Chevron Looks For 'Any Opening to Discredit' $19 Billion Ecuador Judgment, New York Times Writes

For the past eight weeks, the New York Times has been researching a story about an American lawyer who has helped fight one of the most important environmental lawsuits in history -- a 20-year battle for justice brought by a group of Ecuadorian indigenous and farmer communities against Texaco for causing massive oil contamination and health problems in the Amazon rainforest.

Chevron, which bought Texaco in 2001, is now the sole defendant in the case and is using roughly 60 law firms and 180 investigators to beat back what it obviously sees as a massive threat to its business model.

The result of the research from the New York Times appeared Wednesday on the front page of the Business section.

The reporter, Clifford Krauss, did not write what Chevron wants its shareholders to believe -- that Steven Donziger, a human rights attorney and friend who is the subject of the story, committed "fraud" in Ecuador to obtain the $19 billion judgment against Chevron.

Instead, the reporter wrote that Chevron "has looked for any opening to discredit" the judgment, and that Donziger "has a serious following among environmentalists. He and his supporters say he is being vilified -- potentially ruined -- for unmasking Chevron's questionable environmental record."

Taking an even-handed approach, the article lays out Chevron's charges but curiously does not include some of the most venomous remarks made by the company's Chairman and CEO John Watson. Watson has referred to Donziger and his colleagues as "criminal" on conference calls with Wall Street analysts and reporters.

Of course, that's because Donziger and the Ecuadorians have consistently reminded Chevron shareholders and industry analysts that Watson was the Chevron official who 12 years ago vetted and then recommended that Chevron buy Texaco. At the time, Watson clearly did not get how the lawsuit could turn into a legal and public relations disaster of nightmare proportions for the company, which continues to deny it did anything wrong despite mounting evidence to the contrary.

Even though two Texaco internal audits described the company's contamination in graphic detail, Watson recommended the purchase probably thinking that a bunch of indigenous groups and a small legal team could not keep up the fight. He clearly expected the lawsuit to fade away, as do so many lawsuits filed by the "little people" in developing countries against multinational corporations with virtually unlimited legal and lobbying budgets.

This one stuck, in large measure due to the persistence of not just Donziger but primarily because of Ecuadorian lawyers and advocates Pablo Fajardo, Luis Yanza, Juan Pablo Saenz and Julio Prieto. The rainforest communities also are backed by environmental activists worldwide, especially California-based Amazon Watch which has been working in Ecuador for more than a decade and which itself as been targeted by Chevron as part of its retaliation campaign.

Today, with legal fees that likely surpass $1 billion to cover roughly 2,000 legal personnel used in the case, Chevron is doing what it promised it would do in 2009 when a company official said: "We're going to fight this until hell freezes over. And then we'll fight it out on the ice."

About the time of that statement, a prominent Chevron public relations consultant wrote a strategy memo urging the company to "demonize" Donziger in the news media to distract attention from the contamination in the rainforest. Chevron took the consultant's advice and filed a retaliatory lawsuit in U.S. court claiming that Donziger was the ringleader of a "conspiracy" to extort money from the company by falsely claiming it had polluted the rainforest.

If anybody doubts the fundamental essence of what Chevron did, read this blog posting by photojournalist Lou Dematteis or watch this video from 60 Minutes. You can also read this summary of the overwhelming evidence against Chevron relied by Ecuador's courts in finding the company liable.

Only a few weeks ago, Watson was forced to testify under oath in a deposition taken by none other than Donziger himself in preparation for the October trial. The CEOs of major oil companies rarely undergo depositions, and this was Watson's first. Chevron fielded a football team of lawyers to protect him, objecting to almost every question posed.

Watson must have been seething to have to answer questions from the man who, on Watson's watch, played an instrumental role in winning a $19 billion judgment against his company. This is one of the largest environmental damage awards ever. (BP's liability for the comparatively smaller Gulf spill has surpassed $40 billion.)

Not long after that deposition, Chevron suggested to the U.S. court that it might be having second thoughts about a jury trial where Donziger might represent himself. Company lawyer Randy Mastro suggested Chevron might drop all damages claims against Donziger as a way to avoid a jury trial and have the judge himself make a ruling on whether a "fraud" was committed.

Whatever the outcome of that skirmish, it seems Watson and Donziger will meet again in a courtroom one way or another. Donziger and one other lawyer will take on a veritable army of high-paid Chevron lawyers who will use every maneuver that money can buy to prevent a jury from hearing about what Texaco did and what Chevron tried to cover up in Ecuador.

A jury will decide if 900 unlined oil pits that Texaco built to permanently store pure crude -- some near people's homes -- and the 16 billion gallons of untreated toxic production water that Texaco admitted to dumping into streams were dreamed up by a team of human rights lawyers. Or if Texaco -- and then Chevron -- just gambled that it could get away with treating a country's rainforest like a trash heap so it could further increase its profits while the local government looked the other way. Watson probably thought the indigenous people would just be too illiterate and impoverished to do anything about it.

A jury, like the readers of the New York Times, can decide this question if the court lets all the evidence in about Chevron's malfeasence. The question is whether the scales of justice will be as balanced as the news article, or whether Chevron's superior firepower will be able to overwhelm the gripping stories of those impacted.


Disclosure: I work pro-bono for a group of indigenous Ecuadorians and their U.S. legal adviser, Steven Donziger, to help hold Chevron accountable for one of the world's largest environmental disasters in the Amazon rainforest. From May 2008 to March 2013, I was paid by Donziger to represent the Ecuadorians as their U.S. media spokesperson.