, Tyrrell argued. The plaintiffs and the Government of Ecuador have been trying for more than one year to obtain the documents in the face of repeated obstruction by Chevron and lawyers for the Mason Group and Borja, all of whom are paid by Chevron, said Tyrrell.
Legal papers filed in the discovery action accuse Chevron and the Mason Group of trying to hide Chevron's "involvement in concocting and executing a plan to undermine the environmental litigation in Ecuador by tainting the presiding judge with a manufactured scandal."
Chevron presented misleading information in various press materials and public statements at the time it released the videos on YouTube in August 2009, according to the plaintiffs. At the time, Chevron described Borja and Hansen as "Good Samaritans" but did not disclose that the pair were motivated by money and that Chevron lawyers had met with them in San Francisco while the scheme was unfolding.
"It is obvious Chevron feels great anxiety about releasing documents related to this sordid attempt to undermine the judicial system of a U.S. ally to avoid losing a trial," said Hinton.
Hinton said evidence of Chevron's misconduct in Ecuador paint a “picture of duplicity, fraud and corporate espionage" that point to an absence of ethical control by Chevron management.
An investigation by the plaintiffs in 2010 found that Borja and and his wife, Sara Portilla, were key members of Chevron's legal team in Ecuador and that Hansen in the late 1980s had been convicted of smuggling 288,000 pounds of marijuana into the U.S.
Just before the scandal broke, Chevron moved both men from Ecuador to the United States and paid for criminal defense attorneys to represent them so they could not be contacted directly by journalists or investigators, said Hinton. More information about Borja and Hansen can be found here.
Further underscoring Chevron's anxiety about the sought-after documents is that the oil giant has repeatedly requested they be sealed by the court, thus hiding them from public scrutiny. Chevron mistakenly disclosed some documents suggesting the Mason Group helped move Hansen out of the United States to Peru. See this Courthouse News article.
Earlier, evidence that Chevron paid "hush money" to Borja was made public through the news media and a legal brief filed in a related proceeding in federal court in New York.
According to the San Francisco Daily Journal, Borja has received as much as $364,000 from Chevron since June 2009 without having performed any professional duties. Chevron also paid Borja's income taxes to the U.S. government, according to court documents.
Evidence also has emerged that Chevron used the American law firm Jones Day as a conduit to funnel payments to Borja after he was brought to the U.S. A court submission by the plaintiffs revealed that a “Jones Day Partner-In-Charge of the San Francisco office … personally” took care of various perks for Borja and his family, including a car allowance and rent payments.
The Jones Day partner is widely believed to be Middlestadt.
After an eight-year trial, the Ecuador court found in February that Texaco (now owned by Chevron) systematically dumped billions of gallons of toxic waste into the rainforest when it ran a concession in Ecuador from 1964 to 1992, decimating indigenous groups and causing widespread cancer and oil-related health problems.
Experts believe the contamination in Ecuador dwarfs the size of the BP Gulf spill and could be the worst oil-related disaster ever, said Hinton. The appellate court in Ecuador is expected to rule on the trial verdict in the coming weeks.