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2015: Another Bad Year for the ‘Legal Fraud of the Century’

Date: Dec 18, 2015

2015 was another bad year for supporters of the fraudulent lawsuit against Chevron in Ecuador.

Three major supporters of Steven Donziger’s lawsuit, including his principal funder, abandoned his scheme this year and Gibraltar’s Supreme Court ruled against his offshore company there, ordering $28 million in damages to Chevron. Meanwhile, Brazil’s deputy prosecutor general urged the country’s high court not to recognize the fraudulent Ecuadorian judgment. And newly released outtakes from the movie Crude further exposed the full extent of Donziger’s multi-year campaign of collusion, coercion and dishonesty.

Here is a look back at the continued collapse of the corrupt lawsuit in 2015:

Gibraltar Supreme Court Rules Against Donziger’s Offshore Company

In December, the Supreme Court of Gibraltar issued a judgment against a company set up there by Donziger to receive and distribute funds resulting from his fraudulent scheme against Chevron. The court ordered the company, Amazonia Recovery Ltd., to pay Chevron $28 million in damages and issued a permanent injunction preventing it from assisting or supporting the case in any way. Chevron’s general counsel, R. Hewitt Pate, called the decision “yet another example of how the international scheme against Chevron continues to erode.” Read more about the Gibraltar court’s decision here.

Financial Backers Withdraw Support

Russ DeLeon: In February, Chevron reached a settlement agreement with James Russell DeLeon, the principal funder of Donziger’s fraudulent lawsuit. DeLeon invested approximately $23 million in exchange for a roughly 7 percent stake in the $9.5 billion judgment. DeLeon stated that, after reviewing the 2014 RICO opinion against Donziger by a U.S. federal court, “…Steven Donziger misled me about important facts. If I had known these facts, I would not have funded the litigation.” Read more about this settlement in Fortune here.

Woodsford Litigation Funding Ltd: Woodsford, a UK-based litigation funder, began its involvement in the fraudulent lawsuit in March 2013, providing $2.5 million in funding. In May 2015, the company settled with Chevron, agreeing to end all financial support for the litigation and assign all of its interest in the case to Chevron. In a public statement, Woodsford stated that after reading the 2014 RICO opinion against Donziger, the company had “become deeply concerned about the ethical standards of attorney Steven Donziger”. Read more about this settlement in Bloomberg here.

Brazil’s Deputy Prosecutor General Recommendation

In May, Brazilian Deputy Prosecutor Nicolao Dino issued a 16-page opinion recommending that the country’s high court not recognize the Ecuadorian judgment for enforcement because it was procured by corrupt means. To recognize it, Dino said, would be “an offense” to Brazilian and international law.

H5 Withdraws Support, Settles with Chevron

In September, H5, a California-based e-discovery and litigation services firm, withdrew support from the case and settled with Chevron. In the settlement, H5 withdrew its support from the litigation against Chevron in Ecuador and assigned its 1.25 percent interest in the $9.5 billion Ecuadorian judgment to Chevron. Read more about the settlement here.

Amazon Watch Exposed

This year, it was revealed that Amazon Watch, an Oakland-CA based environmental activist group, was richly rewarded for supporting and promoting the fraudulent lawsuit. During the federal racketeering trial against Steven Donziger, forensic accounting expert Troy Dahlberg testified that Donziger and his funders paid Amazon Watch more than $500,000. Court-ordered discovery also revealed a 2005 proposal from Amazon Watch to Steven Donziger in which they request over $1 million to carry out a host of pressure tactics against the company. Read about Amazon Watch’s role in the fraud here.

Pablo Fajardo Exposed

Chevron also exposed the misconduct of Steven Donziger’s Ecuadorian lieutenant, Pablo Fajardo, this year. Fajardo is a key player in Donziger’s scheme, from soliciting support of Ecuadorian government officials to bribing judges to helping ghostwrite the final judgment against Chevron. His misconduct is confirmed by sworn testimony and a host of evidence, including hours of outtakes from the movie Crude. Read more about Pablo Fajardo here.

Outtakes Reveal Fraud and Collusion

Newly released outtakes from the movie Crude further exposed Donziger’s fraudulent scheme, including:

  • Co-opting Amazon Watch: These videos include the organization’s executive director boasting about meeting with the presiding judge and getting his private phone number and home address.
  • Corrupting a Court-Appointee: These outtakes catch Donziger and his team in a planning meeting with “independent court expert” Richard Cabrera openly discussing how they will do Cabrera’s work.
  • Colluding with the Government: These outtakes include clips of Donziger bragging about his team’s relationship with Ecuador’s President Rafael Correa, including a scene where he declares “Now we are friends with the President!”
  • Controlling the Courts: These outtakes include Donziger bragging about using threats, pressure, and intimidation to get judges rule in their favor.

In short, the fraudulent Ecuadorian lawsuit against Chevron continued to fall apart in 2015. It was a very bad year for fraud and another very good year for the truth.