Chevron Accused of Filing Misleading Information to Downplay $27 Billion Liability

Representatives for 30,000 rainforest residents have accused Chevron of distorting information in its public filings and misleading the Securities and Exchange Commission (SEC) to downplay its potential liability in an environmental lawsuit in Ecuador. The plaintiffs' lawyers claim that Chevron's information is dishonest and misleading, and that the company is deceiving shareholders and the financial markets.

Key Takeaways:

• Chevron's November 10-Q filing with the SEC includes four easily proved false assertions, including claims that the Ecuador court lacks jurisdiction over the company, the lawsuit is barred by the statute of limitations, and the company was "released" from liability by Ecuador's government.
• The plaintiffs' lawyers point out that Texaco stipulated to jurisdiction in Ecuador in 2002, waived all defenses based on the statute of limitations, and that the language of the purported release excludes the claims of private individuals bringing the lawsuit.
• Chevron also fails to disclose that two of its lawyers are under indictment in Ecuador for lying to secure the release, and tries to diminish the court expert, Richard Cabrera, by calling him a "mining engineer" despite his being a respected environmental scientist and university professor.
• The plaintiffs' lawyers point out that Chevron's 10-Q also says it cannot estimate a possible loss in the case, despite the expert report identifying specific damage amounts in 4,000 pages of data that includes 64,000 chemical sampling results from dozens of oil production sites.
• The lawsuit was originally filed in 1993 in U.S. federal court and has seen a series of setbacks for Chevron, including a trial court denial of its motion to dismiss the case, an indictment of two Chevron lawyers and seven former government officials for lying about the purported clean-up, and a U.S. federal judge's denial of Chevron's attempt to force Ecuador's government into a binding arbitration.
• The plaintiffs' lawyers are providing the SEC with more detailed information from the court record documenting Chevron's deception.

Statistics:

• 30,000 rainforest residents are represented by the plaintiffs' lawyers
• 18 billion gallons of toxic waste water were dumped into Ecuador's Amazon waterways by Texaco from 1964 to 1990
• 1,041 cancer deaths in an area the size of Rhode Island could be attributed to Texaco's sub-standard operational practices, according to the Cabrera report
• $27 billion is the potential liability cited in the Cabrera report, based on 4,000 pages of data with 64,000 chemical sampling results
• 1993 is the year the lawsuit was originally filed in U.S. federal court
• 2001 is the year Chevron bought Texaco

Sources:

• Fajardo, Pablo. Statement on Chevron's 10-Q filing with the SEC.
• Amazon Defense Coalition. Press release on Chevron's deception.
• CNN. "Hero Award" winner profile on Pablo Fajardo.