Legal Issues

Chevron Witness Describes 'Shocking' Levels of Corruption in $19 Billion Pollution Case


A protester from Ecuador demonstrating at Chevron's trial in New York on Oct. 15

Photograph by Carlo Allegri/Corbis

A protester from Ecuador demonstrating at Chevron's trial in New York on Oct. 15

Chevron (CVX) just had a very big day in its lawsuit seeking to undermine a $19 billion pollution verdict in Ecuador. A prominent New York commercial litigator said on the stand that he bowed out of the Ecuadorian pollution case against Chevron in 2010 when he discovered “shocking” levels of corruption on the plaintiffs’ side.

Jeffrey Shinder said that Steven Donziger, the lead plaintiffs’ lawyer fighting Chevron in Ecuador, had lied to him to cover up the ghostwriting of a critical scientific report supposedly written by a court-appointed independent expert in Ecuador. Shinder said that he withdrew from the suit against Chevron on ethical grounds after he learned that, in fact, Donziger had overseen the ghostwriting of the report by American consultants working for Donziger.

“It was a shocking event, and I remember it very clearly,” Shinder testified. Donziger had recruited him in 2009 to help the plaintiffs collect on any victory they scored against Chevron in Ecuador. Shinder tentatively said he would help Donziger but then quit when he did more research about the case. Best known for bringing lucrative antitrust lawsuits against large U.S. credit-card companies on behalf of merchants, Shinder is the managing partner of the New York office of the Constantine Cannon law firm.

Shinder’s testimony—businesslike in tone and confident in manner—strongly supports Chevron’s allegation that Donziger obtained the $19 billion Ecuadorian contamination verdict in February 2011 by means of fabricated evidence and other deceptions. The San Ramon (Calif.)-based company is now trying to convince a federal trial judge in New York to issue an order forbidding Donziger and his clients—thousands of poor residents of the rainforest in northeastern Ecuador—from ever profiting from the $19 billion judgment. (For more background on Chevron’s case against Donziger and Donziger’s case against Chevron, start here and follow the links.)

Shinder is just the latest in a series of former Donziger allies—fellow lawyers, technical consultants, and financiers—who have turned on the plaintiffs’ lawyer and accused him of dishonesty. Donziger denies wrongdoing and has attempted to portray Chevron’s counter-assault on him as a tactic to avoid paying the $19 billion Ecuadorian judgment, which was upheld on appeal in that country.

Donziger has admitted, though, that the expert report about which Shinder testified was indeed ghostwritten. Donziger has suggested that whatever means were used to produce that report were legitimate under Ecuadorian law. In his cross-examination of Shinder today, a lawyer representing Donziger suggested that Ecuadorian law hadn’t been violated. Shinder stood fast, however, and said that his concern had been how the Ecuadorian verdict would look to American courts if the plaintiffs ever tried to enforce it here. In general, the cross-examination did not appear to undercut Shinder’s testimony.

Strikingly, Donziger did not show up in court on Thursday to hear Shinder testify. In a written filing, Donziger said he was in Canada to attend proceedings in which the Ecuadorian plaintiffs are attempting to enforce the Ecuadorian verdict against Chevron units in Canada. So far, the Canadian enforcement effort has failed. The trial in New York is expected to continue for several weeks.

Barrett_190
Barrett is an assistant managing editor and senior writer at Bloomberg Businessweek. His new book, Law of the Jungle, tells the story of the Chevron oil pollution case in Ecuador.

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