Washington, D.C. – Embattled Chevron Executive Richard Reis Veiga, already under investigation in Ecuador on fraud charges over his role in a botched environmental clean-up, is scheduled to be put under oath today by Ecuador’s government as part of a multi-billon dollar civil case in U.S. federal court to determine who pays for what experts believe is the world’s worst oil-related contamination.
A phalanx of lawyers from Jones Day, Chevron’s premier corporate law firm, will be defending Reis Veiga from a battery of questions about his role in covering up the impact of an environmental disaster 30 times larger than the Exxon Valdez spill.
The deposition of Reis Veiga, a Chevron Vice President, comes at an inopportune time for the company. Already, Ecuador’s lead national prosecutor is investigating Chevron on possible fraud charges while in the U.S. the Securities and Exchange Commission is probing whether the company violated regulations by failing to disclose its Ecuador liability – estimated at $6 billion – to shareholders.
To make matters worse for Reis Veiga, representatives of 30,000 rainforest residents are releasing a detailed 17-page factual report today outlining his leading role in possibly illegal behavior in Ecuador’s rainforest. In a civil trial in Ecuador brought by the residents, Chevron has admitted that it dumped 18 billion gallons of toxic waste directly into Ecuador’s Amazon region from 1964 to 1992. At the same time in the U.S., the company was treating the same kinds of waste and re-injecting it into deep wells.
Ecuador’s residents claim Chevron’s practices and subsequent cover-up have forced two indigenous groups to the brink of extinction and caused thousands of residents to suffer from cancers and other oil-related health problems.
The report, Rainforest Catastrophe: Chevron’s Fraud and Deceit in Ecuador, is based on a year-long investigation and rests partly on evidence generated in the historic civil lawsuit. The report found that:
• Reis Veiga orchestrated a “remediation” of the contaminated areas that cost $40 million, or less than 1% of the estimated cost of a clean-up.
• Reis Veiga, to secure a legal release, led the effort to deceive Ecuador’s government by claiming certain sites had levels of contamination lower than they did.
• Chevron to this day continues its cover-up by using a flawed sampling and analysis plan designed to hide contamination.
Several community leaders in Ecuador have taken to calling Reis Veiga the “Architect of the Fraud” for his role in using whatever means necessary to protect Chevron from liability over its Ecuador contamination. He will be deposed today in Washington, D.C. by lawyers at Winston & Strawn, the firm representing Ecuador’s government.
Chevron is currently embroiled in two related multi-billion dollar litigations over the Ecuador problem. The case involving Reis Veiga’s sworn testimony is part of a dispute in U.S. federal court in New York between Chevron and Ecuador’s government over who should bear the liability for the contamination. That case is distinct from the Ecuador case, which is a trial to determine the scope of a clean-up and how much it would cost.
Chevron’s primary defense to both litigations is a legal release it obtained from Ecuador’s government after conducting the controversial “remediation” from 1995 to 1998 under Reis Veiga’s supervision. The indigenous groups and the government of Ecuador both claim the release is irrelevant because it excludes third party claims of individuals like those bringing the Lago Agrio lawsuit, and in any event is legally invalid because it resulted from a fraudulent inducement.
Reis Veiga had scheduled a press conference last August in Ecuador to defend his name against the fraud allegations, but it was mysteriously canceled at the last minute and has not been rescheduled. Lawyers for the rainforest residents believe Reis Veiga got cold feet when he learned of an investigation by the country’s lead prosecutor into the fraud allegations.
Judge-ordered laboratory analyses during the civil trial show elevated levels of toxic hydrocarbons at 100% of the sites Chevron claimed to have remediated, according to lawyers for the plaintiffs. Chevron’s lawyers in the civil case have claimed to the court that the elevated levels of toxins — including carcinogens such as Chromium 6 — pose no risk to human health despite the fact that they dramatically exceed standards in the U.S. and in Ecuador.
Reis Veiga’s deposition is expected to take one day. A trial on the New York phase of the litigation is scheduled for March of 2007, while the Ecuador trial is expected to finish at the end of 2007.
