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EDITORIAL: Ecuador’s Chevron shakedown

Environmental case designed to grab billions

- The Washington Times - Wednesday, August 11, 2010

Ecuadorean Ambassador Luis Gallegos says in a letter on this page that "the government of Ecuador has no stake in the outcome of the private environmental litigation." The facts show otherwise. On multiple occasions, the president of Ecuador, Rafael Correa, has weighed in against Chevron, making clear that his government has prejudged the case that claims the country suffered grave ecological damage from energy drilling performed by Texaco before the company became part of Chevron.

To cite one of many examples of fairness, Mr. Correa announced on Jan. 19, 2008, that the Amazon Defense Front, advocate of record for the plaintiffs in the case, "has all the support of the national government. ... They know they can count on the support given by the national government." In a weekly presidential broadcast on Aug. 9, 2008, Mr. Correa blasted Chevron and its defense, saying, "Washington Pesantez, the public prosecutor, has wisely opened investigations to sanction these people, because it is a lie. Nothing had been solved; no contamination had been remediated."

The Ecuadorean government has also opened criminal investigations against a pair of lawyers who worked with Chevron and against former government officials who gave Chevron-Texaco a clean bill of health more than a decade ago. This sent a chilling message to anybody contemplating cooperation with the oil company. The judge appointed to the case was caught on video discussing what sounded remarkably like a bribe. The government-appointed independent expert had a contract with the government-owned firm Petroecuador, meaning judgment against a major competitor like Chevron could bring a substantial payday.

The biggest jackpot of all is reserved for Ecuador itself. "From what we know, the amount of the claim is for 27 billion dollars, twice the state's budget in a year," Washington Pesantez said at a Sept. 4, 2009, press conference. "Although I don't have the exact figures, 10 percent would go to the plaintiffs if Chevron is found guilty; 90 percent would be delivered to the state for remediation or bio-remediation activities."

That's quite a "stake" in the lawsuit. If the Ecuadorean state is going to stack the deck against an American company and its shareholders, the U.S. government ought to fight back with its diplomatic muscle.

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