Government Gave Big Oil The Power to Prosecute Its Biggest Critic

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Above photo: A protest outside the attorney general’s office in Quito, Ecuador, September 2018. By Daniel Ochoa, Associated Press.

Note: We interviewed Steven Donziger who is the focus of this story, and of Chevron’s actions in court, on Clearing The FOG Radio. You can listen to it here.

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A judge empowered a private law firm to criminally prosecute Chevron’s nemesis—and now the firm has admitted it worked directly for Chevron.

This story is co-published with Jacobin.

In recent years, the American government has given the fossil fuel industry hundreds of billions of dollars of subsidies and opened up wide swaths of public land for drilling. Now, as the climate crisis worsens, a federal judge has given a private corporate law firm with ties to fossil fuel companies the power to criminally prosecute one of the industry’s biggest foes—a lawyer who notched one of history’s biggest legal victories against a major oil company.

In 2011, Steven Donziger led the legal team that secured a $9.5 billion judgment against Chevron for polluting the Amazon rainforest in Ecuador. Chevron has not paid that claim, and last year a judge appointed a private law firm to criminally prosecute Donziger for a contempt charge in a countersuit filed by Chevron in federal court in Manhattan. That law firm, Seward & Kissel LLP, has represented Chevron itself as recently as 2018, according to recent court documents.

Put another way: The government has taken the extraordinary step of giving prosecutorial power to a law firm that has worked for Chevron—and is allowing that prosecutorial power to be aimed at Chevron’s chief adversary, who has been under house arrest for 332 days.

“Legal ethics rules are complex but one overarching principle is avoiding not just actual impropriety, but also the impression of impropriety that might cause the public to lose trust in the legal profession,” said the University of Pittsburgh environmental law professor Joshua Galperin. He said the appointment of Seward “certainly raises serious questions in that regard.”

Oil giants have in recent years tried to deter environmental litigation by filing their own countersuits, aiming to outspend opponents into submission. These suits have targeted public officials and others who dare to bring cases against the industry.

The Chevron case represents an escalation—potentially opening the door to future cases in which judges give private law firms the authority to imprison corporate critics, without disclosing their corporate ties to industries that are trying to shut down dissent.

Last month, the International Association of Democratic Lawyers and the National Lawyers Guild filed a motion to dismiss the case in order “to avoid the miscarriage of justice and to refrain from setting a dangerous precedent for judges to be able to engage in judicial harassment and misconduct and appoint private prosecutors that are shielded from revealing a conflict of interest.”

Seward & Kissel did not respond to multiple requests for comment about its ties to Chevron and the fossil fuel industry. Chevron did not respond to multiple requests for comment about the work Seward has done for the company.

“A Company of Considerable Importance to Our Economy”

Donziger’s case began in 1993 when he was part of the team that filed a class-action suit on behalf of 30,000 farmers and Indigenous people against Texaco for polluting the area of Amazon where they lived. Chevron’s involvement began eight years later in 2001 when the company purchased Texaco.

The case resulted in one of the largest judgments ever handed down against an oil company.

But the ruling—which was upheld by three Ecuadorian courts—was only the beginning of what would become a decade-long legal saga that one former federal prosecutor would later call “extravagant and at this point so unnecessary and punitive.”

Facing a multibillion-dollar judgment, Chevron set a plan in motion to “demonize” Donziger and his clients, according to a 2009 memo from the company.

The company withdrew from Ecuador, and Chevron retreated to U.S. courts to countersue people involved in Donziger’s case. Those proceedings were overseen by an industry-friendly judge from the U.S. District Court for the Southern District of New York. Lewis A. Kaplan, a Clinton appointee, is a former corporate lawyer who as a jurist let an accounting giant’s executives off the hook in a high-profile fraud case brought by the Justice Department. Kaplan, who had investments in funds with Chevron holdings, suggested that the company could file a racketeering suit against Donziger.

Chevron took the hint: The company filed a civil case against Donziger, alleging that the multibillion-dollar judgment against the company had been secured through bribery and fraud. Backing the company’s claim was an Ecuadorian trial judge, who testified that he had been paid by Donziger to ghostwrite the eventual ruling against Chevron.

At the outset of Chevron’s countersuit, Kaplan expressed sympathy for the company. He ordered a sweeping worldwide injunction—which was later overturned on appeal—preventing enforcement of the Ecuadorian judgment against Chevron. He asserted that the oil giant was a “company of considerable importance to our economy that employs thousands all over the world, that supplies a group of commodities—gasoline, heating oil, other fuels, and lubricants—on which every one of us depends every single day.”

He then ruled against Donziger, crediting the testimony of the Ecuadorian trial judge, who had accepted hundreds of thousands of dollars from Chevron and would later recant some details of his testimony during a hearing at the World Bank.

When Chevron sought to recoup more than $800,000 in legal fees from Donziger, he refused to follow a court order requiring him to turn over his computer and cell phone, asserting that it would violate confidentiality protections for his clients. In response, Kaplan fined Donziger $3.4 million—the “largest sanction in the history of New York courts,” according to ABA Journal. Kaplan put Donziger under house arrest and drafted criminal contempt of court charges against him.

Federal prosecutors, however, declined to prosecute Donziger, citing a lack of resources.

The judge then took matters into his own hands. He invoked an obscure rule to appoint a private law firm as a government prosecutor. To preside over the contempt case, Kaplan also handpicked a senior judge, Loretta Preska, who is affiliated with the right-wing Federalist Society and who recently ordered an alleged victim of Jeffrey Epstein to destroy files on the convicted sex offender.

“Chevron’s Position Is That the Information You Have Requested Is Privileged”

Kaplan did not appoint just any law firm to prosecute Donziger—he hired Seward & Kissel, which Doniznger argues has deep ties to the fossil fuel industry, including to Chevron itself.

Kaplan selected the firm in August 2019, and four months later Seward partner Rita Glavin told the court that the firm had no conflicts of interest in prosecuting the Donziger contempt case. In February, Donziger filed a motion detailing what he said were multiple ties between the firm and Chevron. The motion asserted that Seward has represented shipping clients that do business with oil companies like Chevron, as well as with an investment firm linked to the company.

“The firm’s interests are so aligned with Chevron such as to create a financial conflict of interest,” wrote Ellen Yaroshefsky, a Hofstra University law professor and former commissioner of New York State Joint Commission on Public Ethics, in an affidavit submitted by Donziger’s legal team. “It is an understatement to say that there is a potential and opportunity for bias by Seward lawyers. It is equally an understatement to say that Seward counsel in the special prosecutor role undermines public trust and confidence in the perception of fairness of the legal system. The facts demonstrate a disqualifying conflict of interest under any objective standard.”

In response, Seward submitted an affidavit in March acknowledging that the law firm had in fact directly worked for Chevron on at least two occasions, including as recently as 2018. The firm said it had worked on “corporate forms and the issuance of related legal opinions” for Chevron.

“A truly disinterested prosecutor wouldn’t lock me up, but Chevron wants me locked up so its private law firm is doing that,” Donziger said in an interview. “It is terrible that a Chevron law firm is being given the power by the government to prosecute me and deprive me of my freedom. This is a corporate capture of our federal judiciary. How is it that a private law firm that represents a major oil company gets to lock me up on behalf of the government? There is not a single example of this happening in the history of our country.”

For its part, Seward & Kissel has asserted that the revenues it made from Chevron were negligible and are therefore immaterial to the Donziger case.

When Donziger’s attorneys requested details of the firm’s work for Chevron, Seward rejected the request. “Chevron’s position is that the information you have requested is privileged,” wrote Seward’s Andrew Frisch in an email to Donziger’s lawyer.

The full extent of Seward’s ties to the fossil fuel industry is still unknown. The firm recently refused to disclose the billing records for the three attorneys prosecuting Donziger.

Still, Seward & Kissel has publicly said that its future and the future of its clients depends on the oil industry.

“As we look forward and ponder what 2019 will hold for us and our clients, many of the questions we asked ourselves last year still seem salient,” a 2018 Seward report declared. “Will oil prices recover enough to bring badly needed stability to the offshore drilling and services sectors? Will new environmental requirements lead to increases in investment, scrapping, and newbuild orders?”

The firm even formed an Energy Finance Restructuring Team dedicated to servicing the fossil fuel industry in what it acknowledged are “difficult times” brought on by “the availability of alternative energy sources” and “increased regulation.”

“One of the Most Egregious Cases of Judicial Harassment”

In May, Judge Preska allowed Seward & Kissel to continue prosecuting Donziger. But Donziger is citing the firm’s work for Chevron in his new request for a higher court to intervene and dismiss the contempt charges against him. That request has been echoed by human rights groups, academics and many legal experts.

“In recent years, multifaceted attacks against environmental defenders have grown,” wrote 29 Nobel laureates in April in an open letter about the case. “These include physical assaults and murder, defamation campaigns, digital security threats, and corporate abuse of the judicial system. One of the most egregious cases of judicial harassment and defamation involves Chevron’s legal assault on Steven Donziger and his Ecuadorian colleagues.”

Natali Segovia of the International Association of Democratic Lawyers said the Donziger case presents an unflattering view of America’s justice system.

“Around the world, human rights defenders working on indigenous peoples rights and environmental justice are often killed for their work,” she explained. “As human rights attorneys working in conflict zones and other areas of the world, we often expect and assume those inherent risks involved in the work we do. But in the United States, a nation where we pride ourselves on holding the moral high-ground since World War II, we do not expect retaliation of the type Mr. Donziger has endured for over a decade.”

Walker Bragman is an independent journalist from New York. His work has appeared in Paste magazine, HuffPost, Salon, and The Hill. David Sirota is editor-at-large of Jacobin.