Revisiting Steven Donziger’s fraud against Chevron in Ecuador
This article has been re-posted from The Richmond Standard. To view the full story, click here.
A dishonest campaign is underway to rehabilitate disbarred lawyer Steven Donziger and his Ecuadorian judicial fraud, a scheme he has been trying to profit from for nearly three decades.
So, it is time once again to revisit the facts.
For starters, Donziger is not a “human rights lawyer.” Nor is he, as he has recently claimed, a “planet defender.” He is an adjudicated racketeer, convicted of criminal contempt who was disbarred in 2020 for “egregious professional misconduct” in the Ecuador case, including fabrication of evidence, bribery, and coercion. His own indigenous Ecuadorian clients fired him years ago for refusing to disclose how he spent tens of millions of dollars raised in their name. Far from defending the environment or the indigenous, Donziger’s goal was always, as he himself put it in an outtake from the movie “Crude,” “to make f**king money.”
For the truth about his “legal fraud of the century,” here is a quick look at a few key rulings:
- An adjudicated racketeer. U.S. District Judge Lewis Kaplan found overwhelming evidence that Donziger “obtained [the Ecuadorian judgment against Chevron] by corrupt means,” including a pattern of extortion, bribery, wire fraud, money laundering, witness tampering, obstruction of justice, and violations of the Travel Act and Foreign Corrupt Practices Act. The Court held that the corrupt Ecuadorian judgment was just one component of Donziger’s unlawful pressure campaign to extort Chevron out of billions of dollars—and had he succeeded, he would have personally profited by “more than $600 million.”
- Fraud, extortion, and bribery findings affirmed. On appeal, a unanimous Second Circuit, in an opinion by distinguished Carter appointee Judge Amalya Kearse, affirmed the District Court in full. The court noted that Donziger did not “challeng[e] the sufficiency of the evidence to support any of [Judge Kaplan’s] findings” and held that “[t]he record . . . reveals a parade of corrupt actions by [Donziger and his] team, including coercion, fraud, and bribery, culminating in the promise to [an Ecuadorian judge] of $500,000 from a judgment in favor of the plaintiffs.” The U.S. Supreme Court denied review, rendering the RICO judgment final and unappealable.
- Arbitration tribunal in The Hague confirms fraud. In 2018, a Bilateral Investment Treaty arbitration panel—including an arbitrator appointed by Ecuador (the “International Tribunal”)—unanimously made the same findings of fraud, bribery, and corruption. The Tribunal found that “the circumstantial and other evidence adduced in this arbitration is overwhelming. Short of a signed confession by the miscreants . . . the evidence establishing ‘ghostwriting’ in this arbitration ‘must be the most thorough documentary, video, and testimonial proof of fraud ever put before an arbitral tribunal.’”
- International Tribunal rejects environmental allegations. The Tribunal found that Texaco subsidiary “TexPet spent approximately $40 million in environmental remediation and community development,” the remediation was carried out by a “well-known engineering firm specializing in environmental remediation” and, following completion of the remediation, in 1998, Ecuador executed a final release agreement “certifying that TexPet had performed all of its obligations” and releasing TexPet from any liability. After a personal visit to the area and having considered 40 reports from environmental experts, the Tribunal members found “no cogent evidence” supporting Ecuador’s claim that Texaco failed to comply with the terms of the remediation plan approved by Ecuador.
- Texaco met its obligations, Ecuador did not. The International Tribunal’s award also recites the sworn testimony of Ecuadorian officials that Ecuador’s national oil company “during more than three decades, had done absolutely nothing” to address its own obligations to remediate the environmental conditions in the area, even though Ecuador received 97.3% ($22.67 billion) of the Consortium’s total revenue, while TexPet received less than 3 % ($480 million).
- Multiple international courts confirm wrongdoing. The Ecuadorian judgment has been rejected everywhere Donziger has sought to enforce it. It was rejected outright in both Brazil and Argentina, and, in Canada, Donziger’s team dismissed their case with prejudice after suffering adverse rulings.
- Ecuador admits the fraud. In 2020, the District Court in the Hague upheld the International Tribunal’s award, highlighting that the Republic of Ecuador concedes that the judgment is fraudulent: “The fraudulent character of the judgment and the proceedings preceding it is common ground between [Chevron and Ecuador].” Ecuador also admitted that the judgment is “fraudulent” in a letter to the U.S. Trade Representative.
- Disbarment. In 2020, the New York Appellate Division disbarred Donziger for “egregious professional misconduct, namely, corruption of a court expert and ghostwriting his report, obstruction of justice, witness tampering, and judicial coercion, and bribery which he steadfastly refuses to acknowledge and shows no remorse for.” In May 2021, the New York Court of Appeals denied Donziger’s attempt to appeal.
- Civil and criminal contempt. In March 2021, the Second Circuit affirmed all but one of Judge Kaplan’s many findings of civil contempt, most of which resulted from Donziger’s attempts to profit from his fraud and cover up his misconduct. The Second Circuit found “that Donziger acted in contempt of the Injunction that resulted from the RICO Judgment in numerous ways.” The Court noted that, for the most part, Donziger did “not even attempt to challenge the district court’s findings.” Donziger did not appeal the district court’s order that he turn over his electronic devices, and in fact appealed only the contempt finding regarding how he could get paid. In August 2019, Judge Kaplan charged Donziger with six counts of criminal contempt for his violations of court orders and the RICO judgment. After a week-long trial, on July 26, 2021, Judge Loretta A. Preska convicted Donziger on all six counts in a 241-page opinion. Judge Preska found that Donziger tried to “take the law into his own hands” and “repeatedly and willfully def[ied] Judge Kaplan’s orders.” On October 1, 2021, Judge Preska sentenced Donziger to six months imprisonment. After serving part of his sentence in a federal penitentiary, Donziger was, as a result of a COVID policy, subsequently released to serve the remainder of the sentence under home confinement.
- “All of us might go to jail.” Judge Kaplan wrote on page 386 of his RICO opinion: “[O]ne Ecuadorian legal team member, in a moment of panicky candor, admitted that if documents exposing [Donziger’s corrupt dealings with the court-appointed expert] were to come to light, ‘apart from destroying the proceeding, all of us, your attorneys, might go to jail.”
- Millions raised but unaccounted for. In a May 17, 2018, order, Judge Kaplan wrote: “[M]illions of dollars have passed through Donziger’s hands over the years. Much of it is unaccounted for” and he has previously “shift[ed] assets in which he has an interest into foreign locations to avoid what he may regard as judicial ‘interference.’” Specifically, Donziger has raised at least $19 million, including more than $9 million that flowed through bank accounts Donziger personally controlled.
- Repudiated by former clients, allies. In 2016, the group known as UDAPT, formerly Donziger’s client, declared Donziger persona non grata for selling interests in the Ecuadorian judgment “without any authorization to do so” from the people he claimed to represent and “repeatedly refus[ing] to give an accounting on the use of more than US$20 million that he ‘raised’ on behalf of his clients.”
This is only a partial recounting, but the facts are clear. As Judge Kaplan declared, the “wrongful actions of Donziger and his Ecuadorian legal team would be offensive to the laws of any nation that aspires to the rule of law.”
For more on the Ecuador fraud against Chevron, visit our web pages on the subject here and here.