Prominent Anti-Corruption Group Calls for DOJ to Investigate Chevron on Allegations That It Used Bribery and Fraud in Ecuador Litigation
Questions Raised about Allegations that Oil Giant and U.S. Judge Used False Testimony to Attack Landmark Judgment and Human Rights Defenders
London, UK – Global Witness, a prominent international anti-corruption organization, is calling on the U.S. Department of Justice (DOJ) to investigate Chevron and its law firm Gibson Dunn based on public documents that suggest the company used witness bribery and fraud to avoid complying with a $12b pollution judgment awarded in 2013 to Indigenous groups in Ecuador. Chevron was found liable by four layers of courts in Ecuador for deliberately dumping billions of gallons of toxic waste when it operated in the country from 1964 to 1992.
The London-based organization, which investigates corruption in the oil industry, said in a letter to the DOJ (see Annex A) that Chevron’s exorbitant payments -- estimated at more than $2 million -- to its star witness in a retaliatory civil “racketeering” case presided over by U.S. federal judge Lewis A. Kaplan should be seen as a “major red flag” for corruption. The Amazon Defense Coalition (FDA), the grass roots organization that won the judgment against Chevron, has long warned that ancestral lands in Ecuador the size of Rhode Island have been largely destroyed by the company’s toxic dumping and that its lawyers have engaged in fraud and other crimes to avoid complying with the judgment.
The FDA says recent evidence indicates that Chevron as of 2018 had likely paid at least $5 million in cash and benefits to the witness, an admittedly corrupt former Ecuadorian judge named Alberto Guerra. Guerra and some of his family members have been living in the U.S. since 2013 on the Chevron payroll, said Patricio Salazar, a lawyer for the FDA.
Simon Taylor, a founder of Global Witness who signed the letter (see Annex A) to the DOJ requesting the investigation, said the Chevron payments have many of the usual telltale signs of corruption.
“I have been investigating corruption in the extractive industries for more than two decades and throughout that time, I cannot think of a more blatant example of a conflict of interest,” said Taylor. “As I understand it, U.S. law prohibits payments to witnesses other than for travel and basic support during testimony. How can payments on this scale be legitimate?
“When one takes into account this Chevron witness is an admittedly corrupt former judge – facts known at the time of the civil racketeering trial – I simply cannot understand how such a witness could ever have been considered credible by Judge Kaplan. Taking this into account along with other serious potential irregularities involving Chevron’s lawyers, it would be utterly untenable for the DOJ not to open an investigation of this critically important matter.”
The letter from a prominent independent organization like Global Witness represents a major setback for Chevron, which currently faces a judgment enforcement lawsuit in Canada targeting company assets to force payment of the Ecuador judgment. Canada’s Supreme Court authorized that action in a unanimous opinion in 2015 and the Ecuadorians hope to force Chevron to trial in the coming months, where they plan to present evidence of the company’s corruption if its lawyers try to block enforcement of the judgment. Chevron has an estimated $15 billion worth of assets in Canada.
Those implicated in Chevron’s alleged misconduct in the Ecuador litigation that is the subject of the Global Witness letter include several high-profile U.S. lawyers, including the head of litigation at the Gibson Dunn firm, Randy Mastro, and the General Counsel of Chevron, R. Hewitt Pate. Pate is a former Assistant Attorney General of the United States under President George Bush. (Various courts have determined that lawyers at Gibson Dunn have fabricated evidence and engaged in “legal thuggery” on behalf of the firm’s scandal-plagued corporate clients.)
A Chevron legal team headed by Mastro coached Guerra for 53 days before he took the stand in Kaplan’s case in 2013 and testified he had overhead discussion of a “bribe” to the Ecuador trial judge. Guerra later admitted he had lied repeatedly under oath and a separate forensic analysis proved he lied, but Judge Kaplan – a blatantly pro-business judge who had undisclosed financial ties to Chevron -- nevertheless ruled in favor of the oil giant, contradicting the rulings of 16 appellate judges in Ecuador.
Much of the public documentation of Chevron’s and Gibson Dunn’s witness bribery and fraud is contained in a criminal referral letter sent to the DOJ in 2017 by Steven R. Donziger (see here). Donziger has been the target of a vicious Chevron retaliation campaign after helping his clients win the landmark pollution judgment. He recently attracted wide support from major environmental groups after his law license in New York was suspended without a hearing based largely on Chevron’s false evidence and Guerra’s now-recanted testimony. (Donziger is contesting the decision to suspend his law license.)
Appellate judges in Ecuador from three layers of courts have rejected Judge Kaplan’s findings, including the country’s Constitutional Court in a unanimous ruling last July. In addition, 12 appellate judges in Canada have unanimously rejected a Chevron attempt to use Judge Kaplan’s decision to thwart the enforcement action in that country.
In the 2017 Donziger referral letter to the DOJ, the Ecuadorians presented evidence “suggesting a conspiracy by Chevron and certain of its counsel and executives to engage in witness bribery, perjury and obstruction of justice” to defraud courts and other judicial bodies. Among the evidence:
As of 2013, Chevron had paid $2 million in cash and benefits to the admittedly corrupt Ecuadorian witness, Guerra. The company gave him a housing allowance, a car, health insurance, and paid his income taxes.
Discussing his brazen negotiations with Chevron lawyers for his fee, Guerra was caught on tape saying: “Money talks, but gold screams.”
In 2015, Guerra admitted under cross-examination in a separate arbitration proceeding that he lied repeatedly before Judge Kaplan.
A leading forensics specialist examined the computers of the Ecuador trial judge and determined that he wrote the judgment, contrary to Guerra’s testimony. (See here.)
Chevron used an attorney-intermediary from Miami, Andres Rivero, to offer a $1 million bribe to the trial judge in Ecuador to try to coax him into recanting his decision against the company. The judge refused.
Payments for witness testimony other than reimbursements for basic expenses are considered illegal under federal law according to a sworn affidavit from one of the legal profession’s leading ethicists, Dean Erwin Chemerinsky of the law school of the University of California, Berkeley. Guerra was making only $500 monthly in Ecuador before Chevron paid him monthly fees roughly 50 times larger than his prior salary after he agreed to become a witness.
Taylor, the director of Global Witness, said “we have called for an investigation in our letter, and this is all the more urgent given the extraordinary efforts by Chevron and its hundreds of lawyers to target Mr. Donziger, which are taking place as a I write – efforts that in the absence of a better explanation ... would appear to be based on corrupt and fraudulent claims. In our view the Kaplan trial and a separate bar proceeding against Mr. Donziger are Kafkaesque given that the lawyer had his license temporarily suspended without any hearing based on what would appear to be fraudulent testimony from Mr. Guerra. How on earth is it credible to remove a lawyer’s right to practice law based on a fraudulent proposition?”
Carmen Cartuche, the President of the FDA and a community leader in Ecuador, praised Global Witness for demanding the investigation. “Judge Kaplan clearly encouraged Chevron’s acts of corruption and the company’s unfounded attacks on our lawyer, Steven Donziger, in an attempt to deprive us of counsel,” she said. “This must be investigated by U.S. authorities.”
“More broadly, thousands of lives in Ecuador are threatened due to Chevron’s use of corrupt evidence to avoid a clean-up of its massive pollution of our ancestral lands,” added Cartuche. “Chevron’s litigation games appear to have turned into crimes.”
Chevron has suffered a series of devastating courtroom setbacks in the matter in recent years, but the company uses a policy of forum shopping (see here) to try to delay a final resolution. Although it initially fought to have the claims resolved in Ecuador and has promised to pay any adverse judgment, Chevron has since filed multiple legal actions in at least four other countries attempting to slow enforcement of the judgment.
The environmental case against Chevron originally was filed in the U.S. in 1993. Chevron fought to have the case litigated in Ecuador after the company promised to accept jurisdiction there to avoid a jury in the U.S. When the evidence mounted against it in the Ecuador trial, Chevron sold its assets and in 2011 filed the retaliatory “racketeering” (known as RICO) case against attorney Donziger, other attorneys, and all 47 of the named plaintiffs in the case.
In the meantime, appellate courts in Ecuador ruled that Chevron is liable for the deliberate dumping of billions of gallons of life-threatening oil waste into rainforest waterways relied on by locals for their drinking water. The Canada Supreme Court ruling in 2015 found that the Ecuadorians had the right to enforce their judgment, rejecting a Chevron jurisdictional challenge. The Ecuadorians also have won two unanimous rulings from the Ontario Court of Appeal on various issues.
Adding to the woes of Chevron management, 36 major institutional shareholders from Chevron representing $109 billion in assets under management have pressured CEO Michael Wirth to explore a settlement. (See here.) That follows a stinging rebuke of Wirth’s leadership from two shareholder resolutions related to his mishandling of the litigation that received overwhelming support at the company’s 2018 annual meeting.
Chevron also has been accused by a coalition of more than 20 prominent civil rights and environmental groups (see here), including the ACLU and Greenpeace, for using a new SLAPP-style corporate playbook designed to silence the Ecuadorians through harassing litigation. Chevron’s use of forum shopping and its targeting of human rights defenders with false evidence are part of this strategy, said the group, which recently awarded Chevron its “Corporate Bully of the Year” prize for its attacks on Donziger and the Ecuadorians.
(For more background on the corrupt acts committed by Chevron, see here and here. For background on the many flaws in Judge Kaplan’s proceeding, see here. For a whistleblower video from Chevron showing fraud by the company, see here.)