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August 31, 2009 5:02 PM

Chevron Accuses Ecuadorian Judge of Soliciting Bribes in Mammoth Tort Case

Posted by Brian Baxter

UPDATE: Sep. 1, 10:25 a.m. A link to a statement by a plaintiffs group was added to the last paragraph of this story. A link to an interview the Ecuadorian judge gave to The Wall Street Journal was added in the tenth paragraph.

The decades-long legal battle between Chevron and Ecuador took yet another dramatic turn on Monday when the company announced that it has videotapes revealing a $3 million bribery scheme implicating the judge overseeing a multibillion-dollar civil suit filed against the company by indigenous residents of the country's Amazon Basin.

The latest turn has Chevron and its lawyers from Jones Day firing back against the 30,000 plaintiffs and their lawyers, as well as the Ecuadorian legal system. The case stems from environmental contamination allegedly caused by years of oil drilling in the region conducted by Texaco, which Chevron bought for nearly $35 billion in 2000. (Click here for a feature story on the case in The American Lawyer's Fall 2006 Litigation Supplement.)

In a press release, Chevron says that is has provided authorities in the U.S. and Ecuador with video recordings of Judge Juan Núñez and individuals who identify themselves as representatives of the Ecuadorian government and its ruling political party, Alianza PAIS. (A still image from one of the videos below shows Núñez in a suit.)


The company claims the recordings show an alleged PAIS representative seeking $3 million in bribes in return for handing out "environmental remediation contracts" to two businessmen after a verdict is handed down by Judge Núñez later this year. Of that sum, $1 million would go to Núñez, $1 million to "the presidency," and another $1 million to plaintiffs in the case.

According to Chevron, the recordings were made between May and June of this year. Two of the meetings on the video allegedly took place in the Quito offices of PAIS, another in Núñez's chambers in the northern city of Lago Agrio, and the last meeting involving the judge took place in a Quito hotel room.

The company posted two hours worth of videotaped conversations covering the four meetings on a Web site dedicated to telling Chevron's side of the story in the case, along with a letter to Ecuador's prosecutor general.

In the three-page letter, Jones Day litigation chief Thomas Cullen, Jr., wrote that the recordings have "serious implications for the integrity of the Lago Agrio proceedings, for the reliability of the rule of law, for the criminal liability of the various individuals apparently soliciting bribes, and for the past as well as the future role of Judge Núñez in the proceedings."

Cullen states that evidence of the bribery plot was brought to Chevron's attention in June by Diego Borja, an Ecuadorian working as a logistics contractor for the company. Borja was pursuing business opportunities with an American businessman named Wayne Hansen, who Chevron claims has no relationship with the company. Borja and Hansen recorded their conversations without Chevron's knowledge and were not paid by the company to turn them over.

Cullen's letter claims that the following individuals met with Borja and Hansen: Carlos Patricio Garcia Ortega, a political coordinator for PAIS, Juan Pablo Novoa Velasco, a lawyer representing the Ecuadorian government, Aulo Gelio Servio Tulio Avila Cartagena, a lawyer close to Judge Núñez, Pablo Almeida, an environmental remediation contractor, and Ruben Dario Miranda Martinez, an assistant of Ortega's.

During one of the meetings recorded by Borja and Hansen, Núñez indicates that he's already determined that Chevron is the guilty party and that he will issue a judgment in the ballpark of $27 billion before January 2010. (In an interview with The Wall Street Journal, Núñez admitted meeting with the two businessmen but denied accepting bribes.)

Because of concerns about Borja's safety, Chevron disclosed that it has paid relocation expenses for him and his family along with other "interim support."

The San Ramon, Calif.-based company, America's third-largest, named Hunton & Williams global competition chair R. Hewitt Pate as its new general counsel in July following the promotion of former GC Charles James to executive vice president. (James is a former head of Jones Day's antitrust practice.)

The company has been trying to bring the giant tort case--filed in 1993--back to U.S. shores. Seven years ago lawyers representing Texaco from King & Spalding convinced a U.S. district court in Manhattan that Ecuadorian courts were capable of adjudicating the matter. (Chevron claims that the Ecuadorian government has indemnified Texaco, and thus Chevron, from environmental liabilities to the government and third parties through cleanup agreements signed in the 1990s.)

The latest accusations will likely have immediate ramifications in the long-running legal drama between the company and Ecuador. With a new administration in Washington, D.C., both sides have been maneuvering in anticipation of a long-awaited judgment in the case, which is entering its sixteenth year.

As the litigation has dragged on, Chevron has been subjected to an increasing amount of public scorn in Ecuador and the U.S. Next week a documentary on the dispute by Joe Berlinger will open in theaters nationwide after premiering at Sundance earlier this year.

One individual who for the moment appears to have remained above the fray is Ecuadorian plaintiffs lawyer Pablo Fajardo. Transcripts of the recordings obtained by Chevron show that money allegedly earmarked for the plaintiffs would not go to Fajardo, but PAIS. (Vanity Fair's William Langewiesche focused on Fajardo for this May 2007 feature story about the history of the dispute between Chevron and Ecuador.)

Fajardo has recently been making the rounds stateside. Last week he spoke at the University of Oregon School of Law about his fight with Chevron. Fajardo, along with lead U.S. plaintiffs lawyer Steven Donziger, were not immediately available for comment. A plaintiffs group issued this statement.

Photo: Courtesy of Chevron

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This video raises more questions about Chevron than the judge. Why did Chevron wait four months to turn those tapes to the authorities and released them only a couple of months before the judge was expected to issue his ruling? Who is Hansen exactly? It's almost impossible to hide in the US, thanks to Google, but nobody can find Hansen. All we know about him is that he speaks horrible Spanish and did not want his face shown in the video. And, while Chevron says Borja fears for his safety, he didn't mind all of us seeing his face on the video. Are we really supposed to believe Chevron had no knowledge of these recordings and those men did not expect any compensation for it?
I have dozens of other questions, but you get the picture.

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