Ex-judge says he was bribed by Ecuadorians’ suing Chevron
FORTUNE — Today new allegations of deceit and wrongdoing were leveled against the plaintiffs’ lawyers bringing the already deeply troubled environmental suit against Chevron in Lago Agrio, Ecuador, which stems from Texaco’s oil drilling in the Ecuadorian Amazon between 1964 and 1992. (Texaco was acquired by Chevron in 2001.)
In Manhattan federal district court this morning, Chevron filed the declaration of a former Ecuadorian judge, Alberto Guerra, who describes how he and a second former judge, Nicolás Zambrano, allegedly allowed the plaintiffs lawyers to ghostwrite their entire 188-page, $18.2 billion judgment against Chevron in exchange for a promise of $500,000 from the anticipated recovery.
The bribery charge is completely new, and the ghostwriting charge is more sweeping and better substantiated than before.
Since some readers may be having a hard time keeping all the case’s scandals straight, here’s a précis. Chevron (CVX) has now presented evidence of two distinct, large-scale, ghostwriting frauds which, among other problems, it maintains, taint the Ecuadorian judgment. (Because Chevron has few, if any, assets in Ecuador, the plaintiffs are currently trying to enforce that judgment in Canada, Argentina, and Brazil. The plaintiffs have not tried to enforce their judgment in the U.S., where Chevron is based, evidently calculating that U.S. courts would be too troubled by the fraud accusations.)
The better known of the two alleged ghostwriting scandals—one that U.S. District Judge Lewis Kaplan of Manhattan found in July to have “unquestionably” occurred—involves the plaintiffs’ alleged secret ghostwriting of a crucial report by a court-appointed expert named Richard Cabrera, who made evidentiary findings and damages recommendations to the Ecuadorian court in 2008.
After the plaintiffs’ role in writing the Cabrera report came to light through ancillary litigation Chevron brought in the United States, the Lago Agrio plaintiffs team argued that any alleged Cabrera-related wrongdoing had been rendered irrelevant by Judge Zambrano’s judgment for the plaintiffs in February 2011. In that ruling, the judge claimed to have, in an abundance of caution, disregarded Cabrera’s report, and he purported to rely only on other evidence.
Chevron then countered with new evidence—“mounds” of it, as a Florida federal judge put it last June—of a second, alleged ghostwriting fraud: All or much of Zambrano’s February 2011 judgment itself had been ghostwritten by the plaintiffs lawyers, Chevron maintained. It observed that the judgment incorporated large verbatim passages from at least seven internal plaintiffs’ memoranda that had never been introduced into the court record, as well as faulty data that, likewise, had existed only in the plaintiffs’ internal databases.
With today’s filing, Chevron attempts to further substantiate this second ghostwriting accusation, while adding a new bribery allegation as well.
Even so, its new evidence is vulnerable to counterattack. While Guerra swears that he is receiving no compensation for his testimony, he admits that Chevron has paid him $38,000 to compensate him for the value of the physical evidence he has turned over corroborating his account, including the documents and forensic evidence stored on his computers, cellphones, thumb drives, and bank account records. Chevron also admits that it has committed to protect Guerra’s security, which has already included helping him and four family members leave Ecuador and take up residence in the United States.
In an interview, Chevron spokesman Kent Robertson acknowledges also that Chevron has made 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.
In a preemptive press release issued by Lago Agrio plaintiffs spokesperson Karen Hinton last Monday, the plaintiffs team warned that Guerra was about to file a declaration and that whatever it would say would be false and tainted by the payments Chevron had offered him. Hinton’s complete statements can be found on the Amazon Defense Coalition’s web site at ChevronToxico.com.
Guerra’s extremely depressing story goes like this: In 1998 he became a judge on the Provincial Court of Sucumbíos, the province where the Lago Agrio case was filed in 2003. Judge Guerra presided over the case for its first seven months, until a different judge rotated into that position, as was the routine.
Five years later, however, in May 2008, Guerra was dismissed as a judge by the Judiciary Council for having allegedly disparaged in conversation the validity of the plaintiffs’ case against Chevron.
Three months later, Zambrano was appointed a judge of the Provincial Court of Sucumbíos. Guerra knew Zambrano from when Zambrano had been a prosecutor who had appeared before him. While Zambrano knew criminal procedure well, according to Guerra’s affidavit, he was less sure-footed with civil procedure. They worked out an illegal agreement whereby Guerra would ghostwrite Zambrano’s writs and rulings in civil cases in exchange for $1,000 per month. In October 2009, when Zambrano rotated into presiding over the Chevron case, Guerra ghostwrote Zambrano’s rulings in that case, too. (As part of today’s filing, Chevron has submitted the contents of 11 computer files found on Guerra’s computers which contain rulings—about 300 pages worth—that were eventually issued verbatim under Zambrano’s signature in the Chevron case. The company’s lawyers at Gibson Dunn & Crutcher have also submitted computer metadata that, according to their forensic experts, verify that the files were, in each instance, generated on Guerra’s computer shortly before their issuance.)
At some point, Guerra says, Zambrano authorized him to approach Chevron, through its local attorneys in Ecuador, to try to solicit a bribe to rule in Chevron’s favor. They approached Chevron, he explains in the affidavit, because they assumed it had more money to spend than the plaintiffs.
Chevron’s local attorneys refused to meet with Guerra, however. Guerra then turned to the plaintiffs, he continues, and worked out an agreement whereby they would pay Guerra $1,000 per month in exchange for moving the case along at a brisk pace and generally ruling in plaintiff’s favor on procedural motions. The final agreement was reached, Guerra recounts, at a Quito restaurant called the Honey & Honey, where Guerra met with plaintiffs lead U.S. lawyer Steve Donziger, lead Ecuadorian lawyer Pablo Fajardo, and Luis Yanza, a leader of Los Afectados, a group representing the clients.
“During this meeting,” Guerra writes, “Mr. Donziger thanked me for my work as ghostwriter in this case and for helping steer the case in favor of the Plaintiffs.”
In 2009 Zambrano rotated off the Chevron case, but in August 2010 he took it over again. By then the trial was in the endgame. Zambrano had Guerra make a second approach to Chevron, sending a go-between to talk to Chevron’s local counsel to solicit a bribe. Again, however, Chevron’s local counsel refused to meet.
Guerra then approached the plaintiffs team, again, he recounts. At a second meeting at the Honey & Honey—again, with Donziger, Fajardo, and Yanza—an agreement was struck under which Guerra and Zambrano would let the plaintiffs lawyers write the final judgment in exchange for their promise to pay Zambrano and Guerra $500,000 from the eventual recovery.
In late January or early February 2011 Zambrano gave Guerra a draft of the opinion which, Zambrano told him, had been written by the plaintiffs. “Mr. Zambrano asked me to work on the document to fine-tune and polish it,” Guerra writes.
“Overall, I made very few changes to this document—mostly word changes due to personal preference,” he continues. “Based on what Mr. Zambrano told me, “the Plaintiffs’ attorneys made changes to the judgment up to the very last minute before it was published.”
In February 2012, about a year after the opinion had been issued, Zambrano was himself dismissed as a judge by the Judiciary Council for having inappropriately granted a narcotics defendant bail, allowing him to abscond. That April, Guerra says, Zambrano “authorized me to begin talks with Chevron’s representatives to reveal the truth regarding the drafting of the judgment in the Chevron case. However, since these talks with Chevron’s representatives began, Mr. Zambrano has had a change of heart for reasons he has not fully explained to me, and now says he is not willing to cooperate with Chevron and to reveal the truth.”