Chevron takes on its dogged pursuer
Oil giant alleges missteps in $18B judgment won by Ecuadorean villagers
For the last month, Chev
ron Corp. has presented a parade of witnesses against Steven Donziger, the freelance lawyer who has been suing the company for 20 years over pollution of the Ecuadorean Amazon jungle. One after another, the witnesses, including some of his closest allies and financiers who are now estranged from his cause, have testified that Mr. Donziger committed witness tampering and fraud.
To Chevron, the case against Mr. Donziger is nothing less than an effort to uphold the rule of law and prevent him and his allies from benefiting from a multibillion-dollar Ecuadorean judgment that he won in 2011.
But now, in testimony prepared for delivery in court next week, Mr. Donziger is as defiant as ever, even as he acknowledges mistakes. Among those admissions are that he concealed his relationship and payments to a court-appointed expert witness who presented a report to the Ecuadorean court that tried the case.
“I did make errors along the way,” he said in a draft of his testimony that he has been preparing for the last several days. But he stopped well short of apologizing; instead, he challenged the constitutionality of the case and questioned the fairness of Judge Lewis A. Kaplan of Federal District Court in Manhattan.
“I challenge at the most fundamental level the legitimacy of this proceeding,” Mr. Donziger said at the start of a written draft of his testimony, which he is preparing to submit to the court. “We face from Chevron what I believe is the most well-funded corporate retaliation campaign in the history of human rights litigation.”
With Mr. Donziger’s guidance, Ecuadorean rain forest villagers won a judgment in 2011 of more than US$18-billion in a provincial Ecuadorean court against Chev- ron, a decision that was affirmed this week by Ecuador’s highest court, although it reduced the penalties to US$9.5-billion.
Chevron has virtually no assets in Ecuador, so lawyers for the Ecuadorean villagers hope to persuade courts in Argentina, Brazil and Canada to confiscate company assets for payment. Chevron hopes that a victory in the non-jury trial in Manhattan will strengthen its argument in foreign courts against enforcing the judgment.
In his prepared testimony, Mr. Donziger repeated his long insistence that Texaco, before it was bought by Chevron, spilled millions of gallons of toxic waste water into rivers of the Ecuadorean Amazon in the 1970s and 1980s and left behind unlined waste pits filled with toxic sludge, badly damaging the lives and culture of several indigenous groups. He cites numerous efforts by Chevron to settle out of court.
Chevron disagrees and has waged a withering counterattack in court. Randy Mastro, a lawyer for Chevron, accused Mr. Donziger of leading a “racketeering enterprise” intended to “coerce a big payday against a big company until the pain went away.” If Mr. Donziger is allowed to succeed, Mr. Mastro said, it will jeopardize American corporations’ ability to work in many countries with imperfect judicial systems.
Chevron has said that Texaco complied with an agreement it negotiated with the Ecuadorean government to clean up its area of operations, and Texaco’s former partner Petroecuador is responsible for pollution that was left behind. The company refuses to pay any damages, contending that Ecuadorean courts, with the prodding of the Ecuadorean president, Rafael Correa, were prejudiced as well as corrupted by Mr. Donziger and his associates.
Mr. Donziger, who graduated from Harvard Law School, has become something of a hero to many environmentalists who praise him for his dogged pursuit of the case.
The trial has so far been dominated by witnesses who have accused Mr. Donziger of a series of ethical shortcomings.
Chevron’s star witness has been the former Ecuadorean judge Alberto Guerra, who testified that plaintiffs paid him US$1,000 a month to ghostwrite favourable opinions for the presiding judge, Nicolas Zambrano. He also testified that Mr. Zambrano told him that Mr. Donziger and his allies promised to pay Mr. Zambrano
At no time did I act with fraudulent or criminal intent
US$500,000 out of the eventual damages as long as he agreed to a favourable verdict.
Mr. Guerra said Mr. Donziger thanked him for his work in a 2009 meeting at a restaurant in Quito. In his court testimony, Mr. Zambrano denied he took money.
“I did not bribe Judge Zambrano,” Mr. Donziger said in his written testimony. “Chevron has no evidence that I had any involvement in bribing any judge apart from Guerra’s thoroughly false and corrupt testimony.”
Mr. Donziger said that at the meeting in Quito, where he hoped to pick up “useful tidbits of courthouse gossip,” “Mr. Guerra openly asked for a bribe. I immediately and unequivocally refused.”
Much of the trial so far has delved into a report written by an expert witness named Richard Cabrera, appointed by the Ecuadorean court.
The lawyer Joseph Kohn, formerly a major financier of the suit, testified that Mr. Donziger had withheld information from him about the suspected ghostwriting of the report.
“Mr. Donziger lied to me,” Mr. Kohn said. Cross-examining his former associate, Mr. Donziger suggested Mr. Kohn knew nothing about Ecuadorean legal customs, which allowed for the plaintiffs’ collaboration with a court expert.
But Jeffrey Shinder, a lawyer who had briefly been retained by Mr. Donziger in 2010, said he was shocked to learn from a consultant working on the case that the consultant had written significant sections of the Cabrera report. Mr. Shinder withdrew from the case and the consultant, Douglas Beltman, has since renounced his work.
“It still bothers me,” Mr. Shinder said, “that we’ll never know if there was a case to be made against Chevron.”
In his testimony, Mr. Donziger describes at length his involvement with the Cabrera report, which he said was based on extensive fieldwork. While acknowledging that an executive summary and annexes “were drafted by others,” Mr. Donziger insisted in the draft of his testimony that Mr. Cabrera exercised independent judgment when signing the report.
He conceded that he had concealed his relationship with Mr. Cabrera in part because “our local counsel felt Chevron would mischaracterize the contacts if it found out about them, or file numerous motions to further delay the trial.” He also conceded that the plaintiffs paid Mr. Cabrera “outside the court process” because the payments were made when the court was “effectively shut down by what I considered to be Chevron’s abusive litigation tactics.” They were not bribes, he said, as Chevron has claimed.
“Although I have often been confused about the issues involved, I now believe the process used to create the executive summary of the Cabrera report was fundamentally consistent with Ecuador law, custom and practice,” Mr. Donziger added. “At no time did I act with fraudulent or criminal intent.”