Chevron wins again in Ecuador case as moneyman recants

March 2, 2015
With another triumph in its long battle against litigious gold-digging involving Ecuador, Chevron Corp. again demonstrates the goodness of corporate resolve.

With another triumph in its long battle against litigious gold-digging involving Ecuador, Chevron Corp. again demonstrates the goodness of corporate resolve.

The rest of the oil industry should take note and be grateful.

The company this month reached a settlement agreement in Gibraltar with a leading investor in the long legal siege against it.

The moneyman, James Russell Leon, had provided $23 million to help fund environmental litigation against Chevron in exchange for 7% of the judgment.

A tiny court in Lago Agrio, Ecuador, ruled in 2011 that Chevron should pay $18 billion for damage related to oil production along the Amazon River. The number later was reduced to $9.5 billion.

In March 2014, a US district court ruled the judgment fraudulent and unenforceable and held the activist plaintiffs’ lawyer, Steven Donziger of New York, liable for violations of the Racketeer Influenced and Corrupt Organizations Act.

After agreeing to withdraw his support and assign his interest in the litigation to Chevron in exchange for release of claims, Leon issued a statement saying he started funding the litigation in March 2007 “in the good faith belief that I was supporting a worthy cause.”

Now, he said, “I have concluded that representatives of the Lago Agrio plaintiffs, including Steven Donziger, misled me about important facts. If I had known these facts, I would not have funded the litigation.”

The facts always have been clear. Chevron never worked in Ecuador. Texaco, which it acquired in 2001, did work there but left in 1992 after spending $40 million for its share of environmental remediation and receiving an official release from liability.

Chevron insists state-owned Petroecuador, which took over the consortium of which Texaco had been part in 1990, created the environmental problems.

Even more revealing than hyperbolic environmental allegations is the original damage claim: $27 billion.

For the start, this case has abused the legal system in a money-raising campaign masquerading as populist environmentalism.

Chevron deserves credit for systematically demolishing it.

(From the subscription area of www.ogj.com, posted Feb. 23, 2015; author’s e-mail: [email protected])