S5, Ep8 | Damages

S5 Ep8: Damages

Pablo Fajardo [00:00:00] [Pablo Fajardo, speaking Spanish]

Amy Westervelt [00:00:27] This is Pablo Fajardo again, the Ecuadorian lawyer we heard from last time. He says we have to understand with this trial, with everything about this case, is that it's not the lawyer's legal fight La Lucha. The legal fight is for Los Pueblos, los affectados, the towns that were affected, the people who are affected. So it's not the lawyers, it's the people who were directly affected. That's what they're fighting for. This right here is the center of this story. The heart.

[00:01:00] A lot of what has happened in the decade since the verdict in Ecuador has focused on the ins and outs of legal process. Things lawyers are doing far away from the oil pits in Ecuador. But at its root, this case is about an environmental disaster. The poisoning of a pristine jungle and the people living in it, and the fact that those people are still suffering the consequences of what was done 30 40 years ago. To me, I've picked up on this last time, but Fardeau and Donziger are somewhat at odds these days. Neither will say exactly why, but there are a few possibilities on the table. First, Fajardo is now also suing Petroecuador, the state owned oil company that Chevron has said is really responsible for the pollution in the Amazon. That case could feasibly be seen as a threat to the effort to collect on the Chevron judgment, and just as a case that somehow calls the Chevron case into question because it's holding Petroecuador accountable, too. Although Fardeau says, of course they both did things, they're both responsible, they should both be held to account. On the other side, Donziger has been centered in a lot of the media coverage of this story, often more so than the damage done to Ecuador. That's not necessarily his fault. Sometimes it's just a function of what's happened more recently and the fact that people are being assigned stories on him and can't get into the whole history. But in either case, it can and has caused some resentment in Ecuador. Today, we're going to talk about why media coverage of this case started to shift away from los afectados, those people in Ecuador who were affected, and towards the lawyers. Because that was not an accident, that was a strategy.

Amy Westervelt [00:02:58] Think about it. If you're Chevron, you'd probably rather fight a Manhattan attorney in the court of public opinion than thousands of indigenous people who no longer have access to clean drinking water in the Amazon. When Chevron brought on Gibson Dunn in late 2009, the firm had just finished up a case for Dole, the food company, and they've been really successful deploying what they called the quote unquote kill step, which worked to nullify a judgment against the company that had come in Nicaragua. Basically, the lawyers had convinced a U.S. court that the case in Nicaragua was a sham part of a con that these plaintiffs, who claimed they had been sterilized by a pesticide dole used on its banana plantation down there were frauds pretty quickly after they started working on the Chevron case and Ecuador. The Gibson Dunn lawyers were describing that case in fairly similar terms. We heard in the last couple of episodes about the various subpoenas and depositions that Randy Mastro, the lead attorney on the case for Gibson Dunn, was getting. That all culminated in Chevron filing a civil racketeering suit under Rico against the plaintiffs and attorneys in the Ecuador case in 2011. That came just a couple of weeks before the verdict actually came down against Chevron in Ecuador. Remember Steven Donziger, the American attorney working on the case, told us a while back that Chevron had stolen the moment of that victory?

Steven Donziger [00:04:35] So when the decision came down in Ecuador, I was in New York with some other lawyers in the US who had been working on the case, and we got the news and we were obviously thrilled. But we were also at that point dealing with the RICO case. So it was all confusing and in a weird way. Chevron had stolen the moment

Amy Westervelt [00:04:54] and they'd stolen more than the moment they've taken control of the story from that point on. Most coverage of this case has focused on the legal ins and outs, not the original environmental damage in the Amazon. It became all about the lawyers and not the affected people at all. And in general, that framing of the story has tended to benefit Chevron. So what the heck was this Rico case? What were the charges and what happened here? That story coming up right after this quick break. OK, let's be real, there are now a lot of daily news podcasts out there, but there's not one that's anything like today explained from Fox. Every day, the team picks an essential news story that defines our moment. And then Sean Ramos firm sits down with some of the world's best journalists, academics and policymakers to help us understand that. The team recently took a look back at the ways in which our first reality-TV president has fundamentally changed our reality, and a special series called The Trump Years. Today Explained Really explains the news. All of it. Subscribe if you haven't already to today, explain for free right now and your favorite podcast app to get new episodes automatically. The RICO case filed against lawyers and some of the Ecuadorian plaintiffs in this Chevron Ecuador case was pretty damning. Charges sounded really bad. They included intimidating judges tampering with evidence, ghostwriting witness testimony and even ghostwriting the final judgment itself. But like everything else in this story, the RICO case was anything but straightforward.

Melissa Sims [00:07:07] So my name is Melissa Sims and I'm an attorney with Sanders, Phelps Grossman in New York.

Amy Westervelt [00:07:11] We asked Melissa Simms, who's been involved in various RICO cases and is familiar with this case, but has no stake in it to give us the lay of the land on Rico in general and some of the particularities of this case to start with. What the heck is Rico? It stands for Racketeer Influenced and Corrupt Organizations Act, which is the law. These cases are filed under.

Melissa Sims [00:07:37] It was passed initially in the 1970s and intend to pursue the mafia. What they tried to do is establish a law where you could tie all of their crimes together in one case and show them to be an enterprise, which allow the prosecution to be able to connect a lot of different incidences into one enterprise to show that these people came together for a common purpose and that common purpose cause whatever type of damage

Amy Westervelt [00:08:10] the way the RICO statute is written, you can't just bring a RICO charge against a group of people doing crimes together. The crimes have to be in service of some broader goal.

Melissa Sims [00:08:20] OK, so it can't just be you and I going to rob the bank. It has to be you, and I going to rob a bank with the purpose of taking the money to further some other type of conduct.

Amy Westervelt [00:08:32] Sims is a plaintiff's attorney, which means she's usually bringing RICO complaints against large corporations on behalf of people who've been wronged in some way by the company's behavior in the past few years. For example, she's been working on the big opioid cases where they were able to show that pharmaceutical companies, distributors and some doctors were knowingly getting people hooked on prescription opioids.

Melissa Sims [00:08:55] Now that illegal conduct is one of a list of conduct in the statute. So in the federal statute, that has to be enumerated like bribery, extortion, arson, robbery, kidnaping, the most common is mail and wire fraud. So mail and wire fraud are the ones that we fall back on on our cases. Because you can show if there's an attempt to seize, that's all you need is an intent to deceive using the U.S. mail or wire and the wire with money. You could also apply it to the internet.

Amy Westervelt [00:09:34] Sims says for plaintiffs attorneys, the burden of proof can be really high to make a RICO claim stick, to get past a motion to dismiss. And she says usually with a RICO complaint, you have to show a long pattern of behavior.

Melissa Sims [00:09:49] It's something that is more than just one or two times. It has to be an ongoing event. There has to be more than two occasions in the last 10 years of these people that get together to perpetuate something that they could not do on their own.

Amy Westervelt [00:10:07] That didn't really happen in this case.

Melissa Sims [00:10:10] So, you know, going after a one or two event type of conduct that I think they're alleging in Chevron, that is that is really rare to be able to pass a motion to dismiss on a RICO claim.

Amy Westervelt [00:10:27] The other big anomalies here center around damages and a jury generally in a RICO suit. The whole point is damages. The people bringing McLean were damaged in some quantifiable way, and they're seeking compensation. In fact, one of the reasons big companies have become a target for RICO cases is that plaintiffs can ask for what's called treble damages, so three times the damages they'd be able to get in a simple liability case when it filed a suit. Chevron did claim damages, but then, shortly before the trial was set to begin, they dropped the damages claim. They made it solely about blocking the Ecuadorian judgment from being collected in the US.

Melissa Sims [00:11:06] But it's weird because that's what Rico is all about damages. What good is that without damages?

Amy Westervelt [00:11:11] Sims says damages are the whole basis of Rico claims in general. She says it would be kind of pointless to bring a RICO case if you don't have any damages. But it may also explain why the plaintiff's request for a jury trial was denied without damages to us. There's not much need for a jury. This Rico case is every bit as complicated and confusing as the original case in Ecuador. So we're going to spend a couple of episodes going through it, not because we want to take our eyes or ears off of what happened in Ecuador, but because we think it's important to evaluate these claims transparently and to weigh them against the damage at the heart of the original case, the environmental damage in the Amazon. To explore this mismatch that filmmaker Joe Berlinger described last time between what's legal and what's moral to look at, where the focus of the story turned and figure out where we think it should be now. So first charge pressuring the Lago Agrio court and manufacturing evidence. And when we talked to Randy Mastro, the lawyer with Gibson Dunn, who led this Ricoh effort for Chevron, he talked a lot about how much Donziger and the other plaintiffs attorneys were trying to influence and pressure Ecuadorian judges, among various other pieces of evidence. Mastro pointed to outtakes from the documentary Crude. Here he is talking about one scene in particular.

Randy Mastro [00:12:39] He also is captured at a dinner sitting next to a woman who says to him, You know, the judge will be killed if he doesn't rule in your favor in this country. And Danziger says, Well, I don't know about killed, but he thinks he will, which is just as good.

Amy Westervelt [00:13:02] It sounds really shady what Mastro is describing. But trying to make your case in the public so that it's unpopular for a judge to rule against you…that's kind of the entire basis of litigation PR, which PR firms created for multinational corporations in the first place. And it's something a lot of companies, including various oil companies, have used to their benefit for years. Another scene Mastro described is a bit more concerning

Randy Mastro [00:13:33] when he's talking about mobilizing to put people in front of the courthouse. The thousand people in front of the courthouse to pressure. And he's saying, literally, we have to pressure the judge. We have to make them know who's boss. We have to make them know who is in control. We're going to put a thousand people in front of the courthouse and we're going to mobilize. And there's even discussion of arming the thousand people and some discussion about whether that is, you know, a conspiracy and a crime

Amy Westervelt [00:13:58] in the outtake. It's hard to tell whether the arming part is serious. In this clip, you'll hear Donziger describe pulling together a bunch of protesters, which he describes as an eracito an army. Then Luis Yanza jumps in and says In Spanish, we're using the word army, but it's not really an army. It's like a specialized group

Steven Donziger [00:14:18] [speaking Spanish with Luis Yanza]

Amy Westervelt [00:14:38] A woman from Amazon Watch asks if it's possible these videos might be subpoenaed and warns the group

Amazon Watch [00:14:45] of I'm guessing again with a subpoena as those videos is when I was power to subpoena. What about us, right?

Steven Donziger [00:15:00] No es una ercito armado, es un grupo di gente per…

Amazon Watch [00:15:05] I just want you to know that it's illegal to conspire to break the law.

Amy Westervelt [00:15:08] In another shorter snippet from this scene that we found on YouTube, Yanza says this

Luis Yanza [00:15:15] [Yanza speaking Spanish]

Amy Westervelt [00:15:20] And so he's saying, and then if we need weapons, we can provide weapons. That does sound bad. Although Yanza is laughing a lot, so it's hard to tell what the context was here. Remember, this is 30 seconds taken out of what seems to be a 15 minute or so scene. So we're not really sure how this particular segment was taken out. What was before and after it? How it might have been edited. All we're seeing is this one part. It mostly sounds like people organizing a big protest. The manufacturing evidence part of this section of the RICO complaint refers to the two issues. Mastro mentioned a couple episodes back, the carmaker report and the Cabrera report. Here he is, explaining the issue with Charles Cohn Baker, an expert for the plaintiffs.

Randy Mastro [00:16:12] When we compelled Dr. Baker's testimony in Georgia, what he actually testified was that the reports that Steve Danziger and Ecuadorian lawyers submitted to the court in Ecuador was not carmaker's conclusion that he had not, in fact, concluded that there was significant environmental damage in the work that he had done.

Amy Westervelt [00:16:39] Donziger and the plaintiffs denied this. These are carmaker had been fired and his deposition was basically sour grapes. Then there's the Carrboro report, which Mastro says the plaintiff's experts, Douglas Feldman and and Maced Ghost, wrote. Here's Mastro.

Randy Mastro [00:16:56] The supposedly independent expert in Ecuador, who had been appointed by the court to be an objective, independent party in assessing environmental damage and how much There, was and attributing it to two parties. If there were found to be environmental damage, that in fact it was not an independent objective. Report it had been ghostwritten. Word for word by Stratos

Amy Westervelt [00:17:22] Donziger's explanation was that this was all perfectly normal, that the plaintiffs had asked for Cabrera to be appointed and that their experts helped to run analysis for his reports. He talked about this a couple episodes ago, but here's a little snippet to remind you.

Steven Donziger [00:17:37] Stratos did write or draft most of the Cabrera report. Cabrera, though, reviewed it signed. They worked together. There was a massive amount of information literally tens of thousands of chemicals. Sampling results in any single individual would never have the capacity to pull that together, analyze it by himself or herself.

Amy Westervelt [00:17:58] Douglas Belton, the scientist from Stratis Consulting, told 60 Minutes in no uncertain terms what he thought of Texaco's practices in the Amazon.

Douglas Belton [00:18:08] It's a disgrace. They treated Ecuador like a trash heap.

Amy Westervelt [00:18:13] He was named as a defendant in the RICO too, and in his initial deposition, he said quote, We didn't collect any data ourselves. We were only looking at the data that had been collected by others. According to Belman, that included data collected as part of the trial, including the judicial inspection data where plaintiff experts and Chevron experts collected environmental data, and Cabrera and his team also collected environmental dap. When asked why, the plaintiff samples all seemed to be contaminated and Chevron samples devoid of contamination, Feldman explained why, quote Chevron may have sampled farther away from the pits, and they used a different analytical method from that of the plaintiffs. At one point, the attorney conducting the deposition asked Did you reach any conclusion about whether or not the environment been contaminated during Texaco work in the concession by their work in the concession and veltman answers quote? That conclusion is that Texaco did cause environmental contamination as a result of their operations. Then the attorney asks, did you reach a conclusion as to whether or not tax cooperations in the concession complied with the industry standards in effect at the time? And Veltman says, quote the way that Texaco operated that oil field was substandard by industry practices. They used practices that were common in the early 1800s. But by the time they were conducting operations in Ecuador, these practices were not typically used, certainly in the U.S. and in most places in the world. Now again, it's the method of the report that's been called into question, and in this case in particular, the idea that Veltman and his colleague and Meese wrote the report and that Cabrera just signed his name to it. And it's possible that the plaintiffs and their attorneys and belman in mist should have been more transparent about Travis's work with Cabrera. Ultimately, it seems like a moot point, because both the carmaker report and the Cobra report were thrown out by the judge in Ecuador. In the final judgment, Judge Zambrano wrote that he had disregarded these reports because of the controversy swirling around them both. Which begs the question Why would reports that were disregarded by the Ecuadorian court be used as proof that the case was fraudulent? According to Don Segers, attorney for the RICO case, Zoe Little Page, it was all a diversion tactic.

Zoe Little Page [00:21:01] We have seen a pattern in the last decade of defense lawyers starting to and mainly corporations starting to attack the lawyers personally and the advocates personally, as opposed to the plaintiffs or dealing with the underlying issues. And it has been a terrifying trend for most people in the bar that when you bring a case, you are putting yourself personally on the line, not just representing your client. That's never really happened before.

Amy Westervelt [00:21:35] But Mastro is about to up the ante. Here's what he argued in court.

Randy Mastro [00:21:41] So you ask me, did Zambrano say it and rely on Cabrera? Actually, it's more complicated than that because Serrano didn't write his own judgment.

Amy Westervelt [00:21:52] Masters accusation is that the plaintiffs and their attorneys ghost wrote the final judgment donziger. The other plaintiffs attorneys and the plaintiffs themselves, of course, say this is completely false. So let's look at how Mastro tried to make this case. First, he points to phrases that were found in the Ecuadorian legal team's files that were similar or exact to phrases found in the judgment. Suspicious may be, but not necessarily, proof. They never did find the smoking gun. The final judgment itself on any devices or hard drives and both their expert and a forensic expert hired by the Ecuadorian government did find multiple drafts of the judgment on Zambrano computer, which is consistent with him writing it himself. However, as with everything else in this case, each side thought that the existence of multiple drafts proved their point. A. bolsters his claims with two things. First, he points to judge Zambrano behavior at the RICO trial

Randy Mastro [00:23:02] when I cross-examined him and gave him a pop quiz and he couldn't answer a single question right about the most central important elements in his judgment. Couldn't answer a single one correctly.

Amy Westervelt [00:23:15] And then he points to the testimony of a witness named Alberto Guerra. Guerra was, by his own admission, a corrupt judge in Ecuador. He claimed to have been part of this big conspiracy to ghostwrite the judgment who'd had a change of heart, and then his M.O. put it flipped. Gear two, though, changed his testimony in a few instances despite having been prepped by Chevron's attorneys. And that's what we'll dig into next week. Next time on Drilled.

Zoe Little Page [00:24:03] Well, it was shocking. You know, we knew coming in that Chevron had gone and recruited and paid cash in a duffle bag to in charge who had been essentially disbarred in Ecuador for corruption and fraud. And you know, as an American lawyer, I just assumed that that's sort of what sounded like a story like a movie plot would be completely laughed out of an American courtroom that we would have a key witness in a trial, be someone that Chevron had paid close to a million dollars to in either money or compensation. Or, you know, they bought him a house. They gave him a job, they bought in cars. They gave his flights for him and his family to move out of Ecuador. They paid to the immigration lawyer to bring him here. They, you know, and it all started with Chevron showing up to any sketchy meeting with this former disbarred judge with a duffel bag full of cash.

Amy Westervelt [00:25:15] Drilled is an original production of the Critical Frequency podcast network. The show was created, reported and written by me. Amy Westervelt, my co-rapporteur this season is Karen Savage. Our editor is Julia Richie, the show's editorial consultant. His Rekha Murthy Mixing and Mastering by Mark Lush Original Score by Bea Beeman. Fact Checking by Wootton Yan. Artwork for this season was done by these super talented Matt Fleming. Special thanks to Trevor Gowan and Emily Gertz. If you are a Patreon subscriber, thank you. Your money is helping to make this season, and as a special thank you to Patreon. Members were providing a variety of benefits, including bonus content and early access to episodes in this season. If that sounds appealing to you or you just want to support our work, go over to petrol CNN.com, slash Drilled and sign up. We also have some merch associated with that. You can find stories, documents and photos related to this season on our website at Drilled news dot com. That's it for this time. Thanks for listening, and we'll see you next week.