- The Washington Times - Wednesday, July 15, 2015

When a federal judge ruled last year that trial lawyer Steven Donziger’s team engaged in fraud to win a multibillion-dollar environmental lawsuit against Chevron in Ecuador, both moral supporters and investors who funded the legal action began to bail.

The specific evidence cited by the judge and the negative publicity was too much for backers such as Burford Capital and the Patton Boggs law firm, which renounced their involvement in the lawsuit.

But not Amazon Watch, an environmental group dedicated to preserving the Amazon rainforests and fighting climate change that relies on celebrity donors such as actor and director Leonardo DiCaprio and billionaire philanthropist Tom Steyer to fund its global work.

It has steadfastly remained behind Mr. Donziger’s effort to collect damages from Chevron, using the case for its own appeals and even suggesting that the judge wasn’t qualified to reach his conclusions because he didn’t speak Spanish.

Amazon Watch’s doggedness in supporting a case that has been discredited in the U.S. courts, however, hasn’t scared away its own financial support.

More than a dozen companies — including Essential Living Foods, Beneficial State Bank and New Resource Bank — are partnering this year with Amazon Watch to provide matching funds for product sales to the environmental group.

Longtime backers such as Mr. Steyer and the MacArthur Foundation gave more donations last year to the environmental group, even as the negative publicity surrounding Mr. Donziger’s activities reached a crescendo.

“During Amazon Watch’s 19-year history, we have been supported by donations from many thousands of individuals and dozens of institutional funders. Our supporters are proud of and share in our success to hold Chevron to account and continue to demonstrate that support to this day,” said Paul Paz y Mino, Amazon Watch’s director of outreach and online strategy.

A spokeswoman for Mr. Steyer told The Washington Times that the billionaire environmentalist and his wife, Kat, made a contribution to Amazon Watch specifically to support the group’s work on the expansion of clean energy.

“Climate change is the defining issue of our generation, and Tom and Kat support a number of efforts to address this urgent concern,” the spokeswoman said.

Mr. DiCaprio announced Tuesday that Amazon Watch would be one of the beneficiaries of a $15 million, multiyear grant from his personal charity to fight climate change and protect wildlife.

“The destruction of our planet continues at a pace we can no longer afford to ignore,” the actor said. “We have a responsibility to innovate a future where the habitability of our planet does not come at the expense of those who inhabit it.”

His announcement made no mention of Amazon Watch’s support of the Chevron case or the criticism the court levied against the environmental group.

U.S. District Judge Lewis Kaplan, appointed by President Clinton, issued a nearly 500-page ruling in New York in spring 2014 that excoriated Mr. Donziger’s legal team for its conduct in suing Chevron in Ecuador for alleged historical pollution by its Texaco subsidiary. He concluded the legal work that led to an $18 billion award by an Ecuadorean court — later reduced to $9.5 billion — against the oil giant was based on “egregious fraud” and the judgment therefore was unenforceable.

Judge Kaplan concluded, based on evidence submitted by Chevron, that Mr. Donziger’s team had engaged in improper conduct that included ghostwriting a supposedly independent expert’s environmental analysis and engaging in a bribery scheme involving one of the deciding Ecuadorean judges.

The judge also cited Amazon Watch in his ruling, saying the environmental group had distributed public relations materials drafted by Mr. Donziger that contained “deliberately misleading” information about environmental damage caused by oil drilling in the Amazon.

Extortion accusations

Chevron argues that Amazon Watch has been both a beneficiary and benefactor of the Donziger lawsuit.

Amazon Watch is a key player in a fraudulent scheme concocted by a group of lawyers in an attempt to extort billions of dollars from Chevron. They have been paid to promote knowingly false and misleading information about the company to the media, the U.S. Securities and Exchange Commission and government officials in an effort to pressure Chevron into a settlement,” said Morgan Crinklaw, a spokesman for the oil giant.

“While nearly every other insider involved in the case, including scientific experts, funders, investors and legal counsel, have abandoned this scheme, Amazon Watch remains one of the few remaining supporters,” Mr. Crinklaw said.

Amazon Watch steadfastly denies any wrongdoing and says it intends to continue holding Chevron to account.

Amazon Watch doesn’t consider Judge Kaplan “to be in any way qualified to rule on Ecuadorean law, much less the specifics of this case, when he has no knowledge of the Ecuadorean legal system, does not speak Spanish and never even visited the affected areas,” Mr. Mino said.

Amazon Watch has never committed any unethical or illegal activity, nor has any court determined that we have,” he said.

In an email to The Washington Times, Mr. Donziger disputed Mr. Kaplan’s claims that Amazon Watch had circulated false information, and strongly defended the group.

“The only misleading press releases or statements made in this case have been made by Chevron and their billion-dollar legal team. Chevron paid fact witnesses hundreds of thousands of dollars to distort the truth,” Mr. Donziger said. “Amazon Watch is an extremely credible organization who had zero financial interest in this case and simply wants Chevron to clean up their mess.”

Amazon Watch’s public appeals have repeatedly cited and cheered the Chevron case, and an analysis produced by the accounting firm KPMG concluded that Mr. Donziger’s team and his funders donated over $500,000 to Amazon Watch.

Amazon Watch also funneled tens of thousands of dollars to the “Frente de Defensa de la Amazonia,” an organization that is the sole beneficiary of the $9.5 billion Ecuadorean judgment against Chevron, according to the oil company and the annual reports of the environmental group.

Mr. Donziger has appealed Mr. Kaplan’s ruling, and this spring accused Chevron of waging a “demonization” campaign against him while deriding the judge’s ruling as “deeply flawed.”

Donors respond

Amazon Watch’s funders and business partners stress that their continued support does not hinge on the judge’s assessment.

Kate Williams, CEO of 1% for the Planet, a global organization of more than 1,000 companies that donate 1 percent of their sales to a network of over 3,000 environmental organizations, including Amazon Watch, said her organization was not aware of the accusations against Amazon Watch in the 2014 opinion but that the environmental group met the criteria to receive funding.

“1% for the Planet certifies that member businesses donate 1 percent of their sales to in-network nonprofit partners that are over 50 percent focused on environmental work. Amazon Watch meets this criteria to be an in-network nonprofit, and we have members who choose to support their efforts,” Ms. Williams said.

Sean Harder, a spokesman for the John D. and Catherine T. MacArthur Foundation, said its three-year, $200,000 grant to Amazon Watch does not support the group’s participation in the Chevron case. The grant was awarded in 2013 and will expire next year.

The MacArthur grant was awarded after the trial in Ecuador, which resulted in the judgment against Chevron, but before Mr. Kaplan’s opinion highlighting Mr. Donziger’s questionable tactics and relationship with Amazon Watch was released.

Mr. Harder said the foundation was aware of the ongoing trial but added that its contributions are specifically designed to assist Amazon Watch in efforts to help indigenous people in the region become more self-sufficient.

“When we examined the grant money, there’s nothing that gives us pause or concern over that grant,” Mr. Harder said. “Our conservation is very focused on helping local people do things in their communities.”

Kenneth Greenstein, a partner at the law office of Greenstein & McDonald, which sponsored Amazon Watch’s annual 2014 luncheon, told The Times that he wholeheartedly supported Amazon Watch after traveling with the organization and viewing the oil pollution in the Amazon.

“I traveled with Amazon Watch to the northern section of the Amazon in Ecuador that was devastated by Texaco, mostly in the 1970s and 1980s,” Mr. Greenstein said. “Chevron was found to be liable by a judge in Ecuador after Chevron changed the venue to Ecuador. Chevron needs to pay the $9 billion judgment. I wholeheartedly support Amazon Watch and will continue to support them indefinitely, irrespective of the false accusations which have been leveled against them.”

A spokesman for Trillium Asset Management, the oldest investment adviser devoted exclusively to sustainable and responsible investing, which partners with AmazonWatch, declined to comment.

Other backers, including Beneficial State Bank, Essential Living Food, Nutiva, and Sungevity, did not respond to multiple requests for comment to The Times.

One company did change its mind after learning about the accusations raised against Amazon Watch in 2014, but only after hearing it from The Times.

Kate McKenna, a spokeswoman for Pura Vida bracelets, told The Times that Pura Vida was unaware of the accusations against Amazon Watch and has since removed its Amazon Watch bracelet from its website. Pura Vida had been donating $1 for every $5 Amazon Watch bracelet sold.

In an amicus brief filed in the appeals case after Mr. Kaplan’s ruling, a group of human rights and anti-corruption jurists argued that Mr. Donziger and his allies could not claim that their fight for human rights in the Amazon justifies the corrupt means used to achieve a court victory.

“Advocates for human rights do not advance human rights by violating them, and the corrupt pattern of fraud, extortion, and bribery described by the District Court, if accurate, denies the fundamental human rights to due process of law and a fair trial,” the parties wrote in their brief.

Amazon Watch fights back

On May 27, Amazon Watch hosted a protest at Chevron’s annual shareholder meeting in San Ramon, California.

In a statement announcing the protest, Amazon Watch blasted the oil giant for using its “toxic influence to buy political power, fuel climate disruption, abuse the justice system and attack its critics and victims of its contamination.”

In his opinion Mr. Kaplan faulted Amazon Watch for continuing to use a “flawed” $6 billion estimate to “attempt to convince Chevron that it was facing multibillion-dollar exposure in Ecuador and that the time had come to settle.”

This estimate came from a report by David Russell, an environmental engineer hired by Mr. Donziger to generate an initial cost estimate for remediation of the affected area.

Mr. Russell testified that his “cost projections were very rough” because of the lack of information he had on the extent and levels of oil contamination and informed Mr. Donziger and the Ecuadorean plaintiffs in 2004 that his estimates were “best guesses based upon a week of looking at the sites, without any scientific data.”

Mr. Russell made explicit to Mr. Donziger that his cost estimate had been “wildly inaccurate and that it should not be used,” but Mr. Donziger continued to use the number and included it in public materials, including a letter he drafted for Amazon Watch, which the group then sent to the SEC to request an investigation into Chevron, Mr. Kaplan wrote in his opinion.

In an email to The Times, Marco Simons, general counsel at EarthRights International, which represented Amazon Watch in its appeal that quashed two subpoenas issued by Chevron, disputed Mr. Kaplan’s conclusions about Amazon Watch.

“Judge Kaplan did not actually find that Amazon Watch had said anything that was false. He faulted Amazon Watch for repeating an estimate that the Ecuador cleanup would cost $6 billion after the author of that estimate disavowed it, but Judge Kaplan did not make a factual finding that the cleanup would in fact cost less than $6 billion. In fact, the Ecuadorean court found that it would be more expensive than this,” Mr. Simons said.

According to Mr. Kaplan’s opinion, Amazon Watch promised to stop citing Mr. Russell’s estimate in its press releases and statements to the public, but the group continued to do so, attributing the questionable estimate to Mr. Russell’s firm.

Mr. Simons defended Amazon Watch, saying the group “is entirely free to be critical of Chevron, to try to pressure it to clean up the mess in Ecuador, and to use whatever resources available — including suggestions from Steven Donziger — to do so.”

In April, the 2nd U.S. Circuit Court of Appeals in New York heard oral arguments in the latest appeal of the case. Appellate Judge Richard Wesley called the case “unmanageable” and contemplated whether it might be simpler to order a retrial of the entire case in New York.

Losing support

Although Amazon Watch continues to support the legal action against Chevron, key investors who supported the lawsuit have bailed.

Burford Capital, a firm that specializes in financing litigation, offered as much as $15 million for the lawsuit, but by fall 2011 — well before the judge’s ruling — raised concerns that it had been deceived by the attorneys suing Chevron.

“We believe that you, and particularly your U.S. representatives, engaged in a multi-month scheme to deceive and defraud in order to secure desperately needed funding, all the while concealing material information and misrepresenting critical facts in the fear that we would have walked away had we known the true state of affairs,” Burford Capital wrote Mr. Donziger and other plaintiffs counsel in a September 2011 letter.

The Patton Boggs law firm also had supported the litigation, including assigning two lawyers to the case, and secured a stake in any financial judgment.

But weeks after Judge Kaplan’s ruling, the firm withdrew from the case and settled with Chevron, relinquishing its stake in any award and publicly declaring that it “regrets its involvement” in Mr. Donziger’s case.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide