Chevron’s Elephant in the Room

Oil Giant’s 53-Day Fraud, Denying Ecuadorians Justice in Ecuador Contamination Case

Today an elephant is lurking in a Canadian court where a group of Ecuadorian indigenous are seeking to enforce a $9.5 billion Ecuador judgment against Chevron for one of the largest environmental disasters in history. (See recent Medium piece.)

The elephant is Alberto Guerra, the witness Chevron “prepped” for 53 days to testify against the Ecuadorians and their lawyers on fraud and bribery charges brought by the oil company in a U.S. court to taint the Ecuador judgment. (See page 61 and page 815.)

Problem is Guerra, an Ecuadorian, recently admitted he lied about the fraud, after being paid at least $2 million for his testimony. (See page 853.)

Alberto Guerra, Chevron’s Elephant

(By the way, 53 days is a lot of days. Not normal. $2 million isn’t normal either, and Chevron refuses to say if Guerra continues to be paid under a contract he negotiated {pages 853–857}, after being relocated by the oil giant with his family to the U.S.)

Meanwhile, Guerra has backed Chevron up against the proverbial wall in a Toronto courtroom.

Yesterday Chevron argued dryly for several hours that “corporate separateness” between Chevron Corporation and Chevron Canada blocks the Ecuadorians from seizing Chevron’s assets and, as such, their enforcement case should be dismissed.

The Ecuadorians’ lawyer, Alan Lenczner, disagreed. “The two are bound hand and foot” as Chevron Canada must seek approval from Chevron Corporation to drill on land and make expensive purchases, for example. Lenczner plans to detail today how Chevron Canada received $10.5 billion from its parent, Chevron Corporation.

(Chevron sold all its assets in Ecuador, forcing the Ecuadorians to obtain their damage award through enforcement proceedings in countries that do have Chevron assets, like Canada.)

But, if Chevron’s legal farce of bifurcation fails to win the day and the Canadian judge grants the Ecuadorians a trial to enforce, Chevron will have to explain why Guerra recanted his incriminating testimony only 13 months after U.S. Judge Lewis Kaplan bought Guerra’s story hook, line and sinker.

After obtaining a transcript of a related but secret arbitration proceeding between Chevron and the Government of Ecuador, the online news site VICE reported:

“Guerra has now admitted that there is no evidence to corroborate allegations of a bribe or a ghostwritten judgment, and that large parts of his sworn testimony, used by Kaplan in the RICO case to block enforcement of the ruling against Chevron, were exaggerated and, in other cases, simply not true.”

Also see coverage by Courthouse News.

Here’s a quick run-down on Guerra, a former Ecuador judge who admitted to taking bribes in 40 other, unrelated cases and got kicked off the court in 2009: (See page 2 of this legal brief.)

First, by the end of the 53-day, Chevron inquisition, Guerra had changed his testimony three times, and the changes were not minor. (See pages 55–57.)

Story №1: Guerra alleged the Ecuadorians’ attorneys “ghostwrote” the judgment and hired Guerra to edit it, which he said he did on his home computer. But when Chevron couldn’t find the judgment on his computer, Guerra recanted.

Story №2: Actually, Guerra said, the verdict was on a flash drive that the judge gave him at the Quito airport. But when Chevron couldn’t find the judgment on any flash drives, Guerra changed his story yet again.

Story №3: Actually, Guerra said, he traveled to the jungle on a bus and edited the judgment there on a laptop owned by one of the Ecuadorian attorneys.

Second, after clinching Chevron’s win over the Ecuadorians in U.S. court, Guerra told yet a different story only a year or so later to arbitration lawyers for the Government of Ecuador. From the transcript that VICE obtained:

“Can you recall how you tried to increase your negotiating position with the Chevron representatives?” a government lawyer asked Guerra.
“I must recognize that I did exaggerate about [some things], yes,” said Guerra.
“When we are looking for a job, you say, how much experience do you have, and in fact you really don’t have any experience, and you say, well, I have ten years of experience really. It’s a situation just like that.”
The lawyer asked: “And among the ways you tried to leverage your position was to falsely tell the Chevron representatives that the Plaintiffs had offered you $300,000; isn’t that right?”
“Yes, sir. I lied there,” Guerra responded. “I recognize it.”

With seemingly no shame whatsoever, Guerra described one of his first meetings with Chevron lawyers.

“One of them took me by the arm and said, ‘Look, look, look what’s down there. We have $20,000 there.’ Specifically, one of them was the one that led me to take a look at it. It was inside a safe.”
“At some point, I said, well, why don’t you add some zeroes to that amount, and then later on I said, ‘I think it could be 50,000.’”

Right then, Chevron should have adhered to Abraham Lincoln’s sound advice about elephants.

“When you have got an elephant by the hind legs and he is trying to run away, it’s best to let him run.”

Instead, Chevron’s lawyers may soon have to corral their elephant back into court and explain why Guerra can’t seem to get his stories straight — even after 53 days of prepping.

For more details on Guerra and his sordid tales, see here.