Letters Blogatory

The Blog of International Judicial Assistance
By Ted Folkman

Chevron, Lobbying, and Lago Agrio

Did Chevron lobby the State Department regarding the contents of the Ecuador Human Rights Report during the Lago Agrio litigation? Yes. Did the lobbying have an appreciable effect on the content of the report as it relates to Ecuador’s judicial system? Maybe.

These are the big-picture conclusions we can draw from the first group of documents the State Department has produced to me in response to my August 2011 Freedom of Information Act request. The FOIA issue is summarized here; and you can find copies of all the documents the government has produced so far, as well as the papers in the docket in the action I filed against the State Department, here. I can also give an opinion with which readers may or may not agree: it’s a problem for parties to try to influence the content of a country’s human rights report and then to cite that report when seeking either to obtain recognition and enforcement of a judgment or to persuade a court to refuse recognition and enforcement, particularly if it does not disclose the fact of the lobbying. I don’t see good evidence that Chevron’s lobbying here led to an unfair outcome, because it seems not to have affected the key language of the report. But the point goes further than this case and suggests that courts should be cautious in relying on assertions in Human Rights Reports about foreign judiciaries.

Motivation for the FOIA Request

Here is what we have known for a while:

  1. Chevron claims, in various forums, that Ecuador’s courts were systematically inadequate, that is, that they did not meet the standards of impartiality and due process necessary to make their judgment in the Lago Agrio case worthy of recognition and enforcement outside of Ecuador.
  2. Chevron has cited the State Department’s Human Rights Report on Ecuador, which contains a discussion of the Ecuadoran judiciary, in its arguments.
  3. Chevron has lobbied the US government to take actions aimed at helping it in its dispute with Ecuador and the Lago Agrio plaintiffs, in particular, lobbying the US Trade Representative to refuse to renew Ecuador’s trade preferences under the Andean Trade Preference Act. Chevron and the Lago Agrio plaintiffs have also lobbied at the state level.

When I put these facts together, I am left with the question whether Chevron has also lobbied the State Department about the content of the Ecuador Human Rights Report. In August 2011, I made a request to the State Department under the Freedom of Information Act aimed at answering that question and, more broadly, in trying to figure out what sort of lobbying went on behind the scenes to mold the Human Rights Reports’ descriptions of foreign countries’ judiciaries. This question is particularly important in light of the highly visible challenges to foreign judiciaries in the Lago Agrio case and in other cases.

The FOIA Litigation

The State Department is busy with matters of war and peace and lots of other important jobs, and it did not respond to my request for about a year and a half. So in March 2013 I filed a lawsuit seeking the records responsive to my request. There have been some additional delays—and thanks to John Boehner and the radical rump of the Republican Party, there will be some more delays (responding to Freedom of Information Act requests is, apparently, a “non-essential” government function). But the good news is that I have now received the first batch of documents, along with an explanation of the redactions the government has made.

Chevron’s Lobbying

Bill Irwin is a Chevron lobbyist. In Chevron’s lobbying report for the fourth quarter of 2009, he is identified as a lobbyist on “Ecuador rule of law and trade issues” with the Departments of State, Commerce, Energy, and the Treasury, the National Security Council, the Senate, the House of Representatives, and the US Trade Representative. According to an email he wrote to Liliana Caparo Ariza, a State Department representative who apparently worked on human rights reports, he and a colleague met with Ms. Caparo Ariza on December 8, 2009. After the meeting, Mr. Irwin provided Ms. Caparo Aria with information about two environmental audits done in Ecuador in 1992, one by Furgo-McClelland and one by HBT Agra. (I believe these audits were offered as evidence in the Lago Agrio case). He also provided information about the ownership in the oil consortium that had conducted activities in Ecuador. Mr. Irwin’s email itself does not make the precise subject of the meeting clear. Several State Department personnel traded emails about the meeting in the day that followed, but the government has redacted the contents of those emails. However, the subject line of a December 9, 2009 email is: “RE: Chevron meeting—how the 2009 HRR now looks.” And so I infer that the purpose of the meeting was to discuss the contents of the 2009 Ecuador Human Rights Report. I have asked Chevron twice for comment on what happened at the meeting, but the company has not responded. If it does respond, I’ll provide an update.

The government’s redactions are tantalizing. According to the government, it redacted the intra-agency emails for the following reasons:

This document is an intra-agency e-mail exchange, consisting of an initial (released) message from a private sector entity and six messages among Department attorneys and other Department employees. The excised material, including a draft text for a report intended for eventual public dissemination, consists of exchanges between Department attorneys and other Department employees regarding suggested revisions to that text and pertaining to other issues related to the concerns of the private sector entity. Release of the withheld information could reasonably be expected to chill the frank deliberations that occur when Department officials are crafting text intended for eventual publication and formulating a strategy for an official response to a sensitive matter. In addition, the withheld information contains confidential communications between agency attorneys and their clients sent for the purpose of securing legal advice in order to respond to the private entity. For these reasons, this information is protected by the deliberative process and attorney client privileges and is exempt from disclosure under Exemption 5, 5 U.S.C. § 552(b)(5).

The State Department also had in its files a copy of a Chevron memorandum titled “Texaco Petroleum, Ecuador and the Lawsuit Against Chevron,” which Chevron has made publicly available on the web. It’s unclear whether Chevron provided the memorandum to the Department, and if so, when. The Department was also aware of opposing views. It had in its files a copy of a letter from Sentaors Wyden, Durbin, Casey, and Leahy to the U.S. Trade Representative expressing concerns about Chevron’s “effort to petition your office concerning a lawsuit it is facing in the Ecuadorian legal system.” Again, it is unclear how the State Department came to have the letter.

The government has not (yet) produced its response to Chevron; it may be that the response is not within the scope of my request. In any case, I am going to try to obtain it.

The Effect Of The Lobbying

So did the meeting make a difference? Well, let’s compare the 2008 Ecuador HRR (published February 25, 2009, before the meeting) with the 2009 Ecuador HRR (published March 11, 2010, after the meeting). In the section on fair public trials, the differences are minor. In 2008, the report said that the media reported “extensively” on the “susceptibility of the judiciary to bribes for favorable decisions and resolution of legal cases and on judges parceling out cases to outside lawyers who wrote judicial sentences on cases before the court and sent them back to the presiding judge for signature.” In 2009, the word “extensively” was deleted. In 2008, the report stated that the Ecumenical Human Rights Commission asserted that “judges occasionally reached decisions based on media influence or political and economic pressures.” In 2009, the report made the same claim outright, instead of saying that the Commission had made the claim. These are fairly minor changes.

However, the 2009 report contains a new paragraph:

In August a multinational oil company provided government authorities with clandestinely recorded videos that it alleged exposed a bribery scheme related to a multi-billion dollar environmental lawsuit pending against it in an Ecuadorian court. The judge who had been presiding over the case, as well of some members of President Correa’s Proud and Sovereign Fatherland Movement, were shown on the recordings. The Prosecutor General’s Office opened an investigation into the allegations, while plaintiffs in the lawsuit claimed the videos were fabricated.

It is not possible, given the documents I’ve seen, to tie Chevron’s lobbying to any particular change in the report.

What Use The Parties Tried To Make Of The 2009 HRR.

Judge Kaplan has cited the 2009 Human Rights Report twice, as far as I can tell. First, in In re Application of Chevron Corp., 709 F. Supp. 2d 283 (S.D.N.Y. 2010), an early § 1782 case, he wrote:

Ecuador in recent years has seen the ascendency of a socialist government that is not as well disposed to private oil interests as its predecessor. Moreover, the State Department last year observed:

While the constitution [of Ecuador] provides for an independent judiciary, in practice the judiciary was at times susceptible to outside pressure and corruption. The media reported on the susceptibility of the judiciary to bribes for favorable decisions and resolution of legal cases and on judges parceling out cases to outside lawyers who wrote judicial sentences on cases before the court and sent them back to the presiding judge for signature. Judges occasionally reached decisions based on media influence or political and economic pressures.

Second, in Chevron Corp. v. Donziger, 768 F. Supp. 2d 581 (S.D.N.Y. 2011), he wrote:

While stated more conservatively, numerous independent commentators—quoted in Alvarez’s report—have concluded that the Ecuadorian legal system is highly politicized and has little respect for the rule of law. The World Bank’s Worldwide Governance Indicators show that Ecuador ranks in the bottom eight percent of countries with respect to the rule of law, lower than Liberia and North Korea. The State Department’s three most recent Human Rights Reports indicate that Ecuadorian judges sometimes decide cases based on substantial outside pressures, especially in cases of interest to the government.

In at least one of those two cases, Chevron itself cited the 2009 Report in its papers (in particular, on page 60 of its brief in support of its motion for a temporary restraining order). I do not believe Chevron cited the report in its § 1782 application, but it may have cited it in other documents that informed the judge’s decision.

What About The LAPs?

We’ve focused only on Chevron. What about the Lago Agrio plaintiffs? Have they also lobbied the State Department on the contents of the Human Rights Report? For reasons that are no longer clear to me more than two years later, I don’t think my FOIA request would have captured documents that would answer that question. However, I put the question to LAP spokesman Bill Hamilton, who said that the LAPs “have not lobbied the State Department on anything.”

What’s next?

I expect to receive more documents from the State Department after the government shutdown is over, and the additional documents may or may not shed light on the question of lobbying on Human Rights Reports generally, or the Ecuador Human Rights Report in particular. I will be taking a look at the government’s redactions and withheld documents to determine whether I have a basis to ask the government to produce more. I also welcome readers who know about the inner workings of the State Department to take a look at the documents produced to see whether we can glean anything more from the bits and pieces that the Department has not redacted.

Update: Chevron has issued the following comment: “Throughout this case we have kept a wide range of stakeholders informed on the proceedings and related background.”

Ted Folkman
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15 responses to “Chevron, Lobbying, and Lago Agrio”

  1. Roger Parloff

    Ted—I know you’re getting at a different point, which is entirely legitimate, but I can’t help focusing on something different: the letter that the State Department turned over to you which it received from four U.S. Senators. In that letter, the Senators basically argue the Amazon Defense Front’s position, and in doing so they rely heavily on the findings of “an independent court-appointed expert” in the Lago Agrio case. That’s the Cabrera report, of course, which we now know was secretly planned, executed and ghostwritten by the Front’s own retained American consulting firm in Denver under the oversight of ADF leaders in NY and Quito. Someone defrauded each of those four U.S. Senators into believing that the Cabrera report was “independent” and then persuaded them to write a letter to the State Department containing that fraudulent claim. ADF spokesperson Bill Hamilton, who began working on the case in around March of this year, isn’t competent to know whether the ADF played any role in approaching those Senators and urging them to write the State Department; he is only competent to know what the ADF leaders—the very people who are accused of having orchestrated the Cabrera fraud—instruct him to say.

    Reply
    1. Ted Folkman

      Roger, I agree with you that “trust but verify” is the best approach, and unfortunately, for reasons I can’t really remember, I didn’t draft my FOIA request in a way that would be certain to capture any lobbying that the LAPs did at the State Department. That being said, the only evidence that I know of about whether the LAPs did lobby in some way is their representative’s clear denial. Maybe the documents I hope to receive from the State Department after the shut-down ends will shed some more light.

      Reply
  2. Doug Cassel

    Dear Ted,

    I will comment separately on the issues you raise in regard to Chevron.

    But in regard to the LAPs, whether they lobbied the State Department directly, they or someone on their behalf obviously lobbied the Senators, who in turn lobbied the State Department. In other words, it appears that the LAPs lobbied the State Department indirectly. I’m not sure I see any difference there that matters.

    On the other hand, what does matter is whether the information conveyed was accurate. In the case of the LAPs’ lobbying of the Senators, as Roger Parloff points out, the information provided was less than truthful. (I have not yet looked at the documents you received through your FOIA request, but you do not appear to argue that Chevron provided untrue information to the State Department.)

    Also relevant here is the testimony by the LAPs’ former lead environmental consultant, Douglas Beltman of Stratus Consulting. In his witness statement of March 21 of this year, he described how he went along with the LAPs’ deliberate effort to deceive Massachusetts Congressman Jim McGovern and McGovern’s staff, with regard to the same matter addressed in the Senators’ letter to the State Department, namely the facts — unbeknownst to the Senators — that the purported report of the Ecuadorian court’s “expert,” Richard Cabrera, was in fact written by plaintiffs’ lawyers and their consultants, including Beltman and Stratus.

    Here is what Beltman testified to in par. 13 of his witness statement:

    “On November 9 and 10, 2008, United States Representative Jim McGovern visited Ecuador on a “fact-finding trip” in part related to the Lago Agrio litigation. In early November 2008, Steven Donziger instructed me to talk to Richard Clapp regarding Clapp’s interactions with the Congressman regarding the Cabrera Report so Clapp didn’t “go off the reservation and talk to the congressman in a way that damns the Cabrera report with faint praise.” Steven Donziger also did not authorize Stratus to disclose its role on the Cabrera Report to the congressional delegation. Based on his instructions, I helped Steven Donziger limit the distribution of one of Richard Clapp’s reports, which was intended for the Cabrera Response, so that the delegation and others would not have that document. … At no time did Donziger authorize disclosure of Stratus’s role in the Cabrera Report and the Cabrera Response to Congressman McGovern or anyone on his staff. ”

    Although the LAPs have generally attacked Beltman’s statement on the ground that it was submitted under pressure from Chevron, they have not to my knowledge specifically denied this statement by Beltman.

    In regard to Chevron’s lobbying, you raise thoughtful issues about the extent to which lobbying of the State Department should be disclosed, and the effect of lobbying on the weight to be accorded to the Department’s human rights reports. I will comment on those issues separately. But for starters, it strikes me that the more important issue — on the facts of this case — is whether the information provided, whether to the State Department or to the Congress, is false, especially if it is knowingly false. We now know beyond any reasonable doubt that the LAPs’ claim that Cabrera wrote his report was blatantly false. Whether the LAPs knowingly conveyed that false information directly to the Senators, or instead allowed some innocent intermediary to do so indirectly on their behalf, is of far lesser importance, it seems to me.

    Reply
    1. Ted Folkman

      Doug, thanks for commenting. I am not claiming that Chevron said anything to the State Department that was untrue. And as I say in the post, I am not even claiming that Chevron’s lobbying had much of an effect. I do think, though, that the fact of the lobbying itself is highly interesting given how these reports are relied upon by litigants, courts, and others. I’ve spoken with folks knowledgeable about the preparation of these reports who told me that they would be surprised to learn that there was private lobbying of the kind I’ve pointed to here.

      On the point about the letter from the senators: the letter relates to the question whether the USTR should extend Ecuador’s trade preferences. I don’t know how the State Department came to have the letter. In any case, the lobbying of the USTR by both sides was done in the open, via notice and an opportunity to submit comments, which are publicly available. I’ve written about some of that lobbying before. To me, what’s most interesting about the lobbying of the State Department is that, to the best of my knowledge, there is no notice in the Federal Register or opportunity for the public to submit comments that are made publicly available before the Department issues its Human Rights Reports. Maybe there should be, if lobbying is going on anyway.

      I hear what you are saying about the underlying facts, but I do not want to let the issue about who is ultimately right or wrong about the Ecuadoran judiciary get in the way of the discussion about the process of preparing the State Department reports.

      Reply
      1. Doug Cassel

        Dear Ted,

        I’m surprised that your sources are surprised to learn about the kind of lobbying in which Chevron engaged. One needs to understand how the State Department compiles its human rights reports. They are drafted by human rights officers in each Embassy, and then edited in Washington. The mandate of the human rights officers is omnivorous: to scoop up as much credible information on human rights issues as is feasible from a wide variety of sources — such as person-to-person contacts, local and international human rights organizations, reports and statistics from human rights ombudsmen and other official bodies, judicial proceedings, the press, whistle blowers, and the Embassy’s range of bilateral and diplomatic relationships.

        During my decades of work on behalf of victims of human rights violations, I have made it a regular practice to meet with the human rights officers (among others) in US Embassies in the countries where I work, to inform them of any information and views my clients and I may have on local human rights issues. It is at least implicit, and often explicit, that I am asking the Embassy officials to take the information I provide into account for purposes of their annual human rights report on the country.

        This is hardly unusual. Many local and international human rights NGO’s and lawyers follow the same practice. In my experience it is routinely welcomed by Embassy human rights officers, who are eager to become as well-informed as possible. If they meet with human rights advocates, they and other Embassy officials also meet with representatives of the host State government, who generally present a quite different perspective.

        Less of this advocacy takes place in Washington, simply because Washington is less accessible to foreign human rights victims and their advocates. But I have certainly been in touch in a similar way with State Department country and regional desk officers in Washington over the years, and it is standard practice for human rights delegations visiting Washington to meet with the relevant desk officers.

        In this context, I am puzzled by your source’s surprise. Given the nature of the information-gathering process for these reports, it seems hardly surprising that Chevron, too, would seek to have input on a major issue affecting the company.

        As for public disclosure, much of what is reported to the State Department should remain confidential. Imagine, for example, information provided by an Iranian or Zimbabwean dissident or whistle-blower about human rights abuses by the regimes in those countries. Identifying the source of such information could well prove fatal.

        Other sources need no confidentiality. The documents released to you by the State Department about the information provided by Chevron, for example, were properly deemed not to be within the scope of any exception to the Freedom of Information Act. (The Department’s deliberations on that information, however, were claimed to fall within a separate FOIA exemption.)

        As for reliability, in the 1970s and 1980s the State Department reports were often criticized as politically biased in favor of US friends and against US enemies in the Cold War and otherwise. However, the State Department responded to such critiques over time by making strenuous efforts, through multiple levels of review, to apply uniform criteria in an objective manner in order to produce reliable reports. While no such effort can be entirely free of subjective judgments, in my experience the State Department reports of the last 20 years are generally highly reliable. They draw on a multiplicity of sources, they go through several layers of review within the government each year, they are made public and are widely commented upon and critiqued from all sides, and the reports for a given year usually begin with the prior year’s report and focus on any new or changed factors. Their accuracy is aided by their generality; except for carefully worded mentions of specific cases and statistics attributed to public record sources, they are usually designed to give only a highly general, qualitative assessment, which is much easier to justify than would be a greater level of specificity.

        Finally, you ask whether a litigant who relies on a report should disclose that the litigant lobbied the State Department in regard to that report, and perhaps should even be barred from such reliance, whether or not the lobbying is disclosed. Imposing a disclosure requirement generally would expose some litigants to unacceptable risk; China and other repressive regimes, for example, might treat any citizen who provides information to the State Department as guilty of the criminal offense of divulging “state secrets”; other countries, such as Thailand, would treat any criticism of the monarch or the head of state as the crime of lese majeste or criminal contempt (e.g., “desacato” in Spanish-speaking countries) of the head of state.

        On the other hand, a company like Chevron could disclose its lobbying without, in most cases, posing serious risks. But then the implementation question arises: how would one administer a disclosure requirement that applies only to some, but not to all litigants? (Even applying for an exemption from disclosure might arouse suspicion from a repressive regime.)

        Without being definitive, my initial inclination is that a lobbying disclosure requirement in this arena is unnecessary and unworkable. Judges and other outside observers are best advised, in my view, to take the State Department reports as the considered view of the Department, arrived at after hearing diverse views, and to weigh them in the balance with other sources of information, such as NGO reports and expert opinions, in assessing any issue to which the State Department reports may be relevant. In so doing, outside users of these reports should be aware that the drafters receive information from a wide variety of sources, and that these may, directly or indirectly, include litigants before a court, or other sources sympathetic to one side or the other in a contested dispute.

        Reply
        1. Ted Folkman

          Doug, I don’t really know how common such lobbying by business interests is (remember that my request was limited to lobbying by businesses and by members of Congress—I should have made it broader). I will say that my FOIA experience suggests that it is not common at all—I understand that a few weeks ago, after doing its searches, the Department of State was prepared to say that it had no documents responsive to my request, so it seems clear to me that this kind of lobbying isn’t routine. I don’t want to get into my discussions with counsel for the government, but I will say that at the government’s request, I significantly reduced the scope of my FOIA request, so that it won’t be possible to get a real sense of the frequency of lobbying after the government produces what it is going to produce, which was one of my original goals.

          Regarding lobbying disclosures: my point isn’t really that this kind of lobbying should be disclosed. Instead, it’s that since this kind of lobbying is not disclosed, we need to be careful how we use the reports. In particular, it seems reasonable to me to require a litigant that has lobbied the State Department on these reports and then uses the reports in court should have to disclose the fact of the lobbying to the court.

          Reply
    2. Ted Folkman

      I should add that in terms of judging the accuracy of the information the parties presented to the State Department, I don’t think we’re really in a position to judge that question with regard to Chevron, because we don’t know what was said at the meeting I write about. I have asked Chevron for comment on this and would be very interested to know what claims Chevron’s lobbyists laid out and what changes to the language of the report they sought.

      Reply
  3. Luke Peterson

    Ted,

    Kudos for this interesting line of inquiry.

    Apart from having been cited in proceedings before Judge Kaplan, State Department Human Rights Reports have also been discussed in the earlier BIT arbitration (the so-called commercial claims case) that was viewed by some as a dry-run for the current higher-stakes BIT arbitration between Chevron & TexPet vs Ecuador.

    Paragraph 287 of the March 30, 2010 Partial Award on the Merits in that earlier arbitration reads as follows:

    “The Claimants also present evidence from observers and academics. According to the Claimants, the U.S. State Department’s Human Rights Reports and Investment Climate Statements have grown increasingly critical of the Ecuadorian judiciary’s susceptibility to corruption and outside pressures.”

    The award itself is here: http://www.italaw.com/sites/default/files/case-documents/ita0151.pdf

    On a different note, the term “radical rump” is a wonderful euphemism.

    Cheers
    Luke Peterson

    Reply
    1. Ted Folkman

      Thanks Luke! That is quite interesting. If I had the time, I would like to track the changes in the report over time, track Chevron’s submissions to various courts and tribunals mentioning it over time, and track the use the courts and tribunals make of the report. We’ll see if my day job permits me to take that project on.

      Reply
  4. David

    It is interesting as an Ecuadorian to hear others mention about the corruption of the Ecuadorian Judiciary. What is the difference, in the USA it is called the adversarial system. This means that there is no regard for the truth or the facts because the outcome depends on the deep pockets of the litigants, which includes lobbying and influence. As far as the facts go, President Correa has invited you all to go down there and verify the facts. Please understand that this is a human tragedy, over a thousand people have died of cancer and the pits are still there open and untreated. Also, the current government would not side with Chevron like past bribe-taking politicians have done, because again, the truth can be purchased.

    Reply
    1. Ted Folkman

      David, thank you for commenting. I think your comment is a good reminder of the importance of comity: when the courts of one country are seen to sit in judgment on the courts of another country, tensions between the two countries can arise,and so the default should be to respect a foreign country’s judgments.

      Reply
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