Wednesday, April 24, 2013

Stratus Settlement Results From Chevron's Corporate Thuggery

Below is a post written by Karen Hinton, former U.S. spokesperson for the Ecuadorians suing Chevron for payment of a $19 billion Ecuador judgment for the massive contamination of the Amazon rainforest.

On Oil Disasters: BP Took Responsibility; Chevron Hired Lawyers To Escape Justice 

There’s nothing like watching unadulterated corporate thuggery disguised as respectable lawyering.

Take the case of how Chevron is trying to block enforcement of its $19 billion liability in Ecuador.

When I read the affidavit of my friend Douglas Beltman -- who has been one of the scientists who spoke out against Chevron’s deliberate toxic dumping in Ecuador’s Amazon – I knew his testimony about the pollution and its impact had been coerced by Chevron.

For one, his denial of the contamination was so over the top that only people who stand to benefit from it could believe it, and even they know better.

After almost four years of fighting ruthless attacks, threats and duress at the hands of some of the corporate law firms that Chevron regularly employs, Doug threw in the towel. He also put his integrity on the line by stating, in effect, he had seen no evidence of contamination in Ecuador that could be attributed to Chevron – a statement completely contrary to everything he had said in the past.

By doing so, Doug saved himself and his small Boulder consulting firm, Stratus, from bankruptcy. He saved Stratus from the crushing weight of legal bills that included not only a defense against false fraud charges leveled by Chevron, but also a counterclaim filed by Stratus to try to stop repeated libelous attacks from Chevron lawyers who urged the firm’s clients to abandon it.

Chevron has filed Doug’s affidavit as “evidence” in a legal assault against the Ecuadorians and their lawyers in a U.S. court, where the oil giant is trying to block enforcement of the Ecuador judgment. Seeking almost $60 billion in damages, Chevron agreed to drop fraud charges against Doug and Stratus in exchange for his testimony as part of a settlement agreement.

Doug is a smart, articulate, warm and friendly man who once worked for the U.S. Environmental Protection Agency. Federal agencies such as the U.S. Department of Justice and the U.S. Fish and Wildlife Service have hired Doug for his expertise and his stellar reputation. As the former U.S. spokesperson for the Ecuadorians, I spent long days with Doug and reporters in the hot and sticky Ecuadorian jungle learning about the contamination.

I spent hours with Doug in meetings and on the phone, dissecting documents and reports that detailed how Texaco, later purchased by Chevron, deliberately dumped billions of gallons of pure crude and toxic chemicals into the waterways and soil of the rainforest for one reason only -- to reduce its costs and further inflate its profits. In 2009, during a 60 Minutes segment on the contamination, Doug told the world Chevron treated the rainforest like a “trash heap.”

Today Doug says he got it all wrong. Did he? The facts about the contamination (discussed later) say otherwise.

Simply put, Doug succumbed to Chevron’s pressure campaign:
  • Chevron lobbied the U.S. government to disbar Stratus from obtaining federal contracts, alleging the environmental firm had committed fraud, along with the Ecuadorians and their lawyers. September 2009 emails obtained from court discovery revealed Chevron lawyer Tim Cullen of Jones Day asked for a meeting with Department of Justice lawyers Hank Walther, Mark Mendelsohn and Charles Durros to discuss the fraud. (See emails here- scroll down to second page.) It should come as no surprise to anyone knowledgeable about how business gets done inside the Beltway that Walther is now a lawyer for Jones Day.
  • Chevron lawyer Andrea Neumann of Gibson Dunn lectured Doug during a deposition, reminding him that he and his firm could be disbarred from obtaining any federal contracts.
  • Chevron spent enormous sums of money to produce a slick video and documents maligning Stratus and Doug personally. The video, posted on the internet, accused Stratus of being part of a “criminal conspiracy”. The story was circulated them to federal agencies and companies that had hired or might hire Stratus. Chevron also put the video and materials on its web site and urged reporters to write about Stratus’ “criminal” behavior. As part of the settlement agreement, Chevron removed the materials from its web site.
  • Chevron also lobbied the Oregon Harbor Trustee Council to fire Stratus, preventing the firm from assisting in a cleanup of a toxic site created, in part, by Chevron. The Council members refused to do so because they argued Stratus had not been found guilty of any charges. As part of the settlement with Chevron, Stratus agreed not to work on the second phase of the project.
  • The most recent blow was perhaps the most devastating. Chevron intervened in a litigation between Stratus and its insurance company over payment of legal fees so it could defend itself. Chevron filed an amicus brief, detailing its alleged criminal conspiracy. A Colorado court ruled in favor of the insurance company even though no trial has been conducted to determine the validity of Chevron’s charges. See page 15 of Stratus’ counterclaims.
Stratus described the pressure campaign in its December 2012 counterclaims, four months before the settlement:

“(Chevron has) embarked on an extrajudicial campaign of malicious defamation and deliberate interference with Stratus' business to tortuously destroy Stratus (and the livelihood of its employees) and to prevent Status from being able to successfully defend itself at trial. Chevron’s scheme … consists … of widely and publicly disseminating lurid allegations against Stratus concocted from lies and inappropriate manipulation … (of) evidence; publishing defamatory written statements directly to Stratus’ clients and others, falsely and maliciously telling clients that (courts) have entered conclusive findings confirming Chevron’s allegations …; in direct and indirect communications explicitly and repeatedly requesting that Stratus’ clients fire Stratus or not engage Stratus as a technical consultant….”

No wonder Doug caved.

But, the facts in the record and on the ground reveal the true story:
  • Scarring Ecuador’s rainforest are about 900 Olympic-sized, unlined oil pits full of pure crude and toxic chemicals– all of them built by Texaco only in the 1970s and 1980s. Doug told me that each pit was the equivalent of one U.S. Superfund site (a major environmental disaster) that would cost at least $20 to $40 million each to remediate. In other words, billions of dollars of costs.
    Chevron now says that 900 is an exaggeration, but we know, for a fact, that Texaco drilled 343 well sites during its three decades of oil exploration in Ecuador. We know that Texaco built an average of two to five pits for each well site. Chevron has never produced a master list of its oil pits, but the number of pits comes from a combination of on-site inspections and aerial photographs.
  • Texaco published an ad in an Ecuador newspaper admitting to dumping 16 billion gallons of untreated and scalding-hot production water directly into the streams and rivers that local people use for drinking water and to bathe and cook. Production water is composed of cancer-causing chemicals, such as benzene, toluene, xylene and Polynuclear Aromatic Hydrocarbons (PAHs). It also has a saline content ten times higher than ocean water.
  • Texaco conducted two internal audits in the early 1990s (see here and here) – both part of the massive quantum of evidence against the company -- describing the contamination this way:

    • “No protection of water resources”
    • “Limited environmental protection measurements taken”
    • “Produced water disposed of into the jungle river”
    • “No treatment of wastewater conducted prior to discharge”
    • “Toxic wastes not treated”
    • “No recycling of wastes or waste reduction”
A careful reading of Doug’s affidavit also gives him away.

For example, he says he knows of no groundwater contamination resulting from Texaco’s operations. But Doug and I also discussed that a tight budget prevented the Ecuadorians from gathering many samples of groundwater contamination except under the company’s waste pits. And, as Doug told me on more than one occasion, if the soil is contaminated the groundwater is contaminated.

Most troubling, Doug testified in Chevron’s coerced affidavit that he had seen no evidence of harm to people.

I know that must have been very difficult for him to say. He and I spoke often of the need for a comprehensive plan to deal with the health problems created by Chevron’s contamination in the region – including high rates of cancer as confirmed by independent peer-reviewed health evaluations.

Doug would often counter that in the U.S. we don’t wait for a study to tell us that oil contamination is harmful to people and the environment. We clean it up immediately, as we required BP to do after the Gulf of Mexico spill that created an estimated $60 billion liability for the company.

One difference between the BP disaster and the Chevron disaster is that the British oil company accidentally took the lives of 11 people; the American oil company intentionally used substandard drilling and exploration practices that resulted in illnesses and deaths of untold numbers and the destruction of the environment and a whole way of life for many of the indigenous groups.

The other difference is that BP took responsibility. Chevron, on the other hand, hired lawyers to engage in a pressure campaign to extort testimony and attempt a desperate effort to avoid paying the $19 billion judgment.

With seizure actions filed by the rainforest communities against Chevron assets in three countries – Canada, Brazil, and Argentina – the risk the oil giant faces only continues to grow. In the meantime, a good man named Doug Beltman bites the dust when it comes to calling out environmental injustice.

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Tuesday, April 23, 2013

The Ugly Truth Behind the Burford-Chevron Settlement

It is becoming increasingly clear that Chevron’s so-called “settlement” with Burford Capital, a publicly-traded litigation hedge fund that had helped to finance the historic Ecuador environmental case, is beset by serious ethical problems. Just like the Stratus “settlement” that preceded it, this latest gambit by the oil giant will not diminish in the least its growing risk from the $19 billion adverse judgment.

We already explained the vicious pressure campaign waged by Chevron to extort a settlement from Stratus Consulting, a small Colorado-based technical firm. Stratus literally faced bankruptcy due to Chevron’s efforts to drive away its clients and impose enormous legal liability after it had the temerity to work on behalf of the Ecuador communities.

The good people at Stratus caved in the face of Chevron pressure, with two of its scientists agreeing to sign highly misleading affidavits contradicting earlier sworn testimony that the oil giant caused massive toxic contamination in Ecuador. Stratus essentially chose a near-death event (signing false affidavits) over a certain death event (continuing to fight Chevron).

Chevron’s settlement with Burford, announced with great fanfare on April 15, suffers from similar credibility problems and also appears to be the product of intimidation and threats.

Given that it is a public entity backed by prominent institutional investors, Burford could not afford to embroil itself in Chevron’s threatened litigation sideshow. Chevron’s approach threatened to dry up investment money for Burford. It also raised the prospect of forcing the fund to spend millions to defend itself -- something that would be very bad for business.

To avoid this Chevron-engineered unpleasantness, Burford CEO Christopher Bogart signed an affidavit that has the odor of being designed by Chevron’s own lawyers. Bogart claims in the affidavit that he had had been “misled” by lawyers for the rainforest communities about a wholly irrelevant technical report on damages (called the Cabrera Report). The Ecuador court did not even consider this report when finding Chevron liable.

(The Ecuador court did rely on evidence in more than 100 other technical reports that contained 64,000 chemical sampling results, most showing massive and life-threatening contamination due to Chevron’s deliberate toxic dumping in Ecuador. For a summary of the overwhelming evidence against Chevron, see here)

For the Ecuadorians, Burford’s settlement changes very little.

Burford already had refused to fund the case further in 2011 after Chevron filed a racketeering case against the communities that named the hedge fund as a “non-party co-conspirator” – a wholly invented designation used by Chevron to instill fear in the heart of any person or entity that wished to help the victims of the oil company’s toxic dumping.

But what does matter are the details behind Burford’s own descent into darkness. This is where it begins to get interesting.

What Bogart does not disclose is that when Burford ceased funding the case, it was hiding a flagrant conflict of interest from the Ecuadorians as well as its own investors. In late 2010, shortly after Burford had funded the claims of the Ecuadorians, the firm agreed to bring in as a principal partner former litigation lawyer Ernest J. Getto.

Getto had previously generated enormous fees at Latham & Watkins as one of Chevron’s lead outside lawyers. He worked for Chevron on a number of high-profile cases, including a toxic tort class action involving allegations of pollution and cancer deaths among students, faculty and alumni at Beverly Hills High School. (That case involved Chevron’s use of many of the same subterfuges it employed during the Ecuador trial to undermine the proceedings. You can read about it an excellent book by Joy Horowitz, Parts Per Million.)

In effect, a lawyer extremely close to Chevron had infiltrated the key funding entity of Chevron’s litigation adversary in a high-stakes case. Burford had a contractual right to access information from the rainforest communities, including information related to their strategy. There is no evidence – and Bogart has never asserted -- that Burford built a firewall between Getto and the case. Burford also never informed the Ecuadorians about the conflict.

Obviously aware of and embarrassed by this conflict of interest, Burford took the extraordinary step of censoring from its own website any reference to Chevron as one of Getto’s “major” clients during his tenure at Latham & Watkins. But one need only go to Latham’s directory of its retired partners – which we did just the other day -- to find this extraordinary claim:
“Mr. Getto, representing Chevron, also led a Latham team that won all 12 motions for summary judgment in the highly publicized Beverly Hills High School toxic tort litigation.”
That’s what you call a real whopper.

Bogart does Chevron’s bidding by claiming in his affidavit he was “misled” about the Cabrera report, but this has scant credibility. Bogart admits he had multiple discussions about this report with counsel for the Ecuadorians. He admits he was given a detailed memo on the case by the Patton Boggs law firm that included an analysis of the issue. He also had access to thousands of court documents filed by Chevron related to its concocted “fraud” narrative.

Again, trial and appellate courts in Ecuador rejected Chevron’s arguments about the Cabrera report. The court ruled against Chevron in the underlying case, finding it liable for causing massive toxic damage to the ecosystem. The side Burford funded won. You would think Bogart would be happy.

Which brings us to the next startling detail.

Bogart also does not fully explain in his affidavit the details around Burford's sale to a third party of its interest from its $4 million investment in the Ecuador case. Yet as part of its recent “settlement” with Chevron, Burford said it would give up on any monies it might still be owed from any recovery by the rainforest communities.

That’s at least mildly misleading, don’t you think?

If Bogart really believes what he says – that the Ecuador case is a “fraud” even though courts in Ecuador have ruled otherwise – then Burford surely must disgorge the monies it made when it sold its interest to a third party. That Burford refuses to do so is all you need to know about how the company really views the Ecuador case.

Curiously, nowhere in the “settlement” does Burford say it has freely entered into its terms with no monetary compensation, which is typical language in civil litigation.

Bogart’s affidavit is designed to get rid of a major litigation and business risk for Burford. For Chevron, the affidavit provides a fleeting public relations score that it will use to try to beat back the company’s angry shareholders in the lead up to the annual meeting in late May.

In last year’s annual meeting, Chevron CEO John Watson was pummeled openly for his mishandling of the Ecuador case. This year, he faces votes on two resolutions related to Ecuador that likely will lead to further embarrassment.

But the “settlement” also creates a nagging headache for Burford which will not easily go away. As Burford aspires to be an industry leader in the nascent field of litigation finance, it will always be known as the firm that caved to pressure from an aggressive oil company hell bent on destroying the legal claims of vulnerable indigenous communities.

In his declaration, Bogart presents his motives as high-minded. He said in settling with Chevron he is trying to maintain Burford’s “highly ethical approach to its business”. In light of the undisclosed facts and conflicts of interest that Bogart omitted from his affidavit, one can reasonably question what ethical compass is guiding this man.

In the meantime, while Chevron tries to focus attention on dubious and irrelevant affidavits, an Argentine court has embargoed $2 billion in company assets that could be used to satisfy the Ecuador judgment. Similar seizure actions are proceeding against Chevron assets in Canada and Brazil.

Yet Burford's new dance partners at Chevron headquarters refuse to disclose these real and enormous risks to shareholders, prompting multiple complaints to the Securities and Exchange Commission.

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Monday, April 22, 2013

Note to Chevron: Your Trial Lawyers At Gibson Dunn Need Some Serious Help

It is becoming increasingly clear that Chevron’s high-priced legal team in the $19 billion Ecuador case lacks basic trial skills.
One of the most intriguing sights in the three-day hearing last week in New York on a discovery dispute related to the case was not the fact Chevron trucked in about 35 lawyers for the event.
It was that with 35 lawyers backing them up, the lead lawyers for Chevron --  Randy Mastro and Andrea Neumann – seemed so disorganized and out of sorts.
They looked like what they are: corporate lawyers representing a big oil company trying to crush its indigenous victims and their lawyers.
That can't be good for Chevron.
Judge Lewis A. Kaplan will no doubt use the hearing to further script the RICO trial in Chevron’s favor by prohibiting the use of almost all evidence that makes Chevron look bad. Judge Kaplan, who was unanimously reversed once in the case, already ruled that the extensive evidence of Chevron’s contamination in Ecuador – evidence that proves the case was decidedly not a fraud -- cannot be discussed in court.
Judge Kaplan is now well on the way to throwing out counterclaims from Steven Donziger (a longtime lawyer for the Ecuadorians) that outline a chilling tale of Chevron’s environmental crimes in Ecuador, fraud, lies, espionage, and cover-up. Again, Judge Kaplan apparently does not have the guts to let the truth come out.
But even show trials don’t always go according to plan.
Both Mastro and Neumann seemed to fall over themselves in court, at times infuriating Judge Kaplan.
Mastro repeatedly made speeches before he asked his questions, prompting Kaplan to repeatedly sustain objections. Mastro would then try to reframe his questions, but had trouble figuring out how.
After one of his speeches, Judge Kaplan asked Mastro: “Sir, is there a part of that treatise from which you want to ask a question?”
Neumann appeared as charming as the class nerd who takes notes and regurgitates them back on the next multiple choice test. She read her questions from a thick binder, imposing a form of slow torture on the court by going page by page without adjusting depending on what the witness said or how the court reacted.
Kaplan repeatedly asked her to stop wasting the court’s time.
Neumann began her examination of one witness by reading from a sworn declaration signed by the witness. But she forgot to have a copy of the document available for the witness.
When Neumann had to interrupt her examination to ask her 35-person legal team to find another copy, it took a mind-numbing five minutes of frantic searching until one was discovered. In the meantime, Judge Kaplan fumed.
When Neumann gave another document to the witness, he mentioned that it had some writing in the margins from Chevron’s own lawyers. The Chevron team then scrambled for a clean copy while about two dozen associates did nothing.
Judge Kaplan said: “Please Ms. Neumann, now really…  I really don’t expect to see this from lawyers of your caliber.”
While the Gibson Dunn army (at least 114 lawyers from the firm are on the case) tries to drown the plaintiffs in motions, only one lawyer can talk at a time in open court. That neutralizes Chevron’s huge resource advantage when Mastro and Neumann are at the helm.
John Keker, the lawyer for Donziger, is a former Marine known for prosecuting and convicting Oliver North in the Iran contra scandal. Nobody on Chevron’s team can come close to him in terms of intelligence, presence, and persuasiveness.
Judge Kaplan, not surprisingly, often tried to shut down Keker by calling him up for “sidebar” conversations that take place in whispers in front of the bench – a bizarre move indeed given that there was no jury around. It underscores just how much Kaplan plays to the gallery.
Judge Kaplan’s challenge is to figure out how to keep Keker from getting his client a fair trial before a jury. That would be very risky bet for Chevron under any circumstances, but particularly with this duo running the show.
Mastro’s bigger problem is that he has better political connections than trial skills. He served as Deputy Mayor to Rudy Guliani when the Mayor carried out a racially divisive political strategy, which Mastro helped him implement with evident gusto. His friends suggest he sees the Ecuador case as the pinnacle of his career.
Also of note is that Mastro’s new star hire, former New York federal prosecutor Reed Brodsky, seems to be working as a junior law clerk on the Chevron trial team. In 2011, Brodsky used his formidable trial skills to win a conviction against hedge fund titan Raj Rajaratnam and parlayed that into a lucrative job under Mastro.
During the hearing, Brodsky was sitting next to Mastro and Neumann so he could pass notes and whisper in their ear. He never stood up to ask a question.


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Harvard University Hosts Representatives of Ecuadorians With $19 Billion Judgment Against Chevron

Harvard University's Carr Center for Human Rights Policy is hosting representatives of the Ecuadorian indigenous groups who sued for and won a $19 billion judgment in Ecuador against Chevron for massive oil contamination.

They will discuss their two-decade effort to force Chevron to pay the judgment. Chevron has refused, defying the Ecuador courts even though Chevron promised to accept Ecuadorian jurisdiction when a U.S. federal judge and the 2nd Circuit Court of Appeals transferred the lawsuit to Ecuador in 2001.

The Ecuadorians are aggressively seeking to seize Chevron's assets in three countries: Brazil, Argentina and Canada. Lawsuits have been filed in the three countries, and Argentina has frozen about $2 billion of Chevron's assets already.

Andres Snaider, a consultant to the Ecuadorians, and Chris Jocknick, director of the Private Sector Department for Oxfam America, will discuss the historic lawsuit and bring guests up to date on what is happening with the litigation.

Attendance is free. A flyer can be viewed here. Below are more details.

Wednesday April 24, 2013; 4-6 pm; Carr Center Conference Room, Rubenstein 219, Harvard Kennedy School of Government

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Wednesday, April 17, 2013

The Truth Behind The Stratus Affidavits

Scientific Evidence Against Oil Giant Remains Overwhelming

The Stratus affidavits did not change anything for Chevron's perilous legal position in the Ecuador environmental case where it faces a $19 billion liability, as well as asset seizure actions in Canada, Brazil, and Argentina.

In a classic misdirection move designed to distract attention from its liability, Chevron last week unveiled affidavits from two scientsts from Stratus Consulting who used to work for the Amazon communities that for almost 50 years have been victimized by the company’s pollution. Chevron claimed the consultants, Douglas Beltman and Ann Maest, “disavowed” their involvement in the Ecuador litigation as well as the findings in a technical assessment known as the Cabrera Report that the Ecuador court did not even consider when finding the company liable.

These affidavits show just how limited the options for Chevron have become as it spends more and more money in an increasingly futile quest to escape accountability for its toxic dumping in the Amazon.

Chevron’s fundamental problem is that Beltman and Maest are not telling the truth about the science behind the Ecuador case.
As background, Chevron aimed a figurative gun at the head of Stratus, where  Beltman is a partner.  The company faced bankruptcy just by having to defend itself against Chevron’s 114-lawyer army at Gibson Dunn, which had named Stratus as a defendant in a highly questionable RICO case in New York.

Chevron had also waged a vicioius campaign to persuade clients of Stratus to fire the company based on false allegations that the company had committed "fraud" in Ecuador.  As part of the settlement it extorted, Chevron forced Beltman and Maest to abide by a gag order and agree not to work on projects involving Chevron for two decades.

The problem Beltman and Maest (and Chevron) now have is that the recent affidavits clearly contradict their earlier sworn testimony (available here and here) that concluded Chevron was responsible for massive pollution in Ecuador.  A chart of how Beltman and Maest have flagrantly changed their testimony in the face of Chevron’s threats can be found here.

Just weeks ago, in a legal filing, Stratus itself described the shakedown it was experiencing, saying Chevron has engaged in “an extrajudicial campaign of malicious defamation and deliberate interference with Stratus' business to tortuously destroy Stratus (and the livelihood of its employees).” Stratus made it clear in its court filings that it believed the Ecuador case was legitimate and based on valid scientific evidence. (See Stratus' Counterclaim against Chevron here)

Chevron is also trying to spin the affidavits to convince courts that the Amazon communities have “lost” the main source of their scientific data supporting the Ecuador judgment. Nothing could be further from the truth.  Stratus played a major role in preparing materials for one technical report that the court threw out.

Stratus had nothing to do with any of the more than 100 other expert reports submitted as evidence that were relied on to find liability.

Stratus never produced a single one of the 64,000 chemical sampling results presented by the parties to the court that documented extensive pollution at 100% of Chevron's well sites in Ecuador.  This data was produced by 23 court-appointed experts nominated by the parties that did not include Stratus.

The trial judge also pegged the majority of the remediation cleanup valuation figures to the work of Gerardo Barros, a court appointed expert who had been designated by Chevron.  Chevron’s argument that the process was “tainted” has not been accepted by any court in Ecuador, but as a practical matter the issue of what Stratus did in Ecuador with the Cabrera report is a nullity.

Apart from the prior sworn testimony of Beltman and Maest that proves the contentions of the communities, there is overwhelming scientific and testimonial evidence that documents Chevron’s environmental abuses in Ecuador, where it operated from 1964 to 1992 under the Texaco brand.
For example:

  • Chevron’s own internal audits, produced in the early 1990s as it was winding down its operations in Ecuador, documented pollution at each one of its drilling sites.  They also found the company exercised no environmental controls in the 25 years it operated in Ecuador. (See the audits here and here)
  • Stratus itself documented the pollution in a devastating power point presentation that concluded 100% of the Chevron well sites in Ecuador tested during the trial had levels of toxicity that violated legal norms in the U.S.

Beltman said it best in a deposition taken by the Amazon communities on Sept. 9, 2011, on a date well before the effects of Chevron’s extortion effort had fully kicked in.  Beltman testified that the way Chevron operated in Ecuador was “substandard” and that “groundwater, streams, rainforest, wells and stations” were “all contaminated” by the company’s operations.

Also on that day, again under oath, Beltman concluded that Chevron’s claims that its “remediation” in Ecuador was effective are “false” and that he believes that “exposure to carcinogens caused by Texaco operations at least contributed to the higher rates of cancer.”

If Beltman and Maest testify consistent with the recently extorted affidavits, they will look like liars.  If a jury hears the earlier testimony under oath, which is corroborated by extensive evidence at trial, Chevron will (as it should) look terrible.

The bigger picture is that what Chevron does in a New York court has virtually no significance.

Courts in other countries being asked to enforce the judgment against Chevron assets, if anything, will recoil when asked to abide by any decision coming from a clearly biasd judge trying to give the oil giant a home court advantage.  For an understanding of just how biased, read these mandamus petitions (here and here) asking for the reassignment of Judge Lewis A. Kaplan.

The Second Circuit Court of Appeals has set a date in May to consider that issue yet again, so it is unclear if the RICO trial will even get off the ground or if Chevron will blink when it comes time for a jury to hear even some of the awful facts relating to its criminal activity in Ecuador -- which includes attempted bribes of Ecuador's government to quash the case.

If anything, the New York proceeding before Judge Kaplan – like much else in this case – could easily boomerang against Chevron.  Ditto for Beltman and Maest, who now have lost all credibility in the face of Chevron's pressure campaign that threatened their ability to earn a livelihood.

Stay tuned.

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Friday, April 12, 2013

U.S. Appeals Court To Hear Request To Remove Biased Judge In Ecuador Case

The Second Circuit Court of Appeals -- the same court that stopped cold Chevron's effort to block enforcement of the $19 billion Ecuador judgment in 2012 -- has agreed to hear arguments by the Ecuadorians on why U.S. trial court judge Lewis A. Kaplan is continuing to engage in acts of insubordination from the bench.

The decision by the appellate court to hear the arguments is bad news for Kaplan, who already has been overturned once by the Second Circuit for imposing an unprecedented “global injunction” that purported to prohibit indigenous and farmer communities in Ecuador from enforcing a judgment from their own courts anywhere in the world. Kaplan had become the target of worldwide derision for trying to dictate rulings to the courts of other countries. (See press release here.)

The Ecuadorians say Kaplan’s efforts to orchestrate a show trial warrant the reassignment of the case, as documented by this previous posting on The Chevron Pit.

Chevron is using the remaining fraud counts it filed against the Ecuadorians and their counsel to try to chill fundamental human rights advocacy that attempts to hold the oil giant accountable for its discharge of billions of gallons of toxic waste into the Amazon, as found by an Ecuadorian court based on overwhelming scientific evidence. Steven Donziger, a longtime American lawyer for the communities, has countersued Chevron for lying and engaging in fraud to cover up its misconduct. (See Donziger’s counterclaims here.)

Chevron suffered a major setback recently when a California judge ruled that the environmental group Amazon Watch – known as Chevron’s “sharpest critic” – was engaged in First Amendment-protected activity when it criticized the company for its refusal to clean up its contamination in Ecuador. Chevron had tried to subpoena the group’s documents, claiming its advocacy was part of an improper pressure campaign. (See an article explaining the decision here.)

The Ecuadorians, meanwhile, have denied Chevron’s outrageous charges. The company is desperate to distract attention from advancing seizure lawsuits targeting billions of dollars of assets in Canada, Brazil, and Argentina – with more such actions to come, according to lawyers for the communities.

Kaplan had shocked legal observers with his rants and prejudicial statements from the bench about Ecuador, a longtime U.S. ally where Chevron itself has won multiple lawsuits against the country’s state-owned oil company. He derided Ecuador’s government and judiciary. He refused to recognize the fundamental humanity of the impoverished indigenous victims, referring to them as the "so-called plaintiffs" and urging Chevron to file a racketeering and extortion case.  See this previous Chevron Pit.

To top it all off, Chevron lawyer Randy Mastro literally was laughed out of court when he couldn’t answer fundamental questions before the appellate panel. See here. Mastro’s effort to protect Kaplan was an utter failure.

Kaplan’s tendency to engage in judicial imperialism has once again reared its ugly head. He is now setting up Chevron’s so-called “RICO” case as nothing more than a show trial, stripping the ability of the plaintiffs to put on evidence of Chevron’s toxic dumping and fraudulent cover-up while purporting to rule (in defiance of the earlier Second Circuit order) on the legitimacy of Ecuador’s judiciary.

That’s the same judiciary that Chevron praised when it fought for ten years to venue the trial there after the Ecuadorians originally filed the case in New York.

A trial by jury has been set by Kaplan for October 15th. But we say that neither Chevron nor Kaplan really have the guts to risk a full-blown trial before a jury where the truth can come out. Kaplan and Chevron will try to figure out a way to prevent jurors from hearing the case – possibly by dropping monetary claims for damages, thereby allowing a bench trial.  If jurors do hear the case, Kaplan won’t let the Ecuadorians put on evidence of Chevron’s crimes and fraudulent cover-up.
But wait – isn’t a bench trial by Kaplan what the Second Circuit vacated the first time?

Kaplan and Chevron are now operating from a smaller and smaller box, with their options to impede a final recovery constricting almost weekly. Meanwhile, Mastro and his team of 114 lawyers at Gibson Dunn & Crutcher are on a roller coaster ride of unprecedented billing excess, subsidized by Chevron shareholders who themselves are being duped by Chevron management, as this devastating report by securities lawyer Graham Erion points out.
Gibson Dunn lawyers are laughing all the way to the bank while piling up a string of setbacks for their client, whose management is either too obtuse or personally conflicted to understand the peril they are facing.

In their petition, the Ecuadorians argue that in the earlier reversal the appellate court found that Kaplan did not have jurisdiction to rule on the Ecuador judgment unless the Ecuadorians sought to enforce the judgment in a New York court -- a legal move that the Ecuadorians have not taken and have said they will not take. Yet Kaplan continues to claim in various rulings he can still so dictate, in defiance of the appellate court.

We remind Judge Kaplan of the words written by the Second Circuit in 2011:
“The (Ecuadorians) hold a judgment from an Ecuadorian court. They may seek to enforce that judgment in any country in the world where Chevron has assets. There is no indication that they will select New York as one of the jurisdictions in which they will undertake enforcement efforts . . . . It is unclear what is to be gained by provoking a decision about the effect in New York of a foreign judgment that may never be presented in New York. If such an advisory opinion were available, any losing party in litigation anywhere in the world with assets in New York could seek to litigate the validity of the foreign judgment in this jurisdiction. . . . Chevron can present its defense to the recognition and enforcement of the Ecuadorian judgment in New York if, as and when the (Ecuadorians) seek to enforce their judgment in New York.”"

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Saturday, April 6, 2013

More Revelations About Chevron’s Paid Witness & Its Miami Lawyer, Andres Rivero

Chevron not only is lying to a U.S. court about what happened in the historic Ecuadorian trial that the oil giant lost, it also offered a $1 million bribe to turn evidence against the Ecuadorians and their lawyers, testified an Ecuador judge in a legal declaration filed yesterday in the Southern District Court of New York.

Ecuador Judge Nicolás Zambrano, who found Chevron guilty in February 2011 of the world’s largest oil-related environmental disaster, submitted the filing to the U.S. court, in response to false charges brought by Chevron that Zambrano allowed the Ecuadorians’ lawyers to write his judgment for payment.

Zambrano said in his declaration that only he wrote the detailed 188-page ruling, documenting the extensive contamination of Chevron’s substandard drilling and exploratory system wrought upon the environment and the impoverished indigenous people living near the pollution. Chevron has argued that Zambrano was incapable of writing such a judgment and has entered into evidence testimony by another judge, Alberto Guerra, that the real authors are the Ecuadorians’ lawyers, charges that the lawyers deny.

Only problem is Guerra has been paid at least $324,000 for his testimony and likely will be paid much, much more, given the unbelievable agreement Chevron has negotiated with Guerra, who now lives in Miami with his family and his son’s family – all at Chevron’s expense.

Importantly, Chevron’s own lawyers have admitted that Guerra actually approached Chevron in 2009 about writing the judgment in its favor if they would pay him.

Not surprisingly, about that time, Guerra announced publicly that he thought the lawsuit against Chevron was not legitimate, even though the trial was underway.

Also underway at the same time was a Chevron sting operation to derail the trial by staging a phony bribery attempt against yet another judge who heard the case. It failed miserably, but Chevron spent much of the year organizing it and publicizing its sensational but false allegations of bribes. 

At no time in 2009, 2010 and 2011, during years of hysterically wild accusations of corruption and fraud charged by Chevron, did the oil giant breathe a word about Guerra offering to write the judgment for Chevron for money.

If Chevron wanted to prove that the Ecuador courts were corrupt, here was its perfect opportunity. Yet, Chevron’s lawyers, not known for avoiding a media interview in Quito, were silent.

Now Zambrano reveals that Guerra as Chevron's proxy approached him in August 2012 with an offer to turn evidence against the Ecuadorians’ lawyers for $1 million or as much money as Zambrano might want.

Zambrano rejected the offer then and later avoided overtures in January 2013 by Chevron lawyer Andres Rivero who called Zambrano and urged a meeting. Zambrano refused.

The 20-year-old case, now being litigated to seize Chevron's assets in Brazil, Argentina, Canada and Ecuador as payment for the judgment, continues to take twists and turns in the U.S., both sides slinging charges fast and furious.

But, there are two charges that even Chevron cannot deny: 

One: Chevron’s man, Alberto Guerra, is as corrupt as the day is long.

And, two: Texaco, which Chevron bought, dumped 16 billion gallons of toxic water and oil directly into the rainforest waterways and built 900 unlined pits and filled them with pure crude that has leeched into soil and underground water -- all because it wanted to save money. Chevron's company treated the rainforest like a garbage dump and its people as disposable as the toxic oil it left behind.

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Thursday, April 4, 2013

Take That Chevron: There's A First Amendment After All

Chevron took a severe punch yesterday in its home state of California when a judge there ruled to ditch the oil giant's subpoena against an environmental group that has been highly critical of the company concerning its massive contamination of the Ecuadorian rainforest. See Reuters story below.

"I must err on the side of protecting the First Amendment activity," wrote California Magistrate Judge Nathanael Cousins.

The subpoena request results from a Chevron lawsuit in a New York court, where the company is arguing that Amazon Watch and others, including Chevron's own shareholders, are part of a grand conspiracy to "extort" money from it by applying public pressure through protests, advocacy in front of elected officials and negative media coverage.

An Ecuador court issued an $19 billion damage award against Chevron in February 2011 and an appeals court upheld the verdict, but Chevron has refused to pay, leading the Ecuadorians to file lawsuits to seize company assets in Argentina, Canada, Brazil and the little that's left in Ecuador.

Memo to Chevron: The First Amendment is in the Bill of Rights.

Judge rejects Chevron subpoena of advocacy group in Ecuador case

SAN FRANCISCO | Wed Apr 3, 2013 7:57pm EDT
By Braden Reddall

(Reuters) - A U.S. judge has rejected efforts byChevron Corp to secure documents from a California environmental advocacy group in a fraud case related to a $19 billion award for rainforest pollution in Ecuador.

Magistrate Judge Nathanael Cousins on Wednesday quashed Chevron's subpoena for a deposition and documents from Amazon Watch, which the group's own lawyer described as the U.S. oil company's "sharpest critic."

The subpoena was related to a case scheduled to go to trial on October 15 in which Chevron accuses Ecuadorean residents, their lawyers and advisers of fraud in obtaining a multi-billion dollar judgment from a local court.

Cousins said he had to weigh the free speech rights of Amazon Watch under the U.S. Constitution's First Amendment against the possibility of Chevron uncovering evidence for its case.

"I must err on the side of protecting the First Amendment activity," he said in his ruling in San Francisco federal court, although he left open the possibility that Chevron could seek documents under a narrower scope.

The parties are racing to gather evidence ahead of a May 31 deadline for discovery, Chevron lawyer Ethan Dettmer said.

The start of the trial in October will come almost exactly two decades after Ecuadoreans first filed their case in New York against Texaco, which was bought by Chevron in 2001. Texaco spent years pushing for the case to be moved to Ecuador, which eventually happened a decade ago.

Texaco was accused of contaminating the jungle around Lago Agrio, Ecuador, from 1964 to 1992. Chevron says Texaco cleaned up all the waste pits for which it was responsible before turning the sites over to state-owned Petroecuador, which still operates there. The Ecuadorean court in Lago Agrio issued its judgment against Chevron in February 2011.

Chevron then sued the Ecuadoreans and their long-time legal adviser, Steven Donziger, in Manhattan federal court. Chevron accuses them of illegally pressuring the Ecuadorean court to render a judgment in their favor, making fraud and racketeering conspiracy claims under the U.S. Racketeer Influenced and Corrupt Organizations Act. Donziger and the Ecuadoreans deny they acted improperly.

On Wednesday, Dettmer argued for Chevron that Amazon Watch became part of the fraud by publicizing the Ecuadorean plaintiffs' arguments in an effort to put enough public pressure on Chevron to force the company to settle the case.

But Richard Herz, a lawyer for Amazon Watch, said Chevron had already amassed ample evidence with more than 100 subpoenas, 20 more depositions scheduled, on top of 16 days of deposition from Donziger himself along with his entire computer hard drive. "They have every scrap of paper that he's ever written," Herz said.

The fraud case is Chevron Corp v. Steven Donziger et al, U.S. District Court for the Southern District of New York, No. 11-0691. The related case over the Amazon Watch subpoena was in the Northern District of California, No. 13-mc-80038-CRB.

(Reporting by Braden Reddall in San Francisco. Editing by Andre Grenon)

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