- The Washington Times - Tuesday, September 1, 2009

Back in May, Ecuadorean Attorney General Diego Garcia Carrion was not happy with The Washington Times editorial board. We had written that a $27 billion environmental lawsuit in Ecuador against Texaco/Chevron was no more than a rigged “shakedown of millions of American small investors who have a stake” in the oil company. Mr. Garcia’s letter in response claimed that “the government of Ecuador is not a party” to the litigation and that observers could expect “a just and reasoned decision in the case.”

On both counts, here’s the message to Garcia: Think again.

On Monday, Chevron released secretly recorded videotapes of four meetings between two independent contractors and various Ecuadorean officials — including the judge in the case, Juan Nunez. In the videos, the contractors discuss what appears to be a bribery scheme in which the judge, the plaintiffs and representatives of the Ecuadorean presidency would each get $1 million in return for the contractors being given environmental remediation work supposedly valued as high as $8 billion.

Two of the meetings were held at the Quito offices of the Alianza PAIS, the leftist political party of radical Ecuadorean President Rafael Correa. One meeting was held in the chambers of Judge Nunez. In one exchange, a party representative named Carlos Garcia (no relation to the attorney general) was talking about the deal with contractor Diego Borja, who was one of the two men secretly taping the meeting. Mr. Garcia says of the judge that “he even called me twice.” Mr. Borja says: “The judge called you?” Mr. Garcia: “Sure did ….” Mr. Borja: “And who’s going to give the judge the money?” Mr. Garcia: “I will, personally.”

Later in the conversation, Mr. Garcia explains that Mr. Correa’s sister, Pierina, will get $500,000 of the million originally intended for “the plaintiffs.” In an earlier meeting, the judge is on tape, with a government lawyer present, agreeing that he has already decided Chevron will lose the case — even though evidence and arguments are still to be submitted and the decision is not supposed to come down until November. He also infers that an expected appeal by Chevron is rigged as well: “a formality that has to be done.”

The case involves purported pollution created on oil fields jointly owed by Texaco and the state-run PetroEcuador company during 20 years ending in 1992. (Chevron has since bought out Texaco.) In a 1998 final-release agreement, the government of Ecuador agreed that the fields had been fully remediated. But when Mr. Correa won the presidency, the lawsuit against the oil company suddenly and suspiciously became rejuvenated. Already, Judge Nunez has issued what Chevron spokesman Kent Robertson accurately describes as “a number of irregular rulings” against the American company.

“What the judge did was highly unethical,” Mr. Robertson told The Washington Times. “He needs to be disqualified and his prior rulings must be annulled.”

Ecuador’s court system has been denounced as unreliable or corrupt by the United Nations, the International Bar Association and the U.S. State Department. If this new evidence of corruption is allowed to go unpunished, the United States ought to withdraw special trade status enjoyed by Ecuador.