Sex and Blackmail Now on the Docket in Chevron Pollution Case

We’ve had confessions of bribed judges and allegations of ghostwritten judgments, so why not a sex scandal and suggestions of blackmail? Chevron’s civil-racketeering suit seeking to invalidate a multibillion-dollar pollution verdict in Ecuador took a decisive turn yesterday toward R-rated soap opera.

The melodrama is unfolding in an extraordinary legal action Chevron has filed in federal court in New York against Steven Donziger, the flamboyant plaintiffs’ attorney who engineered the huge judgment against the oil company in Ecuador in February 2011. Initially, a trial judge assessed Chevron’s liability for contamination of the rain forest at about $9 billion. When the company refused to apologize for its conduct, the Ecuadorian judge doubled the amount as a form of punishment. Chevron appealed in Ecuador, and earlier this week that country’s Supreme Court upheld the liability finding but roughly halved the damage award to about $9.5 billion.

All along, the San Ramon (Calif.)-based oil producer has vowed it would never pay anything. Chevron contends that the trial was a sham tainted by fabricated evidence, bribery, and coercion. The civil-racketeering suit against Donziger is designed to discredit him and make it impossible for the lawyer and his clients—thousands of poor rain-forest residents—to enforce the Ecuadorian judgment in any other countries.

Donziger has denied wrongdoing. He has argued that what may appear to be unconventional legal tactics in Ecuador were permissible under that country’s court rules and more flexible notion of conflict of interest. The Ecuadorian government of President Rafael Correa has endorsed the verdict against Chevron and demanded that the oil company pay up.

Lawyers representing Donziger have tried to turn the tables one more time, putting on witnesses to explain how and why the plaintiffs’ attorney pressed his long-running suit against Chevron in Ecuador. Alejandro Ponce Villacris, an Ecuadorian lawyer who worked with Donziger from mid-2005 through late 2008, took the stand to testify that Donziger did not violate Ecuadorian legal regulations. On cross-examination by Chevron’s attorneys, however, Ponce conceded that members of the plaintiffs’ legal team in Ecuador discussed a “sex scandal” concerning one of the six judges who, at various times from 2003 through 2011, presided over the Ecuadorian trial. When asked whether the plaintiffs, as a way of gaining courtroom leverage, threatened the Ecuadorian judge in 2006 with the filing of a public complaint about the sex scandal, Ponce said, “I don’t recall that.” Pressed on the point, he said repeatedly: “Not that I can recall.”

Eventually, U.S. District Judge Lewis Kaplan, who is hearing the racketeering case without a jury, intervened. As for the plaintiffs threatening the Ecuadorian judge with disclosure of alleged sexual improprieties as a way of getting him to rule in their favor, Kaplan declared: “I think, actually, it’s undisputed that occurred.” Kaplan’s definitive statement that Donziger’s team had engaged in what amounted to a form of blackmail appeared to startle a number of people in the packed Manhattan courtroom.

Kaplan did not explain himself, and the testimony continued with Ponce professing a hazy memory on many critical issues. To what, then, was Kaplan referring? Here’s the likely answer:

By means of its civil-racketeering suit, Chevron has obtained from Donziger voluminous notes that the New York-based plaintiffs’ attorney kept about his adventures in Ecuador. This quasi-diary, in which Donziger muses about his methods and his ambitions—often in brutally frank terms—has become part of the court record. So have numerous e-mails Donziger exchanged with his colleagues. Kaplan has demonstrated in his pretrial rulings and comments from the bench that he’s intimately familiar with the record. The Donziger diary and e-mails contain references to the plaintiffs’ legal team drafting a formal complaint in 2006 accusing the Ecuadorian judge at that time of sexually harassing women at the courthouse in Lago Agrio, an oil town in the rain forest. According to these once-private communications, Donziger’s team quietly informed the judge that if he did not make a crucial procedural ruling the plaintiffs were seeking, the harassment complaint would be filed.

“Pablo met with the judge today,” Donziger wrote in an e-mail he sent on July 26, 2006, to another attorney in the U.S. “The judge, who is on his heels from the charges of trading jobs for sex in the court, said he is going to accept our request to withdraw the rest of the inspections.” The Ecuadorian judge “wants to forestall the filing of a complaint against him by us, which we have prepared but not yet filed,” Donziger added.

There might be an innocent explanation for this episode, although it’s hard to imagine what it would be. Judge Kaplan does not seem to be in much doubt as to what transpired.

Donziger is expected to take the stand as early as Monday, and he will surely be asked about this matter, among many others. His answers will help determine the outcome of this most unusual case.

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