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Chevron Statement on Ecuador Court Filings

SAN RAMON, Calif., September. 17, 2010 -Yesterday, Chevron Corp. (NYSE: CVX) submitted expert testimony from leading scientists to the Provincial Court of Sucumbíos in Lago Agrio, Ecuador demonstrating that there is no evidentiary basis for the lawsuit against the company.  Chevron also has renewed its motion for dismissal of the case because there is no evidence of liability and because there is overwhelming proof of fraud on the part of the plaintiffs' lawyers.

In response to a parallel filing by the plaintiffs' lawyers, the company issued the following statement:

"Numerous Federal Courts in the United States have stated that the trial in Ecuador is marred by fraud and misconduct.  The views of these Courts speak for themselves.  Chevron views the latest filing by the plaintiffs' lawyers as a continuation of a strategy to commit fraud."

Key Excerpts from U.S. Courts Follow

Over the last several months, Federal Courts throughout the United States have authorized discovery producing an overwhelming record of misconduct on the part of the Lago Agrio plaintiffs' lawyers.  The evidence, in the form of film outtakes from the movie Crude, sworn deposition testimony from the plaintiffs' own consultants, and documents produced through discovery has led United States Federal Judges and Magistrates to declare that the trial in Ecuador has been marred by fraud that goes to the heart of the case:

A Magistrate in New Mexico wrote, "The release of many hours of the outtakes has sent shockwaves through the nation's legal communities, primarily because the footage shows, with unflattering frankness, inappropriate, unethical and perhaps illegal conduct. In the film itself, Attorney Donziger brags of his ex parte contacts with the Ecuadorian judge, confessing that he would never be allowed to do such things in the United States, but, in Ecuador, everyone plays dirty. The outtakes support, in large part, [Chevron's] contentions of corruption in the judicial process. They show how non-governmental organizations, labor organizations, community groups and others were organized by the Lago Agrio attorneys to place pressure on the new Ecuadorian government to push for a specific outcome in the litigation, and how the Ecuadorian government intervened in ongoing litigation."

Subsequently, the Magistrate wrote that, "The undersigned viewed those outtakes and finds that they are sufficient to establish a prima facie case of attempted fraudulent activity by attorney Donziger, including directing Respondents to 'extrapolate' scientific evidence that does not exist, and having a purportedly neutral expert sign his name to a report that was actually prepared by Plaintiffs' attorneys and experts without Chevron's knowledge."

A Magistrate in North Carolina wrote, "While this court is unfamiliar with the practices of the Ecuadorian judicial system, the court must believe that the concept of fraud is universal, and that what has blatantly occurred in this matter would in fact be considered fraud by any court. If such conduct does not amount to fraud in a particular country, then that country has larger problems than an oil spill."

In New Jersey, a Judge stated that, "The provision of materials and information by consultants on the litigation team of the Lago Agrio plaintiffs in what appears to be a secret and an undisclosed aid of a supposedly neutral court-appointed expert in this Court's view constitutes a prima facie demonstration of a fraud on the tribunal."

In California, a Magistrate stated that, "I feel that the crime fraud exception is implicated by the ghost writing that was done. The two orders from the Ecuadorian tribunal were very clear that Mr. Cabrera was to give to the Court his independent intellectual work, and while he may adopt certain findings and conclusions of other experts, that adoption may occur only after he has independently assessed the integrity and validity of those findings and conclusions and notified the Court of such adoption, the reason for his adoption, and the process by which he came to the conclusion that such adoption was consistent with his own duties to the Court.

"It appears that Mr. Cabrera has failed to do that, implicating the crime fraud exception, and Chevron has a right to explore whether there has indeed been a violation of the -- whether indeed the crime fraud exception is implicated as directly as the evidence suggests it has been."

Subsequently, a Judge in California ruled that "The Court is persuaded by the reasons explained by Magistrate Judge McCurine as well as other U.S. courts who have addressed the issue, that the crime-fraud exception applies. There is ample evidence in the record that the Ecuadorian Plaintiffs secretly provided information to Mr. Cabrera, who was supposedly a neutral court-appointed expert, and colluded with Mr. Cabrera to make it look like the opinions were his own."

Meanwhile, the outtakes from Crude reveal the plaintiffs' lawyers' true damages strategy.  On film, plaintiffs' lawyer Steven Donziger states, "We ask for much more than what we expect. If for example, if we believe three million to clean and we ask for eighteen billion, are they going to regard us as if we're crazy, or will the judge see, 'eh, I can give Texaco about eighty percent of what they want, then I'm going to give them three billion.'  Then, if we ask for eighteen billion...  But as a concept, I ask, do we ask for much more than what we really want as a strategy?  Do we ask for eight and expect three, so that [the judge] says, 'Look, Texaco, I cut down the largest part.'"  It is clear that the plaintiffs' lawyers' latest filing is a continuation of this strategy.

Evidence now before the Lago Agrio court demonstrates that the plaintiffs' lawyers have engaged in fraud through the use of forged testimony, fabricated evidence, intimidation and threats against judges, and collusion with purportedly "impartial" court experts to "jack up" a damages claim that far exceeds the scope of their complaint.  The only reliable evidence in the record exonerates Chevron and Texaco from any liability, showing that Texaco properly performed the agreed remediation of its share of oil sites in Ecuador, and that any remaining remediation in Ecuador is the responsibility of Petroecuador.  Accordingly, Chevron has petitioned the Lago Agrio court to dismiss the lawsuit, and to refer the matter of the plaintiffs' lawyers' fraud to Ecuador's Office of the Public Prosecutor for criminal investigation.

Copies of Chevron's filings and court rulings can be accessed at www.chevron.com/ecuador/background/patternoffraud/

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