Thursday, April 8, 2010

Fraud Claims Mount in Chevron-Texaco Ecuador Oil Pollution Trial

April 7, 2010
Source: Environment News Service

WASHINGTON, DC, April 7, 2010 (ENS) - A lawsuit over oil contamination of Ecuadorian land by the oil giant Texaco, now owned by Chevron, has taken another nasty turn with accusations of fraudulent evidence being presented to the public and to the court by both sides in the long-running legal battle with $27 billion at stake.

Filed by Ecuadorian Indians and farmers who claim to have suffered illnesses and ecological damage to their land caused by oil contamination, the lawsuit alleges that from 1964 to 1990, Texaco deliberately dumped more than 18 billion gallons of toxic oil production process waste into unlined pits in the rainforest rather than injecting it underground.

In a series of revelations from recorded conversations released Tuesday by a lawyer and investigator hired by the plaintiffs, longtime Chevron contractor Diego Borja threatened to reveal that damaging evidence was "cooked" by Chevron unless he received enough money for turning over secret videotapes to Chevron executives in June 2009.

At one point on the tapes, Borja laughed and said, "Crime does pay."

In late August 2009, Chevron released videos it claimed exposed a corruption scandal implicating the judge conducting the trial in the case of Aguinda v. ChevronTexaco currently underway against the company in Lago Agrio, Ecuador.

But representatives of the plaintiffs call the corruption scandal "contrived" and say it has "steadily unraveled with revelations about the secret videotaping of the judge, and the relationship between Chevron and the two men who made the videos - one a convicted felon and drug trafficker, the other a long-time Chevron employee directly involved with the company's legal defense."

Borja's disclosures are found in a report released today by California lawyer and investigator Grant Fine. The report covers more than six hours of audiotapes and 25 pages of online chats that were given to the plaintiffs by Santiago Escobar, a childhood friend of Borja's who made the recordings.

Escobar, an Ecuadoran now living in Canada who said he has known Borja since they were teenagers, said he decided to give the tapes to the plaintiffs because, "If I keep quiet about immoral acts, then I become part of the immoral acts."

In one of the taped conversations with Escobar, Borja said Chevron had "cooked" the evidence and, if the U.S. judge who sent the case to Ecuador in the first place ever knew, he would "close [Chevron] down."

Borja said Chevron hired him to create four companies so his work for the oil company would appear "independent." He suggested that the companies were connected to a laboratory to test contamination samples. Borja said the laboratory was not independent, but rather "belonged" to Chevron.

The investigative report also revealed that Borja's wife, Sara Portilla, worked for Chevron for four years and represented Severn Trent Labs, a U.S. laboratory that Chevron described as an "independent" lab to test its contamination samples. Test America, Inc. purchased STL in 2007.

Court documents obtained by Fine cite Borja and Portilla as representatives of Severn Trent Labs. They both signed chain of custody documents with the Lago Agrio court that showed how the samples moved from the contamination sites at issue to the testing lab.

Borja, who Chevron has cast as a Good Samaritan, also said that Chevron is paying $6,000 a month in rent for his home with swimming pool next to a golf course in a gated community near Chevron's headquarters in San Ramon, California.

Borja said that Chevron is paying him the U.S. equivalent of the salary he made in Ecuador and is also paying for a lease on an SUV and for personal security.

On the audiotapes, Borja said he has enough evidence to ensure a victory by the Amazon communities if Chevron failed to pay him what he was promised. Before turning over the videotapes to Chevron, Borja said he made sure Chevron "completely understood" he wanted payment for them.

He also said he had incriminating evidence against the oil company stored on his iPhone and in an undisclosed location in Ecuador that he could use as leverage if Chevron betrayed him. Specifically, Borja said he has a notarized document that contains a version of events that would help the plaintiffs and that Portilla, his wife, is aware of the information.

Representatives of the Amazon communities reacted with shock to the audiotapes. "They prove at a minimum that Diego Borja is a real con man," said Luis Yanza, president of the Amazon Defense Coalition, which represents the plaintiffs. Yanza initially received the tapes from Escobar.

Yanza called on Chevron to investigate and disclose the information that Borja has stored on his iPhone and in Ecuador. He called on authorities in Ecuador and the United States to examine the Borja tapes and include them in their investigation of the videotaping scandal implicating the judge.

For its part, Chevron claimed Monday that lawyers for the plaintiffs "submitted fraudulent reports" to the Ecuadorian court claiming dangerous contamination was found at Amazon oil well sites.

The original technical expert for the plaintiffs told the court in sworn testimony last week that reports associated with inspections of the Sacha 94 and Shushufindi 48 well sites were submitted in his name without his knowledge or consent.

Charles Calmbacher, PhD, a U.S. biologist and industrial hygienist who was the first expert appointed on behalf of the plaintiffs in the litigation said he had never concluded the sites posed a risk to human health or the environment and that his opinions were known to the plaintiffs' legal and technical teams in Ecuador.

"Nevertheless," Chevron said in a statement, "the plaintiffs' lawyers submitted reports contradictory to Dr. Calmbacher's conclusions, fraudulently using his signature months after he ceased his participation in the case."

"Their own expert has testified that two of the plaintiffs' earliest reports are fraudulent, confirming that the trial in Ecuador has been tainted from the outset," said Hewitt Pate, Chevron vice president and general counsel.

"Chevron will petition the Lago Agrio court to strike the plaintiffs' false Sacha 94 and Shushufindi 48 reports and call on authorities to investigate the misconduct," said Pate.

In his March 29 deposition ordered by a U.S. federal court, Dr. Calmbacher said he sent signed signature pages and initialized blank pages to the plaintiffs' legal team by overnight courier in late 2004 for the submission of reports he thought would contain his true findings.

Dr. Calmbacher also testified that the plaintiffs' lawyers never informed him that the Lago Agrio court had ordered him to answer questions on the reports after they were submitted under his signature in 2005.

Representatives for the plaintiffs expressed surprise at Calmbacher's statements and said there had been no attempt to falsify reports.

Karen Hinton, spokeswoman for the Amazon Defense Coalition told the "San Francisco Chronicle," newspaper on Monday that Calmbacher had been working closely with the plaintiffs' legal team and would have seen any reports submitted with his name.

"While we take Dr. Charles Calmbacher's statements about the reports seriously, we believe his recollection almost six years after the fact is inaccurate," she said.

Chevron claims that the lawsuit is baseless and tainted by scores of irregularities and fraud. The company last September filed a demand for arbitration with the Permanent Court of Arbitration at The Hague asserting that Ecuador's handling of the Lago Agrio litigation amounts to a breach of the U.S.-Ecuador Bilateral Investment Treaty.

Lago Agrio court appointee Richard Cabrera submitted a $27 billion damage assessment against Chevron, which the company now says also is tainted because it is based in part on "fabricated findings" in fraudulent reports submitted under Dr. Calmbacher's signature.

The Amazon Defense Coalition argues that the Chevron-Texaco case strengthens the sovereignty of the Ecuadorian state in that the plaintiffs seek to impose national law above powerful foreign interests that ignore it.

The Coalition says in a statement on its website, "Supporting the Chevron case is to defend Ecuador's right as a state, and demonstrates that the effective exercise of constitutional rights, such as the right to an uncontaminated environment, cannot be blocked by contract, law, or any act of government, as any government act is subject to legal principles."

Click here to read the report on the Borja recordings released by lawyer Grant Fine.
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