EDITORIAL: Fighting Ecuadorean graft

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The Obama administration has made a habit of kowtowing to Latin American leftists. But new information out of Ecuador ought to make the White House finally take a stance against that nation’s anti-American regime.

For years, the radical Ecuadorean government led by President Rafael Correa has been backing a massive and spurious lawsuit, sponsored by American trial lawyers, against the California-based Chevron oil company. In what amounts to a state-enforced shakedown, the plaintiffs seek a whopping $27 billion for purported environmental and health damages, all related to oil projects that Texaco - now owned by Chevron Corp. - stopped operating in Ecuador in 1990. Before it was taken over by left-wingers, the Ecuadorean government in 1998 certified that Texaco had cleaned up its old drilling sites. The new government ignores that certification.

Already, the case against Chevron has suffered numerous major embarrassments, especially when the judge assigned to the case, Juan Nunez, was disqualified after being caught on tape appearing to solicit bribes to side with the plaintiffs. This month, two new scandals have surfaced to cast further doubts on the case against Chevron.

First, on Feb. 2, the German publication Deutsche Welle reported that the Financial Action Task Force of the Group of 20 advanced economies was expected to list Ecuador as a “high-risk jurisdiction” at its annual meeting, which began Monday. This action comes amidst a host of reports and indicators that, as summed up in the headline, show that “Ecuador emerges as hub for international crime.” The Washington-based International Assessment and Strategy Center, for instance, reports that Ecuador is “increasingly attractive to Russian organized criminal groups,” along with Chinese human-smuggling groups. Deutsche Welle reports that Ecuador also has begun doing business with “Iranian financial institutions subject to sanctions by the United Nations.”

The U.S. State Department, the United Nations, the International Bar Association and six major American business organizations all have denounced Ecuador’s court system as unreliable or corrupt.

If that weren’t bad enough, on Feb. 9, Chevron asked the new judge on the case to remove the court-appointed “expert” who put the ludicrous $27 billion price on the “damages” purportedly caused by the oil fields. As charged by Chevron and confirmed by the Dow Jones news organization, geologist Richard Cabrera is the “co-founder, general manager, majority stockholder and legal representative of an oil-field remediation company” that is registered to perform oil-field remediation for Petroecuador, Ecuador’s state-owned petroleum company. In other words, his own company may well be in line for any “remediation” work financed by Chevron if the lawsuit against the oil giant succeeds. The conflict of interest and the bias against Chevron are blatant.

This is the same “expert” whose assessment of the supposedly necessary cleanup work was 30 times as large as Petroecuador had claimed, who estimated the costs of groundwater cleanup at $3.2 billion even though he acknowledged he never actually took the necessary water samples and who said Chevron should pay $9.5 billion for “excess cancer deaths” without providing the name of even one cancer victim.

The Obama administration should pressure Ecuador to stop shaking down an innocent American company. It can do so by immediately suspending trade preferences that Ecuador enjoys.

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