The Dark Side of Green Justice

Review: ‘Law of the Jungle’ by Paul Barrett

Chevron sign
October 4, 2014

Forget "all this bullshit about law and facts," remarked Steven Donziger in 2007. "In the end of the day, it is about brute force."

Donziger was a plaintiffs’ attorney attempting to extract billions of dollars from oil giant Chevron—by whatever means necessary. His observation on the role the "law and facts" played in his work nicely captured the character of the years-long campaign of fraud, bribery, and extortion he conducted on behalf of his clients.

That campaign is extensively detailed by Bloomberg BusinessWeek reporter Paul Barrett in his new book, Law of the Jungle. The book is an exhaustive account of an epic, multi-decade, political, and public relations battle involving Chevron, the government of Ecuador, and a team of trial attorneys and environmentalists bent on remaking the law as a tool of environmental and social justice.

The battle produced a massive $19 billion legal judgment against Chevron in an Ecuadorian court in 2011. Subsequent revelations in a New York court, where the company filed a racketeering lawsuit against plaintiffs’ attorneys, have shed light on the potentially illegal lengths to which those attorneys, chiefly Donziger, went to secure that judgment.

Law of the Jungle reads like a John Grisham novel, except in its painstaking detail and atmosphere of moral ambiguity. There are no good guys fighting in the battle Barrett details, and the book contains few uncompromised characters.

Despite complaints from environmentalists who say that Barrett’s book simply recycles industry talking points, the author reserves deserved condemnation for the oil company and its legal team.

Texaco struck a deal with the government of Ecuador in the 1960s to extract oil from the Oriente, a region of the Amazon on which other companies had given up. They struck gold, and the rising prices during the oil shocks of the 1970s provided the company, and the government, with a windfall.

Texaco operated at the government’s behest, and in collaboration with Petroecuador, the company’s state-owned oil company, which owned 62.5 percent of the consortium that operated there. Withstanding large fee hikes that sapped much of its profits in the area—Barrett reports that it ended up taking only about seven percent of the profits associated with drilling in the Oriente, with Petroecuador taking the rest—Texaco still made out quite well.

Drilling in Ecuador at the time was largely unregulated, despite provisions in the Ecuadorian constitution that required companies to account for any environmental damage there.

There were no means for enforcing those provisions, however, and Texaco took advantage of that fact. It refused to line waste pits beside its drilling sites and did not properly dispose of wastewater associated with its drilling activities.

In 1980, Barrett reveals, the company debated whether to line its waste pits in order to prevent oil from seeping into soil and, possibly, groundwater. "The total cost of eliminating the old pits and lining new pits would be $4,197,968," an internal memo said.

That relative pittance, Texaco decided at the time, was too high a price.

When the company left Ecuador in the early 1990s, it agreed to clean up 37.5 percent of its drilling sites, pursuant to its ownership percentage of the consortium. Petroecuador would clean up the rest (including well sites that Texaco itself had operated). The government agreed, and Texaco complied.

That fact became central to the ensuing legal battle. Chevron, which acquired Texaco in 2001, claimed that it had satisfied its contractual obligations with respect to environmental remediation. But Donziger, who helped initiate the legal battle shortly after Texaco’s departure, was less concerned with legal niceties such as the actual language of contracts than with what he came to see as a moral crusade against globalization and corporate power.

His education at Harvard foreshadowed that attitude. Donziger had been a disciple of Critical Legal Studies (CLS), a controversial strain of legal thought that subordinates rule of law to notions of class struggle.

"Prevalent within Harvard’s faculty, CLS taught that corporations and the politically privileged systematically manipulated legal concepts—the sanctity of contracts, for example, or "due process"—to maintain hierarchical authority and take advantage of ordinary people," Barrett writes.

In contrast to his Harvard Law classmate Barack Obama, Barrett notes, Donziger saw the law as a potential impediment to "progress." In the Chevron trial, Donziger saw a clear dichotomy: a massive oil company had exploited the resources of an impoverished country in an attempt to enrich itself and its shareholders. Indigenous Ecuadorians were the victims, and he would ensure that they received justice.

Donziger frequently described the battle as a David-and-Goliath struggle. He referred to environmental contamination in the Amazon as a "rainforest Chernobyl." He enlisted the support of Sting, Mia Farrow, Danny Glover, Darryl Hannah, and other prominent celebrity activists who, like him, saw a designated villain in Chevron and a picturesque rainforest destroyed by corporate greed.

He even got an assist from his former classmate, then-Sen. Barack Obama. In 2006, Donziger visited Obama and convinced him to sign onto a letter opposing Bush administration efforts to sanction Ecuador for allowing the Chevron trial to move forward.

By that time, Ecuador was ruled by the administration of President Rafael Correa. A committed leftist opposed to American economic influence, Correa quickly became a steadfast Donziger ally. This alliance was important in Ecuador where, Donzinger realized early on, political power would be crucial to winning a verdict in his favor.

"We are going down to have a little chat with the judge," he told documentary filmmakers he had hired to chronicle his efforts in Ecuador. "Chatting" with a judge in the midst of such a high-profile and contentious trial is of course highly irregular and unethical, and Donzinger admitted as much.

"This is something you would never do in the Untied States," he said. "But in Ecuador, this is how the came is played. It’s dirty. We have to—occasionally—use pressure tactics to neutralize their corruption, and today is one of those examples."

The documentary film, which Donziger hoped would provide crucial PR support (and resulting fundraising), premiered at Sundance in 2009. The film received rave reviews, but it would end up being Donziger’s undoing.

At the time, however, Donziger was an environmentalist hero. In 2011, he won a massive $9.5 billion judgment from an Ecuadorian court. The judgment was doubled when Chevron refused to issue a formal apology for contamination in the country.

Far from apologizing, the company had decided to take a stand against what it saw as an attempt to fraudulently extort money from the company. It suspected that Donziger had conspired with ostensibly neutral witnesses, and even the court itself, to obtain the judgment.

Donziger’s documentary, entitled Crude, provided evidence that his machinations went well beyond even what Chevron had suspected.

One version of the film was released on DVD, and another on Netflix. The latter showed plaintiffs attorneys meeting with a court-appointed physician. That scene, which could compromise the physician’s testimony, was removed from the DVD version.

What else, the attorneys wondered, had been clipped from the film?

The company eventually filed a racketeering lawsuit against Donziger, the rest of his legal team, and the plaintiffs they represented, in federal court in Manhattan. Judge Lewis Kaplan presided over that trial, and ordered Crude’s director to turn over its outtakes.

The clips vindicated Chevron. They revealed, among many other details, that Donziger’s legal team had bribed a court-appointed scientific expert to submit a critical report on environmental damage ghostwritten by the plaintiffs’ legal team. That report was used as the basis for the judgment against Chevron.

"I once worked for a lawyer who said something that I have never forgotten," Donizger recalled in another outtake. "‘Facts do not exist. Facts are created.’ Ever since that day, I realized how the law works."

That statement would foreshadow much of what was to come out in discovery phase of the racketeering suit. Donziger and his team had extorted an earlier judge on the case, threatening to initiate sexual harassment complaints against him if he did not put a stop to the court’s monitoring of the contamination of well sites and instead appoint an "independent expert" selected by the plaintiffs (who would later submit the report on contamination used to arrive at the $9.5 billion judgment).

The plaintiffs’ attorneys had even ghostwritten the judgment itself, according to evidence provided by Chevron at trial.

In Barrett’s telling, Donziger’s worst sins were his efforts to actively impede efforts to mitigate environmental damage in the Amazon. A chief impediment to his efforts in Ecuador was the fact that Petroecuador had continued to operate in the Oreinte after Texaco departed, and with comparable disregard for the environment. By the time the trial commenced, it was nearly impossible to say whether much of the pollution there was attributable to the American company or the Ecaudorian one.

Determined to inflict maximum damage on Chevron, Donziger set out to absolve Petroecuador.  In 2007, Pablo Fajardo, the lead Ecuadorian attorney on Donizger’s legal team, began pushing Petroecuador "to suspend all remedial activity in the area run by the Petroecuador-Texaco consortium, because the remediation was depriving the plaintiffs of clear evidence on which to base their claims for damages in the case."

When the Correa administration initiated its own remediation measures—which it estimated would cost less than $100 million, a pittance compared to the judgment plaintiffs were seeking—Donziger frantically pushed Correa to "put an end to this shit once and for all"—"this shit" being the clean-up efforts that would preclude the need for the multi-billion-dollar judgment that had become Donziger’s white whale.

"Donziger’s deal with the Devil was becoming increasingly perverse," Barrett writes.

The Donziger episode culminated this year in a 485-page ruling from Judge Kaplan, who declared the case "extraordinary."

"Justice is not served by inflicting injustice," Kaplan wrote. "The ends do not justify the means. There is no ‘Robin Hood’ defense to illegal and wrongful conduct. And the defendants’ ‘this-is-the-way-it-is-done-in-Ecuador’ excuses—actually a remarkable insult to the people of Ecuador—do not help them. The wrongful actions of Donziger and his Ecuadorian legal team would be offensive to the laws of any nation that aspires to the rule of law, including Ecuador—and they knew it."

Therein lies the lesson of Barrett’s account of the case. Donzgier and his allies have spent decades pursuing what they portray as a pure good vs. evil campaign for justice. Confident in their righteousness, no measure was off limits, no matter how unethical.

From the outset, Donziger was more activist than attorney. To the extent that the law could punish a company that he routinely dubbed "evil," it was a useful tool. Where it failed to bring the a priori villain to justice, it could be circumvented, ignored, or violated. The ultimate irony is that Donziger has not only failed to achieve any recourse for the indigenous Ecuadorians whose lives were upended by oil extraction in the Amazon, but he has actually made it more difficult for similarly aggrieved parties to win such legal battles in the future.

Chevron decided to drag out the trial as long as it had to, and not to cave into what it saw as extortion, lest caving embolden the next extortionist. As a result of the events Barrett chronicles, other companies have seen that fighting back aggressively can be a more effective strategy than settling early and quietly.

Donziger fights on. Barrett himself has been the target of a campaign to discredit reporting that casts Donziger in an unflattering light. That campaign notwithstanding, Law of the Jungle is the most exhaustive, evenhanded account to date of a legal and political battle that will go down in history for its moral complexity, not to say its plain ugliness.

Published under: Chevron , Ecuador , Oil