Wednesday, March 25, 2015

Chevron Law Firm Gibson Dunn Blasted by High Court of London Over Ethical Violations

Reposted from The Chevron Pit

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 abstentia based on apparently falsified evidence. The citizen also happened to be 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 with a recent report in Courthouse News. 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 to frame the firm's adversary counsel. That's after a federal judge from Oregon imposed a fine after determining that one of Chevron's Gibson Dunn lawyers 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 save the company from having to pay a large environmental judgment handed down by the courts in its chosen forum of Ecuador. The firm advertises on its website that it mounts "rescue" operations for corporations in trouble.

As background, the judgment against Chevron issued in 2011 and was based on more than 100 technical evidentiary reports meticulously documenting life-threatening levels of pollution at hundreds of former company well sites in the forest. The judgment has been confirmed by three layers of courts in Ecuador 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 affirmed the findings against Chevron in a unanimous decision.

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 a phone call with the wrong date as part of an extradition proceeding targeting the citizen of Djibouti. On the basis of that wrong date, the High Court froze the assets of the businessman and concluded 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 a bogus 15-year jail 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 of the call, he never could possibly have been tied to the alleged act of terrorism which involved a grenade attack at a shopping mall.

It is clear from reading the judicial opinion of the High Court that it 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 and said nothing to the judge, who 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".

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 the key lawyer for the Ecuadorian villagers, New York human rights attorney Steven Donziger. We know for a fact Mastro on multiple occasions tried to persuade prosecutors to go after Donziger with false evidence. When that failed, Mastro led Chevron's 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. It was helped along by a federal trial judge who engaged in blatantly biased behavior and who illegally tried to overturn the ruling from Ecuador's Supreme Court in favor of the villagers.

(For background on the ample evidence of the judge's bias, see this petition. For details of 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.

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 he damanded 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 no less than 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 hundreds of millions of dollars.

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

Bringing Dishonor Upon an Honorary Award

Reposted from Eye on the Amazon

Commonwealth Club: Please explain to Ines and her daughter Angie why Chevron CEO John Watson deserves a distinguished citizen award despite poisoning their home and refusing to clean it up.

We just found out that the Commonwealth Club of California – the "nation's oldest and largest public affairs forum" – plans to honor Chevron CEO John Watson as a "distinguished global citizen" who has "given back" to the global community. They're actually going to honor Watson's ability to abuse his power, wealth and corporate connections to evade accountability for the wide range of environmental and human rights crimes he has overseen as head of Chevron since 2010? WHAT?!

There are a myriad of reasons why presenting such an award to Watson is outrageous. Massive pollution and health crises in Ecuador, death and destruction in Nigeria, lying to shareholders, abuse of the justice system, trampling free speech in the U.S., dumping millions into local elections to undermine democracy...the list of Chevron's violations goes on and on. Watson has either overseen or has taken a personal role in advancing strategies that attack Chevron's critics and has gone to extraordinary lengths to avoid accepting responsibility for Chevron's well documented actions of harming both people and the planet. It took less than a day to find almost 40 human rights and environmental organizations ready and willing to denounce this decision. If we had taken a week it would easily have been well over 100.

How is it then that none of this leaves a sour taste in the mouths of the Board of Governors at the Commonwealth Club?

Yes, this is all clearly a way for the Commonwealth Club to have a very successful fundraising gala. You present a symbolic award to someone like Watson and all his friends and colleagues come to dine and celebrate, donating thousands to the Club and paying exorbitant amounts for dinner and drinks at the Ritz Carlton. But just how far does someone need to go before it becomes in bad taste to "honor" them, despite how much money it may bring in? Would Bill Cosby be invited to the dinner alongside Jennifer Siebel Newsom as she talks about her work and film project on behalf of women and girls? I think not.

Yet Watson and Chevron's acts to criminalize free speech and attack their critics were recently condemned by the Sierra Club, Greenpeace, Amnesty International and a host of other respected groups. Chevron famously lost in its effort to buy the elections in Richmond, hoping to completely undermine the democratic process. Why? Because their new puppets in Richmond would then drop the city’s lawsuit for the deadly refinery fire of 2012.

When Watson took over Chevron in 2010 his company's handling of its Ecuador disaster took a very different and distinctly aggressive tone. Watson had been one of the architects of Chevron's merger with Texaco years before. He was there when Amazon Watch warned Chevron not to proceed because of the enormous liability in Ecuador. He knew that Texaco admitted to deliberately dumping billions of gallons of toxic waste into the pristine inhabited rainforest. He knew Texaco documents were uncovered proving the company's policy of hiding leaks and not reporting spills during its operations. Apparently, just as the Texaco executives decided that it was worth the human and environmental toll to save $3 per barrel by dumping the waste for decades instead of lining their open toxic waste pits, Watson decided the merger with Texaco was worth the cost. He literally agreed to own Texaco's mess.

When Watson took over from David O'Reilly in 2010, he had a choice. He could have ushered in a new era for the company. He could have apologized to the people of Ecuador. He could have negotiated a settlement and agreed to clean up the Amazon wasteland his company had created. True – to do so would have cost a tremendous amount of money. But in addition to being the right thing to do, and stemming the wave of deaths from cancer, it would have also been fiscally responsible. And it would have earned Watson a legitimate reason to be recognized by a group like the Commonwealth Club.

For in the end, Chevron has spent over a billion dollars already just fighting to avoid its responsibility. Lawyers have built careers (and billed more than the affected communities in Ecuador make in a lifetime) providing legal defense for Chevron. When all is said and done, and Chevron finally pays for the clean-up, when it realizes that the resolve of the affected communities and their many global allies in supporters is stronger, then it will have paid twice over for its acts in Ecuador. Thousands more will have died from cancer, however. They are suffering and dying at this very moment.

Will Watson or anyone at the Commonwealth Club gala give a moment's thought to them on April 2nd?

We could all shrug our shoulders and write this whole event off as just more of the rich patting themselves on the back and move on. But there is a real danger here. The danger is that this isn't just a pro-oil company lobby group celebrating Watson's acts to thwart renewable energy programs. This is an institution founded for debate and discussion on the issues of the day granting legitimacy to a known corporate criminal who is free from accountability only because he and his company are rich enough to hire 60 law firms and over 2000 legal professionals to drag on the legal saga for ages in hopes that the affected communities will literally die out and their supporters will exhaust the resources to assist them any more. That act must be protested. The standard that allows Watson to stand next to people acknowledged for actually trying to better the world must always be condemned. That is why we register our outrage. It is on behalf of those sick and dying in Richmond, Nigeria, Ecuador and elsewhere, who John Watson could have assisted – and didn't.

It probably won't be until the day Chevron finally pays the Ecuadorian judgment when the reckoning comes for Watson. Perhaps only when the bill at long last arrives, when Chevron's assets are seized and Watson can't hide that he's cost shareholders billions of wasted dollars, that organizations like the Commonwealth Club will keep the name of Watson off the list. At that point it would just be in bad taste.

Tuesday, March 17, 2015

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

Reposted from The Chevron Pit

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 help the company, the latest decision must come as very bad news indeed.

The stunning setback suffered last week by Chevron 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 start ruling against Chevron on top of the three layers of courts in Ecuador that have done the same, the company's prospects must be far more dim than many realized.

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.

The more issues the Chevron lawyers can manufacture for the secret panel, the more litigation there is and the more money the three arbitrators make in fees. It resembles a shakedown racket with Chevron's victims in Ecuador – taxpaying citizens – footing a good portion of the bill paid by their government. (The fees of the arbitrators are split evenly between the parties.)

To give one a sense of the money involved, Chevron's top outside lawyers bill more than $1,200 per hour. Chevron paraded 29 lawyers to a recent procedural meeting convened by the arbitration panel. That's on top of the 60 law firms it 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 closed-door proceedings.

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's jurisdictional shell game.

The underlying trial was held in Ecuador at Chevron's request. Yet Chevron sold off its assets in Ecuador after the trial started. 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. Under Chevron's theory, the villagers never will be able to collect the first dollar of their judgment anywhere.

And if that part of Chevron's subterfuge fails, 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, but it must sound clever to Chevron's Board of Directors.

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 for being sucked into a charade that offers no benefit to its own citizens but great riches to its American lawyers. With 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 are refusing to allow the villagers to attend their upcoming proceedings. They desperately want to keep away 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 simply "irrelevant" to the proceedings and did not actually exist for legal purposes. A more honest statement reflecting Chevron's venality has scarcely been uttered.

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

Reposted from The Chevron Pit

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 a gripping 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.