The Fraudulent Ecuador Judgment: 5 Years Later

On Feb. 14, 2011, Steven Donziger had an Ecuadorian court issue a $19 billion judgment against Chevron.

Five years later, he has little to show for it.

Once viewed as a David-vs.-Goliath victory by a scrappy band of Ecuadorian and U.S. plaintiffs’ lawyers, Donziger’s implausible legal win has been exposed as nothing more than a fraud perpetrated in collusion with Ecuador’s government.

Far from a case of environmental justice, Donziger’s meritless case has been discredited in some of the world’s most respected legal forums: its scientific basis found to have been fabricated, its expert testimony bought and paid for and the judgment itself ghost-written by Donziger and his team. Much of the misconduct was caught on film in outtakes from a documentary that Donziger himself arranged to be produced.

As Chevron uncovered the pattern of fraud and collusion it had suspected in the Ecuadorian proceeding and defended itself from attempts to collect on the judgment in other jurisdictions, significant portions of the case – as well as Donziger’s mechanism for profiting from it – fell away.

U.S. Court Finds “Egregious Fraud”

In March 2014, U.S. District Court Judge Lewis Kaplan issued a blistering 500-page ruling, concluding that the Ecuadorian judgment is based on fraud and rendering it unenforceable in the U.S.

The court found that Donziger and his team violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO), committing extortion, money laundering, wire fraud, Foreign Corrupt Practices Act violations, witness tampering and obstruction of justice in obtaining the Ecuadorian judgment and as part of a related cover-up. Judge Lewis Kaplan wrote: “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, including Ecuador – and they knew it.”

The central problem with Donziger’s case is that the scientific evidence doesn’t back up his claims. The Texaco subsidiary that operated in Ecuador until 1992 cleaned up its operations when it left the country and received a release agreement from Ecuador’s government for doing so. Any remaining environmental impacts in the region are the responsibility of state oil company Petroecuador, which has a dismal environmental and safety track record.

Fabricating Evidence

Lacking the evidence they needed, Donziger and his team resorted to fabricating it. There have now been several documented instances in which Donziger and his team misled their environmental experts and misused their experts’ work. Donziger’s own experts Dave Russell and Dr. Charles Calmbacher repeatedly found that testing results did not support Donziger’s allegations of environmental contamination. In a sworn declaration, Russell testified that he had “personal knowledge that [Donziger] and the plaintiffs’ representatives” were “lying about the environmental conditions” in Ecuador.

In 2005, Donziger and his team filed reports in Dr. Calmbacher’s name claiming he had concluded that two sites Texaco remediated were contaminated and required millions of dollars of additional clean up. When subpoenaed by Chevron, Dr. Calmbacher testified under oath that the report bearing his signature was not his work, stating “I did not reach these conclusions and I did not write this report.”

Donziger and his team also blackmailed the judge presiding over the trial to ensure that the court-ordered site inspections were carried out not by a truly independent environmental expert, but by someone who secretly worked for Donziger. Donziger and his team paid the court appointee, Richard Cabrera, through a secret bank account and ghost-wrote his entire damages report for him. Predictably, the report found that Chevron was liable for $27 billion in damages.

“All of us, your attorneys, might go to jail”

As evidence of the Cabrera fraud came to light, Donziger’s former co-counsel and litigation funder Joseph Kohn told the Ecuadorian plaintiffs that he was “shocked by recent disclosures concerning potentially improper and unethical, if not illegal, contacts with the court-appointed expert.” One of Donziger’s Ecuadorian lawyers even admitted in an email that if evidence of their collusion and fraud was exposed, “all of us, your attorneys, might go to jail.”

The final Ecuadorian judgment against Chevron was not written by the presiding judge Nicolas Zambrano, as two prominent forensic linguists (see here, here and here) demonstrated during the RICO trial. Instead, it was ghost-written by Donziger and his team in exchange for a $500,000 bribe. A former Ecuadorian judge, Alberto Guerra, who presided over the case when it was first filed in 2003, came forward and acknowledged that he was paid by the Donziger and his team and by Zambrano to illegally ghost-write judicial orders issued by Zambrano and steering the case in Donziger’s favor. Guerra’s declaration is corroborated by computer, bank and shipping records, as well as the plaintiffs’ lawyers’ own internal emails, and was credited in Judge Kaplan’s 500-page opinion.

Since the extent of the fraud was revealed, more than a dozen former insiders and allies have abandoned Donziger and his associates, including his former co-counsel, environmental consultants, funders, investors, employees and Ecuadorian collaborators.

Much has happened since Judge Zambrano issued the corrupt judgment written by Donziger and his team against Chevron. However, one important constant remains: Chevron will continue to expose the truth about the Ecuadorian fraud and defend the company, its employees and its stockholders.