Tuesday, October 20, 2015

Chevron's Academic Corruption Over Ecuador Pollution Spreads to NYU School of Law

Reposted from The Chevron Pit

Chevron's recruitment of academics to promote the oil giant's increasingly hapless attempts to defend its Ecuador pollution disaster appears to have compromised the ethics of two more professors at a prominent institution of higher learning. This time, the credibility blow handed out by Chevron is being suffered by New York University.

We recently exposed how a Notre Dame human rights law professor, Douglas Cassel, was shilling on behalf of Chevron and compromising the academic integrity of his university without disclosing the extent of his relationship with the oil giant or the amount of money he was receiving. Since our expose appeared, Cassel has not written further about the Ecuador matter.

What we know on the NYU front is that Professor Linda J. Silberman, an expert in transnational litigation who has been teaching at NYU School of Law since the 1980s, is using her post to quietly shadow block on behalf of Chevron to prevent long-suffering Ecuadorian rainforest villagers from recovering their $9.5 billion environmental judgment. Silberman's role in the litigation -- managed by the outside Chevron law firm Jones Day -- is part of a larger campaign by the company to evade accountability for the deliberate dumping of billions of gallons of toxic oil waste into the rainforest when it operated in Ecuador (under the Texaco brand) from 1964 to 1992.

The facts of Chevron's reckless misconduct have been confirmed by three layers of courts in Ecuador, including by the country's Supreme Court in a unanimous 222-page decision issued in 2013. That decision meticulously documented extensive pollution that continues to contaminate groundwater and surface water at hundreds of former Chevron production sites covering a huge swath of rainforest that is home to five indigenous groups. A sixth group, the Tetete, disappeared shortly after Texaco arrived on the scene in the early 1960s. Chevron insisted the trial be held in Ecuador and repeatedly praised the country's court system to get the venue shifted out of the U.S.

Almost five decades after the oil production started, Chevron's horrendous operational practices in Ecuador have resulted in skyrocketing cancer rates that have decimated local communities and killed or harmed thousands of people. Chevron executive Rodrigo Perez Pallares flat-out admitted during the Ecuador trial that the company discharged more than 15 billion gallons of toxic waste into streams and rivers that local inhabitants rely on for their drinking water. More than 100 technical evidentiary reports -- most provided by Chevron technicians -- backed up the claims of the villagers. (A summary of the extensive evidence against Chevron relied on by Ecuador's courts is here.)

Silberman's cameo role in this fiasco came to our attention recently when an unpublished essay she authored with an NYU colleague, Aaron Simowitz, arrived in our inbox. Available here, the essay was distributed to an internet community focused on "dispute management" in the energy sector.

We were stunned to notice the complete absence of a proper conflict of interest disclosure in the essay by Silberman and her co-author explaining their ties to Chevron and its law firms in the Ecuador litigation. Both are clearing violating NYU's Code of Ethical Conduct, as we explain below.

At the end of the essay, Silberman meekly notes she is a consultant to the Chevron law firm Jones Day. Really now. Jones Day has played a critical and highly controversial role fighting the indigenous groups with corrupt tactics -- including the use of bribes and the secret videotaping of a trial judge. Jones Day and its lead partner Tim Cullen have reaped millions of dollars in fees for so-called "services" that include paying the rent and laundry bills of a corrupt Chevron operative (Diego Borja) after he was spirited out of Ecuador to live under Chevron's protection in the United States.

Clearly, the exact nature of the Jones Day relationship to Silberman might be something NYU's students and faculty need to know to be able to assess the credibility of her "scholarship" and teaching about the litigation. She might also mention how much Jones Day is paying her to lend her academic credibility as an NYU professor to Chevron's strategy to block the Ecuadorians from entering the courthouse in Canada, where they are trying to seize company assets to pay for their environmental remediation.

Junior writing partner Simowitz has the same problem. He "discloses" at the end of the essay that he used to work for the law firm Gibson Dunn. What he fails to mention is that Gibson Dunn is Chevron's lead outside counsel in the case and was hired to deploy at least 114 lawyers to viciously attack the main U.S. legal advisor to the Ecuadorians, Steven Donziger. Chevron's goal was to kill the case by using false and distorted evidence, a paid fact witness who lied about a supposed bribe, and outright intimidation. (For more on Chevron's unprecedented retaliation campaign, see this article in Rolling Stone, this analysis of how Chevron made a mockery of justice in a U.S. court, and this legal brief by Donziger's counsel Deepak Gupta that summarizes how Chevron abused the civil justice system.)

The lack of disclosure in the Silberman/Simowitz essay is one problem. The intellectual dishonesty by these so-called scholars is another.

In the article, Silberman and Simowitz claim that Canada's Supreme Court got it "wrong" when it ruled unanimously in September that the villagers have the right to try to seize Chevron's assets in that country to satisfy their judgment. The only reason the villagers are trying to seize those assets in Canada is because Chevron (after 11 years of litigation in its preferred forum of Ecuador) refuses to pay the judgment despite accepting jurisdiction there as a condition of moving the case out of New York in 2001. Chevron also sold off its assets in Ecuador during the trial as the evidence mounted against it, leaving those affected with almost no options to collect.

Silberman and Simowitz fail to mention that Chevron announced years ago that it would fight the villagers "until hell freezes over" and then "skate it out on the ice." Once it became clear Ecuador's courts might actually hold the company accountable, Chevron's lawyers tried desperately to sabotage Ecuador's court process as we mentioned. The company played an abusive game of forum shopping and sued Ecuador's government in a secret arbitration proceeding that excluded the villagers to try to obtain a taxpayer-funded bailout of its pollution liability.

Instead of explaining this critical context to their readers, the authors attack the Canada Supreme Court's decision on conclusory technical grounds by promoting a legal fiction created by Chevron. The authors repeat Chevron's losing argument before the Canada Court that it would impose a "substantial burden" to force an oil company with $250 billion in annual revenue to defend the Ecuador judgment in Canada because all of its assets there -- estimated to be worth $15 billion -- are held by a wholly-owned subsidiary whose dividends flow entirely to Chevron shareholders. The Canada Supreme Court rejected this argument in very plain language by explaining Chevron does have assets in Canada via its subsidiary.

While we believe the Chevron defense promoted by Silberman is preposterous on its face -- any Chevron-owned subsidiary logically is a Chevron asset that can be used to pay off a Chevron debt  -- at a minimum the oil giant's claim will be litigated in Canada at the trial level now that the Court has ruled the case can proceed. Yet according to Silberman and Simowitz, this technical defense should block the enforcement action from even commencing. Given that Chevron operates around the world only through its subsidiaries, their argument is a stab at obtaining complete impunity for a corporate human rights abuser.

While Silberman and Simowitz have a right to make an intellectually dishonest argument in support of Chevron's abusive litigation strategy, they don't have a right to make it without disclosing their conflicts of interest or otherwise ignoring their ethical obligations in violation of NYU's written Code of Ethical Conduct.

NYU's ethics policy prevents conflicts of interest and requires all faculty to uphold the "highest professional and community ethical standards." This means Silberman should disclose how much she is making for promoting Chevron's arguments, how long she has been on the Chevron dole, whether Jones Day passes on the costs of Silberman's work to Chevron, and if so at what rates. She might also mention whether lawyers at Chevron or Jones Day have approval rights or review her supposedly "independent" analyses before they are published or otherwise distributed. Her contract with Jones Day and communications with the law firm pertinent to the Chevron matter should be fully disclosed. The same goes for Simowitz and his relationships with Gibson Dunn or any other Chevron law firm.

The writers notably fail to mention that Gibson Dunn lawyers from Simowitz's former firm have committed all manner of ethical violations on behalf of Chevron. This includes the illegal payment of more $2 million to a fact witness for his false testimony, an attempted bribe of the trial judge, using the discovery process to harass the oil company's adversaries, and threatening judges in Ecuador with jail time if they did not grant Chevron motions to nullify the proceeding. Was Simowitz directly involved in these activities when he worked at Gibson Dunn? Certainly his readers and students have a right to know the answer. (For more on Chevron's attempts to corrupt the judicial process in Ecuador, see this affidavit and these whistleblower videos.)

Again, we question whether these otherwise reputable professors would engage this issue in the way that they have had they not been paid by Chevron or its surrogates.

The issue of corporate corruption of academia has been a hot topic in recent weeks. The New York Times recently exposed how Monsanto pays academics to launder company agitprop to block the labeling of genetically modified foods. A major academic at the Brookings Institute recently lost his job after Sen. Elizabeth Warren nailed him for failing to disclose to Congress that his flawed research was funded by a pro-business lobbying group.

Chevron has a long history in the Ecuador matter of trying to secretly pay academics in service of its litigation positions. The company has hired a global warming skeptic named Douglas Southgate, a former lobbyist for the chemical industry named Ralph Marquez, and a technical consultant named John Conner who wrote a field manual ordering company scientists to lift only "clean" soil samples during the Ecuador trial to hide contamination from the court.

NYU's faculty needs to ensure that Silberman and Simowitz comply with the university's Code of Ethical Conduct. They should be prohibited from trying to hide partisan advocacy in the clothing of independent scholarship. Most of all, they should be barred from letting Chevron secretly capitalize on NYU's good name to evade accountability for its abuses in the rainforest.

We look forward to see whether NYU as an institution has the backbone to address the very obvious ethical lapses of two of its leading professors.

(We might add that another prominent faculty member at NYU School of Law, Burt Neuborne, has been a stalwart defender of the rights of the Ecuadorian villagers and has represented them pro bono.  Two of Neuborne's legal briefs for the villagers can be found here and here.)

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