By Kevin D. Williamson
Tuesday, October 30, 2018
The slow unraveling of the case against Chevron has been
eye-opening, not least for the glimpse it offers into the way money moves
through the progressive activist world.
The background: Chevron was accused of inflicting
horrible suffering on the people of Ecuador through mismanagement of drilling
operations there, contaminating the groundwater and exposing thousands of
people, mostly in nearby indigenous communities, to a stew of toxic sludge. The
most obvious problem with the case was that Chevron had never drilled for oil
in Ecuador; it acquired Texaco, which had done so years before, in partnership
with the Ecuadoran state oil company. At the conclusion of its operations,
Texaco received a formal certification from the government of Ecuador that it
had cleaned up after itself (at a cost of about $40 million) and that it was
released from further liability for the operations, which were continued by the
state oil company. Like many state oil companies, Ecuador’s had at times been
something less than scrupulous in its observance of environmental standards.
Its operations are likely the source of the pollution in Ecuador.
But American lawyer Steven Donziger, an old basketball
buddy of Barack Obama’s, managed to obtain a $9.5 billion judgment against
Chevron in an Ecuadoran court. Chevron complained that this judgment was the
product of corruption, that Donziger et al. had falsified evidence, paid off
allegedly neutral experts, bribed judges, and more. Chevron took those
complaints to court in the United States and was successful.
More than successful, in fact: In 2014, Chevron won a
racketeering verdict against Donziger under the RICO statute, with the judge
finding that the case had been in essence a grand act of extortion executed
through bribery, money laundering, and coercion. U.S. District Judge Lewis
Kaplan in his opinion is flabbergasted, describing plaintiffs’ misdeeds that
include things that normally come
only out of Hollywood — coded emails among Donziger and his colleagues
describing their private interactions with and machinations directed at judges
and a court-appointed expert, their payments to a supposedly neutral expert out
of a secret account, a lawyer who invited a film crew to innumerable private
strategy meetings and even to ex parte meetings with judges, an Ecuadorian
judge who claims to have written the multibillion-dollar decision but who was
so inexperienced and uncomfortable with civil cases that he had someone else (a
former judge who had been removed from the bench) draft some civil decisions
for him, an 18-year-old typist who supposedly did Internet research in
American, English, and French law for the same judge, who knew only Spanish,
and much more.
After a lengthy exploration of bribery, money laundering,
and other corruption, Judge Kaplan concludes: “The decision in the Lago Agrio
case was obtained by corrupt means. The defendants here may not be allowed to
benefit from that in any way. The order entered today will prevent them from
doing so.”
Chevron won, and Donziger and his allies were ordered to
hand over to Chevron any money or other assets they had received or would
receive in the future from their corrupt efforts.
Donziger later had his law license suspended.
In August of this year, the Second Circuit Court of
Appeals affirmed Judge Kaplan’s judgment, and Chevron also won its case at the
Permanent Court of Arbitration at The Hague, which last month found that the
judgment against Chevron “was procured through fraud, bribery and corruption
and was based on claims that had been already settled and released by the
Republic of Ecuador years earlier.”
And yet the campaign against Chevron goes on.
Why?
A partial explanation may be found in a newly disclosed
motion in the case, which had previously been released only in a highly
redacted form. In it, Chevron’s lawyers describe how Donziger used cash
payments and grants of interest in the case to fuel the public-relations front
in his extortion campaign against Chevron.
Bearing in mind that this is Chevron’s view of the case,
not that of the court, it is worth quoting at length not for its analysis but
for its assertions of fact:
Donziger also paid a phalanx of
activists and journalists to produce inflammatory media coverage against
Chevron. Rex Weyler, a Greenpeace activist who wrote a blog post titled
“Chevron’s Amazon Chernobyl Case moves to Canada,” was paid over $15,000.
Canadian indigenous activist Phil Fontaine, who claimed in a statement to the
media that Chevron “must be held accountable” for “devastating, and shocking”
environmental harm, received an interest in the Ecuadorian judgment. Donziger
also planned to give Canadian indigenous activist Ed John an equity interest in
the Ecuadorian judgment.
Prominent Venezuelan-American
activist Eva Golinger, who participated in the “dirty hand of Chevron” campaign
orchestrated by Ecuador and the [plaintiffs], received a 0.125% interest in the
Ecuadorian judgment.
Another prominent public supporter
of Donziger’s media campaign is Pink Floyd’s Roger Waters, who also has an
undisclosed interest in the Ecuadorian judgment.
Kevin Koenig, a senior strategist
with Amazon Watch, who attended Chevron’s shareholder meeting and contributed
to the hostile media coverage surrounding it, was also paid thousands of
dollars by Donziger.
Donziger budgeted $1,500 per month
— later marked up to $2,500 — for public relations, including $500 per month
for Reuters reporter Cristina Munoz.
Karen Hinton, long-time spokesperson
for Donziger’s team and an “important actor in the pressure campaign” received
a 0.125% interest in the Ecuadorian judgment on January 11, 2017. Hinton
regularly issues press releases under her name that Donziger has written or
heavily edited.
Press releases issued by Donziger’s
team have also quoted Patricio Salazar and Aaron Page, both of whom have
recently received interests in the Ecuadorian judgment. (Salazar and Page each
held a 0.25% interest in the Judgment). Page, who also participated in
preparing press releases and preparing investment agreements, was also paid
nearly $100,000 in cash (to himself or his firm, Forum Nobis) out of Donziger’s
accounts based on invoices bereft of detail, including to the $50,000 kickback
he received after transferring the balance of the CWP account to Donziger.
Donziger touted these false press
releases — which, like “neutral” expert Richard Cabrera, he bought and paid for
— to investors as evidence of “Chevron starting to feel serious pressure.” (“Steven
frequently sent his press releases to investors and potential investors, and
had me do the same.”).
A “key part” of Donziger’s current
“out-of-court strategy” is an Indigenous Rights conference in Alberta, Canada,
organized by University of Calgary professor Kathleen Mahoney (the wife of Phil
Fontaine, who holds a 0.175% interest in the judgment) that is scheduled to be
held in November 2018. Mahoney wrote to Donziger that she believed that she
could organize a conference that would “bring significant pressure to bear on
Chevron to come to the table” but would need “some significant funding to pull
it off.”
Donziger agreed that the conference
would “put enormous pressure on Chevron to come to table if executed well,” and
arranged funding for the conference.
Donziger authorized payment of a
deposit of $50,000 and budgeted $200,000 for the conference even as Canadian
counsel were representing to the court that their clients lacked funds for
court costs.
The above-mentioned Karen Hinton is a former aide to
Andrew Cuomo and the Democratic National Committee, and later went to work as
New York mayor Bill de Blasio’s press secretary. She wrote pieces on the
controversy for the Huffington Post
and Politico.
A very interesting article in the Miami Herald described how Vanity
Fair’s reporting on the case was corrupted — Donziger even apologized to
contributor William Langewiesche for being “a little aggressive in the
editing.” Langewiesche denies any journalistic malpractice.
Regarding the budgeting of money for Munoz, a Reuters
spokesman writes: “This has just been brought to our attention and we [are]
looking into it.”
Chevron wants the court to find Donziger in contempt
because he “willfully and repeatedly has violated the RICO injunction,
monetizing and profiting from the fraudulent Ecuadorian judgment by selling,
assigning, pledging, transferring, and encumbering interests therein.” The
court is considering its claims.
Roger Waters, the rock musician, has denounced Chevron
for its “greed,” complaining that it is “disquietingly apparent that the rich
and powerful are still much attached to the feathering of their own nests at
any cost to others.” Well. Documents submitted to the court show “George R.
Waters” taking two equity positions in the case, one for 0.076 percent and one
for 0.025 percent, through “Fenwick,” presumably the firm of Mark Fenwick,
Rogers’s manager and an heir to the Fenwick department-store chain in the
United Kingdom. That would come to roughly $9.6 million of a $9.5 billion
judgment. You could feather a lot of nests with that. (I was unable to contact
Waters or Fenwick for comment. Rock stars are really hard to get on the phone.)
If taking in a few million dollars via an investment in extortion and bribery
is not greed, then what is?
As Eric Hoffer’s proverb goes: “Every great cause begins
as a movement, becomes a business, and eventually degenerates into a racket.”
But this case began as a racket and then
became a movement. There are many good-faith environmentalists in the world.
These are not they. But that has not stopped progressive activists and their
media allies from enabling this multi-billion-dollar extortion attempt — an
attempt in which many of them had, and have, a financial interest of their own.
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