Stacking the Deck Against Chevron in Ecuadoran Lawsuit
Richard Cabrera, author of a report upon which a 16-year-old $27 billion lawsuit against Chevron Corporation in Ecuador is based, was the subject of a court filing recently in Lago Agrio, Ecuador. It seems that officials at the oil giant based in San Ramon, California, found new "dirt" on the Ecuadoran businessman.
Newly discovered information revealed by Chevron shows Cabrera -- the man hired as an "independent expert" by plaintiffs' lawyers to perform inspection work in what could turn out to be the largest legal judgment in history -- is the majority owner of an oilfield remediation company that stands to gain financially from any judgment against Chevron. Due to the remediation company's relationship with Ecuador's state-owned oil company, Petroecuador, Chevron called upon the court to immediately reject the work of Cabrera on the grounds that he knowingly hid his relationship and stands to gain from what was supposed to be unbiased work for the court.
Cabrera's recommendations and independence were already compromised prior to the discovery of his conflict of interests:
• The Amazon Defense Coalition (ADC), the named financial beneficiary of the lawsuit, directly and improperly paid Cabrera more than $200,000 for his work.
• Sections of Cabrera's $27 billion claim are copied word-for-word from documents written by Amazon Defense Front lawyers.
• Photographs and video show representatives of the ADC conducting Cabrera's field work as well as preparing soil and water samples for Cabrera, who had promised to carry out his work independently.
• Nearly 90 percent of Cabrera's $27 billion figure is allocated to issues that he was not directed to examine and that are unrelated to the actual claims in the Ecuador lawsuit.
• Cabrera assessed more than $9 billion as compensation for cancer deaths without providing any medical evidence, or even the name of a single alleged victim or family member beneficiary to support his recommendation.
• Cabrera recommends Chevron pay more than $8.4 billion for what he deems "unjust enrichment," despite the fact that Texaco Petroleum -- merged with Chevron in 2001 -- earned less than $500 million in profits during the life of the consortium while the government of Ecuador received in excess of $24 billion, more than ninety percent of the total revenue generated by the consortium. Moreover, there is no basis in Ecuadorian law for such an award.
• Cabrera assessed $3.2 billion for groundwater remediation and $428 million to improve potable water systems even though he did not take any samples from streams, rivers, municipal water sources or drinking water wells, and states in his own report that he did not have enough data to develop a groundwater remediation plan.
• Cabrera recommends more than $2.7 billion for pit remediation, averaging more than $3 million per pit. This figure is vastly inflated compared to the actual cost of $85,000 per pit for Petroecuador's recent remediation work that has been implemented to the full satisfaction of the government. Proper remediation, therefore, of every pit that Petroecuador is obligated to clean up would cost well under $100,000,000.
• Cabrera claims $1.7 billion in damages for oil infrastructure sites that have been in constant use by Petroecuador for nearly two decades and substantially expanded by Petroecuador since Texaco Petroleum's departure in 1992.
• Cabrera assessed more than $1 billion in soil remediation for sites he never visited.