Wednesday, April 29, 2015

Fortune Focuses On Brad Pitt While Ignoring Key Developments In Ecuador Pollution Case

Roger Parloff's reporting for Fortune about Chevron's growing pollution liability in Ecuador – where he ignores devastating new evidence that the oil giant's defenses are unraveling – is on display yet again with a blog claiming that Brad Pitt has interest in making a movie about the litigation.

This is a great example of how a legal reporter misses the point. A good part of Chevron's Ecuador house is burning down, and Parloff focuses on the tricycle in the front yard.

Parloff's obvious sympathy for Chevron and his refusal to publish our letters calling him out for his errors has been well-documented on these pages and elsewhere, including in this post by activist-journalist Kevin Koenig of Amazon Watch. By consistently engaging in reportorial hijinks when covering the historic case, Parloff deprives Fortune's readers of critical information and undermines his credibility and that of his employer.

Parloff's latest post was about Pitt's supposed interest in a movie focused on Steven Donziger, the U.S. lawyer who helped hold Chevron accountable for dumping billions of gallons of oil waste into the rainforest. According to Parloff, Pitt beat out George Clooney for the rights to the story. Yet neither Pitt nor Clooney nor Donziger confirm any involvement.

While trying to write cute stories about movies, Parloff continues to ignore critical substantive developments in the case that contradict Chevron's narrative that the company has been victimized by the very rainforest communities it poisoned. In 2013, after 11 years of legal proceedings in Chevron's chosen forum, Ecuador's Supreme Court in a 220-page decision affirmed a trial court judgment finding that the company had deliberately dumped billions of gallons of toxic oil waste into rainforest waterways when it operated in Ecuador (under the Texaco brand) from 1964 to 1992.

Since Parloff last reported on the Ecuador pollution matter in depth, three critical facts have emerged that have seriously undermined – if not completely blown up – the contrary civil findings of U.S. Judge Lewis A. Kaplan in Chevron's retaliatory racketeering case. Neither Fortune nor Parloff have reported these developments even though they suggest nefarious efforts by Chevron's lawyers to frame Donziger as revenge for winning a historic $9.5 billion judgment against the company.

(Judge Kaplan's determination that a fraud occurred, which is under appeal, contradicts the findings of eight separate appellate judges in Ecuador that actually had access to the record evidence. Kaplan refused to admit any evidence of Chevron's pollution in Ecuador nor look at the Ecuador trial record. For background on how Chevron made a mockery of justice in Kaplan's courtroom, see here.)

The first critical fact ignored by Parloff is a new forensic examination of the computer of the Ecuador trial judge that emerged recently in a related investor arbitration between Chevron and Ecuador's government. That report – by one of the world's leading authorities on the subject, J. Christopher Racich – found that the trial court judgment against Chevron was written painstakingly by the judge over a period of months on his office computer.

Chevron had claimed Donziger had orchestrated the writing of the judgment and that it had been given to the judge on a flash drive just before it was issued. Donziger has categorically and repeatedly denied the allegation under oath and there is zero forensic evidence to support it. Let's just say the Racich report confirms Donziger is telling the truth, Chevron is lying, and Kaplan (who has undisclosed investments in Chevron) got it wrong.

Also ignored by Parloff is the related issue of how Chevron paid its star witness who testified falsely about the ghostwriting story, a crooked former Ecuadorian judge named Alberto Guerra, tens of thousands of dollars in cash out of suitcase and upwards of $2 million in benefits. You get the picture: Chevron purchased false witness testimony in violation of the ethical rules (read this affidavit by Dean Erwin Chemerinsky) and used it to frame adversary counsel. That might explain why Chevron lawyers coached Guerra for 53 consecutive days before putting him on the stand.

The Racich report and payments to Guerra not only eradicate the last remnants of Chevron's credibility in the company's New York case, they utterly destroy the key factual predicate of Judge Kaplan's deeply flawed decision against Donziger and his clients. Kaplan, who for years disparaged Donziger and the Ecuadorians from the bench, did not have access to the Racich report.

(For a summary of the Racich report, see this filing by Donziger attorney Deepak Gupta. While Fortune ignored the filing, Adam Klasfeld of Courthouse News did report extensively on the Racich conclusions.)

The second key development ignored by Parloff was the release in early April of explosive internal Chevron videotapes that expose an elaborate ruse by company scientists to defraud Ecuador's courts by only "finding" clean soil samples at clearly polluted sites during the eight-year trial. The videos, turned over to Amazon Watch by a Chevron whistleblower, were first published by Vice News and have been rampaging across the internet for the last several weeks. They also show Chevron scientists laughing at the pollution at well sites the company had previously certified as remediated.

Again, nothing from Parloff and institutional silence from Fortune.

Finally, in a devastating setback for Chevron, a panel of investor arbitrators sympathetic to the company recently nullified the oil giant's primary defense to the pollution allegations. Chevron had tried to claim that it was absolved of all liability for the pollution based on what turned out to be a sham remediation conducted in the 1990s; both the arbitrators and three layers of courts in Ecuador have now rejected the defense. For background on how Chevron General Counsel R. Hewitt Pate has misled shareholders on the issue, don't read Fortune because it's not there.

See our own blog posting of the panel's decision here or read the Courthouse News version here.

Instead of focusing on the emergence of new evidence, Parloff wrote a largely unsourced post about a possible movie in a clear attempt to pump up his friend Paul Barrett's pro-Chevron book on the litigation. Barrett's one-sided take has earned him a possible defamation lawsuit for distorting facts and fabricating scenes. It also has received poor reviews from the likes of prominent writer Peter Maas. (Donziger's "notice of defamation" letter to Barrett and his publisher can be read here.)

Barrett and Parloff have a mutual interest in stroking each other. In his own reporting for Businessweek, Barrett also has ignored the Racich report, the arbitration decision, and Chevron's videos. So did Michael Goldhaber of American Lawyer. Along with Parloff, Barrett and Goldhaber have a history of being wedded to Chevron's narrative and they often quote each other's articles. (Goldhaber had the audacity to write a short book about the case without even visiting Ecuador or interviewing any of Chevron's victims.)

Also ignored by Fortune is any serious examination of how Chevron's management team is in trouble after having invested an estimated $2 billion of company funds to hire 60 law firms and 2,000 legal personnel to try to beat back the communities and Donziger (described as a "warhorse lawyer" according to Rolling Stone). Many of Chevron's largest shareholders are seeking the scalp of Chevron CEO John Watson after he was reprimanded over his mishandling of the Ecuador matter during a recent annual meeting.

In his Hollywood blog, Parloff also writes that Donziger's attorneys "for the most part" have not disputed Judge Kaplan's findings that a bribe occurred in Ecuador. That's not true and proves how intellectually dishonest Parloff can be.

Donziger and his attorneys have disputed the bribe and just about every one of Kaplan's "findings" as is made clear by the first 70 pages of the lawyer's appellate brief. Parloff also ignores Donziger's comprehensive 5,000-word takedown of Chevron's environmental crimes and fraud in Ecuador in an article published recently by the legal media outlet Donziger has made it clear at every turn that there was no bribe and that it was Chevron that repeatedly tried to corrupt and sabotage the Ecuador trial, as this sworn affidavit (also ignored by Fortune and Parloff) explains in detail.

While Parloff ignores these new developments, they clearly have planted seeds of doubt about Kaplan's decision in a federal appellate panel that seems highly skeptical of Chevron's forum shopping and bad faith. For more on that, see this article by – you guessed it – a Fortune competitor.

There are many who pay the price for Fortune's apparent inability to report the Ecuador litigation in a balanced way – starting with the magazine's own readers. It shouldn't be hard for a magazine to present two points of view in a contested litigation. Fortune and Parloff need to step it up.

(Editor's Note: For a copy of our letter to Fortune submitted in 2013 criticizing Parloff for errors in a prior story about the Ecuador litigation, see here. Fortune still has refused to print the letter.)

Tuesday, April 14, 2015

The Chevron Tapes: How A U.S. Judge Helped Oil Giant Hide Its Corruption In Ecuador

The stunning internal Chevron internal videos released last week by VICE and the environmental group Amazon Watch demonstrate the oil company knew of its massive contamination in Ecuador's rainforest and had an elaborate ruse to lie about it in court.

That the Chevron trickery failed and it lost the trial anyway changes little about the company's venal attempt to get away with its fraud in the first place. What is becoming increasingly clear is that while most large oil companies are bad, Chevron under CEO John Watson's leadership has become real bad. In fact, as the tapes show, the company is flirting dangerously with the outer boundaries of the law.

Less well known is why the Chevron tapes took so long to see the light of day. An apparent whistleblower from the company mailed them to Amazon Watch in 2011 with a note signed, "A friend from Chevron." (For background on the tapes and to view them, see here for Amazon Watch's version and here for the Vice News report.)

The delay in the release of the tapes is to a great degree the result of what we would consider to be highly devious and inappropriate attempts by both Chevron and U.S. federal judge Lewis A. Kaplan to suppress them as evidence. Chevron and Kaplan did this by trying to claim the tapes were "confidential" throughout Chevron's retaliatory RICO proceeding against the Ecuadorian villagers, which took place with Kaplan presiding from February 2011 to March of 2014.

Amazon Watch had quietly turned over the Chevron tapes to lawyers who had prosecuted Chevron in Ecuador and were later forced to defend themselves before Judge Kaplan. Kaplan was no neutral arbiter. He had disparaged the Ecuadorian villagers from the bench, invited Chevron to bring the case, and then assigned it to his court. (For the general background on how Chevron made a mockery of justice before Kaplan, see this analysis.)

As the "racketeering" trial date neared in the Fall of 2013, the U.S. attorneys Steven Donziger (the longtime legal advisor to the affected villagers) and Julio Gomez (representing two Ecuadorian defendants) tried to use the tapes in a deposition of Chevron's chief scientist, Sara McMillan. It was McMillan and Chevron consultant John Connor who helped design the company's clearly deceptive soil sampling strategy for the Ecuador trial. This strategy can be seen in the videos and a soil sampling "playbook" that directed the company's field hands to only find "clean" samples at well sites otherwise saturated with oil waste.

(Chevron's "playbook" fraud helps one understand exactly what its technicians are doing in the secret videos. See this article by Karen Hinton in the Huffington Post for more background on this aspect of Chevron's fraud.)

Chevron, however, immediately claimed confidentiality over the videos during the McMillan deposition and with Kaplan's backing was able to shut down any questioning about them. Earlier, Chevron lawyer Ethan Dettmer sent a letter to lawyers for the Ecuadorians demanding that the videos be returned to the company -- even though the lawyers had no power (nor obligation) to do so, given that the originals were in the hands of Amazon Watch. In writing the letter, Dettmer acknowledged that the videos were Chevron's property.

Even though the internal Chevron videos clearly were relevant to several key issues regarding the Ecuador judgment -- including Chevron's attempt to corrupt the evidence-gathering process --  Kaplan would not let them be used either in deposition or in trial. In fact, Kaplan jumped through hoops to prevent Chevron's repeated attempts to sabotage the judicial process in Ecuador from ever seeing the light of day in his courtroom.  (For a sense of the extent of Chevron's profoundy disturbing misconduct in Ecuador suppressed by Kaplan, see this affidavit by Ecuadorian lawyer Juan Pablo Saenz.)

Kaplan also helped Chevron suppress the most critical evidence of all. That's the 105 technical reports submitted to the Ecuador court by various experts that demonstrate Chevron left behind extensive and life-threatening levels of contamination at hundreds of its former well sites when it abandoned the country in 1992. These reports -- most of them authored by Chevron's own experts -- were only the basis for the finding of liability against the company by three layers of courts in Ecuador.

These are just a few of the reasons why we call the Chevron/Kaplan racketeering proceeding a show trial. As the appellate briefs show (see here and here), the trial was reverse-engineered by a judge who refused to seat a jury and who clearly disliked the notion of sophisticated American lawyers working with Amazonian villagers to hold a large American company accountable. Kaplan's disdain for the entire notion of Ecuadorian courts hearing a case against an American company is palpable throughout the transcripts of the proceeding.

Given that the appeal of Judge Kaplan's decision in favor of Chevron will be heard next week in Manhattan by a three-judge panel, let's review the highlights of his pro-Chevron bias:

  • He repeatedly disparaged the villagers in open court – calling them the "so-called" plaintiffs "said to reside" in the Amazon rainforest.
  • Prior to trial and without as much as an evidentiary hearing, he tried to impose an unprecedented and blatantly illegal global injunction purporting to block the villagers from enforcing their judgment anywhere in the world. The injunction was reversed unanimously the first business day after oral argument.
  • He called Steven Donziger, the U.S. lawyer for the villagers, a "p.r. flak" who was trying to use the case to "fix the balance of payments deficit" of the United States.
  • He allowed Chevron to pay $2 million to an admittedly corrupt former Ecuadorian judge to testify about a supposed "bribe" that never occurred.
  • He refused to admit into evidence any of the three decisions from Ecuador's trial and appellate courts finding Chevron liable and imposing damages.
We note that since the end of the "racketeering" trial even more evidence has emerged (see this new blog) from the authoritative Louis Berger Group showing that Chevron lied about having remediated its waste pits in Ecuador. This new sampling data further underscores the absurdity of Kaplan's rulings related to the company's contamination.

We believe a decision by a U.S. trial judge based so obviously on a distorted view of the evidence will have little credibility in enforcement courts in Canada and Brazil where the courageous Ecuadorian villagers are trying to seize Chevron's assets. Chevron obviously agrees given its gargantuan effort to block the Canadian enforcement action from even proceeding to the merits.

In the meantime, Amazon Watch has done the world a great service by reviewing, dubbing, and releasing Chevron's secret tapes. Doing so was an extraordinary act of courage by both the Chevron whistleblower and one of the nation's leading environmental groups.

Wednesday, April 8, 2015

Chevron's Secret Tapes: Company Whistleblower Discloses Corrupt Acts In Ecuador Trial

What big oil company takes video of its own technicians committing fraud in a pollution trial? Thanks to the tenacious activists at Amazon Watch, we know the answer: Chevron.

With the disclosure of these shocking videos, we are now beginning to think that acts of stupidity have become a regular feature of Chevron's legal team led by former Bush Administration official and General Counsel R. Hewitt Pate. Pate is the mastermind of a $2 billion Chevron defense strategy that has only put the company in a deeper hole in the Ecuador case in the last five years with a series of stunning legal setbacks -- including losing the underlying environmental case in its chosen forum and being hit with a historic $9.5 billion liability.

Things in Ecuador are again going from bad to worse for Chevron.

In a shocking press release and blog post, Amazon Watch explains how a Chevron whistleblower sent dozens of internal company videos to the group documenting an obviously desperate attempt by the oil giant to hide evidence of contamination from the Ecuador court.

A compilation of these disturbing videos can be seen here. In some of them, Chevron folks are seen laughing at the pollution the company left behind in Ecuador.

In our opinion, the videos show Chevron technicians engaged in obvious acts of fraud at the company's former well sites. These individuals were secretly trying to pinpoint spots at polluted well sites where they could lift "clean" samples at later judicial inspections of the same sites supervised by a judge.

The whole idea was to dupe the court into thinking there was little or no pollution when in fact the area was saturated with oil waste. Chevron -- under the leadership of company executive Ricardo Reis Veiga -- also had falsely certified the same sites as "remediated" to Ecuador's government years earlier.

It turns out that Chevron's elaborate attempt at trickery failed. There was so much pollution at the sites even company technicans found it at the later judicial inspections -- as did the technicians for the affected communities and several independent experts. Which helps explain why Chevron lost the trial in its chosen forum and why eight separate appellate judges affirmed the judgment.

It is frankly unbelievable -- not to mention a gross waste of shareholder resources -- that Chevron's management team has paid at least 60 law firms and 2,000 legal personnel to try to block the verdict of three layers of Ecuador's courts, including its Supreme Court.  In the meantime, Chevron's lead outside law firm (Gibson Dunn & Crutcher) has been found to have falsified evidence by the High Court of England -- just as it tried to do in the Ecuador case with the lying testimony of a witness to whom it paid $2 million in cash and benefits.

Chevron is also the same company whose CEO John Watson recently was lambasted by more than 40 environmental and human rights groups for claiming a "citizenship" award in San Francisco after Ecuador's courts found his company had deliberately dumped billions of gallons of toxic waste into the country's rainforest, decimating indigenous groups and causing an outbreak of cancer affecting thousands of people.

Kudos to the Chevron whistleblower who turned over the tapes. Sir or Madam, you have done the cause of justice a great service.

If any other other Chevron whistleblowers want to give up more of the inside goods on the folly orchestrated by Watson and Pate, please do so. Just contact the good people at Amazon Watch for further instructions.