Don't Buy Chevron's Big Lie!

Originally posted on Amazon Watch's Eye on the Amazon blog, by Paul Paz y Miño:

Global Warming is a Myth

The NSA is Not Really Spying on Americans

The CIA Doesn't Torture Prisoners

Chevron Has Been Exonerated from Ecuador Disaster

These are all headlines you often see in U.S. media that are obviously false. Yet why do they even get traction? The answer, of course, is that they serve powerful interests who promote them incessantly in whatever space they can find or that money can buy in the mediasphere. But that doesn't mean that people buy into them, or that they should.

The Real Story

Chevron's "Big Lie" about its contamination in Ecuador is a prime example. Not only has Chevron been found guilty in a court of law of dumping billions of gallons of toxic waste into the Amazon rainforest, but the decision has been confirmed unanimously by two different appellate courts in Ecuador where Chevron fought to have the trial held. Dozens of independent journalists have also confirmed the existence of Chevron's massive pollution, most recently in this article published just last week.

Chevron likes to point to a recent court decision by a federal judge in New York who "determined" after a one-sided trial with no jury that the trial in Ecuador was marred by fraud. The judge based his decision on the clearly corrupt testimony of an Ecuadorian man to whom Chevron paid well over $350,000, or 20 times his annual salary. Yes, it is offensive to our sensibilities as U.S. citizens to think that such a sting would fly in a U.S. courtroom. But think again about the current state of our democracy, the massive and growing corporate power, and the daily exposure of injustices that read like the script of the next Jason Bourne movie. And then read on – Hollywood's best couldn't make this stuff up.

Let's dispel the myths outright:

1. Chevron was in no way exonerated from responsibility in the recent decision by Judge Lewis Kaplan in its RICO case.
   
2. Kaplan did not even review the evidence of contamination in Ecuador that the Ecuador trial court determined was the basis for Chevron's liability.
   
3. The decision is not the least bit binding in any of the fora where Ecuadorian plaintiffs are now pursuing enforcement (currently Canada, Argentina and Brazil).
   
4. An objective review of the facts presented in the case shows that with respect to the actual fraud claim – that the Ecuadorian verdict was ghost written – the ONLY evidence is a hearsay statement by a disgraced judge, a chevron PAID witness and an admitted liar. That kind of flimsy case would be laughed out of Judge Wapner's court.
   
5. The decision in Ecuador was based almost completely upon scientific evidence submitted by Chevron itself, including internal documents ordering the destruction of records related to oil spills.

So despite sensational headlines, Chevron still owes $9.5 billion to the communities in Ecuador and no court has found otherwise. Indeed, Chevron has openly admitted its predecessor company Texaco deliberately dumped billions of gallons of oil waste into the rivers and streams relied on by indigenous groups and entire communities for sustenance. The company never denied that it engineered and exclusively operated for decades an oil extraction system that was designed to pollute. Chevron's contamination in Ecuador was not an accident; it was a corporate decision designed to sacrifice human health and well being in the name of greater profits.

Eventually, Chevron CEO John Watson is going to have to answer to his shareholders as to why he spent millions upon millions of their money on a legal strategy that offers no actual legal remedy for the company. What he actually spent their money on was a talking point – and a false one at that.

Anatomy of a #BigLie

As is widely known, Chevron bought itself a disaster unlike any other when it merged with Texaco in 2001. For years, it has tried everything, literally sparing no expense, to wash off the filth of its ADMISSION of deliberately poisoning the Ecuadorian Amazon over decades. To that effort it tried pushing its case in any forum it could that would give a favorable verdict – including now more than 30 federal courts throughout the U.S. When you have 60 law firms and 2,000 legal personnel and are spending over a billion dollars to fight, that opens up a lot of options. But Chevron has fundamentally failed. In fact, "18 different U.S. federal trial courts and all four federal appellate courts have either rejected Chevron's claims outright, or refused to adopt them. The U.S. Supreme Court also denied a Chevron petition to review a decision denying it the right to arbitrate the issue of liability."

Yet Chevron finally found two venues working for it – Kaplan's court and an International Investor Tribunal of the Hague (to learn more about how anti-democratic and biases that venue is, read this release from Public Citizen). So, in crude yet sadly accurate terms, Chevron threw all the sh*t it could at the wall to see what would stick. That's how it found Judge Kaplan. Kaplan actually invited Chevron to file the RICO case against the Ecuadorians and their counsel, and then assigned the case to himself rather than go through the random selection process as is the normal custom in the federal judiciary.

The whole process stunk from the beginning.

Witnessing the trial myself last fall and consulting with lawyers in the field, I can attest that things went on in Kaplan's courtroom that raise disturbing questions around his own ethics and the U.S. judiciary. The list is long but includes: allowing Chevron to pay its witnesses in violation of rules barring the same; degrading treatment of a foreign judge from Ecuador who testified that he wrote the judgment; threats and outright hostility to Ecuadorian witnesses and permitting absurd lines of questioning in open court while acknowledging their inappropriateness at sidebar, among many other problems. The Second Circuit Court of Appeals (which oversees Kaplan) will most likely strike down most – if not all – of Kaplan's ruling. Click here to read the Ecuadorian legal team's analysis of why Kaplan's decision is "fatally flawed" and will likely be overturned on appeal and backfire against Chevron abroad. In the meantime, Kaplan's judgment still carries no legal authority outside the U.S. and it decidedly will not stop the seizure of Chevron assets.

So then, why did Chevron pay through the nose to get the verdict?

Setting a Precedent: A Clear and Present Danger

Let's be clear: Chevron's main "victory" (if you want to call it that) is not in the actual verdict – since it has no legal impact on enforcement – but the SALE of the message that it brings. And that was its primary goal in the first place. Chevron knows that its case looks pathetic the moment anyone actually looks beyond the surface. They're counting on most people NOT to look. And they are counting on most members of the U.S. media to swallow the story as it is fed to them by Chevron's deep-pocketed public relations team. Some journalists have paid passing mention to the glaring injustices of Kaplan's court, like the fact that Guerra – the key witness upon which the fraud claims lie – completely lacks credibility. However, almost all continue to promote false Chevron talking points. And everyone knows the famous expression about repeating the same lie over and over.

Ironically, the grave danger here is not to the Ecuadorians seeking justice. In fact, they're not dissuaded in the least by a U.S. judge acting in an overtly racist manner, with the gall to pass judgment on their legal system without knowing the first thing about it nor even trying to educate himself. No, the real danger is the precedent this sets for our work to hold Chevron and other U.S. corporations accountable. Kaplan's ruling, if allowed to stand, tries to criminalize the critical First Amendment activity of watchdog groups like ours. It would allow any corporation to bring SLAPP lawsuits against human rights and environmental activists and their lawyers and force them to spend millions of dollars in time and legal costs defending themselves. Faced with the risk of turning over all their information to their very targets of their campaigns or possibly being fined if they refuse to comply with sweeping subpoenas, many groups will be cowed into submission before their cases even get to court.

If our government – spurned on by pressure from civil society – does not step in and prevent this heinous attack on justice and the First Amendment, then we might as well start waving the white flag in the face of growing corporate power in America. That's why the Sierra Club, Greenpeace USA and 40 other human rights and environmental NGOs (most of which have never even been involved in this campaign) condemned Chevron's actions and well over 100,000 people have sent messages to the U.S. Senate demanding that they investigate this company that has gone off the rails.

We cannot permit Chevron's Big Lie that it is off the hook in Ecuador to take hold and grow. It threatens every action we take to challenge corporate crimes at home and abroad. The first step to fighting back is not permitting the "Big Lie" to permeate our body politic any further. Chevron can spend untold millions touting this verdict but DO NOT BUY IT – and don't let anyone else buy it either.

Read More

Trudie Styler on Seeking Justice in Ecuador

Along with her husband Sting, Trudie Styler founded the Rainforest Fund 25 years ago, and as a longtime advocate for the rights of the indigenous communities of the Amazon, she has supported the legal efforts to hold Chevron accountable for its human rights and environmental abuses in Ecuador.

Today, Trudie posted a powerful article on Huffington Post. We encourage you to read and share this thoughtful piece. Thank you, Trudie.

Seeking Justice in Ecuador
Originally posted on The Huffington Post.

Let us begin with a common understanding; let's start with what is not in dispute. The Amazon rainforest is one of the world's most important ecosystems and is home to the largest remaining area of tropical rainforest on the planet. Its watershed is the largest river system in the world, covering 40 percent of the South American continent and carrying 20 percent of the world's flowing fresh water. The rainforest is also the ancestral home of nearly 200 indigenous cultures; people who have demonstrated sophisticated ecological stewardship of their rainforest territories for thousands of years. And the Amazon rainforest -- our climate's regulating heart-pump, key to the fight to stem global climate change -- is in peril, under increasing threats from our global economy's unsustainable demand for finite resources: timber, minerals, hydrocarbons.

I am no stranger to the struggles of indigenous people in the Amazon to protect their ancestral territories from the short-sighted and exploitative "development plans" of governments, or from the unchecked greed of the global extractive industry. My husband Sting and I founded the Rainforest Fund 25 years ago, and have worked for decades -- at times with great success, and at times with heartbreaking failure -- in support of indigenous people, such as the Kayapo who live along the legendary Xingu river of the Brazilian Amazon, in their fights for self-determination and protection of their pristine lands.

Over the last six years I have been working in Ecuador's northern Amazon, a region of unparalleled biological and cultural diversity that has been decimated by decades of reckless oil extraction. It has been an honor to work in support of, and to learn from, the Cofan, Siona, Secoya, Kichwa and Waorani peoples of the Ecuadorian Amazon on a water project -- www.GiveClearWater.org -- which is building a movement for clean water, cultural survival and rainforest protection. But it would be dishonest for me not to admit that I wish such a project was unnecessary. I wish that history was not so cruel as to demand the need for a project to provide life's basic necessity -- clean water -- to the ancestral guardians of the rainforest. And yet, the region's rivers and streams are today poisoned, necessitating rainwater catchment systems and cultural renewal for these forest guardians, who for millennia relied upon the water flowing through their boundless backyard for drinking, cooking, bathing, and fishing.

You may be familiar with the tragic story of oil drilling in northern Ecuador: Chevron (formerly Texaco) deliberately dumped billions of gallons of toxic wastewater and spilled roughly 17 million gallons of oil ("cost-cutting measures") in the rivers and streams of the once-pristine forest. The consequence: a severe public health crisis amongst the indigenous people and farmers of the region. Cancer, birth defects, disease, and poverty for those unlucky enough to live above an American oil company's underground rivers of liquid gold.

A lawsuit was filed 20 years ago to hold the American oil company accountable, and in February 2011 Chevron was found guilty of environmental crimes in Ecuador, and was fined $19 billion by Ecuadorian courts. Ecuador's Supreme Court recently upheld the verdict, but cut the damages to $9.5 billion, a figure which would allow for environmental remediation, provision of health care and clean water, and cultural restoration, but removed the punitive damages ordered by the lower courts.

And we hoped that was the end of it. That Chevron would recognize its historical wrongs, pay the fine, and pledge to repair the damages that it caused. But instead, it has fought with alarming intensity to evade responsibility. Unfortunately, it seems, corporate impunity is the theme of our days.

Chevron has spent hundreds of millions of dollars on lawyers, public relations firms, private investigators in order to impugn the verdict in Ecuador, assault the entire Ecuadorian judicial system, discredit the human rights lawyers, and humiliate the indigenous people and farmers, who are guilty of nothing more than living in the forest and drinking the water poisoned by oil and the byproducts of its excavation.

Sting and I had the unfortunate opportunity to spend several days over the many weeks in October and November attending a trial in U.S. federal court in New York, where Chevron accused Steven Donziger, a human rights lawyer and friend of mine, along with the indigenous peoples and farmers of Ecuador, of having a waged a multi-decade racketeering conspiracy against the company. Filed under the RICO statute -- designed originally to prosecute organized crime syndicates -- Chevron's racketeering lawsuit is the oil giant's alarming and cynical attempt to destroy a two decades-long effort to hold the company accountable. And tragically, they have succeeded.

Instead of owning up to its grave responsibility in Ecuador, Chevron instead has spent millions of dollars creating what appeared to me a modern Kafkaesque drama in the courtroom, where suddenly the victims of Chevron's contamination in Ecuador have become the accused, and the polluter has become the victim; an absurd theatre where justice has been turned on its head.

It is not my place, nor my expertise, to opine on the legal matters involved. I am nonetheless compelled, principally because of the suffering of humble, dignified people I have witnessed in Ecuador at the hands of an American company, to say that Chevron's legal and public relations tactics in this case constitute a grave injustice. That the affected indigenous peoples and farmers, and the human rights lawyers who have advocated for them, should find themselves in a New York courtroom, accused by its abusers of conspiracy and fraud is a preposterous, humiliating, and distracting sideshow. The victims of a terrible environmental crime have become the guilty parties, and the grave wrongs perpetrated against them are brushed aside, apparently no longer relevant or worthy of note.

One should always ask questions in life. Among the greatest and most pressing questions of our time, indeed of all times, must be: What is the nature of justice? And: How can justice be attained? What kind of world are we living in when a farmer from northern Ecuador, Donald Moncayo, a kind and generous man whom I know and admire; who lost family members and friends to the sickness produced by oil contamination; who has worked tirelessly to bring attention to the plight of his community and surrounding communities now stands accused of conspiracy and racketeering only because he has dedicated his life to holding a corporation accountable?

What kind of world are we living if it has been shown that only 90 companies are responsible for two-thirds of man-made climate-endangering emissions. And among those, we know that but a few companies -- like Chevron, Exxon and BP -- are primarily responsible for climate change since the dawn of the industrial age, and yet we have made no progress in holding them to account, or forcing them to change course? With a stranglehold on government and resources that frequently dwarf that of the vast majority of nation-states, these companies continue to operate with absolute impunity.

These are huge questions. Our shared future depends on asking them, and relentlessly seeking answers. And I suspect that how we confront, and ultimately dismantle, corporate impunity may be the greatest challenge of our time.

Read More

Court Ruling in Chevron’s RICO Case: Violates First Amendment and Will Backfire In International Courts

This morning, U.S. District Judge Lewis Kaplan delivered his ruling in Chevron's retaliatory RICO case against the Ecuadorian villagers living amidst the company's contamination, and their long-time legal advocate Steven Donziger.

Donziger, his appellate counsel Deepak Gupta, and Han Shan, U.S. spokesperson for the Ecuadorians issued a press release earlier today with the headline:

Chevron’s Flawed RICO Decision in Ecuador Case Violates First Amendment and Will Backfire In International Courts, Defendants Say

The release contains brief statements from the three people listed above, as well as an informative background document with additional analysis on the ruling.

An excerpt from Steven Donziger's statement: 

“With all due respect to the court, this is an appalling decision resulting from of a deeply flawed proceeding that overturns a unanimous ruling by Ecuador’s Supreme Court. We believe Judge Kaplan is wrong on the law and wrong on the facts and that he repeatedly let his implacable hostility toward me, my Ecuadorian clients, and their country infect his view of the case. This decision is full of vitriol, is based on paid evidence from a corrupt former judge, and ignores the overwhelming evidence that Chevron committed environmental crimes and fraud in Ecuador. Through this decision, we now have the spectacle of a Manhattan trial judge purporting to overrule Ecuador’s Supreme Court on questions of Ecuadorian law. All of these factual and legal issues will be addressed in due course on appeal. We are confident we will be fully vindicated in the U.S., as we have been in Ecuador."

Donziger's statement concludes:

"I will continue my efforts on behalf of my clients consistent with the law. I also will pursue an immediate and expedited appeal so that a panel of impartial judges can review this decision.”

Deepak Gupta, the appellate attorney for Donziger, said:

“Today’s decision should be extremely troubling for anybody who cares about the rule of law. This court has taken the extraordinary and unprecedented step of appointing itself a worldwide fact-finding commission and issuing what is in effect a global anti-collection injunction that would preclude enforcement of a judgment from another country in every jurisdiction... This decision also effectively outlaws core activity protected by the First Amendment such as bringing lawsuits, holding protests, issuing press releases, and engaging public officials. This is particularly appalling given that this case is about holding a corporation accountable for refusing to clean up decades of toxic pollution in the Amazon.”

And Han Shan, U.S. spokesman for the Ecuadorian villagers had this to say:

“While the Ecuadorians respect the rule of law in all countries, they do not accept this court’s jurisdiction nor this ruling. The affected communities long ago gave up hope that a U.S. court would provide them relief from Chevron’s contamination, which has taken their loved ones, poisoned their lands, and imperiled their cultures.

Their focus now is on enforcing their judgment in countries where they can receive a fair hearing about Chevron’s pollution of the rainforest and refusal to abide by a legitimate ruling from the courts in Ecuador, where the company demanded the case be heard. It is time for Chevron to end its abusive efforts at evading justice, and restore the indigenous people and villagers who suffer from the company’s terrible legacy.”

Read the entire press release here.

Amazon Watch, a US-based human rights and environmental organization that has long supported the Ecuadorian communities, issued a press release as well, stating:

Amazon Watch stands with Ecuadorian communities in rejecting a misguided judgment delaying justice for some 30,000 indigenous people and farmers who continue to suffer from the company's toxic legacy in the Amazon rainforest. The decision – handed down today by New York District Court Judge Lewis Kaplan – also underscores the threat that well-financed corporations pose to justice and the rule of law with their ability to spend hundreds of millions of dollars on efforts to attack victims and their allies.

Today's verdict is an example of Chevron buying and bullying its way to a verdict with 60 law firms and thousands of legal professionals hell-bent on exhausting the Ecuadorians and their allies. Such a verdict will ultimately prove useless in Chevron's efforts to evade justice.

Read More

Paul Barrett & Business Week agree: Chevron's lawyers may not even believe their own arguments

Below is a short, must-read piece from Marco Simons, Legal Director of Washington DC-based EarthRights International (ERI), a "nonprofit organization that combines the power of law and the power of people in defense of human rights and the environment," as ERI's mission states. For nearly twenty years, ERI has provided legal support for oppressed and marginalized communities, often fighting exploitation by multinational corporations and their allies intent on plundering their natural environments for profit. From Burma to Nigeria to the Amazon, ERI's lawyers, activists, and advocacy trainers have done inspiring work—inspired itself by a deep and abiding commitment to fairness, justice, and equity. That's what Marco is talking about in his conclusion. Read for yourself.
Re-posted from Marco's blog at EarthRights International:

Yesterday, BusinessWeek picked up on Michelle's blog post from last week highlighting the inconsistent positions taken by Gibson Dunn, the law firm that represents Chevron, on an issue that is central to Chevron's case against attorney Steven Donziger. Paul Barrett's article confirms that Gibson Dunn is arguing both sides of the issue, but says that this isn't a problem because "That, for better or worse, is what lawyers do." Perhaps unintentionally, Barrett makes a pretty strong case for why you want lawyers who believe in your case.

Barrett has done us a service in confirming that, according to Gibson Dunn, Chevron allowed their lawyers to argue against them in another case. So Gibson Dunn may not be unethical, but Chevron might be a little stupid. Barrett also conveniently overlooks the fact that Gibson Dunn is not simply taking different positions in different cases – it's arguing against Chevron's position in another case that, because it is at the Second Circuit Court of Appeals, will be binding on the lower court deciding the Chevron case.

Barrett is right that the rules allow Gibson Dunn to take a position in one case that could harm or even destroy their legal position in the Chevron v. Donziger lawsuit, as long as Chevron agrees. Doing so, however, doesn't bolster their credibility. It's generally more effective to convince a judge that you actually believe in the position you're taking, not that you'll simply "argue either way, depending on the interests of whoever is paying [your] bill," as Barrett describes it.

As lawyers who take cases that we believe in, arguing positions that we believe are correct, I and my co-counsel don't have to face the dilemma that Gibson Dunn faces – and we don't face judges who are skeptical of our positions because they think we're simply hired guns. Sure the rules allow us to argue any position supported by the law, but if it were your case, wouldn't you want lawyers who actually believed what they were saying?

For more background, read last week's piece here on the Chevron Pit: How Chevron Might Have A Lawsuit Against Its Own Law Firm for Blowing the RICO Case

Read More

Chevron: "Let Them Eat Pizza!"

Originally posted on Amazon Watch's Eye on the Amazon blog. By Paul Paz y Miño.

Would people really offer a coupon for a free pizza and soda to families who just had a gas well blow up in their community, killing a worker and burning for days? People did.

In a move that would make Montgomery Burns proud, Chevron "apologized" to the community for the massive explosion of their fracking well in rural Pennsylvania by offering each affected family a coupon for free pizza from a local pizza joint.

This is one of those rare glimpses into a corporation's ethos, or lack thereof. Somewhere inside Chevron the decision was made that a $12 large pizza and a two-liter soda was proper compensation, or at least sufficient to pacify people for the "inconvenience" of having a huge explosion and toxic fire in their neighborhood. We called Bobtown Pizza this morning (with a story like this, you really gotta hear it for yourself to believe it) and at this point they are just wishing this whole thing would "blow over" (no pun intended).

Chevron's attitude in the US in 2014 has barely evolved from their attitude in 1964 in Ecuador's Amazon rainforest. Back then Chevron told villagers that oil was good for them, to rub it on their joints for arthritis! They sprayed it on the roads to keep down the dust and people walked on it for years, shoeless. All the while they were dumping billions of gallons of toxic waste into pits that drained directly into waterways used for drinking and bathing. Could they get away with that in Pennsylvania today? If it turns out that communities can no longer drink their tap water due to Chevron's fracking, will the company send them coupons for a case of Diet Mountain Dew?

We're not easily surprised by Chevron spokespeople saying horrific and ludicrous things anymore, but this was so tone-deaf that even we were impressed. We haven't been so in awe of Chevron's insensitive hubris since Sylvia Garrigo dismissed Ecuadorians' cancer and other severe oil-related health issues on 60 Minutes by saying, "I have makeup on, and there's naturally occurring oil on my face. Doesn't mean that I'm going to get sick from it." Check out this video, Great Moments In Stupid Chevron PR, for similar outrageous statements.

The friendly, unsuspecting people at Bobtown Pizza are bearing the brunt of complaints and crank calls due to community outrage. We'd suggest that unhappy citizens instead contact Chevron toll-free. Bobtown Pizza never expected a national backlash and coverage from CNN, Newsweek, and others, but they also weren't aware that Chevron is the largest corporate criminal on the run and on the hook for $9.5 billion in Ecuador. They didn't know that Chevron's Richmond refinery blew up not long ago and that they violated 62 EPA regulations there. They didn't know that over 40 environmental and human rights NGOs recently condemned Chevron's actions and over 100,000 people have sent messages to the US Senate to complain about their abusive legal tactics.
And Chevron, just in case you were wondering, the 30,000 Ecuadorians who sued you for polluting their homes and fouling their future will not be appeased by an order of empanadas and a six-pack of Inca Kola.

Read More

How Chevron Might Have A Lawsuit Against Its Own Law Firm for Blowing the RICO Case

Chevron's "Dream Team" at the Gibson Dunn law firm has yet to come up with an explanation for its monumental mistake last week in undermining the company's RICO case against Ecuadorian villagers and their lawyers.  Chevron's team leader at Gibson Dunn, partner Randy Mastro, usually loves spinning to the media.  But even he has gone radio silent.

Last Friday, another partner at Gibson Dunn—Harvard Law School graduate Miguel Estrada—argued before a panel of judges from the 2nd Circuit Court of Appeals in Manhattan. The case being heard that day had nothing to do with the plight of Ecuadorians living with the toxic legacy of Chevron's pump-and-dump oil operations in their rainforest lands.

But the hearing itself—or at least one of the key arguments made—may have an enormous impact on the Chevron-Ecuador case.

From the blog of DC-based EarthRights International yesterday:

Chevron probably isn’t too happy with Randy Mastro and the rest of its dream team at Gibson Dunn & Crutcher right now. Gibson Dunn represents Chevron in its “sue the victims” case against a group of Ecuadorian villagers and their attorneys. The Ecuadorians won a $9.5 billion judgment in Ecuador against the company for massive pollution, and Chevron retaliated by filing a law suit under the Racketeering and Corrupt Organizations Act (RICO), claiming the Ecuadorian judgment was obtained through fraud.

Last week, however, in a completely separate case, Gibson Dunn may have shot the Chevron case in the foot, arguing to the Second Circuit Court of Appeals that a private party can’t seek an injunction under RICO. This is the opposite of the argument they’ve made in Chevron’s RICO lawsuit in the district court in New York.

Of course, in its retaliatory RICO lawsuit against the Ecuadorians and their longtime legal advocate Steven Donziger, Chevron is in fact seeking an injunction.

As Donziger told Law360 last week:

Chevron made three strategic decisions that together strip it of standing: refusing to challenge its liability for the pollution in Ecuador, dropping its damages claim in order to escape a jury trial and asking for a tailored injunction that only blocks Donziger and his Ecuadorean co-defendants from a cut of the multibillion-dollar judgment, rather than a worldwide anti-enforcement injunction.

Donziger and the Ecuadorians have argued all along that the RICO statute does not permit private parties to seek injunctive relief. Of course, Chevron—or more accurately, Gibson Dunn's Mastro —has repeatedly argued the opposite. Meanwhile, Judge Lewis A. Kaplan, who has brazenly promoted the Chevron RICO lawsuit, seems to think it's an open question. 

Back to EarthRights International's recent post:

If it is indeed an open question, it may not be open for much longer.

Last Friday, in Sykes v. Mel Harris, Gibson Dunn urged the Second Circuit to “confirm that private RICO claims for injunctive relief fail as a matter of law” – in other words, private plaintiffs cannot seek injunctions under RICO. If Gibson Dunn wins that argument, the decision will control Chevron’s case against Donziger and will doom Chevron in the lower court.

This, of course is a major Catch-22 for Chevron, as reporter Adam Klasfeld at Courthouse News wrote last week.  Klasfeld concluded that Gibson Dunn's Estrada could "scuttle [Chevron's] efforts" to fight off its $9.5 billion liability in the Ecuador case.

Klasfeld's article concludes with a quote from Christopher Gowen, a professor of ethics at the Washington College of Law at The American University in Washington, D.C.  a member of Donziger’s legal team, Gowen said:

"Gibson Dunn is correct to argue that there is no injunctive relief for a private party under the RICO statute," said Gowen, who serves as a legal ethics professor at American University. "The problem for the firm is that by doing so they acknowledge that their prosecution of the Chevron v. Donziger case has been a complete waste of their client's time and money and an abuse of the civil justice system. While I was troubled by the ethical conduct of Gibson Dunn on behalf of Chevron throughout the trial, I never imagined a day where their unethical conduct would destroy their own client's case."

The EarthRights blog points out that Gibson Dunn has a conflict of interest. And the party with standing to complain is none other than Chevron, the oil company that reportedly has paid the firm in excess of $1 billion for its work on the Ecuador case. EarthRights points out that Chevron might have a whopper of a legal claim against none other than Mastro and his partners.

That would be the ultimate poetic justice: Mastro himself might have to pay part of Chevron's obligations to its victims in Ecuador, should the villagers succeed in recovering their judgment.

For additional analysis on this shocking development, read this press release from Donziger's law firm:

Chevron Law Firm Gibson Dunn Concedes that Legal Basis for RICO Case Against Ecuadorians Is Invalid

And this legal motion filed recently by Donziger and his counsel in the RICO case:

Reply Motion in Support of Donziger’s Motion to Dismiss

In the above Reply Motion, Deepak Gupta, Steven Donziger’s appellate lawyer, attached Gibson Dunn’s Merits Brief in the Sykes v. Mel Harris case in which Gibson Dunn's Estrada spells out exactly why private parties cannot seek injunctive relief under RICO.

Advice to Gibson Dunn: Mr. Estrada and Mr. Mastro need to be re-educated about their ethical obligations.

Read More

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.

Consider:

**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.

Read More

Donziger's New Appellate Team Comes Out Firing; Asks for Nullification of RICO Case

It was only last week that lawyers for Steven Donziger as well as the Ecuadorian victims of Chevron's pollution in the rainforest—sued alongside their longtime legal advocate—filed their final reply briefs in the oil giant's retaliatory RICO case. Judge Lewis Kaplan is expecting to deliver a ruling in the coming weeks or months.

But long expecting an adverse ruling from a judge who his former lawyer John Keker says has shown “implacable hostility” towards him, Donziger didn't wait for a ruling in the case before securing  appellate counsel.

And that appellate team, lead by a lawyer that the Wall Street Journal calls a "heavy" came out firing, filing a motion asking for the RICO case to be dismissed altogether.

As noted in a press release issued yesterday by Donziger:

The move to dismiss the RICO case – which comes after the close of evidence but before decision – is based largely on Chevron's surprise admission in its final post-trial brief that it cannot block foreign enforcement proceedings that rainforest villagers are using to collect on their $9.5 billion environmental judgment.

“In the end, Chevron all but admits that is it not asking this Court to resolve any concrete case or controversy,” said the motion, filed by Deepak Gupta of Gupta Beck in Washington, D.C. “This unseemly spectacle of a case must come to an end.”

Deepak Gupta is, of course, the "heavy" referred to by the WSJ. He is a principal at Gupta Beck, a firm he founded in 2012, and formerly held a high-level post at the Consumer Financial Protection Bureau. Before working at the CFPB, he worked as a litigator with Public Citizen for seven years, where he argued some high-profile cases before the Supreme Court.

The press release continues:

“Motions to dismiss usually happen at the beginning of a trial, not after three years of litigation,” said Gupta. “But when Chevron dropped all of its damages claims to avoid a jury trial, it painted itself into a corner and deprived the court of jurisdiction.”

“After analyzing the case for the last several weeks, we have come to the conclusion that Chevron has not identified a single injury that would give it standing,” said Gupta. “That’s because none exists.”

The motion itself was heralded by respected lawyer and legal analyst Ted Folkman. In a post on his Letters Blogatory site, headlined Lago Agrio: Deepak Gupta In The House, he writes:

If you spend your days reading and writing memoranda of law, you know a good one when you see it. And so when I read Steven Donziger’s latest brief in the RICO case last week, my first thought was that his lawyers had finally found their groove. But then I looked at the cover and saw that Donziger had actually gotten a new legal team! I assume (but I do not know) that the new member of the team, Deepak Gupta of Gupta/Beck, had a big hand in the new brief that’s both legally compelling and a pleasure to read.

Back to yesterday's press release:

What Chevron really wants from Judge Kaplan is an advisory opinion that it can use for public relations purposes in the U.S. and around the world, a judicial function prohibited by the Constitution, said Gupta. “Courts exist to decide actual cases,” said Gupta. “They are not debating societies. Nor do they exist to write advisory opinions for foreign courts.”

Gupta said Chevron faces two other intractable problems – first, that the injunction it seeks from Judge Kaplan to block the Ecuador judgment is not authorized by the RICO statute; and, second, that the injunction is functionally equivalent to one declared illegal by the Second Circuit Court of Appeals in an earlier phase of the case.

To get around the latter problem, Chevron is now claiming that its proposed injunction would only stop the Ecuadorians from “collecting” on their judgment, but would not stop the enforcement actions themselves.

“Chevron is now seeking an anti-collection injunction rather than an anti-enforcement injunction,” said Gupta.

“Although Chevron never has had standing to bring this lawsuit, whatever argument it might have had for standing (before dropping its damages claim) is now gone – and, with it, so too is this Court’s authority over the dispute,” said the motion.

Read the rest of the press release here, and the motion to dismiss here.

Read More

Since When Did Lobbying and PR Become Extortion?

Today, Politico Magazine published a powerful op-ed from Karen Hinton, who has long served as a tenacious spokesperson and advocate for the Ecuadorian communities fighting to hold Chevron accountable for its abuses in the Amazon. It's aimed at an audience of people, who like herself, advocate for the interests of others. In it, she asks whether some basic, constitutionally-protected activities could be in jeopardy because of Chevron's scorched earth legal tactics to evade accountability for its crimes in Ecuador.

Posted in its entirety below, it's a must-read.

Since When Did Lobbying and PR Become Extortion?

I do advocacy work. So why am I accused of being part of a criminal conspiracy?

By KAREN HINTON
January 28, 2014

Within the next two months, a New York federal judge is expected to rule in an environmental case that goes to the core of how lobbyists, publicists and other advocates up and down K Street make their living.

If you are one of them and you know nothing about Chevron’s racketeering lawsuit against a group of Ecuadorian indigenous peoples, farmers and their attorneys (Chevron Corp. vs. Donziger), it’s time to tune into this 20-year battle over who should pay to clean up one of the world’s worst oil contamination disasters.

The U.S. Chamber of Commerce and other business groups are backing Chevron. They hope a favorable ruling from U.S. Federal Judge Lewis A. Kaplan will help put trial lawyers out of business and weaken the ability of human rights advocates to hold corporations accountable for their misconduct. Billions of dollars are at stake. But the business groups should be careful what they ask for. The result could yield a double-edged sword that strikes not just at contingency-fee lawyers and environmental activists but encourages internecine corporate warfare as well.

Chevron is likely to win its lawsuit in the lower court—a retaliatory fight to try and avoid a $9.5 billion Ecuador judgment. Kaplan, who’s hearing the case, made numerous prejudicial statements against the Ecuadorians even before he read or heard one statement in their defense. Tellingly, Kaplan suggested the oil giant file the racketeering and extortion (RICO) charges against the Ecuadorians and their attorneys. In turn, the defendants have argued that Kaplan is biased and should be recused. As proof, they cite comments Kaplan has made that disparage Ecuador’s courts and government and question whether the Ecuadorian villagers harmed by Chevron’s pollution actually exist. He appears to be utterly unbothered by the fact Ecuador’s Supreme Court affirmed the judgment against Chevron after knocking about $10 billion off the company’s liability.

Meanwhile, Chevron maintains it’s a victim of a conspiracy campaign that works something like this:

The attorneys, who head up this “criminal enterprise” and are to be paid on a contingency basis, filed a fraudulent lawsuit with the sole purpose of enriching themselves. Publicists for the Ecuadorians (I’m one), lobbyists and unpaid environmental advocates, recruited by the attorneys, colluded with them and the Ecuadorians to pressure Chevron to pay a judgment or settle – a violation of the RICO statute, according to Chevron and Kaplan.

In other words, Chevron’s theory is that hard-hitting press releases and lobbying before Congress and government agencies to draw attention to the U.S.-based company’s actions in Ecuador equal economic extortion and are part of a grand conspiracy to pressure them to pay.

Put another way, hard-hitting press releases and lobbying before Congress and government agencies by (insert you and your client) against (insert your client’s competitors or opponents) about (insert issue that financially benefits your client) could equal extortion and be a violation of the RICO statute. Plaintiffs who win civil RICO cases are entitled to treble damages, which could bankrupt many companies or trade associations if they were to be so targeted.

U.S. case law establishes that if you lie about others to pressure them for a monetary advantage or payment, then you could be guilty of economic extortion. Chevron has charged that the Ecuadorian “conspirators” and their “co-conspirators,” like me, lied, manufactured evidence about the contamination, and committed fraud. I find this utterly preposterous and assumed we would be allowed to aggressively refute and defend against these charges in court. We were not.

During the six-week trial, which took place in October and November, Kaplan refused to allow any testimony into the record that would prove we did not lie about the contamination – our reason for demanding Chevron pay to clean up the contamination. He struck page after page of witness statements and witness testimony on the stand alleging that Texaco, now owned by Chevron, dumped more than 16 billion gallons of untreated toxic production water into the rainforest waterways and built hundreds of huge, unlined pits to store permanently pure crude and toxic water left over from oil exploration at well sites. This was the evidence relied on by the Ecuador court, an appellate court and the country’s Supreme Court to find Chevron liable.

A ruling in favor of Chevron will mean that corporations unhappy about attacks, possibly from competitors, will be empowered to file RICO lawsuits without having to prove whether the underlying attacks are, in fact, substantially true. Truth is no longer a defense, and that should trouble not only anti-corporate activists but corporations as well – and their lobbyists and publicists.

While Kaplan did allow a limited defense of a fraud charge involving an alleged bribe of the judge who ruled in the Ecuadorians’ favor and the alleged “ghost-writing” of the judge’s final ruling, the only solid evidence of fraud Chevron presented was the testimony of an admittedly corrupt former Ecuador judge – a man who Chevron is paying at least $350,000 during the next two years in exchange for his testimony, which we argue is tainted. Chevron also has arranged for the man and his entire family to live in the United States and apply for political asylum.

No one knows exactly how Kaplan will craft his opinion or if it will survive on appeal.

But, if Chevron gets what it wants, K Street and its corporate clients could easily find themselves on the wrong end of a RICO case. Free speech, especially in Washington, D.C., and New York City, will suddenly cost a whole lot more than the cars and drivers delivering the endless line of talking heads for the political punditry that feeds the cable news beast.

Of course, advocating for what you believe is right and just would be in jeopardy. There’s that, too.

See the original at Politico Magazine.

Read More

Biting Satire Video from Pulitzer-winning Animator Blasts Chevron over Retaliation Tactics

According to a press release from Amazon Watch, long-time staunch allies of the Ecuadorian communities demanding justice from Chevron:

Today Amazon Watch released an edgy satire created by Pulitzer-winning animator Mark Fiore blasting Chevron's unprecedented tactics to avoid responsibility for its admitted acts of environmental destruction in the Ecuadorian Amazon. Despite losing a 20-year legal battle and receiving a $9.5 billion judgment, Chevron maintains that it will never pay for its damage. The company launched an extraordinary racketeering and extortion (RICO) lawsuit against the Ecuadorian plaintiffs, U.S. attorneys and various consultants alleging that the original case was “sham litigation." Fiore's piece comes on the heels of a campaign supported by a diverse coalition including Amazon Watch and the Sierra Club calling on members of the Senate to investigate and put a stop to Chevron's vilification of the environmental and human rights community.

And here's the animated video, a funny and biting satire of Chevron's gangster-like ways:



As Amazon Watch writes in their press release:

Chevron's actions set a dangerous precedent and represent a growing and serious threat to the ability of civil society to hold corporations accountable for their misdeeds around the world. Now a wide cross-section of U.S.-based environmental and corporate governance groups have condemned Chevron's most recent retaliatory attacks to intimidate the Ecuadorian indigenous peoples and farmers who have been harmed by the oil giant's massive contamination of their ancestral lands.

Amazon Watch has also posted an article on its Eye on the Amazon blog in the voice of Donny Rico, the animated star of its new video:

Donny Rico here to deliver a message to all you long-haired hippie activist types complaining about the environment and human rights. Be warned: things have changed in America and you need to keep your mouths shut. Corporations are the top of the food chain and you need to keep your place or you'll be what's for dinner. Got it?

See, me and Chevron are paving the way for corporate freedom in America. Freedom from accountability, freedom from watchdog punks and freedom from caring about how our actions affect the rest of yous. When those pesky Ecuadorians spouted off about the fact that Chevron did a piece of work and chose to dump billions of gallons of toxic waste in their rainforest, we decided to turn the tables and it worked like a real charm. Chevron's tired of being the victim just because over a thousand people died of cancer in Ecuador and we wrecked the Amazon rainforest. 

Visit the Amazon Watch website to read the rest of Donny RICO's diatribe, and to share the video with friends, colleagues, and any of those long-haired hippie activist types you may know

Read More

HuffPost: New Christie Attack Dog Attorney Randy Mastro No Friend to Ecuador's Indigenous Peoples

New York City-based writer Nikolas Kozloff has written a powerful indictment of the lawyer that embattled New Jersey Governor Chris Christie has hired to help him handle a scandal that threatens to engulf the Governor's administration and destroy any chance he may have at a White House run.

Governor Christie has hired none other than Gibson Dunn's Randy Mastro to try and fend off the scandal over the administration's recent abuses.

The Governor's bullying ways were brought into stark relief after inquiries into what turned out to be punitive traffic gridlock for Fort Lee residents, who were unlucky enough to find themselves in the Governor's cross-hairs for having the temerity to elect a Mayor who refused to endorse Mr. Christie during his successful re-election bid.

If you want a preview of the way in which Randy Mastro will try and rescue Christie, you need look no further than the cynical, deceptive, and abusive legal counter-attack Mastro has led for Chevron in the company's efforts to evade accountability for its Ecuador disaster.

Kozloff writes:

Realizing that the company probably could not win its case on the merits, Mastro decided to change the nature of the debate entirely. In a rapidly unraveling kangaroo process, Mastro took advantage of a bizarre legal tactic which states that U.S. courts may force testimony to assist foreign courts. If Chevron prevailed, the U.S. would probably assist Chevron in defending against the Ecuadoran judgment in other countries where the plantiffs might seek to pursue the case.

Taking his cue from the earlier Nicaraguan Dole case, Mastro shifted the focus from pollution to attorney ethics. Through a calculated campaign of obfuscation, denial, personal attacks and claims of bias by the Ecuadoran legal system, Mastro sought to divert attention away from the suffering plaintiffs.

It makes sense, in a perverse kind of way: bully Governor hires bully lawyer to defend himself against charges of bullying.

An expert in Latin American history (with a Ph.D from Oxford University), Nikolas Kozloff has explored the impact of oil companies in the Amazon, authoring the recent landmark book, No Rain in the Amazon: How South America's Climate Change Affects the Entire Planet. He has explored Chevron's toxic legacy in the Amazon. In his latest piece on Huffington Post, he provides a brief history of Chevron's toxic legacy in Ecuador:

In order to put Chevron's problems in context, we must go back in time some twenty years. According to Ecuadoran Indians, from 1964 to 1990 Texaco caused serious damage to human health and the environment by employing obsolete technology in drilling operations at hundreds of wells spread throughout the jungle. Indigenous peoples claim that contamination created a virtual "death zone" in an area the same size of the state of Rhode Island. Within the area, they say, local people have suffered from increased rates of cancer, leukemia, birth defects, and a variety of other medical problems.

And finally, Kozloff concludes:

In light of Mastro's tactics in the Ecuador affair, perhaps we should expect the unexpected when it comes to the unfolding investigation into Chris Christie's affairs. If history is any indication, Mastro will probably try to wear out investigators or to turn the tables. A master of the counter-suit, Mastro might seek to question the credibility of Christie opponents or to underhandedly change the "narrative." From Nicaragua to Ecuador, these are strategies that have worked for Gibson & Dunn over the years, and the firm may well be tempted to employ such an approach once more.

Read the entire article at Huffington Post, and stay tuned for more on Randy Mastro and the Gibson Dunn, and Crutcher law firm.

Read More

Desperation: Chevron CEO Asked Venezuela President for Help On Ecuador

In 2014, Watson Faces Host of  Challenges As Company Tries to Evade Accountability for Toxic Dumping

With shareholder discontent over its Ecuador liability on the rise yet again, Chevron CEO John Watson is facing a new series of challenges in 2014 as the company continues its two-decade campaign to evade accountability for the toxic contamination it left in the Amazon rainforest.   One example of the company's desperation: news reports from Latin America recently disclosed that Watson pleaded in person with Venezuela’s new President, Nicolas Maduro, for help in blocking enforcement of the Ecuador judgment.

This is what the oil giant does.  It uses its political muscle to interfere in court systems around the world.  As a Chevron lobbyist told Newsweek, "We can't let little countries like Ecuador screw around with large companies."  Ecuador's Supreme Court has affirmed the judgment against Chevron.  But Watson simply ignores court decisions from Ecuador that he doesn't like while his lawyers continue their  scorched-earth campaign to avoid paying what the company owes.  For background, see this 60 Minutes segment and this video from Steven Donziger, one of the lawyers who has fought for years to hold the oil company accountable.

These are some of the colossal challenges Watson faces in 2014 because of the company's failure to pay the Ecuador judgement:

**Legal actions to enforce the Ecuador judgment against Chevron are proceeding in Canada, Argentina, Brazil, and Ecuador.  These actions can no longer can be pushed under the rug by the company. Just last month, a Canadian appellate court green-lighted an enforcement proceeding that puts an estimated $15 in Chevron assets in play; Chevron’s defense brief is due later this month.  The Canadian court also openly derided Chevron’s two-decade effort to challenge jurisdiction in three different countries. 

** Canada is now considered one of the most strategically important oil producers in the world, with the third largest proven reserves.  If the Ecuadorian villagers prevail in what is widely seen as one of the world’s most reputable judicial systems – one that, unlike the U.S., is not the product of constant political warring -- they can collect the entirety of their $9.5 billion judgment and begin a long-awaited clean-up.

**On the shareholder front, Watson is likely to face a firestorm over Chevron's Ecuador quagmire.  Displeasure over his $32 million compensation package is at an all-time high.   Prominent shareholders – including the New York state comptroller – are backing resolutions related to the Ecuador case that directly challenge Watson’s stewardship.  One calls for the separation of the CEO and Chairman positions; another calls for the appointment of a Board member with environmental expertise.  In 2011, these resolutions garnered a whopping 38% of shareholder support.

Copies of the three resolutions related to Chevron that will be voted on at the 2014 annual meeting in May are here, here and here.   Background on Chevron’s shareholder dissent can be read here. 

**Watson has become so nervous about the fallout from the Ecuador judgment in Latin American that he personally asked Venezuela President Maduro for help during a recent visit to that country, according to media reports.   Watson must shudder at the thought of an enforcement action against Chevron in the oil-rich country, which has the largest proven reserves in the world.  Any action against Chevron by Venezuela’s courts could have a massive impact on the company’s prospects.  It also could lead to huge problems for Watson and R. Hewitt Pate, Chevron's General Counsel and the mastermind behind the company's exorbitantly expensive ($400 million per year) legal strategy.

**Another way to understand why Watson visited Venezuela is that Ecuador President Rafael Correa is waging diplomatic war against Chevron in Latin America.  Chevron's lobbying effort in Washington to cut off U.S. trade preferences to Ecuador could cost the small country 300,000 jobs.  Correa has called Chevron’s campaign against Ecuador “criminal” and has vowed to defend his country's sovereignty.  Chevron's bullying tactics hardly endear itself to the people of the region.  Correa, who polls show is South America’s most admired leader, has launched the anti-Chevron offensive through ALBA, a regional body that includes Venezuela, Brazil, Bolivia and Argentina.   

**Citizen committees in solidarity with the Ecuadorian villagers have sprouted up in several countries (like Venezuela and France) in response to Chevron’s abominable behavior.   A recent report by famed Argentina journalist Jorge Lanata has spread firsthand proof through Latin America of Chevron’s environmental crimes in Ecuador.   A huge new Chevron investment in Argentina’s gas fields is being hampered by grass roots support for efforts to enforce the Ecuador liability in that country, according to local news reports and 
 The New York Times.  

**In Ecuador, the country’s Supreme Court in November issued a 222-page decision that unanimously affirmed an intermediate appellate court decision in favor of the villagers.  The judgment is now final and ironclad, which opens up the possibility of enforcement actions being filed in yet more jurisdictions.  The court rejected each element of Chevron’s fake narrative that it was the victim of an “extortion” plot by the villagers, who suffer from high cancer rates and other diseases due to Chevron’s sub-standard operational practices.    See these photos on the Huffington Post to get a sense of the human impact on the people Chevron claims are trying to extort money from the company.

**Chevron is now openly conceding in legal papers that it faces enormous risk to its operations from the Ecuador case.   In a recent filing in New York, Chevron admitted that the seizure of the company’s trademarks in Ecuador is “causing millions of dollars of harm to Chevron” and that the Ecuadorian villagers have “injured Chevron is both calculable and incalculable ways” by winning their case. Yet the company has continually failed to disclose these monumental risks to shareholders in its public filings, prompting calls by a group of shareholders and a U.S. Congresswoman for an SEC investigation of the company.

**Aside from Venezuela, another game changer for Chevron is that an Ecuador court recently froze $96 million in cash owed the company from Ecuador’s government from an international arbitration decision.  If these funds are recovered by the villagers, one of Chevron’s main tactical advantages – superior resources – will be significantly mitigated. The villagers will then be able to expand and redouble their legal efforts to force Chevron to clean up its toxic waste.

**The backlash against Chevron for its fugitive-like behavior and aggressive counterattack strategy has begun to take shape.  Just last week numerous environmental and human rights organizations, including Amazon Watch and the Sierra Club, slammed the company in an open letter for using the legal system to try to intimidate and silence its critics.  An announcement that several more prominent civil society organizations have signed is expected soon.

**Chevron’s retaliatory RICO case in New York remains a trial to nowhere, while outraging civil society organizations and public interest groups.  (For a great summary of the trial, see this recent blog  from the Huffington Post.)  After being helped along by an activist judge who seems to despise the concept of tribal leaders suing an American company in their own courts, Chevron lost credibility when it suddenly dropped all damages claims on the eve of trial to avoid a jury.  On the legal front, Chevron's case faces enormous obstacles and is highly unlikely to survive appeal.  The remedy sought by Chevron – an injunction from a U.S. court preventing enforcement of a foreign court judgment – already has been declared illegal by a federal appeals court and produced scorn from legal scholars worldwide.

Chevron has a track record of bribing witnesses for favorable testimony , trying to pay off Ecuadorian government officials to quash the case, trying to entrap a judge in a video scandal, spiriting its own employees out of Ecuador to avoid criminal prosecution, trying to threaten Ecuadorian judges with jail time if they did not rule in the company’s favor , trying to pay journalists to spy on the villagers, using 180 agents from Kroll to spy on adversary counsel, breaking promises to U.S. courts that it would pay the Ecuador judgment, and having top officials like Sylvia Garrigo claim on camera that the company does not believe it should be in court at all over the Ecuador contamination.

The Ecuador-related problems faced by Watson are largely of his own making.  The company has invested an estimated $2 billion to beat back the Ecuador judgment.  It has used 60 law firms, 12 investigative firms, and dozens of lobbyists and public relations firms to try to intimidate its critics.  And it has done so for years and years.

Only two weeks into 2014, Chevron’s grand strategy to avoid paying for a cleanup of its contamination in Ecuador is fraying at the edges.  Its “lifetime of litigation” strategy is sputtering.  Days after the closing arguments in the RICO trial— with no remedy even if the company wins — a court in Ontario gave the Ecuadorians an early Christmas present.

Ontario Court of Appeal Justice James C. MacPherson wrote:

Even before the Ecuadorian judgment was released, Chevron, speaking through a spokesman, stated that Chevron intended to contest the judgment if Chevron lost.  He said: ‘We’re going to fight this until hell freezes over.  And then we’ll fight it out on the ice.’

Chevron’s wish is granted.  After all these years, the Ecuadorian plaintiffs deserve to have the recognition and enforcement of the Ecuadorian judgment heard on the merits in an appropriate jurisdiction.  At this juncture, Ontario is that jurisdiction.

This is shaping up to be a perilous year indeed for Watson and his management team.   The deep freeze and long winter north of the border does not bode well for Chevron's fight on the ice to block enforcement.  The odds favor the villagers.

For background on Chevron’s contamination, see this video, this summary of the evidence against the company, and this video from Steven Donziger, a longtime lawyer for the Ecuadorians and the principal target of Chevron’s retaliation campaign.

Read More