VZCZCXYZ0000
RR RUEHWEB

DE RUEHQT #0860/01 2532225
ZNR UUUUU ZZH
R 102224Z SEP 09
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC 0014
INFO RUEHBO/AMEMBASSY BOGOTA 0002
RUEHCV/AMEMBASSY CARACAS 0002
RUEHGL/AMCONSUL GUAYAQUIL 0006
RUEHPE/AMEMBASSY LIMA 0002

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