Monday, February 3, 2014

Christie Defense Lawyer Randy Mastro Has Ethical Problems of His Own

Who Ordered Christie's Attack Memo On Wildstein—Straight from the Randy Mastro Playbook?

New Jersey Governor Chris Christie’s choice of a defense lawyer to lead him through his various scandals is becoming more and more curious. After all, that lawyer – Randy Mastro of the law firm Gibson Dunn & Crutcher – has his own rather extraordinary history of controversy and ethical problems. 

We say this from watching him over the last four years try to guide Chevron through one of the worst pollution scandals in world history. 

In the Chevron scandal – which has led to a record-breaking $9.5 billion court judgment against Mastro’s client – the former deputy mayor to Rudy Giuliani has left a trail of improper and unscrupulous behavior in his wake.


**For years Mastro has orchestrated a vicious campaign of character assassination against New York human rights attorney Steven Donziger, who for two decades has advised the indigenous groups that held Chevron accountable. Mastro convinced Chevron to retaliate for the Ecuador lawsuit (which took place in that nation at Chevron’s request) by suing the attorney and his indigenous clients for $60 billion in New York federal court. Mastro, who does not even speak Spanish, claimed the entire two-decade litigation in Ecuador was a “sham” and that Donziger – a Harvard classmate of President Obama – is nothing more than a greedy “criminal mastermind.” (For background on Chevron’s horrendous conduct in Ecuador, see Donziger’s website; this 60 Minutes segment on the case where a Chevron lawyer brazenly states the company should not be forced to go to court; and this summary of the evidence to find the company liable.)

**Mastro is a political fixer, not a trial lawyer. Since Mastro took over Chevron’s defense in 2009, the oil company has experienced a devastating series of courtroom setbacks. It lost the underlying case in Ecuador; lost unanimously before a three-judge intermediate appellate court; and lost before Ecuador’s Supreme Court, which affirmed the judgment unanimously in late 2013. Mastro’s team has lost several appellate court decisions on the Ecuador matter in the U.S. – including one just last week in the Ninth Circuit Court of Appeals. (The team also lost appellate court arguments on various aspects of the Chevron matter in the D.C. Circuit, the Second Circuit, the Third Circuit, and the Fifth Circuit.) Even the U.S. Supreme Court rejected Mastro’s effort to obtain an unprecedented injunction to block enforcement of the Ecuador judgment worldwide.

**Mastro’s strategy has led to all kind of problems for Chevron’s management around the world. Just weeks ago, a Canadian appellate court excoriated Chevron for trying to evade jurisdiction in three countries. It also ordered Chevron to stand trial in Toronto on whether the villagers can seize the Canadian assets of two subsidiaries to pay for their judgment. (Chevron stripped its assets from Ecuador in anticipation of losing the case). The villagers are also pursuing Chevron assets in the courts of Brazil and Argentina; leaders throughout Latin America are being asked by Ecuador’s President to block the company from new business opportunities in the region until it cleans up its mess.

**Many of Chevron’s largest shareholders are infuriated with how Mastro’s hyper-aggressive strategy is causing reputational harm to the company. In 2012, several shareholder resolutions stemming from the Ecuador problem garnered surprising levels of support. In fact, a whopping 38% of shareholders (representing $73 billion in assets) voted to strip Chevron CEO John Watson of his Chairman title, alleging a conflict of interest over the Ecuador matter. Several shareholders and a member of Congress have asked the SEC to investigate Watson for failing to disclose the Ecuador risk to shareholders. Read this take from Amazon Watch’s Ecuador-based human rights campaigner on Watson’s growing problems with the Ecuador matter.

**Mastro and members of his team have been found by multiple courts to have committed ethical violations on behalf of Chevron. In Ecuador, the trial court imposed a punitive penalty after finding company lawyers threatened trial judges with jail time if they did not rule in its favor. A federal judge in Oregon fined Chevron and imposed sanctions after finding members of Mastro’s team used the pre-trial discovery process to “harass” a small legal non-profit that was assisting the villagers. For the Oregon judge’s decision read here; for the devastating details from the lawyer who asked for the sanctions, see this affidavit.

**Mastro also hired Kroll, the private investigation company populated with former FBI and CIA agents, and paid them at least $15 million to set up a surveillance operation that targeted opponents of Chevron. We know this operation involved spying on Donziger and U.S. lawyer Craig Smyser when they were in Ecuador. Kroll also deployed six private agents to spy on Donziger and his family in Manhattan. Kroll CEO Daniel Karsen admitted under oath that the company had prepared “20 to 30” confidential reports on Donziger for Chevron’s use. This harks back to the infamous harassment that Ralph Nader suffered at the hands of General Motors when he wrote his famous critique of auto safety, Unsafe at Any Speed.

**Mastro also deployed another member of the Chevron team, the Miami-based lawyer Andres Rivero, to offer a suitcase full of cash to a former Ecuadorian judge to coax him to testify in favor of Chevron. Mastro then traveled to Chicago to personally negotiate Chevron’s deal with the former judge. Chevron paid Guerra hundreds of thousands of dollars, a clear ethical violation as found by none other than Erwin Chemerinsky, a leading ethicist and the dean of the law school at the University of California, Irvine. That’s after another Chevron agent at Kroll was caught offering $20,000 to an American journalist, Mary Cuddehe, to pose as a reporter so she could spy on the plaintiffs in Ecuador. Cuddehe outed the entire scandal in The Atlantic.

The memo created by Christie’s team trying to discredit his former ally David Wildstein is a classic example of Mastro’s handiwork. The approach is simple: when the facts are not on your side, try to assassinate the character of the witnesses who threaten to disclose information that might hurt your client. Mastro is sending a message to any other witness who might come forward to testify against Christie: if you proceed, we will find all the dirt we can and publicize it far and wide. This type of personal attack might be effective in politics, but it gets agonizingly close to obstruction of justice when there’s a federal investigation pending. Mastro’s problem is that he doesn’t know the difference between Christie’s political survival and Christie’s legal defense, where he faces potential criminal jeopardy.

Ultimately, aggressive lawyering based on real facts is completely acceptable. Scorched-earth lawyering based on intimidation of adversaries and potential witnesses is not. When a powerful corporate entity or political figure becomes so desperate that it tries to win on might what it knows it cannot win on merit, the line can be crossed. Gibson Dunn writes in its marketing materials that when the law gets in the way of the interests of its clients, the firm will endeavor to change the law or maneuver around it. (Or, as in the case with Wildstein, try to pound its adversaries into submission.)

That strategy might be tempting to a bad-acting corporation when fighting impoverished indigenous communities in Ecuador. But it is not working. And it certainly won’t work when the adversary is the U.S. Attorney’s office and the leader of that office is a man of great integrity.

Word on the street is that Mastro has been bragging that the “racketeering” case he brought against the Ecuadorians and their lawyers in New York has been a success. But that case is nothing more than a show trial helped along by a U.S. judge who clearly dislikes plaintiff’s lawyers, has made disparaging comments about the plaintiffs, and who thinks he can rule on questions of Ecuadorian law from Manhattan better than Ecuador’s Supreme Court can from Quito. 

Significantly, Mastro convinced Chevron to drop all damages claims against Donziger and the Ecuadorians on the eve of trial to avoid a jury. This is a telling fact that illustrates why Chevron has little confidence in its own case or in Mastro’s trial skills. (See this post-trial brief and motion to dismiss filed by Donziger to understand just how legally and factually weak Chevron’s fraud case is, and why it will not survive appeal.)

While Chevron continues to lose ground in courts around the world, it has paid Mastro and his partners an estimated $400 million per year in fees for their (dis)services. It really doesn’t matter to a lawyer whether you or win or lose when you can rake in that kind of big money. More important to Mastro is being able to convince a client – in this case CEO Watson and his General Counsel R. Hewitt Pate – that progress is just around the corner. The worst result would be for the litigation to end. If it did, numerous lawyers at Gibson Dunn might find themselves without work.

The lesson for Christie when it comes to Mastro: remember the caveat, buyer beware.