Chevron accuses judge in Ecuador case of misconduct

SAN FRANCISCO Mon Aug 31, 2009 7:30pm EDT

Related Topics

SAN FRANCISCO Aug 31 (Reuters) - Chevron Corp (CVX.N) has accused the judge in a $27 billion environmental damage case in Ecuador of misconduct and being involved in a bribery scheme that Chevron said appears to involve Ecuador's government.

The U.S. oil company said in a statement on Monday that it would seek disqualification of Judge Juan Nunez after providing Ecuadorean and U.S. authorities with secretly recorded video of Nunez talking of ruling against Chevron later this year.

Chevron said the video, posted at its TexacoEcuador YouTube channel here shows a man at another meeting identifying himself as a representative of Ecuador's ruling party discussing a $3 million bribe for contracts, of which Nunez would get a third.

Chevron said two meetings with Nunez and two meetings with purported party representative Patricio Garcia were recorded by both Diego Borja, a local logistics contractor who has worked for Chevron, and American Wayne Hansen, who has no relationship with the company.

"No judge who has participated in meetings of the type shown on these tapes could possibly deliver a legitimate decision," Chevron Executive Vice President Charles James said in the company's statement.

The Ecuadorean government did not respond to requests for comment.

Chevron said the four meetings were recorded without its knowledge, through small cameras in a watch owned by Borja and a pen held by Hansen. Borja only brought the bribery scheme to the company's attention in June, Chevron said in the statement.

Chevron said Borja and Hansen had been "pursuing business opportunities" in Ecuador before the potential for remediation work was brought to their attention and the meeting with Garcia was arranged to discuss it.

Chevron spokesman Kent Robertson said the two men had not explained why they recorded the meetings, and he said the bribe scheme had been "put on the table" prior to the meeting with Garcia.

The video of the two meetings with Nunez, who appears to be the same Nunez who has appeared on television news coverage, showed the judge discussing the long-running case, which had been expected to conclude later this year.

The plaintiffs have said Texaco, bought by Chevron in 2001, damaged their health by dumping billions of gallons of polluted water in the jungle around where they live for more than two decades before the company left Ecuador in the early 1990s.

Karen Hinton, a Washington D.C.-based spokeswoman for the Amazon Defense Coalition, which supports the plaintiffs, said the video showed Nunez had resisted the attempted bribe scheme put to him by the former Chevron contractor.

"An appropriate investigation will determine whether the allegations are true or if they are the product of a dirty tricks campaign designed and financed by the company," Hinton said in a statement released to the media.

Chevron said Borja and Hansen first met with Nunez in May after an initial meeting at Alianza Pais's Quito offices with Garcia, who said he was a representative of the party.

Garcia then arranged for Borja and Hansen to fly to Lago Agrio, where the case is being heard, to see Nunez, and the two men met Nunez again at a Quito hotel in June, Chevron said.

Chevron said neither man was paid, though the San Ramon, California-based company said it had assisted Borja with relocation expenses and other support because he and the company feared for his safety and that of his family.

Chevron said it would not provide details about Borja's relocation for security reasons.

"Chevron has alerted authorities both in Ecuador and in the United States, and both governments should investigate this evidence in a serious and expeditious manner," the U.S. Chamber of Commerce's Institute for Legal Reform said in a statement.

Chevron, which says it has faced a "trial lawyer"-led campaign to force it to settle in the case, has long complained of political interference in the Ecuador case.

The plaintiffs, represented by U.S.-based lawyer Steven Donziger, responded by pointing out that Texaco had pushed to move the trial to Ecuador from the United States in 2002.

An expert appointed by the Ecuadorean court said last November that Chevron should pay $27 billion, including more than $8 billion in unjust enrichment, which was far above the previous damages estimate of up to $16 billion.

Chevron has said it would fight what it expects to be an adverse judgment, possibly in the United States, if necessary.

"While Chevron probably has no hope of a fair hearing in the Ecuadorean legal system, it should have no trouble in an impartial setting, and thus we see no plausible scenario under which the plaintiffs would collect anything close to $27 billion," Raymond James analysts said in a note to investors.

Chevron shares closed 1 percent lower at $69.94 on Monday, responding to a drop in crude oil prices. (Reporting by Braden Reddall in San Francisco and Jose Llangari in Quito)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.