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Caught on Tape: Plaintiffs’ Representatives Collude with the Government of Ecuador to Advance Fraudulent Indictments against Chevron’s Lawyers – Part 4

In 2008, Ecuador’s Prosecutor General opened an investigation of two Chevron attorneys associated with the lawsuit filed against the company in Ecuador. The politically motivated charges marked a renewal of the Ecuadorian government’s attempts to disavow contractual obligations owed to Chevron from contracts signed in 1995 and 1998. The actions also ignored the findings of prior Ecuadorian prosecutors who repeatedly investigated the same fraud allegations and found them to be meritless.

The following is an excerpt from a November 10, 2010 opinion issued by Judge Lewis Kaplan of the Southern District of New York. The excerpt discusses the role played by the plaintiffs’ representatives in advancing sham criminal charges against Chevron’s lawyers:

“In 2003, the same year in which the Lago Agrio litigation was filed, the government of Ecuador (GOE) filed a criminal complaint against the Individual Petitioners and former GOE and Petroecuador officials, alleging that they had falsified public documents in connection with the Settlement and Final Release and had violated Ecuador’s environmental laws.

“In 2004, the Ecuadorian Prosecutor General began an investigation of the criminal charges. The Ecuadorian Deputy Attorney General explained in an email to plaintiffs’ counsel in the Lago Agrio litigation that the criminal prosecutions were potentially a ‘way to nullify or undermine the value of the’ Settlement and Final Release, though ‘evidence of criminal liability established by the Comptroller [General’s] Office was rejected by the prosecutor’.

“Two years later, however, the District Prosecutor found that ‘there [was] not sufficient evidence to pursue the case against . . . Mr. Ricardo Reis Veiga and Mr. Rodrigo Pérez Pallares, representatives of TEXPET.’ As we shall see, the same District Prosecutor in his subsequent capacity as national Prosecutor General later decided to reopen the criminal investigation and charge the Individual Petitioners based on the same allegations that he had previously dismissed for lack of evidence.

“In 2006, while the Lago Agrio litigation was still pending, Rafael Vincente Correa Delgato was elected president of Ecuador on a platform of economic and social reform. President Correa, who describes himself as a ‘humanist,’ a ‘Christian of the left,’ and a proponent of twenty-first century socialism, condemned Ecuador’s oil contracts as ‘true entrapment for the country.’  The election appears to have marked a turning point for the prospects of a criminal prosecution of the Individual Petitioners.

“Crude outtakes include a brief interview with [Steven] Donziger on his way to President Correa’s January 2007 inauguration.  Donziger boasted that President Correa’s inauguration was a potentially ‘critical event’ for the outcome of the Lago Agrio litigation.”

“Soon thereafter, Donziger explained that the Lago Agrio plaintiffs and the GOE had ‘been really helping each other.’ The outtakes depict Donziger discussing the importance of working his contacts in the new government.  And work them he did.”

“On January 31, 2007, Donziger met with Joseph C. Kohn of Kohn Swift & Graf, P.C., a U.S. law firm providing financial support for the Lago Agrio litigation. The outtakes depict Donziger explaining that the plaintiffs had been working with the Prosecutor General’s office and that, although the criminal proceedings were closed, there is ‘no finality’ in Ecuador.”

“Approximately a week later in a radio segment, plaintiffs asked President Correa to bring criminal charges against Chevron’s attorneys. Donziger specifically suggested filing criminal charges against Pérez.”

“This campaign continued. The outtakes show Donziger and others planning a press conference to pressure the Prosecutor General to bring criminal charges.”

“On the following day, Donziger asked that posters be made of ‘Texaco’s four accomplices,’ including the Individual Petitioners – posters that later were displayed at a press conference and a demonstration.”

“In March 2007, President Correa pledged his full support for the Lago Agrio plaintiffs. He followed that pledge with a meeting with Luis Yanza, co-founder of the Amazon Defense Front and a close ally of Donziger. In a telephone conversation on or about April 23, 2007, Yanza reported to Donziger and Fajardo on a conversation he had had with President Correa. To the extent that his report may be gleaned from the outtakes, Yanza told Donziger that President Correa had an interest in learning more about the alleged environmental harm and ‘fraud in the field.’ Yanza added to Donziger that President Correa ‘insist[ed]’ that he continued to ‘[think] about doing something in the Prosecutor’s Office.’  A day or two later, Yanza again reported to Donziger and Fajardo, asserting on that occasion that Yanza had ‘coordinat[ed] everything’ with President Correa.”

“Within a day or two, President Correa, Yanza, Fajardo, and others boarded a government helicopter together to tour the Oriente region.  In a voiceover in Crude, Donziger bragged: ‘We have achieved something very important in the case. We are now friends with the President.’ That ‘friendship’ immediately became apparent. On the same day as his visit to the Oriente region, President Correa issued a press release ‘urg[ing] the Office of the Prosecutor to permit the Prosecution of the Petroecuador officials who accepted the remediation carried out by Texaco.’

“The fact that there was no mention of the Texaco lawyers apparently bothered Donziger. In a telephone conversation the next day that was captured by Berlinger’s cameras, Donziger said that ‘perhaps it is time to ask for the head of Pérez Pallares – given what the President said’.”

The unfounded and corruptly filed charges are still pending against Chevron’s lawyers in Ecuador.  In his November 2010 order, Judge Kaplan wrote:

“The Lago Agrio plaintiffs are attempting to procure the criminal prosecution of the Individual Petitioners. The reason they do so relates to the fact Texaco long ago entered into a settlement with the GOE, signed on its behalf by the Individual Petitioners, which may well have released the claims upon which the Lago Agrio plaintiffs sue. A criminal prosecution of the Individual Petitioners, especially a successful one, would overcome or at least help to overcome that obstacle – especially in a country in which, at least according to Donziger: ‘You can solve anything with politics as long as the judges are intelligent enough to understand the politics . . . . [T]hey don‘t have to be intelligent enough to understand the law, just as long as they understand the politics’.”

As the New York federal court recognized in its November order, finding that “The criminal charges at least in part are a result of an alliance between the Lago Agrio plaintiffs and the Ecuadorian government, which has both financial and political interests in the success of the lawsuit.”

This is the fourth in a series of posts that highlight the degree to which the trial in Ecuador has been compromised by the misconduct of the plaintiffs’ lawyers.  These concerns are conveyed in the words of a U.S. Magistrate Judge in New Mexico who found:

“The release of many hours of the outtakes has sent shockwaves through the nation’s legal communities, primarily because the footage shows, with unflattering frankness, inappropriate, unethical and perhaps illegal conduct.”

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