Lago Agrio: More on Guerra and a Response to Ted Folkman

More from Chevron advocate Doug Cassel on the latest development in Ecuador, and on the questions I posed to Chevron. The Goldhaber article is well worth your time. I will note that while Doug has given some reasons why Chevron didn’t disclose the Guerra bribery allegations until now, I don’t think he has responded to my legal point. Even if Chevron had very good strategic reasons not to raise the issue when it arose, is there not an argument for estoppel now? On the facts, in light of the El Universo case and the heavy-duty criticisms Chevron has made of the Correa government, is there really a reason to think that Chevron’s people are in less legal jeopardy now than they would have been had they published the allegations at the time?

Guerra’s Corroboration: The Plaintiffs’ Stab at a Reply:

Even as the plaintiffs remain MIA from Ted Folkman’s invitation to comment on Guerra’s claim that they bribed him, their PR person, Karen Hinton, attempted to answer questions posed by journalist Michael Goldhaber of American Lawyer’s Litigation Daily. Like Ted, Goldhaber is a long-time, cautious, fair-minded observer of the Lago Agrio case. Until now, Goldhaber has been restrained in assessing the plaintiffs’ fraud. But after reviewing the documents corroborating Guerra’s Declaration, he finds that “the documentary evidence of fraud (never mind the testimony) is now virtually unanswerable.”

Among other points, Goldhaber asked Hinton about the deposit slips showing that the plaintiffs’ administrative assistant deposited two checks for $1,000 each into Guerra’s bank account (see my earlier post). According to Goldhaber, Hinton replied that “no one ‘representing the Ecuadorians’ made a deposit to Guerra, and that both the signature and ID number on the bank deposit slips are too visually obscure to prove the depositor’s identity.” Goldhaber commented, “I find the ID number on one slip quite easy to read.” Linking to the slips, he invited readers to judge for themselves.

(Later Goldhaber appended a clarification: “With regard to bank slips that Chevron contends support its accusations of bribery, plaintiffs spokesperson Karen Hinton clarifies that she doesn’t contest that a national ID number is distinctly visible on the documents. Rather, Hinton told us she was referring to an account number that is partly redacted”).

Goldhaber also asked Hinton about the plaintiffs’ emails, written shortly before they made deposits into Guerra’s bank account, admitting that the plaintiffs were paying the “puppeteer” to move his “puppet.” Hinton, he reports, speculated that “‘puppeteer’ may simply have been a bantering reference to one of the plaintiffs’ consultants.”

But one of the emails in question was from the plaintiffs’ leader, Luis Yanza, to their American attorney, Steven Donziger. Hinton knows their phone numbers. She had no need to guess.

Answers to Questions for Chevron

In introducing my post, Ted also posed questions for Chevron. Although I have represented Chevron in regard to Lago Agrio, I do not speak for the company. Here is what I have been able to ascertain in reply to his questions:

  1. Why did Chevron not previously raise the allegations that Guerra offered to bribe its attorneys? An Ecuadorian attorney for Chevron did execute an affidavit in October 2009, contemporaneously memorializing Guerra’s oral bribe offers. Until Guerra came forward in 2012, however, there was no corroboration. Chevron lawyers could reasonably have decided that the probative value of the uncorroborated affidavit was not worth the risk of a criminal libel prosecution if it were to be published. The risk was real: criminal proceedings had already been brought against other Ecuadorian lawyers for Chevron. A US federal judge later found that these prosecutions “appear[] to have been instigated by Donziger and others working with him for the base purposes of coercing Chevron to settle …”1

    In contrast, once Guerra came forward in 2012, the Chevron lawyer’s affidavit was corroborated, and the risk of a libel prosecution no longer real.

  2. Who initiated Guerra’s confession—Guerra or Chevron? According to a published affidavit by Chevron’s lead Ecuadorian attorney, Adolfo Callejas, another Ecuadorian lawyer for Chevron, Enrique Carvajal Salas, informed Callejas in April 2012 that Guerra had recently come up to Carvajal in the Lago Agrio courthouse, stating:

    ‘Dr. Carvajal, I want to tell you that I would like to make any kind of statement about the fact that I helped to prepare the first instance judgment.’ According to Dr. Carvajal, he immediately answered: ‘You and who else, you and who else?,’ after which Dr. Guerra replied, ‘Fajardo and Zambrano.’ Dr. Carvajal further reported that Dr. Guerra then added: ‘I am willing to make a public statement, which will be one more scandal. I have evidence and I can provide to the company my hard drive and, if necessary, I will be available to render an affidavit or statement in the U.S.A.’ As Dr. Carvajal related it to me, he told Dr. Guerra that he would follow up with me, and Dr. Guerra gave his cell phone number to Dr. Carvajal.

  3. Why did Guerra come forward? Chevron does not know. Maybe Guerra, like other witnesses who flip, saw the truth closing in and decided to cut his losses. Whatever the full explanation, he asked for money. Chevron did not pay for his testimony, but did agree to pay $38,000 for his computer and hard drive, pen drives, personal calendar, cell phones, banking, shipping, phone, credit card and email records, and for his time in assembling those records. One infers that his motive, in whole or part, was economic.
  4. What about Chevron’s ongoing support for Guerra? Once Guerra agreed to make public his accusations of judicial corruption, not only in the Lago Agrio case but in other cases as well, he felt – not unreasonably – that he would be in danger if he were to remain in Ecuador. If he were a witness facing similar risks in a criminal case, the government might consider placing him in a witness protection program. But this is a civil case. Chevron decided to safeguard his security by assisting him and his family to live outside Ecuador. According to CNNMoney reporter Roger Parloff, Chevron acknowledges making a “two-year commitment to pay Guerra’s family a total of $10,000 per month for living expenses and $2,000 per month for housing, plus health insurance and legal fees.” Chevron contends that the standard of living thus supported is less than Guerra had in Ecuador.

    Even so, as Ted notes, these payments make the evidence corroborating his testimony all the more important. Without it, I would be hesitant to credit Guerra’s bare Declaration. But with the documentary corroboration, as Michael Goldhaber rightly concludes, Guerra’s version is credible.

  1. In re Chevron, 749 F. Supp. 2d 141, 162 (S.D.N.Y. 2010).

One response to “Lago Agrio: More on Guerra and a Response to Ted Folkman”

  1. Doug Cassel

    In his intro to my post, Ted asks:

    “Even if Chevron had very good strategic reasons not to raise the issue when it arose, is there not an argument for estoppel now? On the facts, in light of the El Universo case and the heavy-duty criticisms Chevron has made of the Correa government, is there really a reason to think that Chevron’s people are in less legal jeopardy now than they would have been had they published the allegations at the time?”

    The answer is yes. Ecuador is not North Korea. The Correa government carries out its repression through a facade of legality. The El Universo libel prosecution and ensuing $40 million damages award would not have happened in the absence of statements in the newspaper’s coverage that provided at least a plausible pretext for Correa’s claim of libel. Likewise the Chevron attorney had no reason to fear a libel suit in 2009 unless he, too, supplied the government a pretext by publishing his uncorroborated affidavit accusing former judge Guerra of orally soliciting a bribe.

    That does not exclude repression in other forms, such as economic repression. Some of Chevron’s Ecuadorian lawyers have been warned to advise their clients that if they hope to win cases before Ecuadorian courts, they had better look for other lawyers.

    But that is a separate matter. No lawyer should have to open himself up to a real risk of criminal prosecution, in order to avoid his client’s later being estopped from raising a claim. Estoppel is a doctrine of fairness, not professional suicide.

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