On Tuesday, Chevron issued a news release that detailed yet another fundamental corruption at the heart of the trial lawyer/activist/government’s legal campaign against the company in Ecuador: The court-appointed “expert” — a mining engineer — who recommended $27 billion in damages against the company for environmental clean-up is also the majority owner of an oilfield remediation company that stands to gain financially from a judgment against Chevron. Richard Cabrera never reported this disqualifying conflict of interest from the Ecuadorian court.

The response from the Amazon Defense Coalition, the front group for U.S.-based activists and contingency fee attorneys driving the litigation, reads like a news release from a political campaign: Our opponents are “desperate.” The argument, such as it is, follows: Cabrera has no conflict of interest! He already revealed the conflict of interest! His conflict of interest precludes him from being involved in future remediation! Chevron’s lying!

In any legitimate legal proceeding , a court-appointed “expert” who concealed his financial self-interest from the judge would be disqualified and sanctioned. But the litigation against Chevron in Ecuador is not a legitimate proceeding, it’s a public relations campaign designed to create enough reputational risk that the company settles out of court. That strategy has been disrupted by Chevron deciding to argue its case not just judicially but also in the court of public opinion, that is, to fight back. You can almost hear the cries of outrage from the Amazon Defense Coalition and New York attorney Steven Donziger: “How dare they defend themselves!”

Chevron’s blog, The Amazon Post, refutes point-by-point the claims by the activist group.

A news release from Chevron today provides more compelling evidence that the activist/trial lawyer/Ecuadorian government’s legal shakedown of the company is based on falsehoods and naked self-interest and can only succeed where the rule of law is absent. From “Court Appointee in Chevron Ecuador Lawsuit Tied to Ecuador State-Owned Oil Company“:

SAN RAMON, Calif., Feb. 9, 2010 - In a court filing today in Lago Agrio, Ecuador, Chevron Corp. (NYSE:CVX) provided newly discovered information showing that the author of a report recommending that Chevron be ordered to pay $27 billion in damages is the majority owner of an oilfield remediation company that stands to gain financially from a judgment against Chevron. Due to the remediation company’s relationship with Ecuador’s state-owned oil company, Petroecuador, Chevron called upon the court to immediately reject the work of Richard Cabrera on the grounds that he knowingly hid his relationship and that he stands to gain from what was supposed to be unbiased work for the court.

“For three years, Mr. Cabrera has concealed clear financial conflicts of interest that disqualify him from acting as an independent and objective evaluator of the evidence in the case,” Chevron Vice President and General Counsel Hewitt Pate said. “While Mr. Cabrera’s financial interests alone are sufficient grounds for his report to be rejected, his intentional concealment of those interests further demonstrates that the entirety of his work lacks honesty, integrity, or credibility.”

Recently uncovered records, from 2003 through 2008, show Cabrera is co-founder, general manager, majority stockholder, and legal representative of an oilfield remediation company, Compañía Ambiental Minera-Petrolera S.A. (”CAMPET”), which is registered to perform oilfield remediation and other services for Petroecuador. Cabrera failed to disclose these business interests as required by law.

That’s just the start of a very detailed dissection of Cabrera’s self-interest, explaining how he could reach the fantastical figure of $27 billion in damages against Chevron for previous operations of Texaco in Ecuador. The bigger the pot, the bigger the payout for Sr. Cabrera.

And for the Amazon Defense Front, which also happens to be guiding and rewarding Cabrera. Chevron had previously documented that:

• The Amazon Defense Front, the named financial beneficiary of the lawsuit, directly and improperly paid Cabrera more than $200,000 for his work;
• Sections of Cabrera’s $27 billion claim are copied word-for-word from documents written by Amazon Defense Front lawyers;
• Photographs and video show representatives of the Amazon Defense Front conducting Cabrera’s field work as well as preparing soil and water samples for Cabrera, who had promised to carry out his work independently;

The Amazon Defense Front and its PR flacks — doing the work of the U.S. trial lawyers — like to accuse the critics of their shakedown of conducting “dirty tricks.” But the facts keep showing that the dirty tricks of the trade are really the tools of the anti-Chevron campaigners.

Journal of Commerce, “House Votes to Extend Trade Programs”

The House on Monday voted to extend two widely-supported trade programs, but for only one year.

The General System of Preferences and the Andean Trade Preference Act were to expire on Dec. 31. The GSP, now in its 35th year, allows developing nations to export selected goods to the United States duty-free. There are currently 132 countries in the program, shipping some 3,400 products.

ATPA, started in 1991, gives similar benefits for exporters in Ecuador, Colombia, and Peru in exchange for cooperation in counter-narcotics efforts. President Obama suspended Bolivia’s ATPA privileges for failing to commit to an anti-drug program.

Latin Business Chronicle, “Business Concern Over Ecuador Benefits,” citing rising objections to the deterioration of the rule of law in Ecuador under President Rafael Correa.

“We are disappointed that the Congress did not include a message specifically putting Ecuador on notice that its behavior puts its continued receipt of preferences benefits at serious risk,” Franklin J. Vargo, NAM’s international vice president, said in a letter Monday to the chairman and ranking member of the U.S. House Committee on Ways & Means. “In light of the deteriorating investment climate in Ecuador, as well as Ecuador’s repudiation of its Bilateral Investment Treaty (BIT) with the United States and President Correa’s announcement on sweeping aside fundamental patent protections for pharmaceutical and agricultural chemical products, the NAM believes that language specific to Ecuador should have been maintained in the extension language of [the bill passed].”

NAM is concerned that without continuing language aimed at challenging Ecuador’s actions, other nations receiving preference programs will be tempted to follow suit, leading to worsening investment conditions and undermining a central tenant of preference programs that participants uphold their commitments to the United States on investment and rule of law, it said.

In any case, the House has now gone on record in support of lowering U.S. trade barriers to imports from foreign countries. It’s time to now lower foreign barriers to U.S. exports by approving the U.S.-Colombia, U.S.-Panama and U.S.-Korea free trade agreements.

From The Boston Globe, with a reviewer who strikes a tone we hadn’t see in the other reviews of the anti-Chevron movie, a world-weary cynicism. The inaccuracies are still the same, though.

From “An ecological disaster meets a media circus“:

In “Crude,’’ the anger onscreen spreads as slowly and inexorably as toxic sludge. The documentary follows a pending class-action lawsuit filed by 30,000 Amazon tribespeople against the US petro-giant Chevron for contaminating an area of land the size of Rhode Island.

But it’s not a class-action suit and it wasn’t filed by 30,000 Amazon tribespeople.

Even the Amazon Defense Coalition’s PR person, Karen Hinton, eventually admitted this basic fact — a basic fact that the Globe gets wrong.

Gee, if the reviewer starts off with a glaring error, wonder what else in wrong in the piece?

P.S. Today is the movie’s last day in Washington, D.C. It had a two-week run at the E Street Cinema, which the producers must regard as a success.

From an author who embraces the attack on property rights by the government of Rafael Correa, a news release, “Ecuador president Correa to override drug patents in order to provide affordable medication“:

(NaturalNews) The President of Ecuador, Rafael Correa, announced Sunday that he planned to override a number of pharmaceutical patents in order to provide more affordable medicines to the People of Ecuador. In a statement, Correa explained that access to medicine is a “human right” and that he intends to seek “compulsory licenses” to acquire medications considered indispensible.

Under current World Trade Organization rules, countries have the right to seek such “compulsory licenses” that override traditional patent rights. Current WTO rules require that such countries negotiate with the patent owners to determine fair compensation.

This action by Correa joins Ecuador’s recent declaration that it would not honor the illegitimate debt that had been placed on the country by foreign banks (under previous administrations). This bold move allowed Ecuador to renegotiate its debt for roughly 30 cents on the dollar. Much of that debt was considered “predatory debt” by academics who understand the way the World Bank and other first-world banking interests attempt to place debt burdens on many smaller nations as a tactic for exerting long-term influence over their economies.

Right. And the Barbary Pirates had legitimate grievances against the United States, too.

See also the AP story, “Ecuador pres: National labs to ignore drug patents.”

Also, on September 25, major U.S. business groups sent a letter to the leaders of the Senate Finance Committee and House Ways & Means Committee urging Congress not to reward Ecuador and Bolivia for undermining rule of law by renewing Andean trade preferences for those countries. The letter from Business Roundtable, Emergency Committee for American Trade, National Association of Manufacturer, National Foreign Trade Council, United States Council for International Business, and U.S. Chamber of Commerce is available here.

From Bloomberg, “Dole Doesn’t Have to Pay Nicaraguan Verdict, U.S. Judge Rules“:

Oct. 21 (Bloomberg) — Dole Food Inc., the world’s biggest fresh fruit and vegetables producer, can’t be forced in the U.S. to pay a $97 million verdict issued by a Nicaraguan court, a federal judge said.

The award, won four years ago by 150 Nicaraguans who claimed they suffered injuries from pesticides used at Dole’s banana plantations in the 1970s, can’t be enforced because it was based on a law that violates international legal standards, U.S. District Judge Paul Huck in Miami said in a ruling yesterday.

“The law under which this case was tried stripped defendants of their basic right in any adversarial proceeding to produce evidence in their favor and rebut the plaintiffs’ claims,” Huck said.

A major ruling, with obvious implications for the lawsuit against Chevron in Ecuador, where the rule of law has deteriorated under leftist President Rafael Correa amid compelling evidence of judicial corruption.

UPDATE (11:52 a.m.): And here’s a good piece at The Wall Street Journal’s Law Blog, with many links, “Dole on a Roll: Court Declines to Enforce $97M Judgment“:

Nicaraguan courts since 2002 have issued judgments in 32 such suits for a total of $2.05 billion against Dole and pesticide makers, Dole said. The company said that if the plaintiffs had won in Miami, their lawyers would try in U.S. courts to collect the other judgments that the companies have refused to pay.

“This is a powerful ruling,” said Ted Boutros, a lawyer for Dole. “It will be a major deterrent to bringing other verdicts to the U.S.”

The activist/trial lawyer combine driving the $27 billion lawsuit against Chevron loves to wield the personal attack, demonizing the company, its employees and anybody else who argues that the litigation is baseless. At first blush the attacks look like an attempt to cow critics, but by now everybody has read Saul Alinsky — pick a target, freeze it, personalize it, and polarize it — and once recognized as tactics, the attacks lose their power to intimidate.

So as the litigation and PR squad now levy personal charges against yours truly (again), we’re left to puzzle over their thinking. “The Chevron Pit” — billed as the blog maintained by the team suing Chevron — mentions my name seven times in its Tuesday post, “Chevron: Don’t believe your eyes…believe our lies!” and adds the usual insults. But if they cannot successfully intimidate, what’s the point? Therapeutic release for the blogging activists?

It’s certainly not truth-telling. The blog goes after our Saturday post, “What Photo Do You Use to Illustrate Misleading Journalism?,” which challenged The New York Times’ use of a photo of a current oil pit in Ecuador to illustrate a story about the lawsuit. Texaco, bought by Chevron in 2001, left Ecuador in 1992. Any photo of a still-liquid oil pit depicts pollution caused by the government-run oil company, PetroEcuador.

How does The Chevron Pit rebut our point? By trotting out more misrepresentation!

As a follow-up to Saturday’s post about photos used to illustrate stories about litigation against Chevron, a $27 billion lawsuit that claims the company is responsible for oil pollution in Ecuador, we offer a photo of a drilling site remediated by Texaco (which Chevron bought in 2001).

We took this photo on a trip to Ecuador in June made on Chevron’s dime.

Catching up on developments, we note that Chevron has filed for international arbitration against Ecuador. From the September 23 news release, “Chevron Files International Arbitration Against the Government of Ecuador Over Violations of the United States-Ecuador Bilateral Investment Treaty”:

SAN RAMON, Calif., Sept. 23, 2009-Chevron Corp. (NYSE:CVX) has filed an international arbitration claim against the government of Ecuador citing violations of the country’s obligations under the United States-Ecuador Bilateral Investment Treaty, investment agreements, and international law. The complaint stems from the government of Ecuador’s exploitation of the ongoing lawsuit against Chevron in Ecuador, as well as the government’s failure to uphold its duties under decade-old contracts. The arbitration proceeding has been commenced before the Permanent Court of Arbitration in The Hague under the Rules of the United Nations Commission on International Trade Law.

Chevron’s claims relate to the lawsuit currently pending against the company in Lago Agrio, Ecuador, where Chevron’s subsidiary, Texaco Petroleum Company participated until 1992 as a minority member of a consortium that explored for and produced oil under contracts with Ecuador and Ecuador’s government-owned oil company, Petroecuador. Through the filing, Chevron seeks to enforce prior settlement and release agreements that the government of Ecuador entered into with Texaco Petroleum when the consortium was terminated, and to hold Ecuador accountable for its obligations under Ecuadorian law and existing international treaties.

News coverage …

• Wall Street Journal, “Ecuador:To Defend ‘Vigorously’ From Chevron Arbitration Claim”
• The Associated Press, “Ecuador rejects Chevron arbitration claim”
• Oil & Gas Journal, “Chevron’s arbitration move called ‘forum shopping’”
• Bloomberg “Chevron Seeks to Foist $27 Billion Amazon Liability on Ecuador

We note the NAM and other major business groups sent a letter to the leaders of the House Ways & Means Committee and the Senate Finance Committee last week opposing an extension of Andean Trade Preferences Act benefits to Ecuador (and Bolivia) because of the deterioration of the rule of law.

Below we noted the lawsuit the Kivalina Alaskan native village has brought against oil, coal and power companies, suing them for contributing to global warming that has supposedly eroded the village’s shoreline. Now some filmmakers are out to depict this calamity, using the litigation as the narrative device.

From Public Nuisance Wire, “Film company shoots Kivalina documentary before trial ends“:

TORONTO - A Canadian-based film company has begun filming a documentary aimed at exposing the controversial case of Kivalina v Exxon Mobil.

Filming began last month in the tiny Alaskan village of Kivalina, a 3.9 square-mile town with a population of around 399 people. The village is in the middle of a lawsuit with Exxon Mobil over allegations the big oil company’s excess gas emissions have caused erosion and damages to the town.

In a press release, Phoebe Greenberg, one of the film’s producers, said she was intrigued by the subject matter and that the dramatic consequences of global warming affect not only the small Alaskan community, but the world as well. 

The production company labels Exxon one the world’s “worst polluters,” claiming the oil giant should pay for the consequences of global warming.

Too bad they have their minds made up already. We were hoping for an objective documentary by an objective filmmaker telling both sides of the story objectively. You know, like the anti-Chevron movie, “Crude.”

Ms. Greenberg better not hope for boffo box-office. “Crude” pulled in $4,219 in weekend gross last weekend, Oct. 2-4, That’s right. Four thousand bucks in four theaters, off 72 percent from the previous weekend.

Total domestic sales as of October 4? $81,257. That’s not quite the “huge hit” that Amazon Watch proclaimed. Tendentious documentaries that pretend to be something else just don’t sell.

The documentary-style film about the litigation against Chevron for past oil operations in Ecuador, “Crude,” has been rolled out around the country in recent weeks, accompanied by much touting by the anti-corporate activists and uncritical reviewers. The Los Angeles Times, for example, profiled the film’s director, Joe Berlinger, and the film under the headline, “‘Crude’ tactics in Ecuador.”

“Crude” ostensibly relates the story around a lawsuit filed by U.S. trial lawyers against Chevron for pollution caused during the operations in Ecuador by Texaco decades ago. (Chevron bought Texaco in 2001.) And “Crude” is a well-made, even compelling movie. Too bad it’s only loosely related to the truth.

Berlinger’s product is a classic anti-business hit job, biased and selective in its telling of facts and spreader of myths and half-truths. But in the media coverage and reviews, the public rarely learns that much of what the movie portrays is bunk — or at least vigorously disputed by Chevron. The Times’ reviewer, Gary Goldstein, doesn’t bother to solicit a response from Chevron.

Berlinger claims to be an objective filmmaker, just bringing a good story to light. In remarks after the June premiere of “Crude” at the SilverDocs film festival in Silver Spring, Md., (Berlinger said):

I think one of the strengths of the film is that it is a fairly objective film, it shows kind of the warts and all of both sides.

Yet moments later he says:

For me the lawsuit is obviously the structural glue of the film. I made this film because of how we as white people have treated indigenous people over the years in both North and South America, and around the world. I think what multinational corporations have done in our name is just the late 20th Century and early 21st Century continuation of this terrible treatment of indigenous people. That’s really why I’m in.

It’s an objective film about the destruction of peaceful people by evil Western exploiters, he said, objectively.  (The photo above is from the SilverDocs’ presentation with Berlinger, right, and Steven Donziger, the trial lawyer who is leading the litigation against Chevron, financed by the Philadelphia law firm of Kohn, Swift & Graft.)