Monday, February 23, 2015

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

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

According to Donziger's letter,

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

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

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

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

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

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

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

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

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

Tuesday, February 17, 2015

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Monday, February 9, 2015

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

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

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

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

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

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

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

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

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

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

Goldhaber also applies a double standard in his analysis.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Friday, January 23, 2015

In Davos, Chevron Crowned Worst Corporation of the Year for Ecuador Disaster

Chevron's battered image over its Ecuador disaster has taken another big hit -- this time in Davos in front of the world's political and policy elite attending the World Economic Forum. That's where Chevron CEO John Watson was crowned today with the humiliating Public Eye award given annually to the world's worst corporation.

Monday, January 12, 2015

In Letter to Obama, Congressman Described Chevron's Degradation In Ecuador

In the extraordinary history of the campaign to hold Chevron accountable for despoiling Ecuador's rainforest, numerous outsiders have traveled to the affected area to bear witness. Few have been more eloquent upon return than Rep. James McGovern of Massachusetts.

Thursday, December 18, 2014

Chevron's 12-Step Program to Obtain Impunity for Its Crimes and Abuses In Ecuador

Why has Chevron still not paid up for its destruction of Ecuador's ecosytem after 22 years of litigation?

And why has Chevron still not paid a dollar directly to those affected by its pollution in Ecuador when BP voluntarily put up $20 billion to compensate victims within weeks of its much less impactful Gulf oil spill in the United States?

Tuesday, December 16, 2014

Canada's Supreme Court Poised to Force Chevron To Stand Trial Over $9.5 Billion Judgment

Chevron Lawyer Clark Hunter Poses Dare to Justices: "Fairness" Should Have Nothing to do With It

Chevron's brazen plan to inflict a "lifetime of litigation" on the indigenous communities it poisoned in Ecuador's Amazon continues to grind its way through courts around the world. We are now in the third decade of litigation since the original lawsuit was filed in 1993 in New York.

Thursday, November 20, 2014

Ecuador Government Should Sue Chevron For Fraud Over Environmental Remediation

It is high time for Ecuador's government to step up and better defend its citizens who are slowly dying off because of Chevron's deliberate contamination of the country's Amazon region. One way it could step up its game: sue Chevron for fraud because of ongoing problems related to the company's sham remediation of the area in the mid-1990s.

Wednesday, October 22, 2014

A Hard Look at NOW's Support for Chevron In Ecuador Case Raises Ethical Concerns

NOW’s Elaine Wood Questioned About Failure to Tell Appellate Court About Her Business Ties to Chevron 

The relationship between the National Organization for Women ("NOW") and Chevron in the Ecuador pollution case is getting even more interesting. (For background, see this press release where Ecuadorian women criticized NOW and this blog for context.)

Figuring out why NOW's legal arm (called “Legal Momentum”) weighed in before a federal appellate court on behalf of Chevron’s targeting of indigenous villagers and their lawyers in Ecuador is the question. We think we are getting close to the answer.  

Monday, October 20, 2014

Chevron Paying Big Bucks to NOW and Others for "Friend of the Court" Briefs In Ecuador Case

U.S. Women's Advocates Cash Chevron Checks and Then Abandon Indigenous Women In Ecuador. Is It Worth It?

Increasingly isolated in its Ecuador pollution case, Chevron is paying for "friend of the court" briefs by supposedly independent parties such as the National Organization for Women ("NOW") that are designed to back the company's faltering defense to its $9.5 billion environmental liability.

Tuesday, October 7, 2014

Chevron Lawyer Randy Mastro Resorts to Dirty Tricks In Ecuador Pollution Case

Chevron lawyer Randy Mastro again appears to be engaging in dirty tricks in a last-ditch effort to rescue the oil company from its worsening legal troubles related to its $9.5 billion liability in Ecuador.

Through backdoor manuevering, Mastro is trying to influence the New York federal appellate court that is hearing Chevron's defense of its ill-fated RICO case.

We hear from a little birdie that Mastro's latest trick involves an apparent unauthorized ex parte contact by his office with a clerk in the appellate court. Mastro's goal was to convince the clerk to change the caption of the RICO case on appeal to produce a more favorable review panel for Chevron.

Sunday, October 5, 2014

Chevron Faces Risk of "Spectacular Implosion" In Ecuador Pollution Case

One of Chevron's many dark secrets -- one company management desperately tries to hide from  shareholders  -- is that its RICO defense in the Ecuador pollution case faces the risk of a "spectacular implosion" in the coming months.

At least that's the informed opinion of somebody in one of the best positions to assess the case.

That person is none other than Aaron Page, a young law professor and practitioner who has represented the indigenous and farmer communities of Ecuador since 2005. That's when Page joined the case in Quito as an intern just out of law school at the University of Michigan.

Tuesday, September 30, 2014

Chevron Faces Rising Business Risk From Ecuador Judgment

Inside Counsel, a magazine for corporate lawyers, recently published an article by New York attorney Steven Donziger outlining Chevron's rising global business risks stemming from its $9.5 billion Ecuador environmental liability.

Donziger writes that Chevron's scorched earth litigation strategy in the Ecuador matter should serve as a "cautionary tale" for corporations facing major environmental liabilities.

Risks faced by Chevron include diplomatic resistance to the company by several governments in Latin America; an open political war with Ecuador's government, an OPEC-member nation; enforcement actions targeting strategic assets of the company in three overseas jurisdictions, including in Canada where Chevron's asserts are worth an estimated $15 billion; the likelihood that more enforcement actions will be filed against the company; and an expected reversal next year of the flawed RICO ruling by controversial U.S. Judge Lewis A. Kaplan, who admitted corrupt evidence and was openly  hostile to the Ecuadorian villagers.

Chevron CEO John Watson and General Counsel R. Hewitt Pate -- despite hiring some 60 law firms and 2,000 legal personnel to battle the villagers -- have done little other than waste shareholder funds in a doomed campaign to evade their legal obligations, said Donziger.  The judgment against Chevron was affirmed by Ecuador's Supreme Court last November in a 5-0 decision.

Watson also suffers from a major conflict of interest given that he vetted the purchase of Texaco in 2001 as a top-level Chevron executive.  However, he failed to recognize the enormous potential liability. For more on Watson's conflict, see the post "Way Down Watson" by Amazon Watch.

"Watson is still chasing his tail as a result of his utter failure to understand Texaco's horrific behavior in Ecuador when Chevron made its purchase," said Donziger. "As a result, Chevron paid far more for Texaco than it should have. The only way Watson thinks be can erase this major blot from his record is through endless litigation against impoverished indigenous groups. But that is producing a wave of additional risk for the company that continues to multiply across jurisdictions."

In the article, Donziger makes it clear that claims by Chevron that the corporation is in the clear because of a favorable decision by Kaplan are misguided. Kaplan never had the legal authority to issue his ruling against the Ecuadorians or their counsel.  The case had many other legal and factual flaws; Chevron had so little confidence in its own evidence that it dropped billions of dollars of potential damages on the eve of trial to avoid a jury of impartial fact finders.  (See this document for background on Kaplan's flawed decision and here for Donziger's appellate brief that addresses all of Chevron's arguments.)

 In sum, Donziger asserts that Chevron faces the following risks:
  • Enforcement actions filed by Ecuadorian rainforest communities are targeting billions of dollars of company assets in Canada, Brazil, and Argentina. In Canada, the company is in particular trouble with a likely trial next year that could result in the recovery of 100% of the liability.
  • Chevron's hardline approach to the litigation is causing major diplomatic fallout and increased business risk in Latin America. Several countries -- including oil-producing Venezuela, where Chevron maintains its largest investment in the region -- have joined with Ecuador's government to condemn the American company for flouting the Ecuador court judgment.
  • The villagers have been able to recruit some of the most prominent litigators in the world to seize Chevron's assets. They include Alan Lenczner in Toronto, Sergio Bermudes in Rio de Janiero, and Enrique Bruchou in Buenos Aries.
The article in its entirety can be read here.

Sunday, September 28, 2014

How Reporter Paul Barrett Got It Wrong On Chevron’s Calamity In Ecuador

Chevron's $9.5 billion environmental liability in Ecuador, affirmed by eight separate appellate judges, has been haunting company CEO John Watson and his shareholders for years. In a new book on the litigation -- one replete with factual errors and lacking even a single footnote -- Businessweek reporter Paul Barrett largely adopts the myopically narrow perspective of the U.S. business community.

Barrett's analysis in the book, called Law of the Jungle, falls far short of a balanced assessment of the dispute even though it has one good chapter on the company's extensive contamination of Ecuador's rainforest. (For a summary of the overwhelming evidence against Chevron relied on by Ecuador's courts, see here.)

That's not suprising given Barrett's sympathies. He recently testified in favor of Chevron's litigation position before Congress. He also spent only ten days in Ecuador "researching" two decades of litigation. It is clear that he cribbed much of his material from Chevron's legal briefs.  He also failed to convince a single lawyer involved in the litigation to grant him an on the record interview.

Barrett does not speak Spanish nor the languages of the affected indigenous groups. Not surprisingly, he talked to virtually nobody in the 80 or so rainforest communities devastated by the oil pollution.  

Barrett clearly wants to cash in on the high-profile case and become the resident "expert" on the issues involved. But he does this by giving Chevron every benefit of the doubt.  He also adopts almost wholesale the company's narrative that it was the victim of the indigenous groups and their lawyers.

Aside from its many factual errors  -- outlined in a "notice of defamation" letter cited below -- the fundamental problem with Barrett’s book is its obsessive focus on American human rights lawyer Steven Donziger rather than on Chevron’s systematic toxic dumping and fraudulent remediation.

Chevron's top legal representative in Ecuador, Rodrigo Perez Pallares, admitted openly during the eight-year trial in Ecuador that the company deliberately and systematically discharged more than 15 billion gallons of bezene-laden toxic oil waste into the rainforest during roughly two decades of operations. It would be hard to find such a frank admission by a major American corporation of industral homicide on a mass scale. Multiple peer-reviewed health studies -- largely ignored by Barrett -- confirm dramatically high rates of cancer in the region where Chevron operated.

Yet Barrett suggests Chevron should not pay the $9.5 billion Ecuador court judgment even though it insisted the trial take place in that venue. In contrast, back in his home country, Barrett seems totally unbothered by BP's $46 billion liability for its far smaller and accidental spill in the Gulf of Mexico. (For an analysis of Chevron's stingy behavior in Ecuador compared to BP's large payouts in the U.S. for its Gulf spill, see here.)

Making indigenous persons invisible or treating them as second class citizens is the sort of colonial mentality that got Chevron in trouble in Ecuador.  Barrett falls into the same trap.  He continues Chevron's pattern of arrogance by conceding he never read the 220,000-page Ecuador evidentiary record.  Nor did he attend a single day of the Ecuador trial from its start in 2003 to its finish in 2011. But that did not stop Barrett from issuing "reports" from the trial in his book by describing scenes from the documentary film Crude without citation in the text.

Even the book's title suggests Barrett runs too easily in the world of stereotypes.   In his mind, it appears most Ecuadorians are little more than savages incapable of running their own affairs who are constantly being manipulated by gringos, be they oil companies or lawyers.

Barrett's overwrought focus on Donziger undermines the upside from his one decent chapter on Chevron’s contamination. Yet even this chapter -- where Barrett interviews Cofan indigenous leader Emergildo Criollo -- serves as little more than a foil for the author's later assault on Donziger's integrity and his distortion of the scientific evidence.

Donziger was hardly alone in battling Chevron.  But you would never know it from Barrett's account, where Ecuadorians simply disappear.

Donziger worked closely with lead lawyer Pablo Fajardo and a team of Ecuadorian scientists, lawyers, and community leaders whose names don't make it in to Barrett's book.  Two of the local leaders – Fajardo and Luis Yanza – were recipients in San Francisco of the prestigious Goldman Environmental Prize and its $150,000 cash prize. The award, considered the “Nobel” of the environment, so angered Chevron that it took out full-page newspaper ads in the San Francisco Chronicle accusing the Goldman jury of being duped by the villagers.

Consider a few more of the shortcomings in Barrett's account:
  • There is nothing in the book about the scientific evidence against Chevron in its two internal environmental audits that confirm the company’s extensive contamination at 158 of 163 well sites inspected.  These reports -- both paid for by Texaco, Chevron's predecessor company -- are readily available in the trial record but were ignored by Barrett.  
  • There is nothing about how Chevron scientists John Conner and Sarah McMillan designed and executed a plan to cheat Ecuador’s courts by secretly pre-inspecting contaminated sites to identify “clean” sampling areas. When the judge showed up later for the official judicial inspection, the company would act like it was engaging in random sampling.  In reality, it was lifting soil from places it knew would turn up clean.  
  • Barrett also ignores the entirely inappropriate – it not outright corrupt – attempts by Chevron lawyers Ricardo Reis Veiga and Jaime Varela to use the U.S. embassy Quito to float various bribe offers to Ecuador’s government to coax it to illegally kill off the case. This has been confirmed by wikileaks cables and Chevron’s own internal documents.  (Reis Veiga was later indicted by Ecuador's government for fraud on a sham remediation.)
  • Barrett also ignores the appeal by the Ecuadorians and Donziger of the deeply flawed RICO decision by U.S. Judge Lewis A. Kaplan that purports to overturn a unanimous decision by Ecuador’s Supreme Court affirming Chevron’s liability. (Donziger’s brief appealing that decision, which shreds Chevron’s fallacious factual arguments, can be seen here).
  • Barrett is silent on the fact that 43 prominent U.S. civil society organizations have blasted Chevron for abusing the racketeering statute to target the human rights advocates defending the Ecuadorian communities.  He tries to leave the false impression that Donziger and his colleagues lack support, when in fact support for the case and its lawyers is strong and growing stronger.
  • Finally, Barrett appears to have a myopically provincial perspective. He barely acknowledges that the final decision on recovery will be made not in the U.S., but by courts in various enforcement jurisdictions (including Canada, Brazil and Argentina) that are being asked to seize Chevron's assets to pay for the court-mandated clean up. There is no evidence Barrett traveled to those countries or read the relevant legal papers.
  • Barrett also ignores or mischaracterizes the intense pressure Chevron’s management is under from its own shareholders to settle the Ecuador case, given the huge risk of business disruption around the world. Chevron CEO Watson has been strongly rebuked over the case by a series of shareholder resolutions.
Boiled to its essence, Barrett’s book is a corporate perspective on a successful American plaintiff’s lawyer who with his Ecuadorian colleagues pioneered a new model of funding for a mass-scale human rights litigation. The fact the lawyers had the trial judgment affirmed unanimously by two separate appellate courts in Ecuador -- including by the country's highest court -- only seems to infuriate Barrett all the more.

Even worse for Barrett is that Chevron's 60 law firms and 2,000 legal personnel have been unable to halt the march toward recovery. Barrett's genetic code as a longtime business reporter does not account for even the possibility that indigenous groups could amass scientific evidence and use it to humble America's third largest corporation in court.  

We might add that while BP already paid out billions in the U.S., Chevron continues to seek a taxpayer-funded bailout of its clean-up costs by suing Ecuador's government in international arbitration.  Imagine the outcry from U.S. citizens if BP did the same to the Obama Administration.

Again, you won't hear this perspective from Barrett.

(For more background on the flaws in Barrett’s book, see this critique and Donziger’s “notice of defamation” letter to the author and his publisher. For balanced reporting on the case, we recommend this recent article by Alexander Zaitchik in Rolling Stone, this 2007 article about Fajardo by William Langeweische in Vanity Fair, or this segment about Chevron's deliberate toxic dumping in Ecuador on 60 Minutes. For the human impact, see this compelling photo essay by Lou Dematteis in The Huffington Post documenting Chevron's cancer epidemic in the affected area.)

Wednesday, September 24, 2014

NYT Columnist Joe Nocera Hides Major Conflict of Interest Over Chevron's Ecuador Case

We have long known business writer Joe Nocera to be the resident lightweight of the NYT op-ed page. He clearly lacks the supple analytical insight often seen in the writing of his colleagues Maureen Dowd, Thomas Friedman, Charles Blow, David Brooks, and Paul Krugman.

It was no surprise, then, when Nocera decided to use his column to help his Businessweek buddy Paul Barrett promote his one-sided new book on Chevron’s ecological calamity in Ecuador. Barrett's thesis -- which Nocera adopts wholesale -- is that a good legal case against Chevron was spoiled by the hubris of New York human rights attorney Steven Donziger. The truth is far more complicated.

Because of the tenacious lawyering of Donziger and his colleagues, Chevron lost the case in Ecuador and now faces the potential seizure of billions of dollars of strategically important company assets in Canada, Brazil, and Argentina. Eight separate appellate judges in Ecuador -- the venue where Chevron wanted the trial held -- have ruled against the company. This includes a unanimous five-judge panel from Ecuador's Supreme Court.

Barrett ignores virtually all of this in his book. So does Nocera in his column.

(For more on Donziger's perspective that Nocera and Barrett ignore, see this op-ed published today on the website of Inside Counsel magazine. Donziger also wrote a highly detailed letter to Barrett and his publisher documenting the writer's shoddy reporting, fictional scenes, lazy technique, and factual errors. That letter can be read here.)

Nocera obviously tried to help salvage Barrett's credibility problems by attacking Donziger. What is surprising is how Nocera blew off the overwhelming evidence of Chevron's liability in Ecuador. Here's an email Donziger sent to Nocera before he wrote. Virtually none of this highly relevant information made it into the published column.

Also surprising – no, inexcusable – is how Nocera failed to disclose in the column that his spouse is a lawyer and public relations director for a prominent New York litigation firm hired by Chevron to work on the Ecuador environmental case. The main adversary of the firm? None other than Donziger, the lawyer Nocera attacks. Oops!

We have since learned that there is a disturbing pattern to Nocera's conflicts. Consider:
  • Nocera’s wife, Dawn Schneider, is the communications director for the Boies Schiller law firm headed by well-known litigator David Boies. Chevron hired the firm to work on critical discovery issues related to the Ecuador case. Here are legal briefs [HERE and HERE] that demonstrate the firm's deep involvement in defending Chevron against corruption allegations. Nocera did not disclose his wife's connection to this law firm in his column.
  • In 2006, Nocera was roundly criticized for writing a cover story for the New York Times Magazine on the tobacco company Altria (formerly Phillip Morris) that was surprisingly soft. The public relations person for Altria who worked directly with Nocera on the article? None other than the erstwhile Dawn Schneider.  
  • On another occasion, Nocera wrote in his column about a litigation dispute between Oracle and SAP in which he passed judgment in favor of Oracle. But Oracle also was a client of David Boies, the immediate boss of Dawn Schneider. Nocera failed to disclose this fact as well. Details of that embarrassing episode -- which caused the NYT to publish a clarification  -- are here.
Nocera’s latest column attacking Donziger relies heavily on the findings of activist U.S. judge Lewis A. Kaplan that purports to overturn a unanimous decision by Ecuador's Supreme Court on questions of Ecuadorian law. Kaplan himself disparaged the Ecuadorians from the bench and made a mockery of justice as this document explains in some detail.

Nocera also ignored evidence of Chevron’s bribes, witness tampering, and cooking of evidence in the Ecuador and U.S. trials – all readily available in public documents, including in Donziger’s 130-page brief.

Barrett’s book is largely an apologia for Chevron’s atrocious behavior in the Amazon rainforest. He spent only a handful of days in Ecuador. Barrett also failed to interview anybody of import on either side of the litigation. And he topped it all off by repeating many of Chevron’s talking points in testimony this summer before the U.S. Congress where he sat next to a partner from Chevron’s lead outside law firm. See here for the details.
Nocera is also friends with Fortune writer Roger Parloff, another full-throated advocate for Chevron trying to masquerade as an independent journalist. For more about Parloff’s own lack of ethics and his own feeble attempt to help Barrett, read this recent blog post.

We have asked Nocera to disclose the conflict of interest over his wife’s role in the law firm involved in the Ecuador litigation. He will have a chance to do so in his next column.

We're not holding our breath.