September 1, 2009 8:15 PM

Former Chevron GC Speaks Out On Ecuadorian Recordings

Posted by Brian Baxter

Charles James's legal career just got a little more interesting.

The former antitrust chair at Jones Day and head of the Justice Department's antitrust division was promoted to executive vice president of Chevron in April after serving as general counsel for seven years. During that time James oversaw a mammoth environmental mass torts case filed against the company by 30,000 indigenous plaintiffs in Ecuador.

On Monday that case took yet another dramatic turn when Chevron announced it had obtained a series of videotaped meetings showing evidence of bribery on the part of Judge Juan Núñez, who has overseen legal proceedings in the northern Ecuadorian town of Lago Agrio since August of last year. (Judge Núñez is the fourth judge on the case.)

The Am Law Daily caught up with James to talk about the case, the videotapes, and where he sees Chevron's decade-long legal battle going next.

When did you become aware of these recordings?

The recordings came to the attention of one of our company representatives in Ecuador in early June. I received a call from Edward Scott, the vice president and general counsel of our upstream business unit, shortly thereafter.

Was there due diligence done on the tapes?

We wanted to handle this as responsibly as we could and not have a hysterical reaction. So first we went about getting interviews with [the two individuals who did the recording] and making sure we had good transcriptions of the tapes. We also did some forensic analysis. We're an energy company, not an investigator, so we had to do some due diligence before we turned this over to the appropriate authorities.

Were outside and in-house counsel involved in this process?

The interviews were conducted predominantly by outside counsel, although our method of legal organization is for us to exercise fairly close in-house oversight of outside lawyers. So in-house legal resources have been involved in this.

By outside lawyers does that mean Tim Cullen from Jones Day and Doak Bishop from King & Spalding?

Unfortunately, this whole affair has forced us to engage quite a few lawyers. But those are among the lead lawyers, yes. Adolfo Callejas is our senior outside lawyer in Ecuador.

Chevron claims it had no prior relationship or knowledge of one of the individuals who recorded these conversations--American businessman Wayne Hansen. The company admits it has had a contractual relationship with the second, Diego Borja. Did they retain outside counsel in their interviews with Chevron?

We're not going to get into the details of their legal situations. We'll speak to ours. Borja and his family have been relocated by Chevron outside of Ecuador because of security concerns.

What's the next step in this process for Chevron? I know that a letter has been sent to the prosecutor general of Ecuador. Have you received a response?

Thus far what we have seen is wild and accusatory responses from Alexis Mera, whom I understand is the moral equivalent of White House counsel in Ecuador. We've seen a more measured response from the prosecutor general, who says he's conducting an investigation. We'll proceed to follow up and file through the judicial process our motions to disqualify the judge and annul his rulings. And then we hope that this investigation by the prosecutor general is a fair, transparent, and comprehensive one. Once we understand the findings of that inquiry, we'll contemplate our next step.

What's your response to Mera's allegations that Chevron illegally intercepted conversations without authorization?

We were disappointed that he appears to be taking a lead role with regard to this as his name comes up fairly prominent on those tapes. We'd hope that the investigation and the [Ecuadorian] government's response would be unconflicted and independent. But obviously we don't run that country. Here in the U.S., a person mentioned in an investigation probably wouldn't be one of the same people conducting it. The differences between the two [countries] seem to be becoming stark and more apparent by the day.

What about Judge Núñez's denials?

Even if you separate the bribery aspect of this, our perspective is that the whole event of the meetings with the judge was inappropriate. The meetings were not with parties to the case. And [Núñez] is talking about granting contracts for a judgment that he hasn't even entered! I can't imagine a set of ethical standards with some semblance of impartiality that would permit these kind of discussions.

Does Chevron want to get this case back to the U.S. where it was filed in 1993?

This case is going to be fought in multiple jurisdictions as it goes along. We have not asked for the case to be brought back to the U.S. We think it ought to be dismissed in Ecuador, not necessarily because of these events, but because the cause is meritless and fraught with corruption and political irregularities. These events only confirm some of the things that we've been saying about the circumstances [in Ecuador] for quite some time.

Have you ever been to Ecuador?

I have never been there and probably won't be going soon. Throughout this entire trial in Ecuador the lawyers that we've had to engage within our company and outside it have had to act with a certain kind of courage just to participate in legal proceedings. One of our principal local lawyers was indicted last year.

Would you say that the chips in Ecuador are stacked against you?

It would be easy for me to say, 'Yes,' but the reality is we recognize that we're a company held to high standards. We try to meet those standards. There have been cases like Bowoto where we've been completely vindicated. Bowoto was considered the human rights case of the century until we won it, in which case it became nothing. And we had a complete jury verdict in our favor--in San Francisco.

Any thoughts about the documentary scheduled for release next week that talks about a David v. Goliath-like battle going on in Ecuador involving Chevron?

In reality this case is American plaintiffs' lawyers working in complicity with a government. So who is Goliath in this sense is unclear to me. As for the documentary, I haven't seen it. But I've seen clips of plaintiffs' lawyers saying you have to play dirty in Ecuador. I'd love to hear more about those statements.

 All interviews are condensed and edited for grammar and style.

The Am Law Daily will be talking to lead plaintiffs lawyer Steven Donziger about his work on this case in the coming days. Check our blog for more on the latest in Aguinda v. ChevronTexaco.

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