Chevron Tapes Backlash

UNCLAS QUITO 000860 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: ECON EINV EPET EC SUBJECT: Chevron Tapes Backlash REF: 09 QUITO 795 Summary -------------- ¶1. (SBU) Several Ecuadorian legal bodies have launched investigations into aspects of the allegations of corruption made by Chevron with the August 31 release of clandestinely recorded videotapes implicating the presiding judge in its multi-billion dollar environmental lawsuit, as well as people affiliated with the government and ruling party (reftel). Ecuador's Attorney General has promised to conduct a full and thorough investigation into the bribery charges and has received evidence from Chevron. However, Chevron opponents have been vociferous in their claims that the company manufactured the tapes to disrupt the lawsuit before a negative ruling could be rendered. Ecuador's Prosecutor General has called on the Attorney General to initiate proceedings against Chevron in the United States, presumably for violations under the Foreign Corrupt Practices Act. A new judge has been assigned to the environmental lawsuit, after the presiding judging recused himself on the urging of Ecuador's Prosecutor General. Although the new judge will require some time to read the case material, the lawsuit is expected to continue without significant delay. End Summary. Those Implicated -------------- ¶2. (SBU) In the week following Chevron's release of videotapes exposing an alleged bribery scheme linked to the upcoming ruling in its environmental lawsuit in Ecuador, those implicated in the scheme scrambled to deny involvement and distance themselves from the potential scandal. Notable among those implicated were President Correa's Legal Secretary, Alexis Mera, and sister, Pierina Correa. Both were mentioned in the taped conversations, but neither were filmed participating in any of the meetings. Mera and Pierina forcefully denied any involvement in the lawsuit and the scheme, and claimed that Chevron's release of the tapes was an attempt to discredit Ecuador's legal system and damage President Correa. See reftel for details regarding Chevron's allegations. ¶3. (SBU) So far, President Correa has refrained from commenting on Chevron's disclosure, while his political party Alianza Pais (AP) has denied any affiliation with those identified on the tapes. Chevron's transcripts identify those purporting to have GoE or AP links as: Carlos Patricio Garcia Ortega, Aulo Gelio Servio Tulio Avila Cartagena, Pablo Almeida, Ruben Dario Miranda Martinez, Diego Fernando Borja Sanchez, and Juan Pablo Novoa Velasco. According to press reports, Carlos Patricio Garcia Ortega was political coordinator of AP when it was first formed in 2006 and Ruben Dario Miranda Martinez was his assistant. The Prosecutor General was scheduled to take statements from Judge Juan Nunez and Patricio Garcia on September 9; Aulio Gelio Servio Tulio Avila Cartagena and Pablo Noboa on September 10; and Ruben Miranda on September 11. Attorney General Launches Investigation -------------- -------------- ¶4. (U) On September 2, Ecuador's Attorney General, Diego Garcia Carrion, announced that his office had initiated an investigation into Chevron's allegations and requested that the Office of the Prosecutor General and the Judicial Council also open investigations, which they did subsequently. In a letter to Chevron dated the same day, Deputy Attorney General Rafael Parreno reiterated the Attorney General's intention to "thoroughly, aggressively and fairly investigate Chevron's allegations" and asked that Chevron provide: unedited copies of the videotapes; a copy of the wiring instructions allegedly sent by Patricio Garcia through Ruben Miranda to the contractors taping the conversations; and any other evidence Chevron wanted to have considered. Chevron Response -------------- ¶5. (U) Chevron responded in writing to Parreno's letter on September 4, and according to its website, on September 7 delivered to the Deputy Attorney General a DVD containing unedited copies of all the recordings, transcripts and highlight videos, as well as payment instruction emails from Miranda and Patricio Garcia. In its letter, Chevron requested that the Prosecutor General, Washington Pesantez, investigate: 1) the individuals in the tapes and their relationship with the judge and the executive branch; 2) the assertion that the government had provided lawyers to help craft the opinion against Chevron; 3) the bank account where the bribery money was to be deposited; and 4) the relationship between Judge Nunez and Richard Cabrera, the court appointed expert in the lawsuit. Prosecutor General Goes After Chevron -------------- -------------- ¶6. (SBU) On September 4, Chevron declined a request it had received via email from Dr. Cevallos, Acting General Secretary of the Office of the Prosecutor General, for Thomas Cullen, Chevron Counsel, to make a statement in Quito on Monday, September 7. However, it reiterated its willingness to cooperate with a good faith investigation and to provide the materials it was sending to the Deputy Attorney General. On September 9, press reports revealed Prosecutor General Pesantez had asked the Attorney General to initiate action in the United States against Chevron, presumably under the Foreign Corrupt Practices Act. In public statements, Pesantez argued that Chevron had been involved in acts punishable under U.S. anti-corruption laws, linking the company with the former contractor, who had clandestinely recorded the tapes, and purported efforts by that contractor to bribe the presiding judge in its lawsuit. Secretary of Transparency, Esteban Rubio, has also publicly supported legal action against Chevron on corruption charges. New Judge -------------- ¶7. (SBU) The first casualty of Chevron's disclosures was Judge Juan Nunez, who had presided over the Chevron lawsuit in the Court of Sucumbios in Lago Agrio. At the urging of General Prosecutor Pesantez, Nunez recused himself from the case on September 4. However, in comments to the press the same day, Pesantez expressed confidence in Nunez' honesty and explained that he had sought the recusal to avoid providing Chevron with any pretext to discredit the Ecuadorian legal system or delay the lawsuit, which has already been pending since 1993, and avoid payment of the sentence in the lawsuit - seemingly presupposing a ruling against Chevron. The Trial Goes On... -------------- ¶8. (SBU) According to press reports, Nicolas Zambrano, Alternate President of the Sucumbios Court, has been designated to replace Judge Nunez in the Chevron lawsuit. Ecuadorian legal experts consulted by Post explain that when a judge is recused in a civil case, a new judge is appointed and the legal process continues without interruption. For the time being, the expectation is that the investigations launched by the Attorney General, Prosecutor General, and the Judicial Council will proceed on separate tracks thereby having no impact on the Chevron lawsuit. The Plaintiffs -------------- ¶9. (U) Plaintiffs in the case, the Front for the Defense of the Amazon, accuse Chevron of shamefully, and perhaps illegally, manufacturing the tapes to disrupt the landmark environmental case against it. The Front, which represents around 30,000 individuals from the Siona, Secoya, Cofan, Huaorani and Quichua communities, has also threatened to start legal action against Chevron in the United States on corruption charges. Comment -------------- ¶10. (SBU) Investigations notwithstanding, the GoE seems intent on limiting, to the extent possible, the impact Chevron's disclosures will have on the timing and outcome of the pending environmental lawsuit. A ruling in the case was expected between October 2009 and January 2010. If there is a ruling against Chevron it could result in the largest damages award ever handed down in an environmental case; a court appointed expert had assessed damages of up to $27.3 billion. HODGES