My latest article, Ecuador’s “dirty hand,” and Mia Farrow’s greased palm is up at Da Tech Guy Blog.
Don’t expect the case to be over, either.
Faustam fortuna adiuvat
American and Latin American Politics, Society, and Culture.
My latest article, Ecuador’s “dirty hand,” and Mia Farrow’s greased palm is up at Da Tech Guy Blog.
Don’t expect the case to be over, either.
. . . he hires Putin’s PR people.
Two items from Ecuador,
I’ve been hesitating to review Paul M. Barrett’s new book, Law of the Jungle: The $19 Billion Legal Battle Over Oil in the Rain Forest and the Lawyer Who’d Stop at Nothing to Win about fraudster Steven Donziger.
While the book is interesting, I find statements like “While not a materialistic person driven by financial rewards, Donziger sometimes groused about the cost of his career choices” (page 134) exasperating. Paul Barrett may believe that Donziger was not “driven by financial rewards” while setting up a Gibraltar corporation to hold proceeds of the judgment, but readers of Law of the Jungle should read Judge Kaplan’s 497-page decision, which quotes Donziger’s personal notebook on April 4, 2007:
. . . I sit back and dream. I cannot believe what we have accomplished. Important people interested in us. A new paradigm of not only a case, but how to do a case. Chevron wanting to settle. Billions of dollars on the table. A movie, a possible book.I cannot keep up with it all.
That said, Barrett is now under attack by the Republic of Ecuador’s U.S. public relations advisers, New York-based Ketchum. His article, What It’s Like to Be Attacked by Putin’s American Flack explains the latest,
Ketchum’s memo about my book connects the dots regarding why Ecuador cares so passionately about the case. Among the “difficult questions” Law of the Jungle raises, according to Ketchum:
Barrett’s book does raise many questions, among them,
• “Ecuador took the biggest part of the income obtained from petroleum extracted from the Amazon, approximately $23.5 billion against $1.6 billion for Texaco-Chevron.” The precise figures are subject to dispute, but according to government records, the split was roughly 90-10 in favor of Ecuador. This contradicts a central theme of the plaintiffs’ (and Correa’s) narrative: that Texaco derived all the benefit from industrializing the rain forest and left the host country with only the nasty side effects. The Ketchum memo warns the embassy that my reporting raises additional questions: How did Ecuador spend its majority proceeds from oil exploitation? Why wasn’t this money spent on environmental controls? Why was the money not used to help those harmed by the drilling?
Ecuador engages in “widespread repression of the media”; now they try to export the repression to our shores via a public relations firm.
The second item:
As you may recall, president Rafael Correa has come up with a fake currency to cover up a fiscal deficit, including debt service, of some $9.2 billion.
Correa claims there’s no plan to replace the dollar. Steve Hanke, who 14 years ago was the chief intellectual architect of the nation’s switch to the dollar, is skeptical,
Ecuador’s Dollarization Architect Doubts Correa’s Pledge
“What Correa’s trying to do is kind of loosen the straitjacket that dollarization has him in,” Hanke said. “If you go off, the fiscal deficit gets bigger, the level of debt gets bigger, inflation goes up and economic growth goes down. All the economic indicators just go south.”
Correa is expected to run for a fourth presidential term in 2017, having changed the law on presidential term limits.
Ketchum may be looking forward to it.
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Ecuador Times reports that
Today in the Twenty-sixth Session of the Human Rights Council, the Chevron case and its impact on the Ecuadorian Amazon will be submitted. The meeting will be held in Geneva and will finish on June 27.
I doubt that Ecuador will start its presentation with Judge Kaplan’s 500-page decision against Donziger (via Business Roundtable), where Kaplan found not only Donziger but the entire Lago Agrio plaintiff team guilty of fraud,
[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 [Lago Agrio 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 [Lago Agrio plaintiff] 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. If ever there were a case warranting equitable relief with respect to a judgment procured by fraud, this is it.
However, I fully expect that “ethically diverse demonstrators” may find employment during the HRC junket, as long as there’s any media willing to watch them.
Following Chevron’s win in the fraud case committed against them, Chevron and Patton Boggs settle their epic legal battle over jungle oil pits in Ecuador
Chevron and Patton Boggs have settled disputes linked to long-running litigation over toxic drilling waste pits in Ecuador, with Patton Boggs agreeing to pay Chevron $15 million, issue a statement of regret, and withdraw from the Ecuador case. Chevron agreed to release all claims against Patton Boggs and its partners.
The settlement is a stunning and highly unusual setback for any law firm, let alone the nation’s leading lobbying firm, long a bedrock of the Washington establishment. While the payment will cover only a tiny portion of the money Chevron has spent on the legal battle, the settlement overall tarnishes the reputation of Patton Boggs.
I know of no other instance where a top lobbying law firm has settled publicly in such terms, particularly when
Now, as part of the settlement with Chevron, Patton Boggs has agreed to assign its 5 percent interest in any money the plaintiffs might obtain. It also agreed to assist Chevron with discovery against the Ecuadorian plaintiffs and their New York-based lawyer Steven Donziger, who has been doggedly fighting Chevron for more than two decades and who Chevron has argued was part of a racketeering scheme to obtain a fraudulent judgment.
Daniel Fisher at Forbes puts it best: Patton Boggs Pays Chevron $15 Million To Rid Itself Of Donziger
The settlement, down to the humiliating, pre-negotiated press release, resembles deals Chevron has negotiated with London-based Burford Capital and other parties that assisted New York attorney Steven Donziger in his attempt to make the oil company pay for widespread pollution left over from a Texaco drilling program in Ecuador in the 1970s and 1980s.
Law firms are rarely found liable for tactics they use to zealously represent their clients, and multimillion-dollar settlements are even rarer. Perhaps more unusual is the law firm’s agreement to deliver partners James Tyrrell and Eric Westenberger to Gibson Dunn’s New York offices for depositions overseen by a court-appointed special master. The firm has also agreed to turn over documents, provided its former clients don’t prevail on challenges under the attorney-client privilege.
Maybe, just maybe this will give pause to anyone considering to engage in fraudulent legalfare against U.S. corporations.
A federal judge in New York has dismissed a suit Patton Boggs filed against Chevron (CVX), which accused the oil giant of bad faith in response to the law firm’s attempt to enforce a multibillion-dollar pollution judgment in Ecuador. While the fizzling of the Patton Boggs case by itself might not seem significant, the dismissal leaves behind Chevron’s counter claims against the law firm, in which the oil company accuses the Washington partnership of participating in a massive fraud and coverup related to that same Ecuadorian judgment.
I’lll be in Silvio Canto’s podcast tonight at 8PM Eastern to talk about this and other Latin American news.
Paul M. Barrett writing for Business Week:
In nearly three decades of writing about the law business, I can’t think of a comparable retreat.
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Linked to by American Thinker. Thank you!
Le-gal In-sur-rec-tion‘s post of the day. Thank you! Understatement of the year: “Chevron must have really good lawyers.”
My latest at Da Tech Guy Blog, on Ecuador: Donziger guilty of fraud against Chevron
timeline from the WSJ:
YOu can read the entire decision (500 pages) here.
In his opinion, Judge Kaplan noted that Mr. Donziger personally stands to gain more than $600 million in contingency fees and, potentially, control over billions that would go to the plaintiffs were the judgment collected.
On Tuesday, the judge ordered Mr. Donziger and his two co-defendants to turn over all property “traceable” to the Ecuadorean judgment to a trust to be set up on behalf of Chevron, and barred them from seeking to enforce the Ecuador verdict in any U.S. court.
A federal judge ruled in favor of Chevron Corp. on Tuesday in a civil racketeering case, saying a record $9.5 billion environmental judgment in Ecuador against the oil giant was “obtained by corrupt means.”
U.S. District Judge Lewis Kaplan found that New York lawyer Steven Donziger and his litigation team engaged in coercion, bribery, money laundering and other criminal conduct in pursuit of the 2011 verdict.
Last month Locke Lord managing partner Jerry Clements told The Am Law Daily that the potential liabilities and “reputational aspects” of the Chevron matter were a key part of her firm’s due diligence efforts in evaluating a merger with Patton Boggs.
At Chevron’s blog: What You Won’t Learn on Ecuador’s Toxic Tour
Remember how Correa made the country default on its debt “because he could”? Well, here’s the price:
How China took control of Ecuador’s oil
Shunned by most lenders since a $3.2 billion debt default in 2008, Ecuador now relies heavily on Chinese funds, which are expected to cover 61 percent of the government’s $6.2 billion in financing needs this year. In return, China can claim as much as 90 percent of Ecuador’s oil shipments in coming years, a rare feat in today’s diversified oil market.
After 2009, terms changed in new Chinese loans, documents show. A 2010 deal for another $1 billion credit line from China Development Bank cut the premium that PetroChina would pay for Ecuador’s oil, and granted PetroChina approval to resell the crude in any market.
In early 2011, Ecuador got another $1 billion loan, and authorized PetroChina to collect money from any other companies that owed PetroEcuador if Ecuador failed to meet repayment terms.
This is close to 11 percent of Ecuador’s gross domestic product.
There’s also the decades-long Chevron lawsuit, which has turned many private companies away from dealing with Ecuador. Last September, Chevron won a major arbitration victory when the Permanent Court of Arbitration in the Hague unanimously ruled that
all such “collective” or “diffuse” forms of environmental relief had been settled and extinguished by the 1995 settlement agreement between Ecuador and Texaco. Accordingly, they reasoned, even if individual third parties were later given standing to seek such relief, they had, by that time, no rights left to assert. The only party that possessed such rights in 1995 — the government — had settled all those claims.
Today is the last day of the Chevron racketeering suit against Steven Donziger.
But back to the report on China,
Chinese firms serve as middleman in most of the Ecuadorean oil sales, while keeping a strategic option to divert barrels to China if needed. As China’s trade grows in the region, U.S. relations have soured with Venezuela and Ecuador, whose leaders are outspoken U.S. critics.
The US needs to become totally independent of foreign oil, right now. Until it does, all foreign policy is at someone else’s mercy.
The latest on the NY Chevron vs Donziger trial: Steven Donziger blackmailed German Yanez, one of the six judges of the Lago Agrio trial, over a possible sexual harassment charge.
Sex and Blackmail Now on the Docket in Chevron Pollution Case
By means of its civil-racketeering suit, Chevron has obtained from Donziger voluminous notes that the New York-based plaintiffs’ attorney kept about his adventures in Ecuador. This quasi-diary, in which Donziger muses about his methods and his ambitions—often in brutally frank terms—has become part of the court record. So have numerous e-mails Donziger exchanged with his colleagues. Kaplan has demonstrated in his pretrial rulings and comments from the bench that he’s intimately familiar with the record. The Donziger diary and e-mails contain references to the plaintiffs’ legal team drafting a formal complaint in 2006 accusing the Ecuadorian judge at that time of sexually harassing women at the courthouse in Lago Agrio, an oil town in the rain forest. According to these once-private communications, Donziger’s team quietly informed the judge that if he did not make a crucial procedural ruling the plaintiffs were seeking, the harassment complaint would be filed.
“Pablo met with the judge today,” Donziger wrote in an e-mail he sent on July 26, 2006, to another attorney in the U.S. “The judge, who is on his heels from the charges of trading jobs for sex in the court, said he is going to accept our request to withdraw the rest of the inspections.” The Ecuadorian judge “wants to forestall the filing of a complaint against him by us, which we have prepared but not yet filed,” Donziger added.
Chevron contends that Donziger also bribed the first judge who heard the case in Ecuador, Alberto Guerra, to collude on the fix with judge Zambrano, who ghostwrote the judgment: Chevron’s Ecuadorean Foes Hit With Double-Whammy.
A former Ecuadorean judge testified Wednesday that he was paid $1,000 a month to ghostwrite rulings and “expedite” proceedings in an environmental lawsuit against Chevron Corp. in Ecuador that ultimately resulted in a $19 billion judgment against the oil giant
On the witness stand on Wednesday, the former judge, Alberto Guerra, said he met in 2009 with Donziger and other representatives of the villagers at Honey & Honey, a restaurant in Quito.
Guerra said another lawyer representing the villagers had already agreed to pay him $1,000 a month to ghost-write court orders for the presiding judge, Nicolas Zambrano. Zambrano, who was also being paid, agreed to expedite the case and limit procedural avenues by which Chevron could delay it, Guerra said.
Donziger was fully aware of the arrangement, Guerra said.
“Mr. Donziger thanked me for the work that I was going to do,” Guerra said of the restaurant meeting.
In late 2003, Guerra presided over the initial stages of a lawsuit against Chevron that Donziger engineered on behalf of thousands of rain-forest residents who allege massive harm from oil contamination. Later, supervision of the case shifted to other judges. Guerra testified that he essentially went into business with one of those subsequent judges, ghostwriting interim rulings that generally—although not always—favored Donziger’s clients. Guerra said that he received monthly $1,000 cash payments from Donziger’s legal team in Ecuador.
Guerra also asserted under oath that he and the other judge, Nicolas Zambrano, offered their services to both Chevron and the Donziger team. Chevron turned them down, but Donziger agreed to play ball, according to Guerra.
Bloomberg: Ecuador’s Worn-Out War on Chevron
David Russell, an environmental consultant who formerly served as a witness for Ecuador’s lawyers, testified that his original damage estimate of $6.114 billion stemmed in large part from assumptions that Donzinger instructed him to use. “I came to learn that my cost estimate was wildly inaccurate and had no scientific data to back it up,” Russell noted in written testimony.
Racketeering aside, the case also looks rather weak on its own merits. For starters, Texaco operated as a minority partner under state-owned Petroecuador when the pollution occurred, so it is difficult to argue the damage is all its doing. Through agreements in 1995 and 1998, the Ecuadorian government also freed the company of further liability following a $40 million cleanup. An arbitration panel in The Hague cited the government’s sign-off when it ruled last month that Ecuador’s lawsuit should have never proceeded in the first place.
And Rafael Correa barked at The Economist, who replied,
Oil, Ecuador and The Economist
A volcano erupts
Rafael Correa lambasts us and “the empire of capital”