Chevron ‘Operative’ Loses Bid to Quash Ecuador’s Subpoena

(CN) - An Ecuadorean man who worked with Chevron to discredit a multibillion trial the oil giant faced in Ecuador must comply with a subpoena issued by the South American nation, a magistrate judge in San Francisco ruled. Friday morning, Chevron released a translation of last week's ruling from the court in Lago Agrio, Ecuador. The decision orders Chevron to pay $18.2 billion in damages, or about $9.5 billion if it issues a "public apology" within the next few days, according to Chevron.

Chevron has been embroiled in litigation over oil-drilling damage pervasive in the Ecuador for about a decade, and the recently concluded Lago Agrio lawsuit was filed in 2003. It was drawn into the decades-long dispute over environmental damage in 2001 with the acquisition of Texaco, which had drilled in Ecuador since the 1960s and settled the country's damage claims in a 1995 agreement under which it paid $40 million. Unfortunately for Chevron, the claims did not die there.

As an adverse judgment against the oil company seemed likely over the last year, Chevron mounted a campaign to discredit the pending verdict. The company claims the Lago Agrio justice system is corrupt, and that the judiciary conspired with the Ecuadorean natives and country's elected officials to extort a big payout. It further claims that any environmental damage was caused by Ecuador's state-owned oil company after Texaco pulled out of the country.

To bolster those corruption claims, Chevron has released video of a supposedly independent, court-appointed expert meeting with the Ecuadoreans' attorneys ex parte. Another video depicts the judge who presided over the Lago Agrio case allegedly taking bribes. The allegedly corrupt Ecuadorean judge, Juan Nunez, recused himself following release of the tapes. Nunez's successor awarded a multibillion-dollar verdict to the Ecuadorean plaintiffs on Feb. 14.

The Ecuadorians say Diego Borja, whom they call a Chevron "operative," recorded the videos and edited them to make them appear damaging. Their attorneys have sought discovery in San Francisco to expose Borja's alleged "dirty tricks" campaign, noting that such discovery would help in undermining Chevron's promise to appeal.

U.S. Magistrate Judge Edward Chen originally granted the Ecuador government permission to subpoena Borja on Sept. 15, 2010, but Borja refused for months to comply for fear that Ecuador would use the documents to try to prosecute him criminally.

Chen ruled Tuesday that Borja must turn over requested documents within a week and submit to three days of depositions before March 21.

Chevron continues to maintain that Nunez was bribed and says the deposition is an attempt to attack Borja for bringing the corruption to light.

"After learning of the $3 million bribery scheme involving the judge presiding over the Lago Agrio trial, Chevron delivered the evidence to authorities in the U.S. and Ecuador," a Chevron spokesman said in an e-mail. "The government of Ecuador has done nothing to address the misconduct of one of its judges and it seems the government remains more interested in persecuting Mr. Borja than addressing corruption in its courts."

The Ecuadorean plaintiffs' legal brief indicates that they believe the discovery will be fruitful.

"As shown on the videotapes, Mr. Borja participated in the meetings that form the basis of Chevron's false allegations," the brief states. "As a direct participant, Mr. Borja is substantially likely to have material evidence related to the meetings with the Ecuadorian judge and other alleged Ecuadorian officials, as well as any involvement in and knowledge of Chevron regarding these meetings."

Meanwhile in Manhattan, a federal judge is still weighing Chevron's request for an injunction that would block enforcement of the Lago Agrio court's judgment. Chevron submitted evidence to that court that the verdict is tainted by fraud. The company is also suing dozens of people and entities associated with the case for violating anti-racketeering laws, and it is pursuing international arbitration against Ecuador.

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