Friday, May 1, 2015

Chevron Targets Journalist With Cyberattacks for Exposing Wrongdoing in Ecuador Case

Chevron is trying to cyberbully a prominent American legal reporter as retaliation for his accurate and detailed coverage of the oil giant's recent courtroom setbacks in the Ecuador pollution case.

The attacks against 34-year-old journalist Adam Klasfeld of Courthouse News appear to be part of a wider company strategy to intimidate journalists, environmental advocates, and supporters of Ecuadorian indigenous and farmer communities who have held Chevron accountable in court for its admitted practice of discharging billions of gallons of toxic waste into the rainforest. For background on the case against Chevron and the company's retaliation campaign, see this summary of the evidence, this article from Rolling Stone, and this overview of Chevron's crimes and fraud in Ecuador from Steven Donziger, the longtime U.S. legal advisor to the affected villagers.

The latest installment of Chevron's intimidation model – the one against Klasfeld – is being orchestrated by CRC Public relations with headquarters in Arlington, Virgina. That's the same outfit that ran the "Swift Boat for Truth" campaign questioning John Kerry's patriotism when he was the Democratic nominee during the 2004 presidential campaign.

Klasfeld has written several articles in recent weeks on developments in the two-decade litigation that run counter to Chevron's narrative that it was the victim of fraud in Ecuador. One can access these articles via the search option at the website of Courthouse News; we link to some of the most important ones in this post.

The "Swift Boat" effort not only grievously damaged Kerry's prospects, but is widely seen as one of the most dishonest smear campaigns in history. That Chevron would hire CRC for any purpose shows the lengths to which the company will go to wield its muscle against its perceived enemies.

Also working on behalf of Chevron to target Klasfeld is Sam Singer of Singer Associates, a longtime Chevron public relations "crisis communication" firm in San Francisco. Singer has been known to secretly pay supposedly independent bloggers to parrot Chevron's public relations talking points on the litigation, among many other unethical activities. See this report from the San Fransico Weekly ("Trust Me: Who Are You Gonna Believe, Sam Singer or Your Own Eyes?") for background on how he has tried to help Chevron elect hand-picked candidates in a California town where a recent fire at the company's refinery forced 15,000 people to seek medical attention.

In recent weeks, several employees of CRC and Singer Associates went after Klasfeld on Twitter after he reported details of an explosive new forensic report that blows up Chevron's defense to the Ecuador judgment. The report was written by a noted American computer forensic expert (J. Christopher Racich) who examined the hard drives of Ecuadorian trial judge Nicolas Zambrano and found the Word document that became the 188-page judgment against Chevron was saved hundreds of times on his office computer over a four-month period. For Klasfeld's story on the new report, see here.

Chevron is in a serious jam because in 2013 it had paid a corrupt Ecuadorian witness, Alberto Guerra, roughly $2 million in cash and benefits and moved his entire family to the U.S. so he would testify falsely in U.S. court that the plaintiffs wrote the judgment and gave it to the trial judge on a flash drive just before it was issued. The Racich report is simply another layer of proof on top of the already ample evidence demonstrating that Guerra is a liar. (For background on how Chevron lawyer Andres Rivero paid Guerra cash out of a suitcase to get him to become a paid witness for the company, see here.)

The specific details of the cyberbullying are outlined in an article for Courthouse News by Klasfeld titled "The Truth Can Be Adjusted" in reference to the movie Michael Clayton.

As Klasfeld wrote,
Courthouse News blew the lid on a secret forensic analysis of the computer hard drives of Ecuadorean Judge Nicolas Zambrano, whose name appears on a $9.8 billion judgment against Chevron, and to date nobody has suggested this article is inaccurate.

Although Chevron has long alleged that lawyers for Ecuadorian villagers secretly wrote the verdict against it, the article revealed what have now become undisputed facts.

The data on Zambrano's computers includes a Microsoft Word document that appears to be a running draft of the judgment. This document was saved "hundreds" of times on both of the computers over four months, and the author names of the supposed ghostwriters do not appear in any files or emails on the hard drives.
The reason for the anger of Chevron's management team is understandable. The company's defense to the underlying environmental case is falling apart after it spent an estimated $2 billion to hire 60 law firms and 2,000 legal personnel to fend off the villagers. Chevron's top brass -- already under pressure from shareholders -- does not want that failure exposed. But the targeting of a journalist who reports the facts is inexcusable.

It is worth noting that CRC Public Relations is headed by political and corporate attack specialist Greg Mueller, whose Twitter account was one of those used to target Klasfeld. Mueller is the Bad Boy of the Republican Right and he makes millions in fees playing the part.

CRC was involved in a campaign to torpedo the nomination of Sonya Sotomayor, the first Latina on the U.S. Supreme Court. It was the force behind a series of vicious attack ads targeting supporters of ObamaCare. The company also has close ties to the the Virginia-based Media Research Center, a shadowy non-profit used by corporations to tar journalists who write about climate change and other topics considered unfriendly to the interests of CRC's clients.

Another source of agita in the Chevron camp is that its retaliatory "racketeering" case in the U.S. against the affected villagers and their lawyers has not stopped collection lawsuits targeting the company's assets in Canada and Brazil. The judgment in Ecuador was confirmed by eight separate appellate judges in the court system where Chevron insisted the trial be held. Further, Chevron knows it cannot effectively use its star witness Guerra to block enforcement actions given his utter lack of credibility.

While at times we have disagreed with his reporting, Klasfeld clearly has guts. That's far more than one can say about other legal reporters like Michael Goldhaber of American Lawyer and Fortune's Roger Parloff who seem so wedded to the oil giant's narrative they have yet to write about the new forensic report. (For more on the bias in Parloff's reporting, see here. For details of Goldhaber's tilt toward Chevron, see here.)

That Chevron is responsible for the ecological calamity in Ecuador known as the Amazon Chernobyl is beyond dispute. Not only has the disaster been confirmed by dozens of independent journalists who have visited the country, during the eight-year trial in Ecuador a Chevron executive admitted the company (operating as Texaco) discharged billions of gallons of oil waste into streams and rivers relied on by local residents for their drinking water. The dumping decimated indigenous groups and caused an outbreak of cancer confirmed by numerous independent peer-reviewed health evaluations.

Despite clear evidence that the story about the "ghostwriting" of the judgment is false, Chevron CEO John Watson and General Counsel R. Hewitt Pate continue to push it in their public statements. The new report by Mr. Racich has not caused these men to walk back even an inch from their claims. That is itself evidence of an intent by Chevron to mislead shareholders and the financial markets about the risk faced by the company.

Klasfeld no doubt also rankled Chevron when he pressed to gain access to a secret investor arbitration proceeding where the oil giant – in what can only be described as act of sheer chutzpah – is pushing for a taxpayer-funded bailout (by Ecuadorian citizens) of its pollution liability in the rainforest. That investor arbitration proceeding, which bars journalists and the public as well as the lawyers for the Ecuadorian communities, has been subject to withering criticism for violating due process and fundamental principles of international law.

Klasfeld is not alone in being attacked by a corporate polluter that acts as if it is above accountability.

The list of journalists who have been targeted by Chevron for reporting on the impact of its pump-and-dump operation in Ecuador is getting longer. The list includes the award-winning writer William Langewiesche of Vanity Fair, who in 2007 published a fascinating story about lead Ecuadorian lawyer Pablo Fajardo. The company also targeted 60 Minutes, which in a 2009 report exposed part of Chevron's deceit in Ecuador. There are many others we know whose articles were deep-sixed under Chevron pressure during the editing process.

The Reporters Committee for Freedom of the Press should investigate Chevron for its intimidation campaign against independent journalists. In the meantime, Klasfeld and Courthouse News deserve kudos for reporting on Chevron's misdeeds without fear or favor.

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.

Wednesday, March 25, 2015

Chevron Law Firm Gibson Dunn Blasted by High Court of England For Falsifying Evidence

This just in from London: none other than the High Court of England has found that a key partner at Chevron's main outside law firm in the Ecuador pollution matter -- Gibson Dunn & Crutcher -- has falsified evidence in another case.  The case involved an attempt to extradite a prominent citizen from the African nation of Djibouti (Gibson Dunn's client) to serve a highly dubious 15-year sentence on a "terrorism" conviction after he had been tried in absentia based on apparently falsified evidence. The citizen is a wealthy businessman and a political rival to the country's President.

Even by the sorry ethical standards of Gibson Dunn's litigation department -- which the Montana Supreme Court recently said uses "legal thuggery" against its adversaries -- it doesn't get much worse than this. The legal press in England is reporting that the main Gibson Dunn partner involved lost his "moral compass" and might face criminal charges. For the extraordinary judicial opinion outlining Gibson Dunn's role in the possible framing of an innocent man, read here.

This latest development is highly relevant to the Ecuador case where allegations that Gibson Dunn also falsified evidence are rapidly gaining currency. Chevron is refusing to release a devastating forensic report that clearly demonstrates its star witness in a U.S. civil racketeering case against lawyers for the Ecuadorian villagers lied in court. Gibson Dunn's goal was to frame the firm's main adversary counsel and paint him as a criminal. That's after a federal judge from Oregon sanctioned one of Chevron's Gibson Dunn lawyers who repeatedly harrassed a small legal non-profit that was assisting the villagers.

The larger point is that the falsification of evidence in the London case appears creepily similar to what Ecuadorian indigenous villagers and their lawyers have experienced with Gibson Dunn. Chevron hired the firm in 2009 to use its notoriously aggressive tactics to try to fend off a large environmental judgment handed down by three layers of courts in its chosen forum of Ecuador. The firm advertises on its website that it mounts "rescue" operations for corporations in trouble. It does this primarily by attacking its opposing counsel rather than by litigating on the merits.

As background, the judgment against Chevron issued in 2011 and was based on 105 technical evidentiary reports meticulously documenting life-threatening levels of pollution at hundreds of former company well sites in the forest. Eight appellate judges in Ecuador affirmed the judgment after 11 years of proceedings despite efforts -- primarily orchestrated by Gibson Dunn -- to sabotage a trial that the oil major clearly was losing on the evidence. Most recently, Ecuador's Supreme Court in 2013 unanimously affirmed Chevron's liability. The company still refuses to pay the judgment and sold its assets in Ecuador as it plays a jurisdictional shell game with courts around the world.

Back to the London case.

The High Court -- one of the world's most respected judicial bodies -- found that lawyers from Gibson Dunn's Dubai office deliberately submitted the transcript of an intercepted phone call with the wrong date as part of the extradition proceeding targeting the citizen of Djibouti.  On that basis, the High Court froze the assets of the businessman after concluding he was likely involved in a terrorist act.

Djibouti, a nation of 800,000 people strategically located on the Horn of Africa and home to a U.S. military base, had hired Gibson Dunn to try to force the businessman (Abdourahman Boreh) to return home so he would serve the 15-year sentence handed down after he was tried en absentia. A key piece of evidence was an intercepted phone call involving Boreh where he made vague references to anti-government activity. But for the wrong date, he never could possibly have been tied to the alleged act of terrorism which involved a grenade attack at a supermarket.

It is clear from reading the opinion of the High Court that the case was likely a government shakedown of an opposition political figure. Gibson Dunn was in the thick of things trying to help its client violate the law and put away a political opponent for a long prison term.

What really infuriated the High Court is how Gibson Dunn's lawyers knew the key evidence was the date on the transcript and that it was patently false. Yet several Gibson Dunn lawyers did not correct the date even as they sat through a two-day court hearing. The judge then relied on the wrong date as the basis for his findings.

Gibson Dunn partner Peter Gray was found personally responsible for the deliberate falsification based on emails and other internal law firm communications. (In typical Gibson Dunn fashion, Gray recently was disappeared from the firm's website.)  The High Court characterized the Gibson Dunn advocacy as "the use of ambiguity to hide the truth" and said Gray lacked a "moral compass". The law firm apparently never launched an internal investigation of Gray nor reported the ethical violations before the High Court issued its findings.

Amazingly, Gray and his colleagues had characterized their decision not to notify the court about the wrong date as nothing more than "acceptable evasion" in their advocacy. Can you imagine?

That approach is awfully familiar to those who have been litigating against Gibson Dunn in the Ecuador matter. Substitute client Chevron for client Djibouti -- and Gibson Dunn partner Randy Mastro for Gibson Dunn partner Peter Gray -- and you have what appears to be a strikingly similar situation in the United States.

Here, the primary goal of Gibson Dunn was to frame Steven Donziger, Chevron's longtime foe and a human rights attorney who for years has advised the Ecuadorian villagers. We know for a fact Mastro on multiple occasions tried to persuade prosecutors to go after Donziger with false or distorted evidence.

When that gambit failed, Mastro led Chevron's private civil racketeering lawsuit against Donziger and his clients. Gibson Dunn deployed at least 114 lawyers against Donziger (a solo practitioner who for a time acted pro se) in what had to be one of the greatest resource mismatches in litigation history.

From our point of view, the racketeering case was nothing more than a retaliatory SLAPP designed to intimidate Donziger and his colleagues into abandoning the lawsuit in Ecuador. The SLAPP suit was helped along by a federal trial judge who engaged in blatantly biased behavior and who violated international law by trying to overturn the ruling against Chevron from Ecuador's Supreme Court. A previous attempt by the same judge to block enforcement of the Ecuador judgment throughout the world was unanimously reversed on appeal.

(For background on the judge's bias, see this petition. For details of how Chevron made a mockery of justice in the case, see this document and this legal brief from the law firm representing Donziger.)

Gibson Dunn's falsification of evidence in the New York case primarily concerned the testimony of a disgraced former Ecuadorian judge (Alberto Guerra) to whom Chevron paid roughly $2 million. The payments in and of themselves appear to violate federal law barring payments to fact witnesses, but Gibson Dunn charged ahead anyway surely thinking it could get away with it. Guerra openly admitted under oath that he had regularly accepted bribes when he was a judge before being removed from the bench.

After receiving these payments, Guerra suddenly came up with a fantastical story that the judgment in Ecuador was ghostwritten by lawyers for the villagers. Prior to trial, Guerra changed his story multiple times as new forensic evidence rendered his prior versions implausible. Each time he changed his story, Guerra demanded more money from Chevron. His handlers at Gibson Dunn made sure Chevron obliged.

After rehearsing his testimony with the help of Mastro and Gibson Dunn colleague Avi Weitzman for 53 days, Guerra claimed under oath in federal court that the Ecuador judgment was given to the trial judge on a computer from lawyers for the plaintiffs. In reality, Gibson Dunn and its investigators made up the story as forensic evidence and Guerra's own contradictory statements now prove.

According to court papers submitted in a related investor arbitration proceeding, the new forensic evidence -- prepared by the prominent computer expert J. Chrisopher Racich -- demonstrates that the judgment actually was written painstakingly by the trial judge on his office computer over a period of several months. Chevron has refused efforts to release the new forensic report even though it is based on evidence ("mirrors" of the judge's hard drives) that was collected at Chevron's request. (For more background on Chevron's falsification of Guerra's testimony, see this blog about a story from Courthouse News and this legal motion about Guerra's lies.)

Also interesting is that Gibson Dunn's private investigative agency of choice -- Kroll -- was heavily involved in both the London and Ecuador cases. In the Ecuador matter, Kroll investigators (led by Yohir Ackerman) along with Chevron lawyer Andres Rivero paid Guerra tens of thousands of dollars out of suitcase and asked him to offer a $1 million starter payment to bribe the trial judge to "recant" his decision against the company. Kroll worked hand in hand with Gibson Dunn to create Guerra's story. In the Boreh case, Kroll operatives were in several key meetings where the issue of the false date was discussed.

Gibson Dunn lawyers led by Mastro were among those who directly worked with Guerra to prepare his testimony. Mastro personally negotiated Guerra's money deal in a meeting in Chicago. Many other lawyers at the firm's New York office were involved. Some of the most prominent include Andrea Neumann, Weitzman, and Reed Brodsky.

Of course, Peter Gray is not simply one bad apple at Gibson Dunn as the firm no doubt would like the world to believe. His unsavory and unethical tactics against Mr. Boreh are part and parcel of the very culture in the firm's litigation department as confirmed by multiple courts around the world.

In the Ecuador case, we already mentioned that a federal judge from Oregon found that Gibson Dunn associate Kristin Hendricks had repeatedly used the discovery process to harass her adversary counsel. In Colorado, Gibson Dunn lawyer Neumann was found to have misled the court on a critical issue. Gibson Dunn also threatened judges in Ecuador with jail if they did not rule in Chevron's favor -- earning a sharp rebuke from appellate judges in that country.

Want more evidence that Gibson Dunn's litigation culture has gone rotten?  Just look at the company's track record in recent years:

**In 2007, the Montana Supreme Court assessed a $9.9 million punitive fine against Gibson Dunn for "blatantly and maliciously trying to intimidate [its adversary] with the apparent power, prestige and resources of a large, nationally prominent law firm coupled with an ominous lawsuit that they knew threatened to ruin and devastate [the opposition] professionally, personally, and financially… GDC's use of the judicial system amounts to legal thuggery".

**In 2005, a federal court in California sanctioned Gibson Dunn for firm's discovery misconduct, including tampering with a third-party witness. The court concluded that the firm's misconduct is "a product of a culture which permeates the portion of Gibson Dunn & Crtucher involved in this matter.  That culture promoted obstruction, gamesmanship and flagrant disregard of this Court's orders to result in increased discovery abuses and to smear the legal profession and standards to which attorneys are to be held".

**In 2008, a New York federal judge sanctioned the firm for hiding a key document in discovery that would have helped its adversary.  The court found the firm had engaged in "unacceptable shenanigans" by making "affirmative representations… that were deceptive".

**In 2010, a state court in California in two separate cases ordered Gibson Dunn to reimbure a documentary filmmaker and a human rights lawyer for their costs in defending illegitimate lawsuits designed to silence their criticism of the firm's clients (Chevron was a client in one of the cases).

We also know that Gibson Dunn lawyers (led primarily by Newman and Scott Edelman) engaged in highly questionable conduct in the firm's representation of Dole from lawsuits from banana field workers in Nicaragua. That work also included payments to fact witnesses in the banana fields to claim supposed "fraud" to undermine a U.S. court judgment against Dole. Court papers claimed the firm made up a meeting between lawyers for the workers and the trial judge that never actually happened.

With Gibson Dunn's narrative about the Ecuador case crumbling before our eyes, look for the firm's unethical tactics to come to the fore even more in the coming months. We believe it is just a matter of time before Gibson Dunn itself is put under hot lights of judicial scrutiny for its representation of Chevron -- representation that reportedly has reaped the firm record sums in fees.

Whether the money was worth it for Team Mastro and Gibson Dunn is clearly a question that will be resolved with time.

Tuesday, March 17, 2015

Chevron's Ecuador Strategy Starts to Crumble After Stunning Setback In Investor Arbitration

Even the three members of a controversial pro-corporate investor arbitration panel -- which meets in secret and we believe sits illegitimately -- appear to be turning against Chevron in the company's longstanding campaign to evade paying its $10 billion Ecuador pollution liability. Is the company's Ecuador strategy beginning to crumble, or what?

For Chevron CEO John Watson and General Counsel R. Hewitt Pate, who convened the investor arbitration in 2010 thinking it would rescue the company, the latest decision must come as very bad news indeed. You might remember Pate as the man to whom Chevron paid $7.8 million in salary and bonus just after the company lost the historic Ecuador trial under his leadership.

The stunning setback suffered last week by Pate's legal team before the secret panel -- which nullified a key plank of the oil major's defense  -- underscores the extent to which Watson and Pate have misled shareholders about the company's growing risk. Because Chevron refuses to pay the judgment, the affected villagers are attempting to seize strategic company assets in Canada and Brazil.

It's become a big mess for Chevron that promises to get worse in the coming months -- not just for the company, but for Watson and Pate personally. When pro-corporate arbitrators meeting in secret start ruling against Chevron on top of the three layers of public courts in Ecuador that already have done the same, the company's prospects must be far more dim than many realized. (The full decision of the panel can be read here.)

Indigenous and farmer communities in 2011 won their judgment in Chevron's chosen forum of Ecuador after an eight-year trial. The decision was based largely on 105 techical evidentiary reports and 220,000 pages of evidence. Chevron executive Rodrigo Perez Pallares admitted during the trial that for 25 years Chevron (operating under the Texaco brand) had systematically discharged billions of gallons of oil waste into Amazon waterways that local communities relied on for their drinking water, bathing, and fishing. Cancer rates in the area predictably have skyrocketed.

Ecuador's Supreme Court in 2013 affirmed the trial court judgment in a 222-page decision that meticulously documented the extensive and life-threatening levels of oil pollution at dozens of former Chevron well sites in the jungle. That decision can be read here. In all, eight appellate judges in Ecuador reviewed the evidence against Chevron and affirmed the judgment.

Pate is the mastermind behind Chevron's increasingly reckless counterattack strategy. Chevron executives have promised to fight the indigenous villagers "until hell freezes over" and then "fight it out on the ice" if necessary. These comments are highly unprofessional coming as they do from a large public company, but Chevron is not used to being held accountable by vulnerable victims in far-off forests. Pate, who has deep ties to the Federalist Society and is a former official in the Bush Administration, seems to enjoy using the Ecuador litigation as a vehicle for what has become an industry-sponsored crusade against contingency-fee lawyers and human rights activists.

Pate's personal problems with the Ecuador liability cut deep. Back in September 2013, Pate flat out lied when he exulted in a Chevron press release that the Ecuador case was over -- "the game is up" were his exact words -- after the investor arbitration panel released an "interim" ruling. At the time, the panel determined that a 1995 settlement agreement between Chevron and Ecuador's government absolved the oil company from liability even though the villagers never signed off on the agreement.

Our position is that the arbitration panel did not have the right to make that or any other of its rulings. No private investor arbitration panel can sit as an appellate court over a sovereign nation's judiciary, as the panel convened by Chevron is attempting to do with Ecuador. The 2013 decision by the arbitrators contradicted rulings from three layers of Ecudorian public courts in the very forum where Chevron insisted the trial be held. All of those courts had rejected Chevron's bogus defense that it was "released" from the private claims of the villagers by virtue of its settlement with Ecuador's government.

Pate published his "game is up" statement in 2013 even though at the time the arbitration panel cautioned the parties that its decision was interim and that it had yet to rule on the question of whether individual claims (as distinct from collective claims) were barred. Last week, Pate found out just how interim it was. The panel ruled that the individual pollution claims filed by indigenous persons were valid under Ecuadorian law and were not covered by the Chevron-Ecuador settlement agreement.

Of course, any first-year law student could have figured out that Chevron's defense on this point was preposterous from the get go. The 1995 settlement agreement expressly excluded the claims of private citizens. The villagers never signed the agreement and thus could not be bound by it in any event. Further, Chevron never even raised the settlement agreement as a defense when it fought for years in U.S. federal court (where the case was originally filed in 1993) to move the trial to Ecuador.

In reality, the settlement defense was manufactured post hoc by Chevron lawyers after they realized they stood a good chance of losing the Ecuador case on the merits. For years, the investor arbitrators obliged Chevron by breathing oxygen into the bogus claim in their illegitimate proceeding. They asked for hundreds of pages of briefing on the issue. They held mutiple hearings attended by dozens of lawyers who charged millions in fees. In so doing, the panel gifted Chevron years of additional time so its "lifetime of litigation" strategy could take root.

How did this happen? Aside from the obvious pro-investor bias of the panel, one reason is money. The three arbitrators -- V.V. Veeder (England), Vaughn Lowe (England), and Horacio Grigera Naon (Argentina) -- bill close to $1,000 per hour. Each has reaped millions in fees since the action commenced. And the American law firms representing the parties also have charged huge sums for their "service" in furthering the unnecessary litigation.

Grigera Naon has particularly troubling ethical problems. He seems to maintain some sort of bizarre business relationship with Chevron's lead arbitration lawyer, Doak Bishop of the American law firm King & Spalding. Bishop almost always has his investor clients (including in this case Chevron) name Naon as their arbitrator; in return, Naokn almost never fails to rule in their favor, regardless of how radical his reasoning must be to do so. See this investigation for background.

The more issues the Chevron lawyers can manufacture for the secret panel, the more action there is and the more money the three arbitrators reap in fees. It resembles a shakedown racket with Chevron's victims in Ecuador -- taxpaying citizens no less -- footing a good portion of the bill paid by their own government. (The fees of the arbitrators are split evenly between the parties.)

For a sense of the money involved, Chevron's top outside lawyers bill more than $1,200 per hour. Chevron paraded 29 of them to a recent two-day procedural meeting convened by the arbitration panel. That's on top of the 60 law firms Chevron has used to defend itself on the Ecuador matter and its ancillary litigations.

Back to that 2013 Chevron press release put out by Pate, available here. The release was a brazen if clumsy attempt by Chevron's top lawyer to snooker the markets into thinking the company was off the hook in Ecuador. Pate has done nothing since to correct his utterly misleading information.

The bigger picture for Chevron is getting far more complicated than the company lets on to its shareholders. As mentioned, because Chevron refuses to pay the Ecuador judgment the affected villagers are pursuing company assets in Canada and Brazil. They could go to other countries if needed. A key decision from Canada's Supreme Court -- in a country where Chevron owns $15 billion of assets -- is due within weeks. We are confident Chevron will be forced to pay the entirety of the judgment in full.

Chevron has another problem brewing in New York. Its retaliatory racketeering case against human rights lawyer Steven Donziger -- the main target of the company's demonization campaign -- appears to be tottering, with oral argument slated for next month in a federal appellate court. Read Donziger's appellate brief to get a sense of how Chevron distorts facts, uses corrupt evidence, and conjures up illegitimate litigations to delay its day of reckoning.

Sadly, the investor arbitrators continue to lie in wait for more opportunities to examine issues and publish "interim rulings" in what has fast become a key driver of Chevron's perpetual litigation model. To keep the lucre flowing, the panel recently scheduled a three-week "trial" to begin in April to determine whether the legal process in Ecuador that held Chevron accountable violated due process. Expect more than 50 lawyers to take part in the proceedings that will probably cost at least $750,000 in fees daily.

After more than two decades of arduous litigation on their underlying claims, that's just what the affected rainforest communities don't need -- more litigation over litigation. But it's obviously what Chevron wants. If Mssrs. arbitrators had any moral sensibility, they would donate their exorbitant fees to the environmental clean-up in Ecuador and close up shop immediately.

More bothersome is how the arbitrators indulge Chevron in its jurisdictional shell game that is making a mockery of the rule of law.

Consider that the underlying trial was held in Ecuador at Chevron's request. Yet Chevron sold off its assets in Ecuador after the trial started so it would be judgment proof in that country. It now claims its assets in Canada and Brazil are immune from seizure because they are held by wholly-owned subsidiaries. But Chevron operates outside the United States only through its wholly-owned subsidiaries. In the meantime, the U.S. is at least temporarily off limits for enforcement purposes because of Judge Kaplan's RICO decision.

Under Chevron's legal theory, the villagers never will be able to collect the first dollar of their judgment anywhere.

And if Chevron's jurisdictional subterfuge fails -- and we expect that it will -- Pate and Watson no doubt believe the investor arbitrators will try to shift the entire liability for the pollution problem to Ecuador's government in what would (at least on paper) appear to be the mother of all taxpayer-funded bailouts for Big Oil. Pate is living a pipe dream if he thinks it is going to work.

The investor panel's decision to sit as an appellate court over Ecuador's entire judiciary is an affront to international law. It would never be tolerated by the United States government if it were to happen here. Sadly, Ecuador's government (for whom we have great sympathy given the abuse it too has suffered at the hands of Chevron) has been played for a fool by an oil company that sucked it into an expensive litigation charade that offers no benefit to its own citizens. With all of these problems, it is no wonder that prominent jurists have blasted the investor panel before the United Nations for acting illegitimately.

The members of the arbitration panel close their doors to the public because they desperately want to avoid contact with the farmers and hunters devastated by Chevron's pollution. Chevron's lead lawyer in the arbitration, Doak Bishop, once told the panel that the villagers were "irrelevant" to the proceedings and did not actually exist for legal purposes. A more honest statement reflecting Chevron's venality has scarcely been uttered. And nobody on the panel even protested.

Getting back to Pate, we have some advice for U.S. regulatory authorities.

The SEC might use the latest arbitration ruling to launch an investigation of Pate and his cohorts at Chevron for trying to spin the markets about the company's Ecuador liability. It needs to be determined whether Pate and Chevron CEO John Watson -- who have invested an estimated $2 billion in various retaliatory litigations -- have run afoul of securities laws. (In the process, they might also be asked about the high cancer rates where the company operated in Ecuador and what they plan to do about it.)

In the meantime, Mssrs. Grigera Naon, Lowe, and Veeder should disclose their fees. The lack of tranparency in the arbitral process is just one of many reasons their work has no credibility.

Friday, March 6, 2015

Courthouse News: Forensic Report Suggests Chevron Falsified Evidence In Ecuador

Chevron is desperately trying to hide from public view a new forensic report that appears to definitively prove what we have been saying for months: the company's fake narrative that it was the "victim" of the courts in its chosen forum of Ecuador is a house of cards that is fast collapsing.

Chevron's latest problem comes courtesy of a fascinating story by Courthouse News that for the first time discloses key details of a forensic analysis of the computer of the Ecuador trial judge who found the oil giant liable for deliberately dumping billions of gallons of oil waste into the rainforest when it operated in the South American nation from 1964 to 1992. The analysis was conducted by noted American forensic expert J. Chrisopher Racich at the request of Chevron in a related closed-door arbitration between the oil company and Ecuador's government.

According to confidential filings in that arbitration obtained by Courthouse News, the Racich report concludes that Ecuadorian trial judge Nicolas Zambrano painstakingly wrote the 188-page decision over a period of several months. Zambrano's ruling, since affirmed by no fewer than eight separate appellate judges in Ecuador, also found that Chevron abandoned hundreds of open-air waste pits gouged out of the jungle floor that continue to contaminate soils and groundwater.

(Evidence also demonstrates that Chevron's dumping decimated indigenous groups and caused cancer rates to skyrocket. For stories of the people Chevron poisoned, see this photo essay by award-winning journalist Lou Demettais. For the view of the only U.S. Congressman to visit Chevron's disaster zone in Ecuador, see here.)

Zambrano also ordered Chevron to pay $9.5 billion for clean-up costs -- a relatively modest sum compared to the $30 billion paid by BP for the much smaller and less impactful Gulf of Mexico spill. To evade paying the Ecuador judgment, Chevron is now mocking courts by engaging in a jurisdictional shell game around the world.

Chevron naturally is doing its best to ensure the full Racich report never sees the light of day. That's because the report debunks Chevron's primary defense that the Ecuador judgment was not written by Zambrano. Chevron's "evidence" in this regard is false testimony from a crooked former Ecuadorian judge named Alberto Guerra to whom the company paid huge sums of money, apparently in violation of federal law that bars payments to fact witnesses. (For background on how Chevron appears to have bribed Guerra to testify falsely, see here.)

It is clear that the Racich analysis can be used by the villagers to shoot down Chevron's weakening defenses in courts in Canada and Brazil that are hearing actions to seize company assets to force compliance with the Ecuador judgment. Chevron's lawyers also have been noticeably silent in the the face of a letter sent weeks ago from New York attorney Steven Donziger (the longtime legal advisor to the Ecuadorian villagers) demanding full disclosure of the Racich report.

After being paid roughly $2 million in benefits -- including tens of thousands of dollars in cash out of a suitcase -- Guerra claimed with no corroborating evidence that he helped ghostwrite the judgment with lawyers for the plaintiffs. It turned out that he had rehearsed his testimony for 53 days with the help of Chevron's lawyers before presenting it in open court in the company's retaliatory civil "racketeering" case in U.S. federal court, where he was promptly shredded on cross-examination. (For background on Chevron's shenanigans in that case, see here.)

The Courthouse News story quotes a confidential legal brief submitted in a related arbitration that the hard drives on Judge Zambrano's computer "proves what [Ecuador] has insisted all along: Judge Zambramo wrote the Lago Agrio judgment, and nothing Guerra says can be believed."

As Courthouse News reported:

"… there is absolutely no forensic evidence in respect to Mr. Guerra's or Judge Zambrano's hard drives that offers any hint that Mr. Guerra actually drafted or edited even a single sentence of any of these orders," the unredacted brief states. "Nothing."

Also interesting is that a U.S. federal appellate court is slated to review Chevron's complaints about the Ecuador court process in a hearing on April 20 in Manhattan. Donziger's letter makes clear that Chevron's lawyers have an ethical obligation to disclose this critically important evidence so it can be considered.

As Donziger said in his letter to the Chevron lawyers,

According to court filings in the [arbitration] proceeding recently made public, the Racich Report "directly contradicts" Chevron's allegations of impropriety regarding authorship of the trial court judgment. The affected Ecuadorian communities and those of us in the United States targeted by Chevron's retaliatory litigations have long asserted that your client's claim in this regard is the product of unruthful and flagrantly corrupt witness testimony. It is our position that any probative or exculpatory evidence related to the Chevron bribe allegation must be made public under your continuing duty of candor to courts where these issues have been raised, and in the interests of justice for all involved in this long-running dispute.

We might add that in a meticulously-detailed 222-page decision, Ecuador's Supreme Court in 2013 unanimously affirmed the trial court decision against Chevron after a de novo review of the evidence. The court rejected all of Chevron's trumped-up complaints of fraud. (For a summary of the evidence against Chevron, see here.)

We predict it is just a matter of time before the full Racich report gets released. For Chevron, the impact already is devastating.

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.