An attorney who was suspended from practicing law after it was determined that he and his partners had been complicit in acts of “coercion, fraud and bribery” is still profiting from a judgment he obtained against Chevron in Ecuador, according to court filings.
In February 2011, a court in Lago Agrio, Ecuador, issued an $18 billion judgment against Chevron that was later reduced to $9.5 billion. The company has been defending itself against allegations that it is responsible for environmental damage in the Amazon region of Ecuador since the early 1990s. In a previous post, I explained how Chevron acquired documents containing evidence of unlawful collusion between attorneys, environmental activists, and Ecuador’s judiciary.
In March 2014, Judge Lewis Kaplan of the Southern District of New York issued a 500-page ruling in favor of Chevron that said New York attorney Steven Donziger and his associates “submitted fraudulent evidence” and that the judgment in Ecuador was obtained by “corrupt means.” Kaplan also said in his decision that Donziger and the other members of his legal team should not be permitted to profit from the ruling in Ecuador. The court ruling came in response to a Racketeer Influenced and Corrupt Organizations Act suit Chevron had filed against Donziger and other attorneys involved in the case. RICO is the federal law that allows for the prosecution of organized crime.
The Washington, D.C., Court of Appeals suspended Donziger from practicing law in the District of Columbia this past September as did the appellate division of the New York Supreme Court in July. He is not licensed to practice in any other another jurisdiction. Even so, the motion from Chevron demonstrates that he has found a way to continue profiting from his fraudulent lawsuit and to make an end-run around Kaplan’s ruling.
The motion, which Kaplan publicly disclosed in October, reveals that Donziger has raised at least $2.4 million from selling interests in the Ecuadorian judgment since the issuance of the RICO judgment in March 2014, of which at least $1.5 million ended up in Donziger’s accounts. The motion also shows that Donziger benefited personally from these funds, transferring nearly $300,000 to his wife and paying more than $54,000 to cover her credit card charges and using investor proceeds to pay $14,040 in gym membership expenses, $5,225 at the bar Walkers, and $2,578 to Acme Fine Wines.
There’s also evidence cited in the motion that describes how Donziger used shares in the Ecuadorian judgment to pay personal creditors and to conceal his funding arrangements by routing transfers through Canadian lawyers. A link to the Chevron documents is available here. A solid source for additional insight into the history of the case and some of the recent developments is Michael Krauss, a professor at the Antonin Scalia Law School of George Mason University, who has authored an impressive series of reports at Forbes.
In June 2017, the Supreme Court rejected an appeal from Donziger leaving in place the lower federal court ruling from Kaplan. Since then, Chevron has been on a roll internationally.
In July 2018, an appeals court in Argentina ruled against enforcement of the Ecuadorian judgment after it found that the company had no legal presence or assets in Argentina and that its courts had no jurisdiction.
The ruling in Argentina followed on the heels of court decisions in Brazil, Canada, and Gibraltar with similar findings that were all in favor of Chevron.
But the final coup de grace against any court room satisfaction for the plaintiffs may have come this past September when an international tribunal ruled that the Ecuadorian judgment “violates international public policy” and “should not be recognized or enforced by the courts of other States.”
In its unanimous ruling, the tribunal administered through the Permanent Court of Arbitration in The Hague found that Ecuador had violated its international treaty obligations and international law. The tribunal also ruled that the 2011 Ecuadorian ruling against Chevron was obtained through fraud, bribery, and corruption. Under international law, the tribunal’s ruling establishes that the oil company is not obligated to comply with fraudulent judgment in Ecuador.
Yet, environmental activists continue to celebrate the case despite the many well-documented instances of fraud.
Exhibit A: The just-completed “Indigenous Solutions for Environmental Challenges” conference held in Alberta, Canada, focused on the Chevron case. Donziger was listed as a participant as were some of his partners in the case including Phil Fontaine, an aboriginal Canadian leader, and Roger Waters, the English songwriter who co-founded the rock band Pink Floyd.
The motion from Chevron, which asks the district court in New York to hold Donziger and his associates in contempt, says that Fontaine received a 0.25 percent interest in the Ecuadorian judgment while Waters received a 0.076 percent interest in the judgment. Donziger budgeted $200,000 for the conference, according to the motion.
The website for the conference makes no mention of the court rulings in favor of Chevron or the fact that the attorneys and activists standing behind the case were exposed in court for fabricating evidence. Instead, conference attendees were asked to view the Chevron case as a model for future shakedown campaigns against industry and “to consider the critical role of judicial remedies.”
Ideally, courtroom losses should serve as an impediment to substantial payouts to attorneys who fail to make their case. Until they do, environmental activists will have every incentive to cook the books and fabricate evidence.
Kevin Mooney (@KevinMooneyDC) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is an investigative reporter in Washington, D.C. who writes for several national publications.
