Chevron's Star Witness In $9.5 Billion Corporate Sovereignty Case Admits He Lied

from the well,-that's-awkward dept

One of Techdirt's earliest posts on corporate sovereignty was back in October 2013, when we wrote about the incredible case of Chevron. It used the investor-state dispute settlement mechanism to suspend the enforcement of a historic $18 billion judgment against the oil corporation made by Ecuador's courts because of the company's responsibility for mass contamination of the Amazonian rain forest. Given the huge sums involved, it's no surprise that things didn't end there. As the site Common Dreams reports, in 2013:

Ecuador's National Court of Justice upheld the verdict but cut the initial mandated payment from $18 billion to $9.5 billion.

Chevron has repeatedly refused to pay the $9.5 billion ordered by Ecuadorian courts and even took the step of removing most of its assets from Ecuador in an apparent effort to avoid paying.
Chevron not only refused to pay, but asked a judge in New York to invalidate the claim. And that's precisely what happened in 2014, as Vice News explains:
California-based oil giant Chevron hailed a sweeping victory in a two-decade long legal battle in the Ecuadorian Amazon. A New York federal judge, Lewis Kaplan, ruled that a $9.5 billion Lago Agrio judgment leveled against the company by the small Andean country's highest court, was obtained by way of fraud and coercion.
Vice News notes that central to Chevron's case in New York was the testimony of Alberto Guerra, a former Ecuadorian judge:
In New York, Guerra testified that he had struck a deal between the plaintiffs [the Ecuadorian government] and the presiding judge [in Ecuador], Nicolas Zambrano: Guerra would ghostwrite the verdict, Zambrano would sign it, and the two would share an alleged $500,000 in kickbacks from the plaintiffs.
Pretty damning stuff, which seems to have played a major part in convincing the New York judge to dismiss the $9.5 billion award. But in a rather dramatic turn of events, the following just emerged:
Guerra has now admitted that there is no evidence to corroborate allegations of a bribe or a ghostwritten judgment, and that large parts of his sworn testimony, used by Kaplan in the RICO case to block enforcement of the ruling against Chevron, were exaggerated and, in other cases, simply not true.
In keeping with the rest of the case, Guerra's confession is not entirely straightforward, and it's not clear what really happened during the 2013 Ecuadorian court case -- it's worth reading the fascinating Vice News story to get the full details of the continuing confusion. It does appear that the advantage has passed back to the government of Ecuador in this high-stakes legal battle, but it's by no means over -- all thanks to corporate sovereignty's disturbing power to overrule otherwise "final" rulings from national courts.

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Filed Under: alberto guerra, corporate sovereignty, ecuador, isds, rain forest
Companies: chevron


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  • icon
    That One Guy (profile), 3 Nov 2015 @ 11:04pm

    No, not really

    It does appear that the advantage has passed back to the government of Ecuador in this high-stakes legal battle, but it's by no means over -- all thanks to corporate sovereignty's disturbing power to overrule otherwise "final" rulings from national courts.

    The 'advantage' is purely illusionary. If Chevron has refused to pay up so far, I see no reason why they would change their stance, now or ever. What is the Ecuadorian government going to do, seize the assets that the company no longer has in the country as payment for the fine that Chevron doesn't acknowledge as legitimate?

    reply to this | link to this | view in chronology ]

    • icon
      Ninja (profile), 4 Nov 2015 @ 4:03am

      Re: No, not really

      That. Ecuador can go after Chevron in their home country though. There are still routes to get that money. I'm not saying they will work but it's worth a shot.

      reply to this | link to this | view in chronology ]

    • icon
      Bergman (profile), 4 Nov 2015 @ 9:57am

      Re: No, not really

      Well, since sovereignty has historically been solely the right of nations, if a corporation wants to pretend to be a nation, well, there is a historic remedy for that too.

      If Chevron is a sovereign nation unto itself, then Ecuador could invade it and seize assets in the amount of the unpaid debt.

      reply to this | link to this | view in chronology ]

      • icon
        JoeCool (profile), 4 Nov 2015 @ 10:24am

        Re: Re: No, not really

        I've said it before, and I'll say it again: one day, one company will find it cheaper and quicker to hire mercenaries rather than lawyers, and then the Corporate Wars will start.

        I even said that before 'Demolition Man'. And Taco Bell would TOTALLY lose.

        reply to this | link to this | view in chronology ]

  • identicon
    bobby b, 4 Nov 2015 @ 2:17am

    No, he admitted that he lied about how much his bribe was.

    I notice that you fail to link to actual records of what he said.

    Funny, that.

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 4 Nov 2015 @ 2:28am

      Re:

      ... did you actually read the article? He's not saying that he lied about the size of the bribe, he's saying that he lied about there being a bribe at all.

      'Guerra has now admitted that there is no evidence to corroborate allegations of a bribe or a ghostwritten judgment, and that large parts of his sworn testimony, used by Kaplan in the RICO case to block enforcement of the ruling against Chevron, were exaggerated and, in other cases, simply not true.'

      He exaggerated other stuff, but the bribe and resulting judgement were flat out lies.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 4 Nov 2015 @ 9:34am

      Re:

      I notice that you fail to link to actual records of what he said.
      I must've missed your link.

      reply to this | link to this | view in chronology ]

  • identicon
    David, 4 Nov 2015 @ 2:27am

    Uh oh.

    I have a premonition that Guerra will meet some accident or heart attack or robbery or so within the next 6 months that will quite unfortunately render him dead.

    reply to this | link to this | view in chronology ]

  • identicon
    Alex, 4 Nov 2015 @ 4:35am

    And, the lawyers win, no matter what.

    reply to this | link to this | view in chronology ]

    • icon
      BJC (profile), 4 Nov 2015 @ 5:13am

      Re: Lawyers win

      Actually, no. Donzinger's working on contingency, so unless Chevron pays up, he's out millions (or millions of other people's money; there's some interesting litigation financing here as well).

      reply to this | link to this | view in chronology ]

  • icon
    BJC (profile), 4 Nov 2015 @ 5:11am

    We're not talking about ISDS here

    Nothing that happened in New York has anything to do with ISDS.

    Yes, Chevron did go to an ISDS tribunal as well, but the New York case is in a regular U.S. court, not a weird international arbitration body. Like the suit over Argentina's sovereign debt (also in a NY court), this is basically a suit over whether anybody connected to the U.S. should help Ecuador collect against Chevron.

    Whether or not TPP or TTIP are ratified, that kind of legal case is still good in cases like this.

    reply to this | link to this | view in chronology ]

    • identicon
      Klaus, 4 Nov 2015 @ 7:40am

      Re: We're not talking about ISDS here

      That's what I was wondering - how does a NY court get to overrule an ISDS verdict. I thought those things were ironclad without any possible appeal.

      reply to this | link to this | view in chronology ]

      • icon
        BJC (profile), 4 Nov 2015 @ 8:01am

        Re: Re: We're not talking about ISDS here

        The NY proceeding is about collecting the judgment. The ISDS proceeding is about the judgment itself.

        The ISDS proceeding is basically an international law tribunal saying, "Ecuador, your courts screwed up, go fix it." The ISDS proceeding is against Ecuador to change its own laws and policies.

        However, the NY case doesn't challenge Ecuador's ability to levy massive money judgments in its own courts. If Chevron had a lot of assets in Ecuador, the N.Y. court wouldn't have any legal basis to stop them from being confiscated to satisfy the judgment. However, the N.Y. court can say, as a matter of U.S. law, that the judgment is basically an arbitrary attempt to steal stuff from a multinational corporation and therefore Ecuador can't expect U.S. courts to order Chevron to pay the judgment.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 4 Nov 2015 @ 1:26pm

          Re: Re: Re: We're not talking about ISDS here

          > If Chevron had a lot of assets in Ecuador,

          And previously, in the article...
          and even took the step of removing most of its assets from Ecuador in an apparent effort to avoid paying.


          Convenient, for a company framing the argument as "stealing international assets from a megacorp".

          reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 4 Nov 2015 @ 5:13am

    And you wanna be my latex salesman ...

    No surprise that countries across the globe are hesitant to enter into deals with these corporate juggernauts.

    reply to this | link to this | view in chronology ]

  • identicon
    Earl Richards, 4 Nov 2015 @ 6:22am

    Chevron

    To understand the sleaze-side of Chevron, see, www. truecostofchevron.com.

    reply to this | link to this | view in chronology ]

  • icon
    Hugo S Cunningham (profile), 5 Nov 2015 @ 10:10pm

    US pension funds and other Chevron stockholders should not be fleeced by Ecuador for the same conduct that Ecuador's national oil company continues to this day. Let Ecuador shut down their oil industry and start paying their own reparations free and clear to the indigenous plaintiffs, and then I might be open to arguments that Chevron make a proportional contribution.

    reply to this | link to this | view in chronology ]


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