On Tuesday, Chevron issued a news release that detailed yet another fundamental corruption at the heart of the trial lawyer/activist/government’s legal campaign against the company in Ecuador: The court-appointed “expert” — a mining engineer — who recommended $27 billion in damages against the company for environmental clean-up is also the majority owner of an oilfield remediation company that stands to gain financially from a judgment against Chevron. Richard Cabrera never reported this disqualifying conflict of interest from the Ecuadorian court.

The response from the Amazon Defense Coalition, the front group for U.S.-based activists and contingency fee attorneys driving the litigation, reads like a news release from a political campaign: Our opponents are “desperate.” The argument, such as it is, follows: Cabrera has no conflict of interest! He already revealed the conflict of interest! His conflict of interest precludes him from being involved in future remediation! Chevron’s lying!

In any legitimate legal proceeding , a court-appointed “expert” who concealed his financial self-interest from the judge would be disqualified and sanctioned. But the litigation against Chevron in Ecuador is not a legitimate proceeding, it’s a public relations campaign designed to create enough reputational risk that the company settles out of court. That strategy has been disrupted by Chevron deciding to argue its case not just judicially but also in the court of public opinion, that is, to fight back. You can almost hear the cries of outrage from the Amazon Defense Coalition and New York attorney Steven Donziger: “How dare they defend themselves!”

Chevron’s blog, The Amazon Post, refutes point-by-point the claims by the activist group.

The movie “Crude” was again used to promote the anti-Chevron cause last week when a Congressman and the U.S. trial lawyer appeared at a Washington, D.C. showing alongside the film’s director, Joe Berlinger.  Their comments in the Q&A demonstrated again that the litigation against Chevron for its predecessor Texaco’s operations in Ecuador is a matter of politics and public relations — not law –  designed to force the company into a settlement.

Rep. Jim McGovern (D-MA) levied several serious charges against Chevron, accusations commonly made by the anti-corporate activists but still startling when delivered by an elected member of Congress. In his five minutes of remarks (audio here), McGovern urged the crowd “to ramp up the pressure.”

And one final thing, and that is, here in Washington, we need to raise this issue more in Congress. We’re trying. I chair a human rights commission. We had a hearing on this, and trying to raise the issue of environmental contamination as a human rights issue. These people, their human rights are being abused by being forced to live in that area. And we can do something about this. We need to make this a priority.

Shortly after…when I came back — this was in December — I sent then President-elect Obama a letter [here] explaining my trip and asking him to raise this issue, and to coordinate with all the relevant departments and with the Ecuadorian government a way to help these people. We can’t continue to fight this thing out. This is not about lawyers, this is about these people that you see in this film. It’s about my friend Luis and all the people he’s been fighting for.

Donziger, the New York City trial lawyer who has masterminded the case, made it clear what he considers Chevron’s real target — its reputation:

At the end of the day, though, I don’t think it’s just a money question for them, I think it’s a reputational question. There’s opportunity costs when you have this hanging over your head and you search for new sources of supply around the world. So, you know, we’ll see how this all shakes out. They could try to drag this out as long as they possibly can. But we have a plan legally to go get their money, assuming we win the case and get a judgment, to go get that judgment in force as quickly as possible. (Audio clip)

As the old saying goes, when the law is against you, argue the facts. When the facts are against you, argue the law. And when both are against you, pound the table.

And get a movie made about your cause.

And hire a lobbyist while you’re at it. Only someone who believes the issue is going to be resolved politically, not legally, hires lobbyists as have Donziger, the Amazon Defense Coalition, and Kohn, Swift and Graf, the Philadelphia law firm paying the bills.

For the audio of the entire Q&A, click here. It’s about 28 minutes. Also speaking are Mitch Anderson, Amazon Watch; Luis Yanza, an Ecuadorian activist; Joe Berlinger, director of “Crude.” Berlinger said Washington’s E Street Cinema was the only venue showing the film and he urged the crowd to support the film, saying, “If it does not do well this week, it will be gone.”
 

The publicity machine has geared up for the umpteenth premiere of the anti-Chevron movie, “Crude,” this time at the E Street Cinema Friday just a few blocks down from NAM-HQ. Joe Berlinger, the director, will be at the premiere, perhaps proclaiming his objective distance as he did in this San Francisco Chronicle interview:

I have maintained throughout the entire production period and release an arms-length relationship with everybody involved, so that the film is treated as a piece of objective journalism—because it is.

Berlinger will be appearing at the DC showing with Luis Yanza, an Ecuadorian activist, and Steven Donziger, the American trial lawyer who is directing the lawsuit.

Now that’s objective distance!

To be fair to Berlinger and the movie, you learn a lot about the trial lawyer/activist/media combine that drives the litigation. He shows Donziger in full trial-lawyer mode, coaching Ecuadorian Indians to be more emotional when speaking to company stockholders, successfully selling Vanity Fair on doing a piece he can use to market the lawsuit (”Jungle Law“), and begging for more money from the Philadelphia law firm that’s subsidizing the litigation in the hopes of a big payout.

And there’s a scene in the movie where Donziger berates an old, shaky judge in Quito and then verbally attacks an attorney out in the hallway for the sake of the cameras. (See our earlier Shopfloor.org post.) It’s ugly bullying from Donziger, but you don’t really learn how cynical the abuse is until you read Peter Maass’ description of the encounter.

Maass is author of “Crude World,” a global maligning of the oil industry, with a chapter devoted to Donziger and the litigation. (Maass is also a sympathetic promoter of the movie.) In the book, Maass reports:

Donziger had known for months that Chevron had built a villa at the [army] base and agreed to give it to the military once the case ended. Donziger hadn’t opposed the deal because Chevron was not popular in Lago Agrio; he’d realized that the company’s lawyers would be safer with military protections. But with more than a dozen news-hungry journalists recording the moment, Donziger suspected that the time was right to accuse the military of being on the payroll of gringo oilmen. He was correct. The accusation made national headlines, and a little more than a month later the Ecuadorian military canceled all military contracts with oil firms and ordered Chevron off the base.

In other words, Donziger originally didn’t make an issue of legitimate security precautions because the opposing legal team faced potential harm. But when it served his purposes — when the cameras were there to record the mock outrage — he’d gladly renege on any understanding and put those lawyers in danger.

A truth-teller. Sure.

More …

• Yet another over-the-top release from The Amazon Defense Coalition about “Crude’s” D.C. showing.
• An article by Peter Maass on the litigation, “Slick” from Outside Magazine, which includes another telling of Donziger browbeating the judge in Quito.
• In Spanish, the kind of headlines that Donziger’s cynical stunt produced in Ecuador, “Amazónicos denuncian que Chevron Texaco usa base militar para sabotear juicio.”

The activist/trial lawyer combine driving the $27 billion lawsuit against Chevron loves to wield the personal attack, demonizing the company, its employees and anybody else who argues that the litigation is baseless. At first blush the attacks look like an attempt to cow critics, but by now everybody has read Saul Alinsky — pick a target, freeze it, personalize it, and polarize it — and once recognized as tactics, the attacks lose their power to intimidate.

So as the litigation and PR squad now levy personal charges against yours truly (again), we’re left to puzzle over their thinking. “The Chevron Pit” — billed as the blog maintained by the team suing Chevron — mentions my name seven times in its Tuesday post, “Chevron: Don’t believe your eyes…believe our lies!” and adds the usual insults. But if they cannot successfully intimidate, what’s the point? Therapeutic release for the blogging activists?

It’s certainly not truth-telling. The blog goes after our Saturday post, “What Photo Do You Use to Illustrate Misleading Journalism?,” which challenged The New York Times’ use of a photo of a current oil pit in Ecuador to illustrate a story about the lawsuit. Texaco, bought by Chevron in 2001, left Ecuador in 1992. Any photo of a still-liquid oil pit depicts pollution caused by the government-run oil company, PetroEcuador.

How does The Chevron Pit rebut our point? By trotting out more misrepresentation!

The New York Times features a longish piece today about the litigation brought by a New York trial lawyer and the Amazon Defense Coalition against Chevron over claims of environmental damage in Ecuador, “Ecuador Oil Pollution Case Only Grows Murkier.”

Well, maybe it’s murky because the paper doesn’t bother to report basic facts, like who actually brought the lawsuit. It’s as if the $27 billion in legal claims just appeared.

The lawsuit is being financed by the Philadelphia law firm of Kohn, Swift and Graf, directed by New York trial lawyer Steven Donziger, and marketed by the Amazon Defense Coalition, which would receive the money from any settlement. And the legal/activist lawsuit is indeed a shakedown intended to force a settlement from Chevron for pollution supposedly left by Texaco, which Chevron purchased in 2001. Texaco operated in Ecuador as Texpet in a joint exploration and production venture with the government-owned oil company, Petroecuador, up until 1992. (See this Texaco history, “Chevron in Ecuador.”)

1992. 1992. 1992. 1992. We stress the year because any oil now appearing as liquid in Ecuador is the responsibility of Petroecuador. First, TexPet remediated all the sites assigned to it for clean-up by the government of Ecuador, which released the company from future claims. Second, oil doesn’t stay liquid on the surface for 17 years!

Those facts notwithstanding, here are the photo and caption the Times used to illustrate today’s story. (In the paper, it’s a five-column black-and-white photo, 6-1/2 inches deep, i.e., big.)

A pool of oil in Lago Agrio, an Ecuadorean town in the Amazon where Texaco left contamination. Chevron, which acquired Texaco, has inherited its legal troubles.

So the Times has illustrated a story about charges of pollution against Chevron with a photo of an oil pit (and flare-offs) created by Petroecuador. And doesn’t bother to tell the readers what they are seeing in the paper has nothing to do with Chevron.

The activists use the trick all the time, pointing to unrelated pollution and claiming Chevron is to blame, but shouldn’t the Times have higher standards? The truth isn’t THAT murky.

Investor’s Business Daily editorializes today on the release of videotapes by Chevron documenting a bribery scheme involving the judge and government officials in Ecuador, “Chevron’s Shakedown.” Judge Juan Nunez clearly indicates he intends to rule against Chevron, even though he’s supposedly still taking evidence.

In sum, the tapes provide more, powerful evidence that the $27 billion lawsuit against Chevron is really just a grand scheme of wealth transfer, taking from the stockholders to give to U.S. trial lawyers, environmental activists, corrupt officials in Ecuador and, if they’re lucky, a few Amazonian Indians.

The tapes confirm three serious things: the Ecuadorean judge has already decided to rule against Chevron later this year, even before he’s heard the evidence; that he can no longer preside over this case; that the government, though not a party to the lawsuit, will benefit from the $26 billion jackpot; and that the judge can no longer credibly preside over the case; and that any appeal of the court’s decision would be, in the judge’s words on the video, “a formality.”

Whatever this is, it’s not justice.

The merits of Chevron’s case are irrelevant to Ecuador, whose judge is internationally recognized as the arbiter of the case. And the U.S. government’s passivity in this case is foolish. Chevron’s fate should be a lesson: Ecuador’s crooks will shake down American corporations for everything they have — and then some.

Dow-Jones reached Judge Juan Nunez in Ecuador, who denied any wrongdoing: “Nobody has offered me any money. I have not met with government officials, nor from the government’s party to deal with the Chevron case.”

And Steven Donziger, the New York trial lawyer who masterminded a PR and media campaign against Chevron in the hopes of bullying the company into settling, continues the attacks, telling The Washington Post: “I think this raises as many questions about Chevron as it does about the judge. I think this was a dirty-tricks operation by Chevron.”

Well, it’s certainly not the first time Donziger has made a wild accusation with no facts to back him up.

Chevron has posted the tapes and other materials at its website, www.chevron.com/ecuador.

In the comments to our post below, “Ecuador, Correa, Trial Attorneys and the Convergence of Interests,” you’ll see the use of a tactic common to the plaintiff’s side in the U.S. trial lawyers/environmental activist lawsuit against Chevron for the operations of Texaco in Ecuador. Karen Hinton of Hinton Communications, hired to do PR by the plaintiffs, goes after me by name, accusing me of inhumanity, etc. 

What took so long? The lawyers in this case have specialized in personal attacks and intimidation, encouraging blogospheric campaigns against anyone who dares to challenge the preposterous claims made in the lawsuit and propaganda. In the movie “Crude,” there’s a scene where the chief U.S. trial attorney Steven Donziger bursts into a judge’s office in Quito with the media in tow, a scene full of shouting and physical intimidation — Donziger’s a big guy. The judge, an old and shaky fellow, backs off a decision-making process just as Donziger wanted. The Ecuadorian attorney for Chevron is left sputtering.

The next scene in the hallway has the Chevron attorney trying to explain his side of the issue. Donziger is shouting, pointing fingers, gesticulating menacingly, “This is a corrupt attorney! This is a corrupt attorney!” (As we said, “Crude” is a remarkably revealing movie, made in a documentary-like style.)

It’s a tactic. It’s a cynical yet successful tactic that appears throughout the plaintiff’s case and masterful PR campaign. The facts of their lawsuit don’t bear up — see http://www.chevron.com/ecuador/ for Chevron’s side — so the  plaintiff’s team resorts to ad hominem, appeal to emotion, and blogospheric harassment. It’s only surprising it took them a day to call out Ms. Hinton’s sharp keyboard, although she does seem to spend a lot of time online.

P.S. Sludge? Petroecuador has operated the oil fields in Ecuador since 1990. Any sludge we saw was the result of Petroecuador, the government-owned oil company.

P.P.S. Here’s a revealing connection. As the movie “Crude” documents, the lawsuit against Chevron is being financed by the Philadelphia law firm of Kohn, Swift & Graf, P.C. The firm last year hired the lobbying firm of Ben Barnes to lobby Congress on Ecuador and the environment. And whom does Hinton Communications list among its clients? The Ben Barnes Group!

The movie “Crude” uses documentary film techniques to launch a one-sided, fact-challenged but well-crafted attack against Chevron for environmental damage supposedly caused by the operations of Texaco in Ecuador. (Chevron bought Texaco in 2001.) The directors have been showing the movie to friendly audiences around the film-festival circuit, including last week at the American Film Institute’s “SilverDocs“* festival in Silver Spring, Md.

Perhaps despite themselves, the moviemakers reveal an awful lot about the nature of the litigation scheme.

The photo shows U.S. trial lawyer Steven Donziger, the moving force behind the lawsuit filed on behalf of the Frente de Defensa de la Amazonia (AKA Amazon Defense Coalition), being introduced to Rafael Correa, the president of Ecuador. As the post immediately below describes, Correa is a radical, anti-American politician in the mode of Venezuela’s Hugo Chavez and Bolivia’s Evo Morales.

In the movie Donziger and his Ecuadorian colleague, Pablo Fajardo, fly to Philadelphia to solicit more financial support for their litigation from Joe Kohn, a partner in Kohn, Swift and Graf. Kohn cheerfully explains to the camera that the lawsuit is, indeed, intended to be a money-making venture. (Photo below: Kohn, left, chats with Donziger in the Philadelphia law offices.)

And here’s the House lobbyist registration form from 2008, in which über-lobbyist Ben Barnes signs his firm up to lobby for Kohn, Swift and Graft on issues related to Ecuador and the environment. Which would be…

The campaign against Chevron rests on a foundation of falsehoods, misrepresentation and emotional appeals.

But when you have the Ecuadorian government, self-styled documentarians, big-time lobbyists, not to mention Sting’s wife Trudie, all on your side, who needs the facts?

More on the film and the alliance against a U.S.-based energy company soon.

* The SilverDocs prizes were announced today. “Crude” did not win any awards.

Disclosure: I recently traveled to Ecuador on Chevron’s dime to get a first-hand view of the territory over which the lawsuit makes numerous claims. Chevron is a member of the NAM. But I’ve been posting on this lawsuit since September 2008.

We posted Thursday on the amazing, welcome, very cool news that Chevron has begun producing from the Tahiti deepwater oil field in the Gulf of Mexico, one of 40 projects costing the company $1 billion or more.

Of course no profitable satisfying of market demand goes unpunished, and Chevron is the target of a particularly ravenous combine of U.S. lawyers and “indigenous activists” suing the company for environmental damage in Ecuador, contamination supposedly caused by Texaco before it was bought by Chevron. The shakedown combine is also supported by U.S. environmental activists and the just reelected left-wing government of Rafael Correa, all out for a piece of $27 billion in damages. That’s right, $27 billion is being claimed — the equivalent of one-fourth of Ecuador’s annual GDP. For purposes of comparison, Chevron’s first quarter earnings were $1.84 billion this year; in 2008, first quarter earnings were $5.17 billion.

For all the details about why the lawsuit is egregious even by the standards of environmental shakedowns, one can visit the Chevron site on Ecuador. The suit was filed in New York City in 1993, is masterminded by attorney Steven Donziger. Recently the media stepped up the coverage of the controversy in anticipation of a ruling from an Ecuadorian judge. There was an NPR Morning Edition story, and a similar piece in The Washington Post, “In Ecuador, High Stakes in Case Against Chevron.” (Similar? They were done by the same reporter, Juan Forero.)

Then last Sunday it was “60 Minutes,” the gold standard of gotcha journalism, in the lead segment on the program, “Amazon Crude.” The usual anti-corporate framing was in abundant evidence: horrible pollution in the Amazonian jungle, suffering poor people, supposedly reliable scientific reports and impassioned advocates.

“It’s a disgrace. They treated Ecuador like a trash heap,” says Doug Beltman, who worked for the EPA on Superfund sites in the U.S.

For balance, one Chevron executive was interviewed in her office.

The trouble with these sorts of stories is that the average viewer has no clue what’s fact and what’s fiction, what’s a bogus legal claims versus what’s a REALLY bogus legal claim. Your Shopfloor blogger is more than passingly familiar with the Chevron controversy and regards the suit as yet another search for deep pocket corporations that lawyers can demonize. Still, watching the “60 Minutes” segment we thought, “Well, that was OK. Wasn’t so bad for Chevron.”

Except the facts weren’t facts, and the “60 Minutes” segment did not allow those fictional claims to be challenged. It wasn’t OK for Chevron, it was a hit piece.

The facts are readily available, and the Business and Media Institute did a good job of citing the more salient ones in response to the segment, “‘60 Minutes’ Promotes $27-Billion Leftist ‘Fraud’ Efforts Against Chevron.” Here’s our favorite refutation: