Chevron adversary to deny Ecuador fraud in testimony

By Christie Smythe
Bloomberg News

A Manhattan lawyer who’s spent his career battling Chevron Corp. over pollution in Ecuador is set to defend the tactics he used to win a multibillion-dollar judgment against the company before a federal judge.

The attorney, Steven Donziger, is scheduled to take the stand today in a Manhattan trial over Chevron’s allegations that Ecuadorean plaintiffs secured their 2011 victory through bribery, fraud and coercion. The misdeeds amounted to a racketeering and extortion plot, the San Ramon, California-based company said in its lawsuit against Donziger, who joined the Ecuador case in the 1990s and became its lead adviser.

In a draft of written testimony Donziger made public, he denied wrongdoing and said the pollution judgment “represents a profound historical accomplishment of indigenous and farmer communities in securing justice for wrongs inflicted upon them by one of the most powerful corporations on the planet.”

Legal saga: Diary of the legal drama in lawsuit against Chevron

Donziger said he drew upon his skills in “advocacy for the disadvantaged,” and believed it was important to wage the Ecuador case through the media, through protests and by speaking directly to influential people.

The goal in the case “was never to politically influence the legal process, but to safeguard that process from corrupt activities on behalf of Chevron,” Donziger said in the prepared testimony.

Ecuador judgment

Chevron is seeking an order barring the plaintiffs from trying to enforce a $19 billion judgment won in Ecuador in 2011 on behalf of rain-forest villagers living in the country’s Lago Agrio region. The award was cut in half by the Ecuadorean National Court of Justice on Nov. 12. Chevron has refused to pay any of it.

Donziger’s testimony is scheduled in a nonjury trial that began last month before U.S. District Judge Lewis Kaplan as the lawyer seeks to refute claims he and Ecuadorean associates exploited corruption in the country’s judiciary, bribed a judge, and ghostwrote an expert report and the court ruling against Chevron.

Donziger contends he was trying to combat even more-brazen behavior by Chevron’s representatives. Spokesmen for Donziger and Ecuadoreans who were also sued called Chevron’s racketeering proceeding a “show trial” intended to discourage activists in other developing countries from challenging corporations over alleged human rights violations.

Captain Ahab

A Harvard Law School graduate, Donziger has pursued the pollution claims against the second-largest U.S. energy company with an intensity that inspired some writers to compare him to the Bible’s David and Goliath tale and Moby Dick’s Captain Ahab.

Throughout much of the case, Donziger worked out of his Manhattan apartment, raising money from financing partners and plotting strategy while Ecuadorean lawyers handled the litigation.

Chevron accident: Pipeline fire keeps Texans away from homes second night

A team of about 15 lawyers and law students helping with the racketeering trial is living and working out of a three-bedroom apartment in lower Manhattan they call their “war room.”

“I don’t think it’s shocking to anyone that we are out-gunned on a profound level,” Han Shan, a spokesman for the Ecuadorean plaintiffs, said on Nov. 11 in the apartment cluttered with notes and evidence binders.

In the underlying case, the plaintiffs accused Texaco of dumping billions of gallons of toxic oil-drilling waste in the Amazon from the 1960s through the early 1990s, causing cancer, birth defects and other ills among the indigenous people.

State company

Chevron, made part of the litigation through its purchase of Texaco, contended its predecessor cleaned up its share of the damage under agreements with Ecuador, and that Petroecuador, Texaco’s state-owned partner, was responsible for most of the pollution.

Donziger’s team says Petroecuador’s contribution to the damage wasn’t at issue in the judgment.

The racketeering trial has included testimony from two former Ecuadorean judges who handled the pollution case: Nicolas Zambrano, who issued the ruling, and his former colleague Alberto Guerra. Guerra, who now lives in the U.S., receiving a $12,000 monthly stipend from Chevron, told the court he regularly ghostwrote rulings for Zambrano because the former prosecutor wasn’t as experienced handling civil judgments.

Guerra testified he also helped write the 188-page judgment based on materials from the plaintiffs, and that he and Zambrano were promised proceeds from the ruling to throw the case in the Ecuadoreans’ favor.

Working alone

Zambrano denied he was bribed and told the court that while Guerra regularly helped him draft some rulings, he worked on the Chevron judgment with help only from an 18-year-old assistant.

Donziger said he didn’t bribe Zambrano and didn’t know of anyone on the plaintiffs’ team who had.

Chevron built its racketeering case against Donziger after pre-trial information exchanges produced hundreds of hours of outtakes from 2009 documentary, “Crude: The Real Price of Oil,” about the Ecuador litigation, and a sporadic journal Donziger kept.

The journal, which Donziger described as “personal notes,” was intended to help remind him of details if he wrote a book, he said in his draft testimony.

Chevron contended the material showed Donziger discussing ways to take advantage of Ecuador’s weak judiciary and pressure judges. Donziger said the outtakes were edited by Chevron and that some of his statements were taken out of context.

The personal notes “reflect that I always believed in the bona fides of this underlying evidence,” Donziger said in the draft testimony.

The racketeering case is Chevron Corp. (CVX) v. Donziger, 11-cv-00691, U.S. District Court, Southern District of New York (Manhattan).