The plaintiffs in a $27 billion shakedown of Chevron Corp. have been embarrassed by a disclosure that further undermines their case over environmental claims in Ecuador. The Obama administration ought to use diplomatic weight to support this American company fighting foreign shenanigans.
American trial lawyers have been carrying the case against Chevron for years, claiming grave ecological and human harm from energy drilling performed by Texaco before Texaco became part of Chevron. Never mind that the Ecuadorean government (before being radicalized) certified in 1998 that Texaco had satisfactorily cleaned up all its old sites.
The latest scandal with regard to the lawsuit came to light on March 29, when the scientist originally hired by the plaintiffs to assess the purported ecological damage testified under oath that he did not write reports attributed to him.
The report submitted to the court by plaintiffs’ lawyers, attached to the signature of U.S. biologist and industrial hygienist Charles W. Calmbacher, said two sites he analyzed in 2004 contained high levels of contamination that would cost $40 million to remediate. But reality is not so straightforward. “I did not reach these conclusions, and I did not write this report,” Mr. Calmbacher said in a March 29 deposition. “I did not see significant contamination that posed immediate threat to the environment or to humans or wildlife around it.” He also said he never recommended remediation, never put a dollar value on purportedly required remediation and never said Texaco had failed to adequately remediate the sites.
About lead plaintiffs’ attorney Steven Donziger, Mr. Calmbacher said, “He wanted the answer to be that there was contamination and people were being injured.” Question: “And why would he want people to be at risk?” Mr. Calmbacher: “Because it makes money.” And: “He felt, you know, if we showed any contamination, he could basically … get public opinion on his side. And, you know, you know that Texaco and Chevron Texaco is seen as big pockets, and he figured that any decision would go in his favor against you, since you had the money to pay.”
Mr. Calmbacher also testified that he had heard not a word from the plaintiffs’ attorneys since the winter of 2004-05 - until the week before his deposition, when Mr. Donziger told him (in Mr. Calmbacher’s words) that “it would pay or be in my best interest to go in with him on quashing the subpoena. … His tone was, you’re in trouble unless you go in with me, you know, it’s going to probably evolve into a problem for you.”
This testimony comes on top of a raft of other developments that cast doubt on the plaintiffs’ case or on the reliability of Ecuadorean courts and Ecuador’s business system. On March 30, the Permanent Court of Arbitration in The Hague awarded Chevron some $700 million for commercial violations not directly related to the environmental case. The International Financial Action Task Force, meeting Feb. 17 through 19, listed Ecuador among just four rogue nations with key “strategic deficiencies” in combating money laundering and financing of terrorism. On March 2, Dow Jones reported that a court-appointed expert confirmed the accuracy of a video recording that seems to show the Ecuadorean judge on the $27 billion Chevron case participating in a bribery scheme in the plaintiffs’ favor.
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 because it turns out he is the co-founder and majority stockholder of an oil-field-remediation company that is registered to do work for Petroecuador, Ecuador’s state-owned petroleum company. In short, his company could benefit if Chevron is forced to pay.
Before that, on Feb. 2, a German newspaper featured a lengthy report headlined “Ecuador emerges as hub for international crime.” This follows actions in recent years in which 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.
All of this explains why the Obama administration should use its muscle to get the whole lawsuit against Chevron dismissed. There comes a time when American companies should be able to expect the American government to insist that they not be subject to injustices perpetrated by corrupt foreign actors out to make a buck, or billions of bucks, in cahoots with avaricious American lawyers.