Chevron alleges fraud in billion-dollar oil pollution case

2013-11-27 09:51
Spanish singer-songwriter Luis Eduardo Aute shows his oil-covered hand at Aguarico 4 oil well in Aguarico, Ecuador. (Juan Cevallos, AFP)

Spanish singer-songwriter Luis Eduardo Aute shows his oil-covered hand at Aguarico 4 oil well in Aguarico, Ecuador. (Juan Cevallos, AFP)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

New York - Chevron claimed on Tuesday that corrupt Ecuadoran plaintiffs mounted an elaborate fraud to win a multi-billion-dollar case against it for polluting the Amazonian rainforest, in arguments before a US court.

"It was a scheme so audacious, so bold it would make a Mafia boss blush," argued Randy Mastro, a lawyer for the US oil company. "But Chevron didn't give in and that's why Chevron is here to get justice."

Chevron has asked US Judge Lewis Kaplan to block Ecuador from enforcing a $9.51bn Ecuadoran court award against the American company, alleging widespread corruption in the case.

In closing arguments in the US District Court in New York following a six-week trial, Chevron alleged fraud under the Racketeer Influenced and Corrupt Organisations Act in the handling of the lawsuit.

Mastro outlined an alleged scheme in which the Ecuadoran plaintiffs' team, led by New York attorney Steven Donziger, conspired to use fraud and bribery to win the huge judgment in Ecuador.

Cancer

Under the 2011 ruling, Chevron was ordered to pay a $9bn fine for polluting the Amazon when the US oil company Texaco operated in Ecuador between 1964 and 1990.

Chevron acquired Texaco in 2001. The fine, later increased to $19bn, was reduced by Ecuador's Supreme Court to $9.51bn on November 12.

Attorneys representing Ecuadoran plaintiffs say the charges are meritless and that Chevron is trying to evade payment with endless legal challenges.

Ecuadoran Foreign Minister Ricardo Patino challenged Chevron on Tuesday to prove its case that there was fraud.

"They say the trial was improper. Let them prove it. That is their challenge," he told a press conference.

The case has become a cause celebre for many environmental activists. The rock star Sting, who has supported the litigation against Chevron, attended one of the earlier days of testimony.

Thousands of villagers in the polluted area say they were sickened and many have cancer from the contamination of their water supply from oil spillage.

Bribes

Mastro's charges included that Donziger and allies ghost wrote a report assessing the scale of the environmental damage that was supposed to be led by independent consultant Richard Cabrera.

Other allegations include that Donziger and allies bribed Ecuadoran judges to win the 2011 ruling and ghost wrote parts of the ruling.

Chevron has spared no punches in its attack on Donziger, who studied with Barack Obama at Havard Law School. "Steve Donziger has shamed our profession," Mastro said.

Donziger has acknowledged his side wrote parts of the Cabrera report, but argues this was not illegal in Ecuador, where there is a different standard in determining the independence of experts.

Richard Friedman, an attorney representing Donziger, also highlighted the weakness of one of Chevron's main witnesses, former Ecuadoran judge Alberto Guerra.

Guerra testified that he received bribes from Ecuadorian plaintiffs in exchange for ghost writing rulings on the case for another judge.

Lawyers representing the defendants have criticised the US judge for accepting the case in the first place, which they said inappropriately overreaches US authority over foreign courts.

"Ultimately, what Chevron is asking you to do is to extend the reach of common law... to the far reaches of the globe," Friedman said.

"Chevron is asking the court to do some extraordinary things and take some extraordinary positions."

President will resign

The defendants have also criticised some of Kaplan's earlier rulings that blocked evidence about the environmental conditions in Ecuador from the case.

A handout from Donziger's spokesperson predicted an adverse ruling, citing "Kaplan's bias".

Earlier in the litigation, Kaplan granted Chevron the right to a huge trove of documents, including Donziger's private notes, his correspondence with plaintiffs and hundreds of hours of outtakes from the film documentary "Crude," which chronicled the case.

In a preliminary ruling in July 2012, Kaplan determined that the Cabrera report was "tainted" and that there were "serious questions" about the judgment.

But Kaplan said there was not sufficient evidence at that point to conclude that these problems prevented Chevron from receiving a fair case.

The case could have implications for lawsuits in Canada and Brazil, where the plaintiffs are going after Chevron's assets. Chevron has almost no assets in Ecuador.

Last week, Ecuador's president, Rafael Correa, promised to resign if Chevron proved his government interfered in the Ecuadoran trial.

A decision is expected in 2014.


Read more on:    chevron  |  rafael correa  |  ecuador  |  us  |  energy  |  health  |  pollution

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.
NEXT ON NEWS24X

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
1 comment
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.