Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Extortion Claims Abound in Chevron's Ecuadorean Quagmire

By Adam Klasfeld, Courthouse News
20 August 2012

A lawyer who helped land a $19 billion judgment against Chevron in Ecuador has now lobbed extortion counterclaims against the oil giant for its efforts to discredit the verdict.

Chevron faces huge liability amid claims that its predecessor, Texaco, exposed thousands of Ecuadoreans to life-threatening disease, contaminated the groundwater and left oil pits oozing across the rainforest.

Though Chevron initially fought to try the case in Ecuador, it changed its tune as proceedings got underway in a Lago Agrio provincial court.

Attorney Steven Donziger, who helped orchestrate the case on behalf of 30,000 native Ecuadoreans, says Chevron initially believed it could pressure the Lago Agrio court by exploiting the company's relationship with the Ecuadorean military and threatening to lobby against trading privileges if it faces an unfavorable ruling.

With a finding of massive liability imminent in 2010, however, Chevron then launched a Shakespearean campaign to vilify Donziger, the lawyer claims.

"In short, Chevron decided to follow the advice of 'Dick the Butcher' in Henry the Sixth, part 2: 'The first thing we do, let's kill all the lawyers,'" according to a 158-page filing authored by Keker & Van Nest attorney John Keker.

Chevron's media and legal offensive casts Donziger as the ringleader of a plot to extort billions from Chevron with political pressure and vexatious lawsuits around the globe.

But Donziger says Chevron took his words out of context. Chevron has allegedly publicized one piece of footage in which it appears that Donziger is calling for his team to intimidate the judge with a gun-toting "army."

Donziger says the full tape shows laughter after that joke, which he emphasizes is not discussing "an armed army." The lawyer says he wanted people to "monitor" the court to "protect the process from corruption" in the transcripts.

But these out-of-context clips allegedly inspired U.S. District Judge Lewis Kaplan to block the Ecuadoreans from collecting their $19 billion verdict from Chevron in any court in the world, Donziger says.

The 2nd Circuit reversed Kaplan's "radical" injunction with instructions for the judge to craft rulings respecting the sovereignty of other nations.

Chevron is still pursuing Donziger and his colleagues for allegedly violating federal anti-racketeering law, but the company can seek only an injunction limited to the Southern District of New York.

Courts in Canada, Brazil and Ecuador are currently weighing calls for Chevron to start payment on the Lago Agrio verdict.

Judge Kaplan has also indicated that he might lack jurisdiction to grant Chevron money damages because the alleged fraud occurred in Ecuador.

Though Kaplan has characterized Chevron's extortion claims as credible, Donziger's countersuit boldly asks the judge to dismiss it as an extortion plot.

Chevron spokesman Kent Robertson called the maneuver "nothing more than a ploy to distract attention from his well-documented fraud."

"The claims Donziger has brought are no more credible than those that he and his clients brought in Ecuador," Robertson told Courthouse News. "Over the course of the last two years, Chevron has introduced incontrovertible evidence that Donziger coordinated an elaborate scheme to defraud Chevron and its shareholders."

Karen Hinton, a spokeswoman for the Ecuadoreans whom Donziger represented, applauded her colleagues in the case for putting Chevron on the defensive in the Southern District of New York.

"Steven Donziger is fighting back because Chevron's been allowed to damage his reputation in an effort to derail the lawsuit," Hinton told Courthouse News. "Chevron has failed, but that doesn't mean we're going to just allow them to tell lies and misrepresent what happened in Ecuador."

Donziger says that Chevron chose "three main avenues of attack" to discredit the case in Ecuador. Chevron allegedly fabricated evidence of judicial corruption, misrepresented the findings of scientific experts, and intimidated their opposing counsel and their supporters.

The judicial corruption allegation stems from footage that Chevron touted as evidence of Ecuadorean Judge Juan Nunez agreeing to bribes.

Nunez had been filmed by Chevron contractor Diejo Borja and convicted felon Wayne Hansen, whom Chevron claimed had no relationship with the company. Eventually, The New York Times, Los Angeles Times and Financial Times reported that the tapes showed no evidence of bribery.

Later, reports trickled out that Hansen had a prison record for trafficking hundreds of thousands of pounds of marijuana in 1986.

As reported first by Courthouse News, Hansen more recently evaded a subpoena from the Ecuadorean government by fleeing to Peru, a development that Hansen shared with a Chevron investigator in cryptic emails. Donziger says he later learned that Borja received more than $2 million in payments and benefits that Chevron allegedly characterized as "humanitarian."

Judge Nunez maintained his innocence but stepped down to avoid the appearance of impropriety. Nevertheless, his replacement, Judge German Yanez, allegedly become embroiled in a sex scandal.

Chevron claims that Donziger seized upon this situation to pressure appointment of a biased expert, Richard Cabrera, in the Lago Agrio trial. The case then fell into the hands of Judge Nicholas Zambrano.

Donziger says that none of the court-appointed experts in the Lago Agrio were neutral since each party paid their own, and that Chevron's own experts found the best evidence of its liability for the environmental damage.

According to the countersuit, Chevron's expert Doug MacKay wrote an email to a colleague stating: "I doubt seriously that there never were any significant environment or public health impacts, so I don't want to imply that."

But the lynchpin of Chevron's case comes from allegations that its legal adversaries ghostwrote Zambrano's final judgment.

Kaplan found that, "stripped of the rhetoric," the evidence confirms that a "multipage section" of the 188-page judgment mirrors one of the Ecuadorean's memos, "character-for-character."

Yet Donziger says Chevron cannot tie him to this memo.

"In fact, Donziger did not ghostwrite the judgment or have any knowledge that anyone else did. Chevron has no evidence to the contrary and no basis to accuse him," the countersuit states.

Even Kaplan reached this conclusion, as quoted next in Donziger's filing.

"Even assuming the [Lago Agrio] judge did not draft much of the judgment, there is no admissible evidence as to the identity of the author or authors," Kaplan wrote, as quoted in the countersuit. "The record is silent, for example, even as to such a basic matter as whether the trial judge had professional staff assisting him, which could account for multiple authors and for certain dissimilarities in style between the judgment and prior writings of the judge."

Donziger says that Chevron's campaign against him has been relentless.

"Chevron also has physically threatened, harassed, and intimidated Donziger by subjecting him and his family to near-constant monitoring and surveillance, both in the United States and in Ecuador," the countersuit states.