Politics & Policy

Finally, Justice for Chevron

The environmental-damages case against Chevron in Ecuador was always a questionable one: Chevron’s only connection to the sites in question stemmed from its 2001 acquisition of Texaco, which for nearly 30 years had drilled for oil in Ecuador as the junior partner to the country’s state-run oil firm, Petroecuador. As is common in such cases, Texaco performed some $40 million worth of environmental “remediation” when the job was done; the government of Ecuador certified that everything had been done to its satisfaction and released Texaco from future liability. Texaco’s operations in Ecuador ceased in 1992. But in 1999 the country enacted a law, the Environmental Management Act, that empowers any Ecuadorian to seek reparations for claimed environmental damages. It was Christmastime for lawyers.

One of those lawyers was Steven Donziger, a politically connected Harvard Law classmate of Barack Obama. Mr. Donziger would come to be the central figure in the legal case against Chevron — a case that, according to a decision just handed down by the U.S. District Court for the Southern District of New York, was the product of an ongoing criminal conspiracy under the Racketeer Influenced and Corrupt Organizations Act, or RICO. The judge, Lewis Kaplan, found that Chevron’s antagonists had used “corrupt means” to procure a $9.5 billion judgment against Chevron in Ecuador, and that those means included falsifying evidence, coercing judges, bribing “independent” expert witnesses and ghostwriting those “independent” experts’ reports to the court, bribing the Ecuadorian judge in the case, and subsequently lying to U.S. legal authorities in an attempt to cover up their misdeeds.

The anti-Chevron roster includes a who’s-who of environmentalists, high-profile Democrats, lawyers, and financial interests. When Chevron indicated that it would seek to prove that the criminal conspiracy attempting to extort $9.5 billion from its shareholders was in fact a criminal conspiracy, Greenpeace USA and the Sierra Club, among other groups, protested that Chevron’s defending itself set “a dangerous precedent.” Politico and the Huffington Post published articles penned by Karen Hinton, a former aide to Andrew Cuomo, fresh off a $10,000-a-month gig running the anti-Chevron PR campaign. The Huffington Post published a similar piece by Kerry Kennedy, Governor Andrew Cuomo’s ex-wife and a self-styled human-rights campaigner. According to the New York Post, Ms. Kennedy was given a percentage stake in the lawsuit (along with generous fees) that would have been worth as much as $40 million.

The high-profile law-and-lobbying firm of Patton Boggs — a name partner is the son of former House majority leader Hale Boggs (D., La.) — was instrumental in the effort to use U.S. courts to collect the Ecuadorian judgment. (Because Chevron has no assets in Ecuador, there was nothing there to collect.) Mr. Donziger was helped along by Washington lawyer Deepak Gupta of Gupta Beck and by two University of Denver law-school professors, Justin Marceau and John Campbell, who recruited their law students to join the team. New York state comptroller Tom DiNapoli, a major Chevron shareholder through the state’s pensions, was so aggressive in leaning on the company to pay off its tormentors rather than defend itself that the company took the unusual step of filing an ethics complaint against him with the state board.

Most disturbingly, Andrew Cuomo, then attorney general of New York, threatened an investigation into Chevron to try to encourage it to pay up. He did that, according to the aforementioned Karen Hinton, not because of the merits of the case but as a political favor to her: “Andrew has no interest in doing this,” she wrote in documents later published by the New York Times. “He is doing this for me. Because I asked.”

Judge Kaplan’s extraordinary decision is remarkable not for its legal reasoning but for its findings of facts: falsified evidence, judges confessing to accepting bribes, “independent” expert testimony drawn up by the plaintiffs. Among other things, he found:

[Donziger] and the Ecuadorian lawyers he led corrupted the Lago Agrio case. They submitted fraudulent evidence. They coerced one judge, first to use a court-appointed, supposedly impartial, ”global expert” to make an overall damages assessment and, then, to appoint to that important role a man whom Donziger hand-picked and paid to ”totally play ball” with the [plaintiffs]. They then paid a Colorado consulting firm secretly to write all or most of the global expert’s report, falsely presented the report as the work of the court-appointed and supposedly impartial expert, and told half-truths or worse to U.S. courts in attempts to prevent exposure of that and other wrongdoing. Ultimately, the [plaintiffs’] team wrote the Lago Agrio court’s Judgment themselves and promised $500,000 to the Ecuadorian judge to rule in their favor and sign their judgment.

Judge Kaplan’s ruling has rendered that $9.5 billion judgment uncollectable in U.S. courts, but the plaintiffs are still seeking to use foreign courts, in Canada and practically everywhere that Chevron has assets, to collect. No court in the world with a decent respect for its duty would sign off on allowing these parasites to profit from this fraud — but, as the shenanigans in Ecuador show, not every court has a decent respect for its duty.

Chevron has spent a good deal of money that it probably will never recover on this case, and its status as one of the largest companies in the world should not cause us to shrug off efforts to commit extortion against it. The fact that Chevron is a very profitable firm should not distract from the stench of corruption emanating from this case — a stench that clings not only to institutions in Ecuador but to those in the American political class as well, with political figures, activists, media outlets, and of course lawyers all standing to benefit, each in their own way, from this criminal enterprise. They may not all be criminally culpable, but they are all to a degree responsible.


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