Monday, February 23, 2015

Donziger To Wall Street Journal: The Real Fraud Is Chevron's Jurisdictional Shell Game

The Wall Street Journal today prominently featured a letter from attorney Steven Donziger criticizing Chevron for engaging in a jurisdictional shell game to evade paying the environmental judgment in its chosen forum of Ecuador. The judgment was confirmed unanimously by Ecuador's Supreme Court in 2013 after eight years of trial and three years of appellate proceedings.

According to Donziger's letter,

The real fraud in the Ecuador case is Chevron's litigation shell game. After agreeing to jurisdiction in Ecuador, Chevron sold its remaining assets there. Chevron then returned to the same U.S. court where it had blocked the original lawsuit to try to prevent enforcement in this country. That forced the villagers to try to collect their judgment in Canada and Brazil. But Chevron claims its assets there are immunized because they are held by wholly owned subsidiaries.

Given that Chevron operates outside the U.S. only through its wholly owned subsidiaries, under the company's theory the villagers -- after 22 years of litigation -- will never collect the first dollar of their judgment anywhere. That is a mockery of the rule of law.

Donziger also charged that Chevron for years had kept "a litigation bazooka" pointed at the head of James Russell DeLeon, a financier who had been one of the lead supporters of the villagers in their fight to hold Chevron accountable. DeLeon settled with Chevron last week as a result of a separate retaliatory litigation the oil giant filed against him in Gibraltar, where he maintains a residence.

The full text of a statement released by the villagers in response to the DeLeon-Chevron settlement can be read at the bottom of this press release. In short, while we are sad to see such a strong supporter bow out, the reality is that Chevron's pressure of DeLeon resulted in a huge gift to the villagers that will come in the form of more funds for their court-ordered environmental clean-up.

For Mr. DeLeon, let us be clear: we appreciate what you did. We know you were motivated primarily by the need to deliver justice to vulnerable people. Your support has been critical.

In his WSJ letter, Donziger also emphasized the underlying evidence against Chevron:

Technical evidentiary reports submitted during the eight-year trial in Chevron's chosen forum of Ecuador confirm that for decades the company deliberately discharged billions of gallons of oil-laden waste into rivers and streams relied on by indigenous groups for their drinking water and fishing. Eight appellate judges in total affirmed the findings, including five justice on the country's Supreme Court who in 2013 issued a unanimous 222-page decision that meticulously documented extensive pollution at hundreds of former well sites.

The overwhelming scientific evidence against Chevron -- most of it produced by Chevron in dozens of evidentiary reports -- should never be forgotten as the villagers proceed to try to collect their judgment.

The full text of Donziger's letter to the WSJ can be read here.

Tuesday, February 17, 2015

Top Ten List of Chevron's Most Outrageous Comments On Its Ecuador Disaster

Once evidence emerged that their client was guilty of dumping billions of gallons of toxic waste in Ecuador's rainforest, Chevron's gargantuan "team" of lawyers and consultants just couldn't seem to stop stepping on themselves. 

We therefore decided to compile just some of the company's most moronic comments relating to its efforts to try to sleaze out of taking responsibility for its man-made disaster in the rainforest. Remember that three layers of courts and nine judges in Chevron's chosen forum of Ecuador have confirmed the company's $9.5 billion liability, but CEO John Watson still refuses to pay up.

Since there are so many startlingly obtuse comments from Watson and other Chevron employees and lawyers related to the company's toxic dumping in Ecuador, we promise that more such lists will be presented on this site in the coming months. Based on what we have seen so far, the second list of nutty Chevron comments will be almost as wacked out as the one below. 

We also wanted to take this opportunity to offer a special shout-out to Sylvia Garrigo, the only Chevron employee to have placed two comments on our first Chevron Top Ten list. Once Sylvia became the public face of Chevron during an unflattering interview in 2009 on 60 Minutes, she seems to have disappeared into the bowels of company headquarters in California. 

For now, here is the Top Ten List of Chevron's Most Outrageous Comments On Its Ecuador Disaster:

10.  "The short answer is, it will end when the plaintiffs' lawyers give up."  

Chevron CEO John Watson to journalist Christopher Helman of Forbes magazine when asked about his plan to end the Ecuador litigation.  (Published on March 4, 2013.)

9.    "There is danger is paying too much attention to fairness."

Chevron Lawyer Clarke Hunter to the Supreme Court of Canada, December 11, 2014.  Chevron had ordered Hunter to try to block an attempt by Ecuadorian villagers to seize Chevron's assets in Canada to force the company to comply with the Ecuador judgment.

8.   "The plaintiffs are really irrelevant. They always were irrelevant."

Chevron lawyer Doak Bishop of the American law firm King & Spalding to three private investor arbitrators in a closed-door proceeding where the transcript was later made public. Chevron was trying to make the preoposterous claim that it is entitled to a taxpayer-funded bailout of its pollution liability in Ecuador -- paid for, at least in part, by the very people it poisoned in the rainforest.

7.  "We can't let little countries screw around with big companies like this." 

Chevron lobbyist in Washington, D.C. quoted anonymously by Michael Isikoff in Newsweek magazine, August 4, 2008.

6.  "Ecuador: the next major threat to America?"

Chevron public relations consultant Sam Singer -- the company's own Baghdad Bob -- in a 2008 memo outlining "message themes"designed to distract the media from reporting on the environmental disaster. 

5.  "You are exploiting poor people who are suffering.  That's outrageous."

Chevron lawyer Reed Brodsky to Karen Hinton, longtime U.S. spokesperson for the rainforest communities, in a panel discussion at a legal conference in New York on February 5, 2015.  Brodsky lashed out at Hinton when she showed the audience photos of some of the villagers who have contracted cancer in the area where Chevron operated.

4.  "Our L-T strategy is to demonize Donziger."

Chevron public relations consultant Chris Gidez in a 2009 email to company officials.  "Donziger" refers to Steven Donziger, the longtime U.S. legal advisor to the affected communities.  Chevron has spent an estimated $1 billion and used dozens of law firms and public relations companies to execute this strategy. 

3.  "We will fight until hell freezes over -- and then skate it out on the ice."

Chevron General Counsel Charles James in a speech in 2008 to law students at the University of California, Berkeley.

2.  "I have make-up on, and there's naturally occurring oil on my face. Doesn't mean that I'm going to get sick from it."

Chevron lawyer Sylvia Garrigo responding to a question from Scott Pelley of 60 Minutes about the contamination from the company's abandoned waste pits in Ecuador in a segment that aired on May 3, 2009. Garrigo, now Chevron's Manager of Shareholder Engagement, is no longer used by the company to speak publicly about the Ecuador litigation. Garrigo's response to Pelley is widely considered one of the more moronic comments by a corporate spokesperson in history. 

1.  "We don't want to be in any court, must less a court with respect to this kind of claim."

Chevron lawyer Sylvia Garrigo to Scott Pelley of 60 Minutes, May 3, 2009. Pelley had asked Garrigo why the company wanted the trial be held in Ecuador, and then decided during the trial -- with the evidence against it mounting -- that it suddenly did not want the trial to be in Ecuador.

Monday, February 9, 2015

American Lawyer's Michael Goldhaber Under Fire Again For Biased Coverage of Ecuador Case

The ethics of American Lawyer reporter Michael Goldhaber are under fire -- yet again -- for his one-sided coverage in favor of Chevron in the Ecuador pollution dispute.

Goldhaber last week used his platform as a columnist for American Lawyer to become a full-on advocate for Chevron in its demonization campaign against Steven Donziger, the American human rights attorney who helped to hold the company accountable in its chosen forum of Ecuador.

Donziger worked tenaciously for years to help rainforest communities in Ecuador win a $9.5 billion judgment against Chevron in 2011. Part of the evidence was an admission by Texaco executive Rodrigo Perez Pallares that his company deliberately dumped billions of gallons of toxic waste into rainforest waterways relied on by indigenous groups for their drinking water, bathing, and fishing. Chevron has used at least 60 law firms and 2,000 lawyers in what thus far has been a futile effort to grind down and defeat the affected communities.

Goldhaber -- who has never traveled to Ecuador and who skipped the entire eight-year trial proceedings there  -- urged that Donziger be "disciplined"by the bar association  for his supposed violations in winning the historic judgment in the South American nation where Chevron fought to hold the trial. (The affected communities had filed the original case in New York but Chevron refused to litigate there.)

In reaching his conclusion, Goldhaber relies worshipfully on the highly disputed "findings" of a U.S. trial judge (Lewis A. Kaplan) who invited Chevron to file a retaliatory civil racketeering case against Donziger and then had it assigned to himself. Judge Kaplan then ran roughshod over international law by taking the unprecedented stop of trying to overturn the decisions of three layers of courts in Ecuador (including the country's Supreme Court) that agreed with Donziger's version of events and affirmed the judgment against Chevron.

Goldhaber again ignores key facts that undermine his analysis and shed light on his own ethical shortcomings.

One key fact ignored by Goldhaber is that eight Ecuadorian appellate judges agree with Donziger and have rejected Chevron's fraud allegations. Goldhaber also ignored that Ecuador's Supreme Court in 2013 affirmed the judgment in a 5-0 decision. An English translation of that 222-page ruling is available here but it cannot be found on any of Am Law's numerous websites.

The trial and appellate judges in Ecuador's civil law system (which requires a de novo appellate review) relied on 105 technical evidentiary reports, 64,000 chemical sampling results, and Chevron's own damning internal audits to affirm the liability against the company. In short, the courts reinforced what we have been saying for years: Chevron created an "Amazon Chernobyl" in the jungle that has killed or threatens to kill thousands of people from cancer and other oil-related diseases.

Contrast those reasoned rulings with the utterly rebellious decision of a U.S. judge on whom Goldhaber relies. Judge Kaplan excluded all evidence of Chevron's contamination. Much of the damning evidence documenting Chevron's wrongdoing and corruption can be read in Donziger's counterclaims  -- which, not surprisingly, Judge Kaplan refused to hear and which Goldhaber ignores.

Goldhaber also applies a double standard in his analysis.

Goldhaber is silent about Chevron's flagrant ethical violations in dumping toxic waste on the ancestral lands of 30,000 vulnerable Ecuadorian citizens. Instead, he focuses obsessively on the supposed ethical violations of one American lawyer as seen through the lens of that lawyer's adversaries at Chevron who have spent untold millions to try to demonize him.

If Goldhaber had even a slightly balanced view, he would urge the Department of Justice to investigate Chevron for lying to courts and its own shareholders about the deliberate toxic dumping. He might also ask the DOJ to examine Chevron's illegal $2 million payment to its star fact witness, its manipulation of soil samples during the trial, its threats to put judges in jail if they didn't rule in its favor, and its attempts to bribe Ecuador's government to quash the claims of the indigenous communities.

And he might might question why Chevron refuses to release a critical expert report that proves it star witness in Kaplan's trial lied in open court.

Much of the detail of Chevron's toxic dumping, fraudulent remediation, and other misconduct in Ecuador is documented in the briefs appealing Judge Kaplan's decision, available here and here. Donziger also recently published a powerful defense of the case in another Am Law newspaper whose editors obviously take their ethical duties more seriously than does Goldhaber.

Paul Paz y Miño from the environmental group Amazon Watch reacted to Goldhaber's latest attack on Donziger in a comment on the Am Law website. Unlike Goldhaber, Paz y Mino has been to the disaster zone in Ecuador on numerous occasions.

Here's what he had to say (with minor edits) about Goldhaber's latest broadside against Donziger:
The reason Donziger has not been subject to bar discipline is because the "facts" as determined by the courts of Ecuador completely support his version of events... 
Consider what Goldhaber ignores in his analysis:

First, eight appellate judges in Chevron's chosen forum of Ecuador affirmed the finding of liability against the company based largely on Chevron's own technical reports and internal audit reports, which prove the company was responsible for what could be the worst oil-related contamination on the planet.

Second, contrary to Goldhaber's assertions, the video outtakes of Donziger mouthing off at Ecuador's courts prove nothing other than Chevron sliced and diced them in the editing room to make Donziger look at bad as possible.  Donziger's comment that "it's dirty" in Ecuador reflected his frustration at evidence that Chevron's lawyers were corrupting the court process, bribing witnesses, and trying to sabotage the proceedings…

What is clear is that Chevron had so little confidence in its own evidence that on the eve of its RICO trial it dropped all damages claims against Donziger to avoid a jury of impartial fact finders.  
Paz y Miño also explained that Judge Kaplan ran a "one-sided trial" where he denied Donziger and his clients a jury and excluded the overwhelming evidence of Chevron's contamination. He continues:

Goldhaber has been predicting the imminent demise of the case for years, but it just keeps on going. Like all lawyers and all human beings, Donziger is flawed. But he deserves credit for executing a brilliant strategy … against one of the worst perpetrators of corporate human rights abuses our country has ever seen. He did it by creating a new model of human rights litigation focusing on forcing private companies to be held accountable. That's why 43 NGOs signed a letter supporting the effort, and 35 law scholars from nine countries have signed an amicus brief urging reversal of Judge Kaplan's decision.

As for the case, Paz y Miño says it is "just a matter of time" before Chevron's "lifetime of litigation" strategy goes belly up. He writes,
In the meantime, Goldhaber should chill out and let courts that actually look at all of the evidence continue to resolve the relevant issues that are outstanding…
Which brings us to Goldhaber's apparent conflict of interest. Goldhaber has long been enamored with some of the hyper-aggressive litigators at Chevron's lead outside law firm, Gibson Dunn. This is the firm that used 114 lawyers to fight Donziger when he represented himself pro se for several months during the racketeering case.

Gibson Dunn also ran into ethical problems when judges not named Kaplan were exposed to some of the firm's tactics. See here for how a federal judge in Oregon fined Chevron because of Gibson Dunn's harrassment of a small non-profit organization that tried to help the villagers.

Goldhaber was a member of the committee at American Lawyer Media that in recent years crowned Gibson Dunn its "litigation firm of the year" partly for executing the demonization strategy against Donziger. And Goldhaber still has not corrected the numerous inaccuracies in Gibson Dunn's manipulated video outtakes from the award-winning documentary film Crude that have been posted on the Am Law website for several years.

As for Donziger, let's give him at least a little credit even if Goldhaber won't. He has survived what is probably the most well-financed corporate retaliation targeting a single lawyer in history. Dozens of civil society organizations are backing the case and criticizing Chevron's abusive litigation tactics.

Largely through the use of a new model of human rights litigation, Donziger and his partners have crawled deep under Chevron's skin. Chevron remains furious that Donziger connected the skills of sophisticated lawyers worldwide -- prominent firms such as Lenczner Slaght, Patton Boggs and Keker Van Nest -- to serve the interests of impoverished indigenous groups in the rainforest.

Such alliances never were anticipated by Chevron's business planners -- including current Chevron CEO John Watson -- when they took a calculated risk to buy a company (Texaco) that they knew had systematically dumped billions of gallons of toxic waste into the forest.

The fact Chevron now uses 60 law firms to fight the villagers is a good thing. Paying all of those expensive lawyers raises the cost to company management of its misconduct and has produced a veritable rebellion against CEO Watson among many of the company's shareholders.

Chevron also has dispatched at least 150 private investigators from Kroll and other agencies to track and spy on Donziger, his family, and his colleagues as they travel around the world. That's not a good thing, because it is an obvious violation of the professional rules. Again, silence from American Lawyer's self-annointed in-house arbiter of legal ethics.

The degree to which Michael Goldhaber deprives American Lawyer's readers of critical facts to manipulate them toward his point of view is stunning -- even taking into account that he is an opinion columnist. Part of the problem for American Lawyer is that Goldhaber's "opinions" are often the only coverage its readers can get from the company about the Ecuador case.

For Mr. Goldhaber and Chevron, the lesson about ethics is simple: those who live in glass houses should not throw stones.

(For more background on the pro-Chevron slant in the reporting of Goldhaber and his friend Paul Barrett, see this blog from Amazon Watch. A summary of the evidence against Chevron can be found here; a video explaining Chevron's human rights violations in Ecuador can be seen here; a recent article in Rolling Stone explaining the case can be read here.)