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Environmental lawyer in $19 billion lawsuit against Chevron to go on trial for fraud

BOGOTA, Colombia – One of the hemisphere’s most contentious and longest-running environmental trials is going on trial itself.

On Tuesday, a New York judge will begin hearing testimony that a $19 billion judgment against Chevron Corp. for polluting Ecuador’s Amazon region decades ago was the product of fraud.

The oil giant claims that Steven Donziger, a lawyer for the Ecuadorian plaintiffs, engaged in racketeering by manufacturing evidence and bribing judges in the Andean nation to win the record-setting verdict.

Donziger and his legal team say Chevron is trying to evade its responsibility. Since it couldn’t win the pollution trial on its merits, they say, it’s going after the lawyers.

The case has dragged on _ in one form or another _ for 20 years. It has produced more than 200,000 pages of evidence, spawned documentaries and television programs, and dragged celebrities and politicians into its wake. Movie star Daryl Hannah has dipped her hands into oily muck for the cameras, and Ecuadorian President Rafael Correa has called the case a matter of national honor and asked for a Chevron boycott.

Both sides have accused their rivals of lying and cheating to make their case. But this time, it’s the Ecuadorian team that’s on the defensive.

At the New York bench trial, Chevron is expected to present a raft of sworn testimony it says proves Donziger gamed the Ecuadorian courts.

Among that evidence: testimony from Stratus Consulting, a Colorado-based environmental engineering firm hired by Donziger’s team. In a March deposition, Stratus Executive Vice President Douglas Beltman said his company wrote the damning environmental report that was passed off as being the work of Richard Cabrera, the “independent expert” appointed by the Ecuadorian judges. To give that study more credence, Stratus then provided third-party commentary supporting the document’s claims.

In the testimony, Beltman says he was following Donziger’s instructions when he lied about the origins of the report to journalists, the lawsuits’ financial backers and U.S. Rep. Jim McGovern, who visited the country on a fact-finding trip. He also said he could no longer stand behind the study’s findings, or his commentary, because of Donziger’s influence.

Beltman said he was instructed not to make a distinction between oil contamination that could be attributed to Chevron’s predecessor, Texaco subsidiary TexPet, and its majority partner, state-run Petroecuador. He also said Donziger asked him to inflate the cost of repairing the damage.

Donziger’s team says the issue is moot. In his Feb. 14, 2011, ruling, Ecuadorian Judge Nicolas Zambrano threw out the tainted Cabrera report. Even so, he said there was sufficient evidence to find Chevron liable. He ordered the company to pay $8.6 billion plus 10 percent to an environmental nonprofit. When Chevron refused to apologize within 15 days, the fine was doubled.

Donziger said Chevron’s true aim behind this case is to strong-arm his supporters.

“Chevron (is using) the case for publicity purposes to try to intimidate people into not working for us,” Donziger said. “When you allege RICO or racketeering violations, it’s a very explosive charge that almost can paralyze or terrorize people into not wanting to help the Ecuadorians.”

But Chevron’s claims run deeper. The company may also present testimony by Alberto Guerra, a former judge who says he was paid $1,000 a month by Donziger’s team to ghost-write Zambrano’s original judgment.

“Litigants sometimes secretly provided Judge Zambrano and Mr. Guerra with draft judgments, which Mr. Guerra would revise and Judge Zambrano would issue as his own,” Chevron’s lawyers wrote to Ecuador’s Prosecutor General in September. “This ghost writing took place at both the trial and on the appellate ‘second instance’ review.”

Donziger’s lawyers say Guerra is an unreliable witness and on the oil company’s payroll. While Chevron admits it helped Guerra move to the United States for “his own safety,” it said there is ample evidence, including bank transactions, that prove his claims.

The case dates back to 1993, when Ecuadorian villagers sued Chevron’s predecessor, Texaco, in New York on claims that it poisoned the Amazon from the 1960s to 1992 with shoddy environmental practices that included pumping millions of gallons of oil-tainted wastewater into creeks and streams. When Texaco left, it spent $40 million to clean up its portion of the drilling sites and, in 1998, the government signed off on the remediation and absolved the company of any further legal responsibilities.

But Ecuador’s courts found that the government release did not cover third-party claims. So when Chevron and Texaco merged in 2001, Chevron inherited the legal battle. In 2002, the case was moved to Ecuador at Chevron’s insistence.

By the time of Zambrano’s ruling two years ago, Chevron no longer had assets in the country so the plaintiffs have been seeking damages in Canada, Argentina and Brazil. They hope to take their case to Venezuela and other countries soon.


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