Friday, September 25, 2015

Chevron's Forum Shopping Over Ecuador Pollution Hits Dead End In Canada

It is widely known that Chevron has acted as a serial forum shopper when it comes to trying to evade its liability for creating an environmental disaster in Ecuador's Amazon. But Chevron's game of corporate subterfuge and litigation is clearly unraveling, spelling huge new risks for company shareholders.

In short, Chevron CEO John Watson's billion-dollar campaign to buy impunity for Chevron's human rights abuses in Ecuador is flaming out. Watson himself is at risk of being whipsawed by his own short-sightedness.

Canada's Supreme Court ruled in early September that thousands of Ecuadorian rainforest villagers have the legal right to try to seize company assets in that country to force it to pay for its court-mandated clean-up in Ecuador. This is serious: for the first time in two decades, the villagers have a direct path to a full recovery of their $9.5 billion judgment. (Chevron has an estimated $15 billion of assets in Canada, including a refinery, offshore oil field, and office buildings.)

Ecuador's Supreme Court already ruled in 2013 that Chevron must pay up. True to form, Watson had sold off company assets in Ecuador as the evidence proving the company's pollution poured in to court. Watson's posture of evasion not only has infuriated Chevron shareholders and alienated environmental and human rights groups, but has forced the impoverished villagers to chase down company assets around the world in a cynical game of corporate hide and seek.

In finding that the villagers had jurisdiction over Chevron, Canada's Supreme Court dealt a severe blow to Watson's strategy. In a unanimous decision, the court said this in reference to Chevron and other debtors who try to evade paying foreign court judgments:
Through their own behaviour and legal non-compliance, they have made themselves the subject of outstanding obligations, so they must be called upon to answer for their debts in various jurisdictions... The need to acknowledge and show respect for the legal action of other states has consistently remained one of comity's core components, and militates in favor of recognition and enforcement.
Murray Klippenstein, a Canadian lawyer who represented several human rights groups in the country who submitted a brief in support of the villagers, praised the decision in a legal publication. He said,
Chevron some time ago declared a total war, scorched earth legal strategy against this claim by the Ecuadorian villagers, and in this proceeding in Canada, Chevron was seeking to import into the law of international reciprocal enforcement of judgments an entirely novel test... in its decision the Supreme Court methodically and meticulously analyzed, and rejected, that attempt, based on existing legal principles -- and rightly so.
While Chevron forum shops, thousands of vulnerable people in Ecuador suffer from cancer and other grievous health impacts such as spontaneous miscarriages due to the company's failure to remediate its contamination. Thousands have either perished or face a real risk of death in the coming years. (For background on Chevron's cancer problem in Ecuador as documented by several independent scientific studies, see here.)

Chevron's forum shopping has been well-documented.

Chevron blocked the original case from being heard in U.S. courts (where it was filed in 1993) and insisted the litigation take place in Ecuador. It filed 14 sworn affidavits praising the fairness of Ecuador's courts.

Once in Ecuador, Chevron sold off its assets in the country and tried to get the matter dismissed on jurisdictional grounds even though it had promised U.S. courts it would accept jurisdiction there. When that didn't work, it started to attack the very courts it had previously praised.

At one point, notorious Chevron lawyer Ricardo Reis Veiga corruptly "persuaded" the country's Attorney General to call the trial judge to insist that the case be tossed. (The judge refused the entirely inappropriate request; Reis Veiga still works for Chevron.)

After years of trying to sabotage the proceedings in Ecuador -- Chevron's lawyers threatened judges with jail time and filed thousands of frivolous motions -- the courts ruled against the company based on more than 100 technical evidentiary reports and the company's own internal environmental audits. Despite its earlier promises, Chevron refused to pay and said it would fight the matter "until hell freezes over and then fight it out on the ice."

In Canada, Chevron tried to block the enforcement action by claiming its assets are held by a wholly-owned subsidiary. In Argentina, where another enforcement action was filed, Watson flew to Buenos Aries and met with the country's President. He then invested in a new gas field in exchange for a technical dismissal of the enforcement action.

Back in the United States, Chevron convinced a rogue federal trial judge in Manhattan to issue an unprecedented and illegal order purporting to block the villagers from attempting to enforce their judgment anywhere in the world. The judge, who had undisclosed investments in Chevron when he ruled, was reversed unanimously on appeal. He was also mocked by international law scholars around the world.

Chevron will face major hurdles in Canada if it tries to allege it was the victim of "fraud" by the very people it poisoned in Ecuador. Its evidence in this regard was rejected unanimously by Ecuador's Supreme Court and has been debunked even more since in other legal proceedings. The real fraud is how Chevron uses its fake allegation to retaliate against those who held it accountable.

It turns out that much of Chevron's "evidence" comes from a completely discredited witness paid $2 million by the company in violation of federal law.  Further, new whistleblower videos prove Chevron technicians tried to hide evidence of oil contamination at its former well sites in Ecuador as part of an elaborate scheme to defraud the courts during the trial there. (For more evidence of Chevron's vast corruption in Ecuador, see this affidavit.)

Chevron's two decades of litigation trickery, executed by no fewer than 60 different law firms paid enormous sums by the company, has forestalled justice in Ecuador for far too long. Something tells us the respected courts of Canada understand this point very well.

Friday, September 11, 2015

Chevron Paying Notre Dame "Human Rights" Professor Cassel To Publicly Attack Ecuadorian Villagers

If you want a new example of corruption in legal academia, look no further than Chevron's relationship with Notre Dame "human rights" law professor Douglas Cassel. Chevron is paying Cassel to attack the rainforest villagers and lawyers who have held Chevron accountable in Ecuador for its environmental disaster in one of the great recent successes of the corporate accountability and human rights movements.

As far as we can tell, Cassel never even spoke or wrote about this historic human rights case until Chevron started to pay him in 2012. He now tries to downplay his financial relationship with Chevron when writing bogs that largely regurgitate the company's talking points and are rife with factual distortions and other shortcomings, as this critique to his "Open Letter" points out in detail.

Cassel is being used by Chevron to help it evade paying the $10 billion judgment it owes to the people of Ecuador for dumping toxic waste into the rainforest when it operated in the South American nation between 1964 and 1992.

It is pretty clear that Cassel also is allowing himself to play a central role in a classic oil industry subterfuge. Since the corporation (Chevron) that dumped billions of gallons of oil waste into the rainforest no longer has credibility, it tries to enlist a third party academic to launder its agitprop. It is another example of how Chevron tries to use money to corrupt institutions, whether they be courts or universities as we describe in more detail below.

During the litigation, Chevron was so desperate to avoid losing that it paid $2 million to a discredited witness to present false testimony about a supposed bribe that was later disproven by computer forensic analysis. It also threatened judges in Ecuador with jail time if they did not rule in its favor. Chevron lawyers filed thousands of frivolous motions to delay and sabotage the judicial process. (For more on Chevron's unethical payments of thousands of dollars in cash to key witness Alberto Guerra, see here and here. For a general account of the company's corruption in Ecuador, see this sworn affidavit.)

Chevron has tried to enlist other academics in its cash-for-support propaganda plan. Most have resisted the entreaties, but the results are poor for those who signed on. When in 2008 Chevron tried to use Dr. Douglas Southgate to defend its toxic dumping in Ecuador, it turned out he was affiliated with an institute funded by the oil and gas industry designed to cast doubt on global warning. See here for background.

Chevron also tried to use Dr. Ralph Marquez to "monitor" the science in the Ecuador case during visits by court experts to the company's highly contaminated well sites. Once Marquez was exposed as a former chief lobbyist for the chemical industry in the state of Texas (and a confidant of Karl Rove), he disappeared from the case. (See here for background.)

Chevron's lineage with low-grade "academics" reflects poorly on both Cassel's personal ethics and those of Notre Dame's reputable law school. Notre Dame should not be letting Cassel trade on its credibility to sell his own soul (and by extension the university's) to a corporate human rights abuser -- particularly when there is no real transparency about the amount of money changing hands and the conditions placed by the company on any "research" for publication.

While Cassel reaps cash for the arrangement, Notre Dame must pay a high cost via its harmed reputation and compromised academic integrity. The New York Times just exposed the same type of academic corruption at various universities -- including the University of Florida -- where Monsanto and other companies are battling to stop the labeling of genetically-modified foods by quietly paying academics to advocate their positions without full transparency.

Most universities now require their faculty to be completely transparent about any financial relationships they might have with third parties. Notre Dame needs to get on board. Cassel's failure to be transparent about his financial ties to Chevron creates a conflict of interest given his responsibilities to teach Notre Dame's students consistent with the high standards of scholarship and professional objectivity demanded by a top-flight university.

Does Cassel tell his students that he is taking money from Chevron, a company that multiple courts have found to have committed environmental human rights abuses in Ecuador on a grand scale? When he teaches the case, does he provide the financial details of his conflict of interest? Does he disclose his contract so students can assess if Chevron has editorial control (or influence) over what he publishes as a so-called "academic"? Is anyone at Notre Dame asking these questions?

Cassel's spectacle is made worse by the fact Notre Dame expressly states that its mission is to help combat poverty, oppression, and injustice -- the very life conditions forced on thousands of indigenous persons and farmers in Ecuador by the irresponsible operating practices of Cassel's client. (For background on the overwhelming evidence against Chevron in the case, see here. For the high rates of cancer in the rainforest where Chevron operated, see here. For a legal brief responding in detail to Chevron's allegations of fraud, see here.)

Last week, after Canada's Supreme Court ruled unanimously that the Ecuadorian villagers could try to seize Chevron's assets in that country to pay for their clean-up, Cassel predictably posted a blog trying to minimize the importance of the decision. In fact, the decision is highly significant and was reported in all major media (see here for our take on the significance) for good reason. Which interpretation of the decision does Cassel plan to teach in the classroom -- his "own" version consistent with Chevron's talking points, or the perspective of the Canadian justices and villagers?

It is worth nothing that Cassel is isolated in his pro-Chevron view of the case. At least 35 prominent international law scholars from nine countries have filed a legal brief supporting the villagers as have numerous U.S. environmental and human rights groups. As far as we can tell, Cassel is virtually alone in legal academia as a wholesale backer of Chevron defenses that already have been rejected by multiple courts, including Ecuador's top court. We doubt he would take such a position if he were not being paid.

Notre Dame appears to have a strong "conflict of interest" policy that prohibits any "situation where financial or other personal or professional considerations compromise an individual’s objectivity, professional judgment, professional integrity, and/or ability to perform his or her professional responsibilities to the University." On its website, the law school says a Notre Dame lawyer should embody "exceptional moral and ethical standards" and "compassion" for others.

These standards might be a good starting point for Notre Dame faculty to use when assessing Cassel's behavior.

To be clear, we don't mind taking on Cassel's pro-Chevron arguments and we do not dispute his right to be heard. What we do mind is his lack of ethics and fundamental dishonesty in trying to downplay -- and often hide -- his relationship with Chevron as a way to try to enhance his own credibility.

We are waiting for Cassel to disclose any and all of his written agreements with Chevron. It would be interesting to know how much he charges to compromise his personal ethics, the ideals of the human rights movement, and the academic integrity of a university.

Tuesday, September 8, 2015

Six Reasons Why Chevron's Ecuador Disaster Just Became A Company Nightmare In Canada

Chevron's Ecuador environmental disaster -- called "The Amazon Chernobyl" by its indigenous and farmer victims in the rainforest -- has now spread to Canada in what is fast becoming a business and legal nightmare for company management.

For Chevron CEO John Watson, the news that the company will face a trial in the respected courts of Canada over its toxic dumping in Ecuador could hardly have come at a worse time. Due to the drop in oil prices and other structural problems in the company, Chevron has lost a whopping $100 billion in market value just in the last 12 months. (See here for background.)

Now, Watson must face the frightening fact that seven justices on Canada's respected Supreme Court ruled unanimously last week that Ecuadorian villagers can try to seize $10 billion of Chevron assets in the country to pay for their environmental clean-up as mandated by the very courts in Ecuador where Chevron insisted the trial be held. While legal hurdles remain -- the case now goes back to a trial court in Toronto -- the villagers plan to use any funds collected to remediate what experts believe is the worst man-made oil disaster on the planet.

This is a huge and much-needed legal victory for the affected indigenous and farmer communities and for human rights victims worldwide. It is also the latest in a series of stinging courtroom defeats in the case for Chevron under Watson's leadership.

This is the second time that a respected Supreme Court has ruled unanimously against Chevron's attempts to block the Ecuador judgment. Ecuador's National Court of Justice, in a 5-0 decision in 2013, affirmed the oil company's liability for the deliberate dumping of billions of gallons of toxic waste into the rainforest when it operated hundreds of wells (under the Texaco brand) from 1964 to 1990. That dumping caused a massive outbreak of cancer affecting tens of thousands of people.

There are now four separate appellate courts -- two in Canada and two in Ecuador -- issuing unanimous rulings against Chevron on important aspects of the case. (Intermediate appellate courts in the respective countries each issued separate 3-0 decisions against Chevron.) In Canada, the villagers have gone 10-0 against the oil company before appellate judges; in Ecuador, they have gone 8-0.

The latest decision is not Chevron's only bad news. Just recently, in a related investor arbitration between Chevron and Ecuador's government, the oil company suffered a devastating setback when the three international arbitrators tossed out its main legal defense. (For more, read this.)

The latest Canada ruling is a powerful example of how Chevron's vicious attacks against the very indigenous tribes it poisoned  -- in a strategy orchestrated by Watson and former Bush Administration official and Chevron General Counsel R. Hewitt Pate -- continue to backfire. It seems that the more the money the company spends to fend off the Ecuadorians, the more it ends up chasing its own tail.

Here are six main reasons why Watson and Pate -- despite having spent an estimated $2 billion of shareholder funds to pay 60 law firms and 2,000 lawyers to carry out the company's scorched-earth strategy -- are facing a growing nightmare north of the border:

**Canada has a judicial system respected throughout the world. When Chevron loses in Canada, it cannot attack the credibility of the country's courts as it has unfairly done for years in Ecuador. Nor can it strip its assets from the country, as it sneakily did in Ecuador. Chevron's litigation strategy of gamesmanship and intimidation simply won't work in Canada.

**Chevron will be forced to face its environmental crimes in public. Watson and Pate likely will have to deal with the merits of Chevron's horrific environmental pollution and the cancer fallout before company shareholders and a global audience -- something they and their predecessors have been trying to avoid for two decades.

**Chevron has a critically important pool of assets in Canada. Estimated to be worth $15 billion, these assets can pay for the entirety of the Ecuador judgment. That's a huge business problem for Chevron as Canada is one of the leading energy producers in the world and the source of an estimated $3 billion in annual profits for the company.

**For the villagers, the cost of litigation just got way lower. Given that the entire Ecuador judgment can be recovered in one country, for the villagers the case just became much more viable. Also helping is that any issues that might be raised already have been litigated. Chevron's massive resource advantage is no more.

**Because of interest payments, Chevron's liability is growing. Canada allows interest to run on uncollected judgments. This will severely tax Chevron if it tries to employ its usual strategy of obstructionism. The villagers estimate accrued interest in Canada on the judgment already has cost Chevron an additional $500 million, increasing its Ecuador liability to $10 billion.

**One of the  top trial lawyers in Canada represents the villagers. The highly respected Alan Lenczner has been litigating for 40 years and has argued roughly 20 cases before the Canada Supreme Court. (A leading Canadian newspaper just published this fascinating profile of Mr. Lenczner's extraordinary career.)

Other than Chevron, the big loser from the Canada decision seems to be increasingly isolated New York trial judge Lewis A. Kaplan. Kaplan, who maintains highly questionable personal investments in Chevron and let the company block any airing of the environmental evidence, is Watson's favorite activist jurist. While literally dozens of trial and appellate judges in three countries have now rejected some or all of Chevron's defense claims, Kaplan is the only judge in the world who has embraced Chevron's discredited "fraud" narrative.

The larger point: if Watson thinks Kaplan will be able to bail him out in Canada (or anywhere else for that matter), he should think again. Kaplan's preposterous and arrogant opinions condemning the entire Ecuadorian judiciary based on the testimony of a single political pundit will backfire against Chevron before any fair tribunal and are likely to be reversed on appeal. (For details on Kaplan's personal conflict and his open hostility toward the villagers, read this legal petitionthis analysisthis appellate brief and this article.)

Watson and Pate have other problems. A new computer forensic analysis has destroyed their manufactured allegation that the Ecuadorian judgment was the product of bribery. The forensic analysis demonstrated that Chevron's star witness, the discredited Alberto Guerra, has been lying under oath (after being coached by Chevron lawyers for an astonishing 53 days) about the supposed bribe. Chevron had greased Guerra and his family with roughly $2 million, including a Mafioso-style $38,000 in bills out of a suitcase, for his "cooperation" (i.e., false testimony) in violation of the ethical rules and possibly federal law. For more of the disturbing details, read here.

The options for Chevron are narrowing as shareholders grow ever more furious at the mishandling of the litigation and the unsavory tactics being used. Watson and Pate also has been criticized for using the notorious "transnational practice group" at the controversial law firm Gibson Dunn to help Chevron undermine the rule of law by falsifying scientific evidence, coaching the corrupt Guerra to lie, filing motions to harass its critics, and trying to intimidate judges in Ecuador with the threat of jail time. (See below for details.)

New evidence also emerged recently that Chevron tried to defraud Ecuador's courts by ordering its scientists to engage in an elaborate scheme to hide toxic contamination during the underlying trial, as these whistleblower videos demonstrate.

With Chevron's defenses fraying and the bad news coming in torrents, the more intelligent approach for Watson and Pate would be to respect the Supreme Court ruling in Ecuador and work with rainforest community leaders and their lawyers to solve the pollution problem. Instead, in an era of industry uncertainty produced by low oil prices, Pate and Watson squander precious resources in an all-out litigation war that increases the company's business risk and does nothing to save the many lives that are being lost on Chevron's watch in the forest.

In the end, these two and others associated with Chevron could very well face personal exposure over the Ecuador liability given the unethical, dubious, and potentially illegal tactics being used.

As the enforcement action in Canada proceeds and interest on the judgment runs, we suspect neither Canada's judiciary nor the financial markets will be impressed with Chevron's approach.

(For a summary of some of the gross misconduct from Chevron and Gibson Dunn, see this sworn affidavit from Ecuadorian lawyer Juan Pablo Saenz. Some of the Gibson Dunn lawyers involved in the conspiracy to present false testimony via Guerra include Randy Mastro, Avi Weitzman, Reed Brodsky, William Thomson and Andrea Neumann. In another incident, the High Court of London recently sanctioned a Gibson Dunn lawyer for presenting false witness testimony to try to frame a political enemy of one of the firm's clients, the African government of Djibouti. In the Ecuador case, the firm has been sanctioned by a U.S. federal judge and criticized for using discovery motions to harass Chevron's critics and present false testimony about the case to the U.S. Congress.)

(For a summary of the evidence against Chevron in Ecuador, see here. For a summary of the cancer problem in Ecuador created on Chevron's watch, see here. For photos of the people in Ecuador Chevron says don't matter, see this essay in The Huffington Post. For a 60 Minutes segment on Chevron's pollution in Ecuador, see here.)

Tuesday, August 11, 2015

Chevron's Ecuador Strategy Backfires As Villagers Move to Seize $106m From Company

If you want a vivid example of how Chevron CEO John Watson and General Counsel R. Hewitt Pate continue to step on themselves in Ecuador, look no further than the company's recent arbitration "victory" against the government of Ecuador in a case involving a dispute over oil royalties.

This supposed Chevron "victory" -- in the amount of a $106 million award -- is likely to help Ecuadorian indigenous villagers collect their separate $9.5 billion environmental judgment against the oil giant. It could also disrupt Chevron's operations in other countries where the villagers are trying to seize company assets to force compliance with the environmental judgment.

The villagers won the larger judgment in 2011 in a civil case in Ecuador after Chevron insisted the trial be held in the South American nation. Chevron's attempts to sabotage and corrupt Ecuador's court system throughout that trial have been well-documented. Ultimately, Ecuador's Supreme Court affirmed the judgment in 2013 in a unanimous 222-page opinion that meticulously described -- mostly using Chevron's own evidence -- the company's wrongdoing at hundreds of well sites throughout the Amazon.

(For examples of Chevron's attempts to corrupt the Ecuador proceedings, see this affidavit and how the company falsified evidence by paying a corrupt witness.)

Chevron launched the arbitration case against Ecuador's government in the middle of the environmental trial to gain leverage. It tried to claim its "damages" over the distribution of oil royalties dating from the 1980s were a whopping $700 million. (Chevron and Ecuador's state-owned oil company had been partners in a consortium at the time.)

Chevron's goal was to use the risk of a large judgment over the royalties to pressure Ecuador's government to kill off the environmental case, where the company faced an enormous multi-billion dollar liability. Chevron's plan was an illegal attack on the rule of law and a blatant attempt at extortion. Ecuador's government did not buckle, further infuriating the company.

In the meantime, because Chevron refused to abide by the environmental judgment, the villagers in 2012 quietly secured a court order in Ecuador entitling them to seize company assets to help pay for the remediation of their ancestral lands. Chevron had no real assets in Ecuador at the time, having sold off its Texaco gas stations in 2007 in anticipation of losing the case.

Here's where the law of unintended consequences kicks in. Watson and Pate's arbitration victory over the issue of royalties created Chevron's only real asset in Ecuador. That asset is a debt owed Chevron by the government of Ecuador. But Ecuador's courts -- the very courts where Chevron accepted jurisdiction and wanted the trial held -- have told the government that the asset is now the property of the villagers and cannot be paid to Chevron.

The villagers no doubt plan to use some of the recovered funds to help seize Chevron assets in other jurisdictions such as Canada and Brazil, where collection actions are pending.

The clean-up in Ecuador clearly will require far more resources than the amount of the arbitral award. Chevron abandoned roughly 1,000 toxic waste pits that continue to contaminate soils, streams and groundwater. Each of those sites is akin to a Superfund site in the United States. And by way of comparison, BP has already paid out $54 billion to repair damage and to compensate victims after the much smaller Gulf of Mexico spill in 2010.

The 1,000 or so waste pits are not the only problem. Chevron also discharged billions of gallons of benzene-laden formation waters into streams and rivers relied on by locals for their drinking water. Cancer rates in the area have skyrocketed and untold numbers of people have perished, as this photo essay by journalist Lou Demettais documents.

(For a summary of the overwhelming evidence against Chevron in Ecuador, see here. For a 60 Minutes segment documenting the company's deliberate dumping of oil waste, see here.)

Pablo Fajardo, who represents the villagers, said that any funds collected from the arbitral award will be placed in a trust account set up to administer the clean-up. Actually getting the funds into the account will require a line item in Ecuador's budget. It is unclear how that might play out given Chevron's many prior attempts to disrupt the case in Ecuador, but we are hopeful.

Fajardo was clear about his intentions, saying in a press release:

The Ecuadorian victims of Chevron's toxic dumping have a lawful right to obtain this arbitral award and other company assets until their judgment is fully satisfied. Our people are suffering from a humanitarian crisis and many lives are at stake because Chevron -- unlike BP in the United States -- refused to pay for a clean up of its pollution.

We might add that the Ecuador court order is not the only bad news lately for Chevron.

Chevron's central defense in the Ecuador matter -- that the trial court judgment was "ghostwritten" -- has been unraveling for several months, as this article in The Huffington Post explains. And Chevron's retaliatory "racketeering" case also faces a major risk of reversal, as this brief and this article by American lawyer Steven Donziger and his representatives explain.

Also hurting Watson is the stunning disclosure of internal Chevron whistleblower videos that show company field technicians trying to hide evidence of contamination from Ecuador's courts. These videos were published by VICE News and Amazon Watch and can be seen here and here.

The bottom line is that Chevron is suddenly at risk of becoming the leading financier for its adversaries in Ecuador. Some might call that the very definition of poetic justice.

Monday, July 6, 2015

Chevron's Greed and Racism Highlighted by BP's $18 Billion Settlement

BP's latest settlement for its Gulf of Mexico spill, for the amount of $18.7 billion, further highlights the greed and racism of Chevron for refusing to settle claims over the far worse ecological damage caused by the company to the people of Ecuador's Amazon region.

With the latest settlement, BP estimates its total liability for the 2010 spill to be $54 billion. That's more than five times higher than Chevron's liability for systematically discharging billions of gallons of benzene-lade oil waste into the waterways of Ecuador's Amazon. The dumping happened from 1964 to 1992, when Chevron (operating as Texaco) abruptly pulled out of the country.

Could there be a more brazen illustration of racism and greed than Chevron's despicable refusal to accept responsibility for what it did in Ecuador?

Chevron CEO John Watson has claimed Ecuador's courts gouged the company when they delivered the verdict against the oil giant in 2011. The damages later were upheld in 2013 in a unanimous decision by Ecuador's Supreme Court. To avoid a U.S. jury, Chevron had insisted the trial be held in Ecuador and had accepted jurisdiction there.

While BP compensates its victims in the U.S., Chevron thus far has been able to obtain effective impunity for its crimes against the people of Ecuador. Cancer rates in the affected area have skyrocketed, costing numerous lives. Instead of cleaning up, the company attacks the very villagers it poisoned and sues the lawyers who have led the legal charge demanding adequate compensation.

Chevron's contamination in Ecuador is far more widespread than BP's in the Gulf. It has lasted longer, was planned deliberately, and has decimated indigenous groups. The hard truth is that environmental racism is alive and well in Chevron today and Ecuador is not the only example.

Another is how the company treats the Bay Area community of Richmond. That's where Chevron owns a polluting refinery where a fire recently forced thousands to seek medical attention. When the community stood up to Chevron and demanded changes, the company had the temerity to spend $3 million to fund its own candidates for the town council.

There was a tragic loss of life and a major environmental impact from the Gulf spill. But at least 1,400 people in Ecuador are estimated to have died from cancer and other oil-related diseases. The death toll will rise if there is no clean-up.

Chevron's racism toward the people of Ecuador was on clear display during the trial. Company lawyers proposed that Ecuador's courts adopt a clean-up standard 100 times more lax than that used in its home state of California. For more on how Chevron tried to corrupt the court process in Ecuador, see this sworn affidavit from lawyer Juan Pablo Saenz.

Of course, many of Chevron's victims in Ecuador are indigenous and live in an isolated part of a Third World country. Unlike BP's victims in the U.S., they do not have environmental laws like the Clean Water Act to protect them.

Let's review the facts.

In Ecuador, a major U.S. oil company has refused for almost 50 years to clean up an environmental catastrophe caused by intentional dumping over a period of decades. In the U.S., a British company that had a terrible accident put up $20 billion without as much as a trial and ultimately settled the entire matter for more than $50 billion.

When Chevron CEO Watson claims the Ecuador judgment is too high, what he is really saying is it is unfathomable to him that people in the forest could actually hold his company accountable.

Watson and Donald Trump might have more in common than they realize.

Wednesday, June 17, 2015

In Blow to Chevron, Judges Rule that Ecuador Pollution Dispute Belongs In The Courts of Ecuador

A five-judge panel from a respected New York appeals court has dealt a blow to Chevron in a dispute between two groups of villagers related to the company's $9.5 billion pollution liability in Ecuador.

In a decision issued this week, the court unanimously ruled that any dispute among Ecuadorian villagers over the distribution of proceeds from the historic judgement should be heard in the same courts that issued it. American law professor Judith Kimerling, who claims to represent a handful of indigenous families out of an estimated 30,000 affected Ecuadorian villagers, had asked the New York trial court to issue an order that her clients were entitled to a proportional share of the proceeds.

Kimerling's theory was sound but her choice of forum was nuts from the get go. Although she purports to be a human rights lawyer, in reality she was doing the bidding of Chevron by attacking Ecuador's courts as incapable of dealing with the dispute. She could not point to a single instance in the history of American jurisprudence where a U.S. court tried to resolve competing claims among foreign citizens over the proceeds of a foreign judgment issued in the courts of their own country.

The latest appellate court decision, issued unanimously, is a direct rebuke to Chevron and raises yet more questions about the wrongheaded approach of U.S. trial judge Lewis A. Kaplan in a similar case brought by the oil giant.

At Chevron's request, Kaplan in 2014 refused to seat a jury and then entered a bizarre and unprecedented order that tries to block the Ecuadorians from collecting the proceeds of their judgment anywhere in the world. Kaplan refused to even review the 105 technical evidentiary reports that demonstrated Chevron had deliberately disposed of its toxic waste in the rainforest, decimating indigenous groups and causing an outbreak of cancer that has cost the lives of numerous local residents.

Dozens of international law scholars filed a "friend of the court" brief blasting Kaplan's decision as a violation of international law. The Kaplan ruling is under appeal before a separate federal panel.

In the meantime, just a few blocks away, five judges from a New York state appeals court used logic and common sense sorely lacking in Kaplan's courtroom. The court agreed with Steven R. Donziger, a New York attorney who has represented the affected communities in Ecuador for two decades. Donziger had argued that any dispute over the judgment obviously should be resolved in the nation that conducted the trial.

According to the state appellate court,

"Ecuador is the forum more convenient to the parties and witnesses in New York; there is no unfairness in requiring plaintiffs to prosecute their claims in Ecuador where they reside; the underlying litigation took place there; the underlying judgment to which plaintiffs claim a proportional share, was issued there; and defendant Amazon Defense Coalition, which was directed to distribute the proceeds of the judgment, is domiciled there."

Donziger, in his own statement, praised the court's logic and implicitly criticized Kaplan:

"The New York state appellate court properly recognized that issues related to an Ecuadorian judgment against Chevron should be resolved by the courts of Ecuador, not by U.S. trial judges who not only lack jurisdiction but have no expertise regarding Ecuadorian law or procedure."

One must remember that Ecuador's courts spent 11 years in trial and appellate proceedings only because Chevron insisted the trial be held there after the original action was filed in New York in 1993. Once damning evidence of extensive contamination was presented in Chevron's preferred courts of Ecuador, the oil company shifted gears and began to attack the very judicial system it had previously praised.

In the meantime, Chevron came back to the same U.S. court where it had blocked the original case to beg Judge Kaplan to try to rescue it from the Ecuadorian judgment. Kaplan -- who has undisclosed investments in Chevron -- was more than happy to oblige. He allowed the oil giant to present fabricated witness testimony and otherwise make a mockery of justice in his courtroom, as this document explains. (For Donziger's explanation of the case, see this article from The Huffington Post and this legal brief appealing Judge Kaplan's decision.)

In the meantime, the affected villagers are not waiting around to hear from U.S. courts. They have hired counsel in Canada and Brazil where they are pursuing Chevron's assets to force the company to comply with the rule of law. Chevron has responded in its usual fashion to its latest spate of bad news -- by trying to cyberbully a respected journalist who exposed that its entire defense to the judgment is falling apart.

For Donziger's full statement on the recent court decision, see this press release. For the court's full decision, see here.

Monday, June 8, 2015

The Nation Magazine Exposes Chevron's Lies About Its Toxic Dumping In Ecuador

More journalists are beginning to expose the lies behind Chevron's retaliation campaign against the indigenous and farmer communities who held it accountable in a court of law for dumping billions of gallons of toxic waste in Ecuador's rainforest.

The communities own a $9.5 billion judgment against Chevron, but the company refuses to pay even though it had accepted jurisdiction in Ecuador's courts and insisted the trial be held in the South American nation.

The latest to weigh in: James North of The Nation.

In a fascinating article called Ecuador's Battle for Environmental Justice In Ecuador, North describes a trip he took recently to the affected area of rainforest that Texaco claims it had remediated after operating there from 1964 to 1992. North describes a trip with Donald Moncayo, a local resident:

We set off into the rainforest.  Moncayo...started at Aguarico 2, a well that has been closed for years... The oily residue is still floating on the surface. Then he marched down a steep slope to a stream, where you could see and smell the oil as well.

Moncayo then took North to a well site called Lago 2 -- one that Texaco in 1998 specifically had certified as "remediated" to Ecuador's government in exchange for a bogus "release" that it still tries to argue absolves it of all legal responsibility. This is how North describes it:

Moncayo went to Pozo Lago 2, which is near the modest wood-frame house where he lives with his wife and baby daughter. He pulled out his core sampler and set to work. After only a meter and a half, he struck some viscosity; before two meters, he hit heavy oil soak... Less than 50 yards away, people were washing in a stream.

North also takes certain legal reporters to task for adopting Chevron's world view that it has been victimized by the very people in Ecuador that it poisoned. He writes:

On closer inspection, the truth is totally different. If the plaintiffs finally win in the end, the rain-forest inhabitants will not just have their habitat start to be cleansed of the oil muck that oozes into their water supply, or enjoy improved health facilities to treat what they argue are elevated levels of cancer and other diseases. They will also have proved the success of an innovative legal strategy that recruits financial help in the rich developed world to provide at least a fighting chance against a corporate colossus like Chevron, which has already spent, by some estimates, $2 billion it its massive legal and propaganda campaign.

Aside from from North, other journalists to expose Chevron's wrongdoing in Ecuador in recent years include Alexander Zaitchik of Rolling Stone, who summarized the company's unethical intimidation tactics;  William Langewiesche of Vanity Fair, who wrote a stirring profile of Ecuadorian lawyer Pablo Fajardo; and the producers of 60 Minutes, whose award-winning segment Amazon Crude had Chevron spokesperson Sylvia Garrigo tying herself in knots by suggesting the oil on the ground in Ecuador was as harmless as the oil in the makeup on her face.

Most recently, Adam Klasfeld of Courthouse News -- himself a victim of Chevron's cyberbullying for his independent reporting -- exposed that the oil giant had donated a whopping $13 million to the U.S. State Department while inappropriately trying to lobby Hillary Clinton and other government officials over the Ecuador litigation. Klasfeld earlier reported on a new forensic analysis that suggests Chevron presented false evidence about the case to a U.S. federal judge.

The underlying environmental matter was heard in Ecuador at Chevron's insistence after the company praised the country's justice system. The litigation in Ecuador resulted in a Supreme Court decision in 2013 that requires the oil giant to remediate more than 1,000 toxic waste pits as well as rivers and streams where the company discharged an additional 15 billion gallons of oil waste. Locals call the disaster the "Amazon Chernobyl".

For background on the case and Chevron's retaliation campaign, see this summary of the evidence and this legal brief  from Steven Donziger, the longtime U.S. legal advisor to the Ecuadorian communities.

You can also learn from North's article why Chevron and its CEO John Watson so hate Ecuador President Rafael Correa, one of the most popular leaders in Latin America.

Correa has the temerity to call out Chevron for its malfeasence, much like President Obama did to BP in 2010 after its spill in the Gulf of Mexico. North quotes Correa accusing Chevron of "shamelessly lying" to evade paying for a clean-up in Ecuador. Correa also explains what already has been confirmed by three layers of courts: Chevron polluted deliberately to inflate its profits.

"They weren't interested in the human beings who lived in the Amazon region,"  Correa told North in an interview. "To me, it is question of racism."

Thank you, President Correa. We could not have said it better. And thanks to James North and The Nation for highlighting this latest sad chapter in American corporate wrongdoing.

Monday, June 1, 2015

Judge Kaplan's Decision For Chevron Based on Falsified Evidence, Says New Report

Chevron is on the ropes yet again in the Ecuador pollution case as its main defense continues to unravel, according to prominent appellate lawyer Deepak Gupta of the Gupta Beck law firm in Washington, D.C.

An explosive new forensic report from Ecuador's government filed recently before a federal appellate court in New York proves that U.S. Judge Lewis A. Kaplan accepted false evidence from a paid witness to try to help Chevron evade paying its $9.5 billion pollution liability to rainforest villagers in the South American nation, according to Gupta. Gupta's letter brief on the issue can be read here.

Gupta has charged Chevron with presenting false testimony to try to frame his client, New York-based human rights lawyer Steven R. Donziger. Chevron's goal for years has been to evade paying the court judgment in its chosen forum of Ecuador, primarily by trying to demonize Donziger to distract attention from its own crimes and fraud. Donziger has been working on the case for 22 years.

Chevron executive Rodrigo Perez Pallares admitted during an eight-year trial in Ecuador that the company dumped at least 15 billion gallons of toxic oil waste into streams and rivers in Ecuador relied on by indigenous groups for their drinking water, bathing, and fishing. Multiple health evaluations have found skyrocketing cancer rates in the affected area. A half-hearted Chevron remediation turned out to be a sham; even Chevron's own technical reports proved during the trial that its former well sites were contaminated with life-threatening toxins. (For a summary of the overwhelming evidence against Chevron see, here.)

Donziger and one of his Ecuadorian colleagues, Goldman Prize winner Pablo Fajardo, have been the primary targets of a Chevron smear campaign that involves at least six public relations firms. One of those firms, CRC Public Relations, is notorious for having executed the Swift Boat campaign attacking John Kerry's patriotism in the 2004 presidential campaign.

In his latest filing, Gupta accused Judge Kaplan of accepting the false testimony from disgraced former Ecuadorian trial judge Alberto Guerra as part of Chevron's strategy to exact revenge against the lawyers who helped the villagers win their historic judgment. (For the specific details of Guerra's false testimony, see this legal brief.)

Gupta demonstrates in his latest brief that Chevron's main allegation -- that lawyers for the villagers "ghostwrote" the trial judgment -- is irrefutably false.

Gupta points out that after being found guilty in Ecuador, Chevron looked for a way to blow up the judgment against it. It suddenly found a man (Guerra) who had been defrocked as a judge in Ecuador for accepting bribes. At the time, he was making $500 monthly but was willing to accuse Donziger (whom he had met briefly on two occasions) and Fajardo of orchestrating the "ghostwriting" of the 188-page trial court judgment in exchange for a princely fee.

Guerra struck a deal with Chevron to be paid $2 million in cash and benefits. He then told a story that the document that became the trial court judgment in Ecuador was given to the trial judge (Nicolas Zambrano) on a flash drive just days before it was issued.

Donziger, who has never received an ethics complaint in 23 years of law practice and who had never even met or seen the trial judge who wrote the judgment, always claimed that testimony was a lie. But how do you prove a negative?

Enter the new forensic report that became available only after Kaplan made his horrendously flawed findings of ghostwriting.  Based on an examination of the hard drives of the office computer of the Ecuadorian trial judge, the report clearly demonstrates that the Word document that became the judgment was saved no fewer than 484 times on the computer of the trial judge in the four months before it was issued. So much for Guerra's flash drive story.

Gupta's brief explains how the new report, prepared by American computer expert J. Christopher Racich ("Racich report") for a related arbitration proceeding between Chevron and Ecuador's government, blows the lid off the oil major's defense.

Gupta nails Chevron for corrupting the court process:

"On this record, and even more so in light of the new forensic analysis not available to the district court, it is no exaggeration to say that Mr. Donziger was framed by Chevron on the basis of a paid witness who admitted to making false statements to sweeten his deal with Chevron."

For good measure, Gupta added that the Racich report proves "Guerra's story was a lie designed to net him a massive payout from Chevron." You would have to be obtuse not to figure that out even before the Racich report was disclosed.

But Kaplan, who called Donziger a "field general" and allowed Chevron to make a mockery of the rule of law in his courtroom, still credited Guerra's internally inconsistent and wholly unreliable testimony.

Chevron's exorbitant payments to Guerra were themselves an utterly indefensible act as federal law prohibits payments to fact witnesses. None other than distinguished Dean Erwin Chemerinsky has confirmed this in a sworn affidavit that Kaplan predictably ignored.

It gets worse. Before taking the stand, Chevron lawyers coached Guerra on what he would say for 53 consecutive days. Those engaged in this unprecedented witness "prep" for Chevron were Avi Weitzman, Andrea Neumann, Reed Brodsky and Randy Mastro. That group hails from a law firm (Gibson Dunn & Crutcher) that the High Court of England recently found falsified evidence in another case to try to frame a man who had become a threat to another of its high-profile clients.

Sound familiar?

Guerra has gotten rich off of Chevron. Among the other perks the oil giant provided for his testimony: immigration from Ecuador to the U.S. for several family members, health insurance, housing, a car, and a team of lawyers to help him secure political asylum. He lives in a secret location in the U.S. under Chevron's protection.

Donziger repeatedly has called Chevron's allegations a frame-up and criticized Judge Kaplan for making disparaging comments from the bench. (Kaplan referred to the affected communities as the "so-called" plaintiffs "said to reside" in the rainforest.) Donziger also exposed that Kaplan held undisclosed investments in Chevron during the trial, further un-endearing himself to a judge widely known for his bullying tendencies.

(For more detail on Kaplan's bias against Donziger and his clients, see this petition to remove him from the case.)

Donziger and a team of Ecuadorian lawyers secured the judgment against Chevron after eight years of hard-fought litigation where the oil giant repeatedly tied to corrupt and paralyze the proceedings. At one point, Chevron threatened the judge with jail time if he refused to grant a company motion to nullify the proceedings. At another point, the company filed 39 duplicative motions in 50 minutes to throw sand into the gears of the court. For part of the background on the company's corruption, see this affidavit from Ecuadorian lawyer Juan Pablo Saenz.

As if 105 technical evidentiary reports proving contamination was not enough evidence, just recently a Chevron whistleblower turned over internal company videos showing the oil giant's scientists laughing at the pollution at well sites in Ecuador that the company claimed to have remediated.

The judgment against Chevron was affirmed by two separate appellate courts in Ecuador, including by the country's Supreme Court in a unanimous 5-0 decision. The judgment was based almost completely on scientific evidence Chevron itself put before the court. The damages are relatively modest compared to the $30 billion paid out by BP for the far smaller Gulf of Mexico spill.

Even though Chevron insisted the the trial be held in Ecuador, as the evidence mounted the company quickly became a sore loser and announced it would never pay the judgment. In 2011, it sued Donziger and Fajardo in New York for roughly $60 billion -- thought to be the largest potential personal liability in U.S. history. Yet Chevron General Counsel R. Hewitt Pate had so little confidence in his own evidence that he dropped the entire damages claim on the eve of trial to avoid a jury of impartial fact finders.

Chevron's 32-year-old forensic expert Spencer Lynch -- who also examined the trial judge's hard drives -- had no answer for the Racich report. He has tried to claim flash drives were used in the judge's computer 56 times during the four-month period the judgment was written. But Racich showed that not a single one of those flash drives contained the judgment or any related documents. Most contained personal items such as family photos.

We might add that CEO John Watson had no answer to the Racich report either when confronted about it by Ecuadorian indigenous leader Humberto Piaguaje at the company's annual meeting last week.  See here for how Watson continues to mislead his own shareholders about the Ecuador case.

The question now is whether the United States Court of Appeals for the Second Circuit can absorb this disturbing evidence and reverse a case where a federal judge so clearly relied on false evidence for his factual findings.

(For Donziger's view of the case, see this article in The Huffington Post and this article published on the legal website Law360.)

Friday, May 1, 2015

Chevron Targets Journalist With Cyberattacks for Exposing Wrongdoing in Ecuador Case

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Wednesday, April 29, 2015

Fortune Focuses On Brad Pitt While Ignoring Key Developments In Ecuador Pollution Case

Roger Parloff's reporting for Fortune about Chevron's growing pollution liability in Ecuador – where he ignores devastating new evidence that the oil giant's defenses are unraveling – is on display yet again with a blog claiming that Brad Pitt has interest in making a movie about the litigation.

This is a great example of how a legal reporter misses the point. A good part of Chevron's Ecuador house is burning down, and Parloff focuses on the tricycle in the front yard.

Parloff's obvious sympathy for Chevron and his refusal to publish our letters calling him out for his errors has been well-documented on these pages and elsewhere, including in this post by activist-journalist Kevin Koenig of Amazon Watch. By consistently engaging in reportorial hijinks when covering the historic case, Parloff deprives Fortune's readers of critical information and undermines his credibility and that of his employer.

Parloff's latest post was about Pitt's supposed interest in a movie focused on Steven Donziger, the U.S. lawyer who helped hold Chevron accountable for dumping billions of gallons of oil waste into the rainforest. According to Parloff, Pitt beat out George Clooney for the rights to the story. Yet neither Pitt nor Clooney nor Donziger confirm any involvement.

While trying to write cute stories about movies, Parloff continues to ignore critical substantive developments in the case that contradict Chevron's narrative that the company has been victimized by the very rainforest communities it poisoned. In 2013, after 11 years of legal proceedings in Chevron's chosen forum, Ecuador's Supreme Court in a 220-page decision affirmed a trial court judgment finding that the company had deliberately dumped billions of gallons of toxic oil waste into rainforest waterways when it operated in Ecuador (under the Texaco brand) from 1964 to 1992.

Since Parloff last reported on the Ecuador pollution matter in depth, three critical facts have emerged that have seriously undermined – if not completely blown up – the contrary civil findings of U.S. Judge Lewis A. Kaplan in Chevron's retaliatory racketeering case. Neither Fortune nor Parloff have reported these developments even though they suggest nefarious efforts by Chevron's lawyers to frame Donziger as revenge for winning a historic $9.5 billion judgment against the company.

(Judge Kaplan's determination that a fraud occurred, which is under appeal, contradicts the findings of eight separate appellate judges in Ecuador that actually had access to the record evidence. Kaplan refused to admit any evidence of Chevron's pollution in Ecuador nor look at the Ecuador trial record. For background on how Chevron made a mockery of justice in Kaplan's courtroom, see here.)

The first critical fact ignored by Parloff is a new forensic examination of the computer of the Ecuador trial judge that emerged recently in a related investor arbitration between Chevron and Ecuador's government. That report – by one of the world's leading authorities on the subject, J. Christopher Racich – found that the trial court judgment against Chevron was written painstakingly by the judge over a period of months on his office computer.

Chevron had claimed Donziger had orchestrated the writing of the judgment and that it had been given to the judge on a flash drive just before it was issued. Donziger has categorically and repeatedly denied the allegation under oath and there is zero forensic evidence to support it. Let's just say the Racich report confirms Donziger is telling the truth, Chevron is lying, and Kaplan (who has undisclosed investments in Chevron) got it wrong.

Also ignored by Parloff is the related issue of how Chevron paid its star witness who testified falsely about the ghostwriting story, a crooked former Ecuadorian judge named Alberto Guerra, tens of thousands of dollars in cash out of suitcase and upwards of $2 million in benefits. You get the picture: Chevron purchased false witness testimony in violation of the ethical rules (read this affidavit by Dean Erwin Chemerinsky) and used it to frame adversary counsel. That might explain why Chevron lawyers coached Guerra for 53 consecutive days before putting him on the stand.

The Racich report and payments to Guerra not only eradicate the last remnants of Chevron's credibility in the company's New York case, they utterly destroy the key factual predicate of Judge Kaplan's deeply flawed decision against Donziger and his clients. Kaplan, who for years disparaged Donziger and the Ecuadorians from the bench, did not have access to the Racich report.

(For a summary of the Racich report, see this filing by Donziger attorney Deepak Gupta. While Fortune ignored the filing, Adam Klasfeld of Courthouse News did report extensively on the Racich conclusions.)

The second key development ignored by Parloff was the release in early April of explosive internal Chevron videotapes that expose an elaborate ruse by company scientists to defraud Ecuador's courts by only "finding" clean soil samples at clearly polluted sites during the eight-year trial. The videos, turned over to Amazon Watch by a Chevron whistleblower, were first published by Vice News and have been rampaging across the internet for the last several weeks. They also show Chevron scientists laughing at the pollution at well sites the company had previously certified as remediated.

Again, nothing from Parloff and institutional silence from Fortune.

Finally, in a devastating setback for Chevron, a panel of investor arbitrators sympathetic to the company recently nullified the oil giant's primary defense to the pollution allegations. Chevron had tried to claim that it was absolved of all liability for the pollution based on what turned out to be a sham remediation conducted in the 1990s; both the arbitrators and three layers of courts in Ecuador have now rejected the defense. For background on how Chevron General Counsel R. Hewitt Pate has misled shareholders on the issue, don't read Fortune because it's not there.

See our own blog posting of the panel's decision here or read the Courthouse News version here.

Instead of focusing on the emergence of new evidence, Parloff wrote a largely unsourced post about a possible movie in a clear attempt to pump up his friend Paul Barrett's pro-Chevron book on the litigation. Barrett's one-sided take has earned him a possible defamation lawsuit for distorting facts and fabricating scenes. It also has received poor reviews from the likes of prominent writer Peter Maas. (Donziger's "notice of defamation" letter to Barrett and his publisher can be read here.)

Barrett and Parloff have a mutual interest in stroking each other. In his own reporting for Businessweek, Barrett also has ignored the Racich report, the arbitration decision, and Chevron's videos. So did Michael Goldhaber of American Lawyer. Along with Parloff, Barrett and Goldhaber have a history of being wedded to Chevron's narrative and they often quote each other's articles. (Goldhaber had the audacity to write a short book about the case without even visiting Ecuador or interviewing any of Chevron's victims.)

Also ignored by Fortune is any serious examination of how Chevron's management team is in trouble after having invested an estimated $2 billion of company funds to hire 60 law firms and 2,000 legal personnel to try to beat back the communities and Donziger (described as a "warhorse lawyer" according to Rolling Stone). Many of Chevron's largest shareholders are seeking the scalp of Chevron CEO John Watson after he was reprimanded over his mishandling of the Ecuador matter during a recent annual meeting.

In his Hollywood blog, Parloff also writes that Donziger's attorneys "for the most part" have not disputed Judge Kaplan's findings that a bribe occurred in Ecuador. That's not true and proves how intellectually dishonest Parloff can be.

Donziger and his attorneys have disputed the bribe and just about every one of Kaplan's "findings" as is made clear by the first 70 pages of the lawyer's appellate brief. Parloff also ignores Donziger's comprehensive 5,000-word takedown of Chevron's environmental crimes and fraud in Ecuador in an article published recently by the legal media outlet Donziger has made it clear at every turn that there was no bribe and that it was Chevron that repeatedly tried to corrupt and sabotage the Ecuador trial, as this sworn affidavit (also ignored by Fortune and Parloff) explains in detail.

While Parloff ignores these new developments, they clearly have planted seeds of doubt about Kaplan's decision in a federal appellate panel that seems highly skeptical of Chevron's forum shopping and bad faith. For more on that, see this article by – you guessed it – a Fortune competitor.

There are many who pay the price for Fortune's apparent inability to report the Ecuador litigation in a balanced way – starting with the magazine's own readers. It shouldn't be hard for a magazine to present two points of view in a contested litigation. Fortune and Parloff need to step it up.

(Editor's Note: For a copy of our letter to Fortune submitted in 2013 criticizing Parloff for errors in a prior story about the Ecuador litigation, see here. Fortune still has refused to print the letter.)

Tuesday, April 14, 2015

The Chevron Tapes: How A U.S. Judge Helped Oil Giant Hide Its Corruption In Ecuador

The stunning internal Chevron internal videos released last week by VICE and the environmental group Amazon Watch demonstrate the oil company knew of its massive contamination in Ecuador's rainforest and had an elaborate ruse to lie about it in court.

That the Chevron trickery failed and it lost the trial anyway changes little about the company's venal attempt to get away with its fraud in the first place. What is becoming increasingly clear is that while most large oil companies are bad, Chevron under CEO John Watson's leadership has become real bad. In fact, as the tapes show, the company is flirting dangerously with the outer boundaries of the law.

Less well known is why the Chevron tapes took so long to see the light of day. An apparent whistleblower from the company mailed them to Amazon Watch in 2011 with a note signed, "A friend from Chevron." (For background on the tapes and to view them, see here for Amazon Watch's version and here for the Vice News report.)

The delay in the release of the tapes is to a great degree the result of what we would consider to be highly devious and inappropriate attempts by both Chevron and U.S. federal judge Lewis A. Kaplan to suppress them as evidence. Chevron and Kaplan did this by trying to claim the tapes were "confidential" throughout Chevron's retaliatory RICO proceeding against the Ecuadorian villagers, which took place with Kaplan presiding from February 2011 to March of 2014.

Amazon Watch had quietly turned over the Chevron tapes to lawyers who had prosecuted Chevron in Ecuador and were later forced to defend themselves before Judge Kaplan. Kaplan was no neutral arbiter. He had disparaged the Ecuadorian villagers from the bench, invited Chevron to bring the case, and then assigned it to his court. (For the general background on how Chevron made a mockery of justice before Kaplan, see this analysis.)

As the "racketeering" trial date neared in the Fall of 2013, the U.S. attorneys Steven Donziger (the longtime legal advisor to the affected villagers) and Julio Gomez (representing two Ecuadorian defendants) tried to use the tapes in a deposition of Chevron's chief scientist, Sara McMillan. It was McMillan and Chevron consultant John Connor who helped design the company's clearly deceptive soil sampling strategy for the Ecuador trial. This strategy can be seen in the videos and a soil sampling "playbook" that directed the company's field hands to only find "clean" samples at well sites otherwise saturated with oil waste.

(Chevron's "playbook" fraud helps one understand exactly what its technicians are doing in the secret videos. See this article by Karen Hinton in the Huffington Post for more background on this aspect of Chevron's fraud.)

Chevron, however, immediately claimed confidentiality over the videos during the McMillan deposition and with Kaplan's backing was able to shut down any questioning about them. Earlier, Chevron lawyer Ethan Dettmer sent a letter to lawyers for the Ecuadorians demanding that the videos be returned to the company -- even though the lawyers had no power (nor obligation) to do so, given that the originals were in the hands of Amazon Watch. In writing the letter, Dettmer acknowledged that the videos were Chevron's property.

Even though the internal Chevron videos clearly were relevant to several key issues regarding the Ecuador judgment -- including Chevron's attempt to corrupt the evidence-gathering process --  Kaplan would not let them be used either in deposition or in trial. In fact, Kaplan jumped through hoops to prevent Chevron's repeated attempts to sabotage the judicial process in Ecuador from ever seeing the light of day in his courtroom.  (For a sense of the extent of Chevron's profoundy disturbing misconduct in Ecuador suppressed by Kaplan, see this affidavit by Ecuadorian lawyer Juan Pablo Saenz.)

Kaplan also helped Chevron suppress the most critical evidence of all. That's the 105 technical reports submitted to the Ecuador court by various experts that demonstrate Chevron left behind extensive and life-threatening levels of contamination at hundreds of its former well sites when it abandoned the country in 1992. These reports -- most of them authored by Chevron's own experts -- were only the basis for the finding of liability against the company by three layers of courts in Ecuador.

These are just a few of the reasons why we call the Chevron/Kaplan racketeering proceeding a show trial. As the appellate briefs show (see here and here), the trial was reverse-engineered by a judge who refused to seat a jury and who clearly disliked the notion of sophisticated American lawyers working with Amazonian villagers to hold a large American company accountable. Kaplan's disdain for the entire notion of Ecuadorian courts hearing a case against an American company is palpable throughout the transcripts of the proceeding.

Given that the appeal of Judge Kaplan's decision in favor of Chevron will be heard next week in Manhattan by a three-judge panel, let's review the highlights of his pro-Chevron bias:

  • He repeatedly disparaged the villagers in open court – calling them the "so-called" plaintiffs "said to reside" in the Amazon rainforest.
  • Prior to trial and without as much as an evidentiary hearing, he tried to impose an unprecedented and blatantly illegal global injunction purporting to block the villagers from enforcing their judgment anywhere in the world. The injunction was reversed unanimously the first business day after oral argument.
  • He called Steven Donziger, the U.S. lawyer for the villagers, a "p.r. flak" who was trying to use the case to "fix the balance of payments deficit" of the United States.
  • He allowed Chevron to pay $2 million to an admittedly corrupt former Ecuadorian judge to testify about a supposed "bribe" that never occurred.
  • He refused to admit into evidence any of the three decisions from Ecuador's trial and appellate courts finding Chevron liable and imposing damages.
We note that since the end of the "racketeering" trial even more evidence has emerged (see this new blog) from the authoritative Louis Berger Group showing that Chevron lied about having remediated its waste pits in Ecuador. This new sampling data further underscores the absurdity of Kaplan's rulings related to the company's contamination.

We believe a decision by a U.S. trial judge based so obviously on a distorted view of the evidence will have little credibility in enforcement courts in Canada and Brazil where the courageous Ecuadorian villagers are trying to seize Chevron's assets. Chevron obviously agrees given its gargantuan effort to block the Canadian enforcement action from even proceeding to the merits.

In the meantime, Amazon Watch has done the world a great service by reviewing, dubbing, and releasing Chevron's secret tapes. Doing so was an extraordinary act of courage by both the Chevron whistleblower and one of the nation's leading environmental groups.