In Chevron Shakedown, Ecuador’s Government Plays a Part

By February 3, 2011Briefly Legal, Energy, General

Steven Donziger is clearly the “star” in the documentary-style film, “Crude,” about the $113 billion shakedown lawsuit against Chevron claiming environmental damage in Ecuador. The New York trial lawyer is profane, arrogant, and in numerous outtakes obtained by Chevron, repeatedly reveals the corruption at the heart of the litigation. Donziger’s admissions against interest have done so much damage to the suit that he has reduced his public role with the plaintiffs’ team, which has turned to the prestigious law firm and lobbying outfit, Patton Boggs, to salvage its case.

But there’s another great performance in the film, a cameo appearance that bears close attention. In segments never shown to the public, Alexis Mera, Ecuador’s Secretary of Judicial Affairs and a legal advisor to President Rafael Correa, strategizes with the plaintiffs’ legal team about how best to apply political pressure to a public prosecutor and even revoke an Ecuadorian law so the lawsuit gains a modicum of legitimacy.

Mera’s comments — and other revelations from the outtakes — demonstrate that the government of Ecuador has been actively aiding the U.S. trial lawyers’ plans to extort billions out of a U.S.-based company. The scheming by top government officials, as well as comments by Correa himself, reinforce the Ecuadorian government’s anti-American policies and contempt for international law.

On March 29, 2007, Mera met in his offices with the legal team of the so-called Lago Agrio plaintiffs, including Pablo Fajardo, Alejandro Ponce Villacis, and Julio Prietro, as well as the activist and public face of the anti-Chevron awsuit, Luis Yanza. In one outtake, Mera says, “The problem, I see, is what to do and how we can help each other.”

The video, available here, continues with Mera and the team discussing the Public Prosecutor’s office, which the plaintiffs’ lawyers are demanding should bring criminal charges against two Chevron attorneys in Ecuador. The plaintiffs want the charges brought to introduce personal risk into the portfolio of pressure tactics; Chevron might be more inclined to settle if its employees could be sent to jail.

The top justice official advises, “You have to take the people from the Orient [province] there, hold a demonstration. The people — that’s how this country works. Close Republica Street.”

Then there’s this, Mera’s clear recognition that his discussions with the plaintiffs are improper.

Mera and the plaintiffs’ team are talking about a “nullity suit” to revoke the Ecuadorian government’s previous sign-off on Texaco’s clean-up of its Ecuadorian oil operations. (Chevron acquired Texaco in 2001.) As they’re discussing these legal issues, Mera seems to realize the camera is on.

MERA: Why are they filming? Why are they filming? That seems to me to be completely improper. Forgive me for the way I’m saying it.

Camerman: Let’s see. Forgive me. Excuse me. (Cut off)

When you’re a government official scheming with a private party in a lawsuit, you tend not to want to be caught on camera.

We’ve struggled for a U.S. analogy. Perhaps: It’s as if lawyers claiming to represent Iranian citizens came to meet with the White House Counsel — Robert Barr or Harriet Meiers, for example — to plot a strategy for pressuring an Iraqi company into settling a lawsuit. Wouldn’t that be a scandal?

Ecuador’s interest in the suit is two-fold. First, the government hopes to obtain the major portion of any settlement. Richard Cabrera, the supposedly independent expert that recommended a $27 billion damage award, included billions of dollars to pay for government projects and services, including infrastructure and even a half-billion dollars for an animal farm to support local native people.

Indeed, this video shows Ana Alban, then Ecuador’s minister of the environment, telling Donziger and the activist Trudie Styler, Sting’s wife, about the government’s plans to create a corporation to use the funds from the lawsuit.

Second, Ecuador wants to escape its own liability. Texaco operated in the Amazon through a consortium with Petroecuador, the government-owned oil company. Petroecuador’s environmental record is horrible. Texaco departed Ecuador in 1992; when environmental activists denounce oil spills and unremediated waste pits, it’s Petroecuador they should be denouncing.

President Correa is clearly a supporter, too. In one segment actually of “Crude” actually seen by the public, Donziger is introduced to Correa who, when learning of Donziger’s activities, says, “Wonderful, keep it up!”

Then there’s this outtake, in which Donziger talks to his legal team after a Correa toured an oil site, held a news conference and denounced as criminal any Ecuadorian who might take the side of Chevron.

DONZIGER to camera (in English): Fantastic. Fantastic. Ninety-percent successful for us. They’re so excited, you know. It’s awesome. It’s awesome. [Cameraman: What happened?] He said the right things, the entire Ecuadoran press corps was there. He’s basically calling for the head of government officials who are signing off on the remediation and he’s totally with us.

We’ve recounted only a portion of the evidence of the Ecuadorian government’s support for this extortionate lawsuit, and the twists and turns are many. It’s no surprise that lawyers for Ecuador, citing their “common interest,” last year joined the plaintiffs in U.S. District Court, Southern District of New York, in an unsuccessful attempt to prevent Chevron from subpoening Donziger.

Judge Lewis Kaplan rejected their claims, citing the personal risk faced by the two Ecuadorian attorneys for Chevron facing criminal charges and making the plaintiff-government connection explicit: “The criminal charges at least in part are a result of an alliance between the Lago Agrio plaintiffs and the Ecuadorian government, which has both financial and political interests in the success of the lawsuit.” [Our emphasis.]

The Obama Administration has acknowledged a serious problem with Ecuador. The State Department
2010 Investment Climate Statement on Ecuador notes the uncertain legal environment in the country and the government’s attempt to pull out of Bilateral Investment Treaties, or BIT. (Chevron has filed for BIT arbitration.) Trade preferences for Ecuador under the Andean Trade Preferences Act have been extended only for six months in light of the country’s various offenses against investment and the rule of law. (Bolivia’s preferences were canceled.)

Still, the activities of Ecuador to promote this lawsuit against a U.S. corporation warrant far more attention than they have received. The government of Rafael Correa is working with U.S. trial lawyers to shake billions of dollars out of a company because its deep pockets and American roots make it a convenient target: The company is rich, and anti-American, anti-corporate sentiments can be flamed in the United States and Ecuador to force the company into a settlement.

It really should be a foreign policy scandal.

We have posted many outtakes from “Crude” at YouTube/NAMvideo, the Ecuador playlist here.

Join the discussion 2 Comments

  • Anonymous says:

    As of September 2011, Ecuador is a de-facto dictatorship led by Rafael Correa. Since he controls 50% of Ecuador’s GDP, he imposes his will on others. Correa has denounced as criminal any Ecuadorian who might take the side of Chevron. If an Ecuadorian attempts to do so, Correa will persecute him with the full force of his state apparatchik.

  • Diego says:

    Amazing article!!

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