EDITORIAL: Drilling Chevron in Ecuador

U.S. oil giant victimized by polluted lawsuit

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Chevron Corp. dropped a bombshell last week in defending against a gold-digging lawsuit from Ecuador. The U.S. government should stand up for the California-based company and its millions of American stakeholders.

On Aug. 3, Chevron filed in federal court some transcripts of video footage appearing to show collusion between the American lawyers pushing the suit and a purportedly independent environmental expert assigned to the case by the Ecuadorean court. This consultant, Richard Cabrera, conjured up damages to the Ecuadorean ecosystem broad enough to turn a $1.5 billion suit into a $27 billion monster.

When the Ecuadorean court appointed Mr. Cabrera in May 2007, he signed an oath to perform his duties “faithfully … with complete impartiality and independence vis-a-vis the parties.” Mr. Cabrera, however, already was in bed with the plaintiffs. Video taken two weeks before his appointment shows him meeting with plaintiffs’ attorneys and others. A member of the group explained their plans to involve “our entire technical team … of experts, scientists, attorneys, political scientists, so that all will contribute to the report - in other words, you see … the work isn’t going to be the expert’s” (i.e., Mr. Cabrera‘s).

Pressed on that point, the speaker restates: “What the expert is going to do is [unintelligible] and sign the report and review it. But all of us [unintelligible] have to contribute to that report … together.” One of the plaintiffs’ environmental analysts adds, to much laughter, “But not Chevron.”

Another outtake shows the two analysts alerting lead plaintiff attorney Steven Donziger that they “don’t have” solid evidence on “the extent of the contamination.” Mr. Donziger responds: “This is Ecuador, OK. You can say whatever you want, and at the end of the day, there’s a thousand people around the courthouse, you’re going to get what you want. … If we take our existing evidence … and wanted to extrapolate based on nothing other than our, um, theory … we can do it. And we can get money for it.”

This evidence of what Chevron calls “pervasive corruption and fraud” comes on top of other embarrassments for the plaintiffs and the left-wing Ecuadorean government. Last August, the Ecuadorean judge assigned to the case was filmed discussing what sounded like a bribery scheme. In February, Dow Jones reported that Mr. Cabrera was the main shareholder of an environmental remediation company registered to do the lucrative work that could ensue from the lawsuit. In April, the main U.S.-based expert for the plaintiffs, Charles Calmbacher, swore under oath that the plaintiffs’ lawyers had submitted fraudulent reports under his name.

All of this involves sites the Ecuadorean government certified - in 1998 - had been cleaned up. The suit is a transparent shakedown by a foreign government that the U.S. State Department, the United Nations and the International Bar Association all have labeled as unreliable or corrupt. The victim isn’t Ecuador; it’s the U.S. oil firm, its 206,000 shareholders and all the retirees whose pension funds invest in Chevron. It’s time for the Obama administration to step in by suspending Ecuador’s trade preferences and taking other diplomatic action to isolate its crooked government.

© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.

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