Wednesday, March 25, 2015

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

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

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

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

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

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

Back to the London case.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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






Tuesday, March 17, 2015

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Friday, March 6, 2015

Courthouse News: Forensic Report Suggests Chevron Falsified Evidence In Ecuador

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

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

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

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

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

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

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

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

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

As Courthouse News reported:

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

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

As Donziger said in his letter to the Chevron lawyers,

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

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

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




Monday, February 23, 2015

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

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

According to Donziger's letter,

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

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

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

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

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

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

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

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

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





Tuesday, February 17, 2015

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


Monday, February 9, 2015

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

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

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

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

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

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

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

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

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

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

Goldhaber also applies a double standard in his analysis.

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

Friday, January 23, 2015

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

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

Monday, January 12, 2015

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


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

Thursday, December 18, 2014

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


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

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

Tuesday, December 16, 2014

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


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

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

Thursday, November 20, 2014

Ecuador Government Should Sue Chevron For Fraud Over Environmental Remediation

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

Wednesday, October 22, 2014

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


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

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

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

Monday, October 20, 2014

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

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

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

Tuesday, October 7, 2014

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


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

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

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

Sunday, October 5, 2014

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

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

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

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