Chevron Says Ecuador Environmental Claims Now in Question

A consulting firm whose work helped lead to a $19 billion award against Chevron Corp for rainforest pollution in Ecuador has disavowed environmental claims used by local residents to obtain the 2011 court judgment, court documents show.

Chevron on Friday released affidavits from two officials at Stratus Consulting Inc saying they believed damages assessments used against the oil company were “tainted.” Those assessments relied in part on the consulting firm’s work.

The affidavits were released in connection with Chevron’s settlement on Thursday of fraud and racketeering claims against the firm and the two officials.

“I disavow any and all findings and conclusions in all of my reports and testimony on the Ecuador Project,” Stratus Executive Vice President Douglas Beltman and managing scientist Ann Maest wrote in the affidavits, referring to their work related to the rainforest case.

Chevron is involved in acrimonious litigation stemming from claims that Texaco, which the San Ramon, California-based company bought in 2001, polluted the Amazon jungle between 1964 and 1992, damaging the health of area residents.

The so-called Lago Agrio plaintiffs who won the $19 billion judgment from an Ecuador court are trying to enforce it in other countries where Chevron does business.

Chevron has called the judgment a fraud. It said the Stratus affidavits show that a supposedly independent report used to obtain the judgment was engineered by Steven Donziger, a Harvard-educated lawyer who has for 20 years represented the Ecuador plaintiffs.

The second-largest U.S. oil company is still pursuing similar claims in a lawsuit against Donziger and two representatives for the Lago Agrio plaintiffs, Hugo Gerardo Camacho Naranjo and Javier Piaguaje Payaguaje.

U.S. District Judge Lewis Kaplan in Manhattan is overseeing that case and most related U.S. litigation.

The affidavits surfaced in the New York litigation, and it is unclear how they might affect the Lago Agrio plaintiffs’ ability to enforce the $19 billion Ecuador judgment.

The ongoing legal saga has also been filled with allegations of misconduct by lawyers, and even judges.

Ecuadorean judge Nicolas Zambrano, in a March 28 affidavit, denied allegations by a colleague that he had been bribed to issue the original judgment in 2011.

The settlement with Stratus prevents the Boulder, Colorado-based firm from making public statements about the Ecuador case, and imposes a 20-year ban on Beltman and Maest from involvement in cases adverse to Chevron’s interests.

Both sides also agreed to remove critical statements about the other from their websites and blogs. No money changed hands, according to the terms of the settlement, which was filed in Manhattan federal court.

Craig Smyser, a lawyer for the Lago Agrio representatives, accused Chevron of “using financial bullying” on a “heretofore reputable” environmental consulting firm to win the settlement.

“I took Doug Beltman’s deposition myself in 2011, and he swore to me under oath that the science Stratus did was sound,” Smyser said in a phone interview.

Stuart Krause, a lawyer for Stratus, said: “There was no coercive aspect to this settlement. Mr. Beltman and Ms. Maest have always testified truthfully, and any analysis of their declarations will find nothing that anyone could fairly characterize as untruthful or perjurious.”

Chevron spokesman Kent Robertson said “Stratus came to us … several months ago” with its concerns, which ended with its conclusion that “it was used by Donziger and the Lago Agrio plaintiffs in perpetrating a fraud.”

John Keker, a lawyer for Donziger, did not immediately respond to a request for comment.

In his affidavit, Beltman said that his firm drafted parts of the report submitted by supposedly independent expert Richard Cabrera, but kept its role secret at Donziger’s direction.

Beltman and Maest also outlined several instances in which they said evidence to support the damages award was unreliable.

On April 16, Kaplan will begin hearing a few days of testimony on whether to sanction Donziger and the Lago Agrio representatives for failing to turn over evidence that Chevron wants.

The case is Chevron Corp v. Donziger et al, U.S. District Court, Southern District of New York, No. 11-00691.