Chevron's Legacy

Chevron's Legacy
The Pollution Chevron Left Behind...Shushufindi pit 38. Chevron's scientists found no contamination at this pit.

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.

Anxious to save its flawed non-jury verdict in its retaliatory RICO case, Chevron is again reaching into its deep pockets to garner support. The company already hired at least 60 law firms and 2,000 legal personnel to defend against the claims of the rainforest villagers. Yet the business community -- led by the U.S. Chamber of commerce -- is clearly skittish with Chevron's scorched earth approach. So too is the bulk of the U.S. human rights community.

NOW's legal arm (called Legal Momentum) apparently has no such qualms, prompting furious criticism of the organization by Ecuadorian women and their allies in the U.S. The organization received major donations in 2013 from Chevron and its lead outside law firm, Gibson Dunn. It then filed an amicus brief backing Chevron's unprecedented expansion of the RICO statute to target human rights lawyers and indigenous groups. Not even Gibson Dunn's own lawyers agree with Chevron's and NOW's untenable legal position, as this press release points out.

It appears that Gibson Dunn gave NOW's Legal Momentum a small amount annually until 2012. That's the year it became clear the appeal of Chevron's RICO case would be critical. So in 2012, Chevron started contributing to NOW's legal entity for the first time. That's also when Gibson Dunn upped its contribution significantly.

Among human rights lawyers, the only traction Chevron can get is by paying consulting fees to outliers like Professor Douglas Cassel whose agenda is to mitigate corporate human rights abuses by working closely with the abusers and making them feel less bad about themselves. Like Chevron, Cassell traffics in distorted facts about the litigation in Ecuador as this critique makes clear. (Cassell's diatribes about Ecuador got so bad that the Notre Dame faculty ordered them removed from his university website.)

The mainstream of the human rights and environmental communities in the U.S. -- including prominent groups like Amnesty International, Avaaz, Greenpeace, Rainforest Action Network, Friends of the Earth, Amazon Watch, and Earth Rights International -- have lined up squarely behind the rainforest communities in their two-decade battle to hold Chevron accountable for the dumping of billions of gallons of toxic waste. For a summary of the overwhelming evidence against Chevron, see here.

What Chevron's management should do is pay for the clean-up ordered by the court in its preferred forum of Ecuador. Chevron's stunning problems with the RICO case -- including a likely reversal on appeal -- were outlined recently by attorney Aaron Marr Page in this blog on the Huffington Post. Eight appellate judges in Ecuador have affirmed the trial court judgment. Because Chevron refuses to pay, the villagers are now being forced to pursue company assets in Canada, Brazil, and Argentina.

For a party to a litigation, paying for a "friend of the court" brief (also known as an "amicus" brief) without disclosure is a clear violation of the rules governing legal ethics. Such briefs are supposed to come from independent entities that offer a perspective that bears on an issue being considered by the appellate court. Any financial ties between the entity and a party to the litigation are required to be disclosed.

As usual, Chevron and its new "friends" are playing by their own rules. In NOW's case, there was no disclosure. Chevron gets around this by claiming it is not paying for the preparation of the briefs. Rather, it claims it is just making "general" donations to the organizations that wrote the briefs. Such a cute distinction. And so typical of Chevron.

Does NOW actually think it will receive Chevron money in the future because the company is so committed to protecting abortion clinics?

Chevron submitted its 185-page brief to the U.S. appellate court in early October. Its amicus briefs were filed soon thereafter. That's when new and unpleasant details of the company's strategy emerged. Consider:

**NOW filed a brief backing Chevron's use of the RICO statute to target the impoverished women and children suffering from cancer in the rainforest due to the company's pollution, as this press release points out. NOW admits on its website that took in at least $50,000 to $100,000 from Chevron and its law firm in 2013. NOW has thus far refused to disclose more recent payments from Chevron or Gibson Dunn, but they are likely sizable.

Mariana Jiminez, a community leader in Ecuador who lives in an area contaminated by the company, could not have said it better: "We are furious that a major American advocacy group that purports to advocate on behalf of women would sell out the women of Ecuador in this fashion."

**The U.S. Chamber of Commerce has openly received millions of dollars from Chevron in recent years. The Chamber's "friend of the court" brief on behalf of Chevron, which opposes "fraud" in litigation but is notably silent on the use of RICO, did not disclose any aspect of its extensive financial and lobbying dealings with Chevron.

**The Business Roundtable ("BR"), an organization that also receives substantial Chevron donations, submitted an amicus brief that also did not disclose its ties to the company. We believe it is likely that the four law professors who signed on to the BR brief were paid by BR. In other words, BR allowed itself to be used a conduit to launder Chevron's payments to the professors when court rules bar direct payments without disclosure.

The professor who led the BR brief, Roger Alford, once took an all-expense paid trip to Ecuador sponsored by Chevron. Another, Janet Walker, was a Chevron consultant on the case. Neither disclosed their ties to the company in the brief they signed.

**Then there's a curious brief by a small group of self-annointed "human rights and anti-corruption" lawyers who call themselves "jurists" even though they seem to engage in the tawdry practice of hourly billing just like most lawyers. Given Chevron's long history of corruption and bribes in Ecuador -- including an offer of $1 billion to extricate itself from the legal case and threats to put judges in jail -- one would think this group of "human rights jurists" would come down on the side of the indigenous groups who are being victimized by Chevron. But no.

While the "jurists" take no position on the "merits" of the case, the professors posit that if Judge Kaplan's "findings" are true (and we have explained repeatedly why they are not) then his unprecedented decision should be upheld. These "jurists" appear to have so much respect for the rule of law that they ignore the fact that two layers of Ecuador's appellate courts engaged in a de novo review of the 220,000-page evidentiary record and unanimously rejected Chevron's complaints.

In contrast, the meddling Judge Kaplan (who does not speak Spanish and has zero familiarity with Ecuadorian law) refused even to read the Ecuador trial court record. He also "ruled" that Ecuador's entire judicial system is flawed based on the testimony of one political opponent of the current President. We cannot remember another instance when an American trial judge thought he could overturn a foreign country's Supreme Court on issues of that country's laws.

Chevron's pay-for-briefs game recently took a dramatic bad turn for the company in Canada. That's a place where the judiciary seems to have more respect for the sovereignty of foreign courts than Judge Kaplan. It's also where Chevron has roughly $15 billion in assets. The villagers have an argument in early December before Canada's Supreme Court on a jurisdictional issue as Chevron continues its strategy of obsruction at every pass.

Even with its deep pockets, Chevron was unable to garner any support in Canada for the Supreme Court argument. First, the Canada Supreme Court rejected a request by the U.S. Chamber of Commerce to file an amicus brief for Chevron. Chevron then tried to strong-arm the Canadian Bar Association into filing an amicus brief. But that backfired when hundreds of members threatened to resign from the organization in protest.

The CBA then embarrassingly withdrew its planned amicus brief that had been drafted "pro bono" by none other than a law firm that had done extensive work for Chevron on its oil and gas business in Calgary. For background on Chevron's debacle in Canada, see here.

It is worth noting that the Ecuadorian villagers and New York human rights lawyer Steven Donziger (Chevron's primary targets) are being backed with "friend of the court" briefs by none other than 17 prominent non-profit groups and 35 international law scholars from more than 11 countries. In Canada, three prominent human rights groups (including the International Human Rights Program at the University of Toronto Faculty of Law) have weighed in on the side of the indigenous groups. Their amicus brief can be read here. Unlike NOW, none of these entities are being paid (excuse us, are receiving sudden large donations) for their work.

That support for the villagers is in addition to a letter signed by 43 U.S. non-profit groups criticizing Chevron's effort to use the RICO statute to silence and intimidate its critics.

Of course, Chevron's ethical shortcomings with its amicus briefs pale in comparison to the company's refusal to clean the billions of gallons of toxic waste it dumped into the rainforest. But it is part of a disturbing pattern of untoward behavior by the oil company. We also note that Elaine Wood, the director of NOW's legal arm, is a fomer executive at Kroll. Kroll is the private investigations service based in New York to whom Chevron paid at least $15 million to spy on, track, and harrass Donziger and his Ecuadorian colleagues.

We must wonder whether Ms. Wood is comfortable taking money from a company that not only pollutes the rainforest for profit but also engages in corporate espionage against adversary counsel.

It is the superprofits from Chevron's dumping in Ecuador that help allow it to make "contributions" to all sorts of non-profit organizations in the U.S. and elsewhere. We suspect that if NOW's members were to learn of their organization's acceptance of substantial funds from a corporate polluter that is harming indigenous women in the Amazon rainforest, they would not be happy.

For a reminder of the devastating human toll of Chevron's toxic dumping in Ecuador, see this gripping photo essay by journalist Lou Demettais. Ms. Wood, NOW's leaders, and the organization's members and supporters could do themselves a big favor by taking a close look.

Note: The leading amicus briefs for the villagers in the U.S. case -- which argue that Chevron's strategy violates the First Amendment and international law and comity -- are available here and hereThe appellate briefs from Donziger and his clients, which we believe expose the deep weaknesses in all of Chevron's factual and legal arguments, can be read here and here.

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.

Ex parte contacts with the court? Isn't that exactly the kind of behavior Mastro claimed repeatedly (albeit without legal basis) was "fraudulent" when it took place in Ecuador?

First, a little background. We already reported that Chevron never had a legal basis to bring the RICO case, as this document explains in detail. RICO never has been used to impose an injunction to block lawyers and impoverished indigenous villagers from bringing their claims against a corporate polluter, as Chevron tried to do in the case.

We might add that Chevron's fabricated complaints of "fraud" and "ghostwriting" were rejected by eight different appellate judges in Ecuador. Even so, controversial federal Judge Lewis A. Kaplan decided in favor of the company after a deeply flawed civil RICO trial based on corrupt witness testimony paid for by Chevron, among other problems.

Ultimately, Ecuador's highest court -- the equivalent of our Supreme Court -- affirmed Chevron's liability for causing massive pollution in a 5-0 decision last November. One would think the game would be over for Chevron and it would pay up, much as BP did after its Gulf spill.

Led by Mastro, who never saw a billing opportunity he didn't like, Chevron in 2010 came storming back to the same U.S. court where it earlier had tried to block the claims of the indigenous groups. On the verge of losing in Ecuador after an arduous eight-year trial, Chevron now wanted a second bite at the apple in the same court it had turned its back on years ago.

This was Chevron's ultimate act of forum shopping.

Judge Kaplan, a former corporate defense lawyer with a libertarian bent, was all too happy to indulge Chevron. In the process, he assigned his former law partner Max Gitter to serve as "Special Master" and reap enormous fees. The secret bills were paid exclusively by Chevron.

Encouraged by Kaplan's and Gitter's obvious hostility toward the Ecuadorians and their American lawyer, Chevron dispatched at least 114 lawyers from the Gibson Dunn firm to take over the jurist's giant federal courtroom and mount a retaliatory attack against the Ecuadorians and their counsel. Kaplan had invited Chevron to file the RICO case and then assigned the matter to himself. The courtroom was packed with Chevron executives and lawyers, including company General Counsel R. Hewitt Pate.

As presiding judge, Kaplan denied the defendants a jury on the eve of trial. He also excluded all evidence of Chevron's wrongdoing. He refused to read the Ecuador evidentiary record and he let the company present secret witness testimony.

Kaplan's proceeding was a show trial through and through, not to mention an utter embarrassment to the entire federal judiciary. The spectacle attracted the criticism of dozens of law scholars worldwide.

How things can change when you get to a real appellate court.

The  defendants in the RICO case -- including New York lawyer Steven Donziger and two Ecuadorian villagers, Hugo Camacho and Javier Piaguaje -- have slowly turned the tables on Chevron. Their appellate briefs (see here and here) have exposed Mastro's Trojan Horse case for what it is.

Not surprisingly, Mastro is now backing away from his previous bombast. He is claiming to reporters that Chevron's only real interest is in preserving Kaplan's flawed factual "findings" even if the RICO case gets thrown out.  Memo to Mastro: when a case gets thrown out on jurisdictional grounds, its factual findings go away.

Regardless, Kaplan's "findings" are so tarnished by his obvious bias that they will be worth far more to the Ecuadorians (as an example of U.S. judicial imperialism) than they will to Chevron.

Mastro probably cannot believe that Donziger and his clients secured competent appellate counsel.  One (Burt Neuborne) is a law professor at NYU who helped to settle the Holocaust cases. He is representing the villagers pro bono.  Donziger is represented by Deepak Gupta, a rising young star in the world of appellate advocacy who has argued multiple cases before the U.S. Supreme Court.

Chevron's management team -- whose strategy all along was to win by might what it could not win on merit -- is none too happy about the laser focus of Gupta and Neuborne on the weaknesses in the company's case. It should be no surprise that Chevron is again turning to Mastro to try to trick up the process.

The call by Mastro's office to the clerk is most impolitic and unethical. In any event, Mastro's team filed a brief last week where the caption of the case suddenly changed from Chevron v. Naranjo to Chevron v. Donziger.

Why does it appear that Chevron unilaterally decided to change the caption of the case?

The answer is simple and provides insight into Mastro's devious approach.

Chevron was reversed by the same federal appellate court in 2011. At that time, a three-judge panel threw out an unprecedented injunction imposed by Kaplan at Mastro's request that purported to block enforcment of the Ecuador judgment anywhere in the world. The title of that case: Chevron v. Naranjo.

If the appellate court keeps the same caption for the current appeal -- as it should given that the issues are the same  -- then Chevron likely will face the same three judges as before. These are judges who will not easily be deceived by Chevron's hijinks.

If Chevron gets the caption changed to Chevron v. Donziger, Mastro would claim that it is a different case warranting different judges. It also would allow Chevron to better align the case with its demonization campaign against Donziger, the lawyer who for two decades has prevailed time and again against Chevron and who has driven the company near mad in the process. (Chevron has used no fewer than 60 law firms and 2,000 lawyers on the case since its inception in 1993 while Donziger works from his kitchen table.)

When Mastro tried to defend Kaplan's illegal preliminary injunction before the appellate court in 2011, he was de-pantsed and literally laughed out of the courtroom. At the time, Mastro could not answer the most basic questions posed by the panel. That's one reason why Chevron wants to start anew.

To do so, Chevron has enlisted none other than star Supreme Court lawyer Ted Olson to try to put lipstick on its Ecuador pig. Olson is slated to make a rare appearance in a lower court and argue for the oil company. (It would be great for the villagers if Mastro argues.  Chevron might be stupid, but not that stupid.)

For background on Olson's previous failed attempts to save Chevron in the case, see here and here.

This ex parte lobbying is the modus operandi of Mastro and the litigation team at Gibson Dunn. Mastro and his teammates brag to scandal-plagued corporations about their uncanny ability to mount "rescue" operations. (The motto of the firm: "When the law is in the way, we change the law.")

What that really means is the firm uses corporate power, intimidation, and backdoor gamesmanship to get what it wants for clients willing to pay exorbitant fees. Usually it involves accusing opposing counsel of fraud or unethical behavior so the victims are left defenseless.

But Mastro's "dream team" already has run into major troubles given its own lack of ethics. Andrea Neumann and Kristin Hendricks were found by federal judges to have engaged in unethical behavior. Scott Edelman sued a lawyer for the Ecuadorians in California with no legal basis and was fined by a state court judge for violating the First Amendment.

Gibson Dunn's intimidation template was attractive to Chevron CEO John Watson until it started to unravel. We understand that company management is looking for an exit strategy.

It is increasingly clear that the  RICO case will not determine the outcome of the dispute. The Ecuadorian indigenous groups are pursuing multiple actions to seize the company's assets in foreign courts. There is nothing Chevron or any U.S. judge can do to stop the enforcement process.

We look forward to explaining to the appellate panel more details of the ethically-challenged Mastro's backdoor maneuvering. That will happen regardless of the caption of the case.

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.

In between, he had a stint at a large corporate law firm before returning to work fulltime on his passion of human rights law.

Page now runs Forum Nobis, a law firm and consulting service dedicated to the advancement of international human rights. Page also was a member of the defense trial team in Chevron's RICO case last year in New York before judge Lewis A. Kaplan.

While Page did not stand up in court, he was part of the "brain trust" behind the scenes that fought Chevron's army of 114 lawyers at every turn. Though grossly outmatched in terms of resources, it is now clear that the trial team actually set up Chevron for the possibility of a spectacular fall on appeal.

(For the details of Chevron's many problems on appeal, read the appellate brief of New York attorney Steven Donziger; this brief from Professor Burt Neuborne of NYU school of law; and this brief from international law scholars criticizing Judge Kaplan.)

In a blog posting earlier this week on the Forum Nobis site, Page explained why Judge Kaplan's decision is unlikely to protect Chevron. He demonstrates how Chevron's attorneys -- led by the ethically-bereft Randy Mastro from Gibson Dunn -- seem desperate to salvage anything they can out of the case knowing a reversal is likely.

Page also explains how Kaplan's bloated 500-page "findings" in the RICO matter were based on tainted evidence, cultural ignorance, and a heavy dose of intellectual dishonesty as well as the judge's bullying of the Ecuadorian villagers and their counsel.

Here's Page in his own words:

While Chevron tries to pretend that Kaplan's decision is a juggernaut, it is increasingly apparent that it is really a Hindenberg, likely facing a spectacular implosion on appeal.  It is too controversial on too many fronts: too many sweeping jurisdictional assertions and novel legal conclusions; too little concern for core constitutional rights; too easy an embrace of deeply disturbing evidence, like the paid fact witness testimony; and ultimately, so much raw hostility directed at the defendants, on every page for 500 pages, that it starts to feel unseemly, no matter what your view of the facts.

Page also points out that Chevron, in its 185-page responsive brief, gives away its entire game in a single footnote.

In that footnote (#19 for the wonks among us), the company seems to prostrate itself before the appellate court and begs to let Kaplan's "freestanding" factual findings stand no matter what. Ouch.

Of course, Chevron ignores that Kaplan's factual findings are the result of a deeply flawed proceeding that excluded all evidence of the oil giant's contamination in Ecuador. The findings also purport to overturn a 5-0 decison by Ecuador's Supreme Court affirming Chevron's liability. (Ecuador is the venue where Chevron insisted the trial be held as a condition of the transfer of the litigation out of U.S. courts in 2001.)

Our apologies to Judge Kaplan, but we think Ecuador's Supreme Court might just know a little bit more than you about how to apply Ecuadorian law to the facts.

Page also quotes Judge Kaplan pontificating from the bench as to what he thought of Donziger and the historic enviroinmental litigation. Kaplan spouted on about the merits of the case even though the veteran jurist had not even held an evidentiary hearing.

Here is Page quoting Kaplan's own words:

The imagination of American lawyers is just without parallel in the world. It is our absolutely overwhelming comparative advantage against the rest of the world, apart from medicine. You know, we used to do a lot of other things. Now we cure people and kill them with interrogatories. It's a sad pass. But that's where we are. And Mr. Donziger is trying to become the next big thing in fixing the balance of payments deficit. I got it from the beginning.

Yes, we got it from the beginning too, Judge Kaplan. Your attitude is a most vivid example of U.S. judicial imperialism. It is also an embarrassment to the entire federal judiciary.

The entire blog can be read here.

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.

Friday, September 19, 2014

Fortune's Roger Parloff Now Helping Chevron's Smear Campaign

Fortune legal reporter Roger Parloff seems upset over Chevron's diminishing prospects of evading its $9.5 billion environmental liability in Ecuador.

We have written previously about Parloff's slanted reporting in favor of Chevron. For months, with no conceivable justification, he has refused to print our detailed letter to the editor pointing out the many flaws in his reporting about Chevron's claims of "fraud" in the Ecuador judgment.

Chevron's claims have been rejected by no fewer than eight separate appellate judges in Ecuador and six separate federal appellate courts in the U.S. But Parloff, relying on an outlier decision by an activist U.S. judge who already has been reversed on appeal in humiliating fashion, continues to stand by Chevron's claims.

Lest there be any doubt, Parloff this week outed himself as a full-throttled apologist for Chevron's human rights abuses in Ecuador. He also jumped on the Chevron bandwagon to help push the company's strategic "demonization" campaign against its main litigation adversary, New York human rights lawyer Steven R. Donziger. (An email in 2009 from Chevron public relations consultant Chris Gidez was explicit: Chevron's "long term strategy is to demonize Donziger.")

In defense of a deeply flawed book by his friend, reporter Paul Barrett of Businessweek, Parloff claims Donziger uses "mendacity" and "intimidation" to achieve his goals in holding Chevron accountable for dumping billions of gallons of toxic waste into the Amazon ecosystem. While an estimated 1,400 people have died of cancer in Ecuador courtesy of Chevron's dumping, it is none other than Donziger who Parloff claims should be thrown in jail.

Tellingly, Parloff is completely silent about Chevron's admission that in Ecuador it deliberately dumped 15 billion gallons of toxic oil waste into streams and rivers relied on by local indigenous groups for their drinking water. Or that the company repeatedly tried to sabotage the Ecuador trial, corrupt the evidence, bribe witnesses, and intimidate judges who would not bend to its will.

What Parloff won't tell his Fortune audience is how unqualified he and Barrett are to serve as judge and jury about the Ecuador matter or Donziger's role. Neither attended even a single day of the eight-year trial. Neither read the 220,000-page evidentiary record relied on by Ecuador's courts to find Chevron liable. Neither is familiar with the country's civil code. Neither will cite to Donziger's appellate brief (prepared by Deepak Gupta of the fast-rising Gupta Beck law firm) that rips apart all of Chevron's fallacious arguments.

Both also fail to mention critical information that does not fit Chevron's "demonize Donziger" narrative. This information includes the fact that two separate appellate courts in Ecuador unanimously affirmed the trial court judgment. And that the villagers are enforcing their judgment against Chevron's assets in four countries in one of the most important accomplishments of indigenous groups against the power of Big Oil in history.

Instead, Parloff and Barrett join Chevron's public relations firms in focusing on a minor and fabricated issue that is largely irrelevant to the underlying litigation. The particular issue, however, can be quite useful to damage Donziger's reputation before an American audience unfamiliar with a foreign legal system.

Parloff and Barrett claim that Donziger's role in having U.S. consultants prepare one of the 106 technical reports submitted to the Ecuador court was improper. The particular report in question – which Ecuadorian law experts say was prepared consistent with local practice as well as the methodology used by Chevron's lawyers – was discarded by the judge at the end of the trial. He concluded he did not need it to find Chevron liable given the overwhelming weight of the evidence against the oil company in the other 105 technical reports submitted.

No harm, no foul. Donziger and the Ecuadorian legal team stand by the report. Chevron disagrees. It doesn't matter.

Parloff also repeats the Chevron canard that Donziger bribed a judge. But that information came from a crooked witness to whom Chevron admitted paying an estimated $1 million in salary and benefits, including $48,000 in cash out of a suitcase in Quito. The witness changed his story to suit Chevron's needs each time the company paid him more money. See here for more of the disturbing details that point to witness tampering and possible criminal wrongdoing by Chevron.

To defend Barrett's dishonest book, Parloff continually cites to the only thing Chevron has left. That's the deeply flawed RICO decision by federal judge Lewis A. Kaplan. A former corporate defense lawyer, Kaplan seems unable to leave aside his obvious sympathies for the powerful when he takes the bench. We might also add that Kaplan is invested in mutual funds that own Chevron stock. Tellingly, he did not disclose this fact to the parties during the trial.

Kaplan turned over his New York courtroom to Chevron last fall for an abusive show trial where the company's army of high-priced lawyers turned their demonization campaign against Donziger into high art.

Chevron's case was preposterous from the get go. There was no legal basis for it, as Donziger's appellate brief makes clear. In a state of agita over its lack of evidence, Chevron dropped all damages claims on the eve of trial to avoid a jury. Kaplan repeatedly disparaged the Ecuadorian villagers, tried to meddle in Ecuador's judiciary, and refused to consider any of the extensive evidence of Chevron's contamination in Ecuador. He also treated every witness from the Global South like a second class citizen and worse.

Given that Kaplan reverse-engineered the result, his decision is highly likely to be reversed on appeal. That already happened with Kaplan's unprecedented decision in 2011 purporting to block the villagers from enforcing their judgment anywhere in the world. That provoked the ire of legal scholars from numerous countries and deeply embarrassed the federal judiciary. For detailed background on Judge Kaplan's latest abuse of the trial process, see this document.

Parloff and Barrett seem to have forgotten an important lesson. Those who live in glass houses should not throw stones. Particularly not at Donziger, who has proven himself to be tough as nails and has survived what is probably the most well-financed corporation retaliation campaign in history.

This retaliation campaign is funded, we might add, by an oil company that advertises in the very publications that sign the paychecks of Parloff and Barrett.

Like most trial lawyers, Donziger is far from perfect. But he rightfully is seen by many human rights advocates around the world as a role model. Donziger and his Ecuadorian colleague Pablo Fajardo found funders who helped them pioneer a new model of legal accountability for oil companies that had enjoyed virtual impunity. For two decades Donziger has worked alongside his indigenous clients to chase Chevron as it tries to run from the law.

The legal team has braved anonymous death threats and constant public attacks from the oil company and its allies. Donziger and Fajardo have been followed, harassed, and spied on by Chevron operatives both in the U.S. and Ecuador. Chevron has even extended its intimidation campaign to the lawyers in foreign jurisdictions.

As part of this intimidation model, Chevron has filed court actions against at least 100 supporters of the villagers as well as three separate funders. It also sued Ecuador's government in international arbitration to seek a taxpayer-funded bailout of its pollution. But the team remains undeterred.

The advocacy of Donziger, Fajardo, and others helped lead to the criminal indictment of two Chevron lawyers in Ecuador for fraud. The underlying case produced the largest environmental judgment ever against an American company from a foreign court.

Worst of all for Chevron, the Ecuador judgment came from the very court system where the company insisted the trial be held. In the 1990s, Chevron lawyers submitted 14 sworn affidavits to a U.S. judge praising the independence and fairness of Ecuador's courts. That was Chevron's position until the overwhelming evidence of its wrongdoing started to come in. Then the company switched gears and started to trash the very courts it previously had praised.

Parloff apparently forgets the meaning of "mendacity" and "intimidation" when applied to corporate misconduct.

Reporters – even those working for business publications – should not help corporations smear the people who held them accountable. But that appears to be the modus operandi for Parloff, Barrett, and Chevron: attack the lawyers and create a smokescreen to divert attention away from those responsible for the atrocities.

It's an awful litigation model that ultimately will cost Chevron dearly, as this blog post points out about BP's estimated $50 billion liability for its accidental Gulf of Mexico spill.

For some balanced and independent reporting on the case, one must move well beyond Parloff and Barrett.

We recommend this article published recently by Alexander Zaitchik in Rolling Stone, this 2007 article about Fajardo by William Langeweische in Vanity Fair, or watch 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.

These journalists provide a powerful counterpoint to Parloff and Barrett's zeal to defend a corporate polluter and cash in on its unethical demonization campaign.