From New York to the Amazon, lawsuit is a Chevron shakedown

In the modern mainstream media world in which Big Oil is always the offender, the storyline was perfect. Impoverished and dying, native people from Ecuador sued Chevron — which is based in the Bay Area — to force the company to clean up the environmental catastrophe its oil operations had left in the Amazonian jungle. The $113 billion in damages would pay for compensation, health care and clean water.

U.S. environmental activists decried Chevron for committing an “Amazon Chernobyl,” disrupted stockholder meetings and appealed to Congress. A noted filmmaker produced a documentary, “Crude,” raising awareness and winning film festival awards.

It’s a good storyline, but the truth is much simpler. The litigation against Chevron was always just about the money — big money for U.S. trial lawyers, their Ecuadorean underlings and the anti-American regime of Ecuadorean President Rafael Correa.

“I sit back and dream. I cannot believe what we have accomplished,” New York trial lawyer Steven Donziger wrote in a diary entry.  “Important people interested in us. A new paradigm of not only a case, but how to do a case.  Chevron wanting to settle. Billions of dollars on the table. A movie, a possible book.”

Donziger’s reveries appear among the hundreds of thousands of pages Chevron has submitted as evidence in court proceedings around the United States. The company’s legal defense argues that what the plaintiffs portray as pursuit for corporate accountability and justice is nothing more than a litigation shakedown backed by a public relations and political campaign.

Campaign? Chevron calls it a conspiracy, filing a RICO lawsuit on Feb. 1 against Donziger and other major actors in the litigation. Chevron charges that the conspirators sought to extort the company by a plan developed in the United States: “The enterprise’s ultimate aim is to create enough pressure on Chevron in the United States to extort it into paying to stop the campaign against it.”

Chevron is under attack for pollution it never created. Drilling began after the Ecuadorean government opened up its Amazon territory to oil development and settlement in the 1960s. A subsidiary of Texaco — acquired by Chevron only 40 years later in 2001 — worked in a consortium with the government-run oil company, Petroecuador, beginning to produce oil in 1973.

Texaco ended its operating role in Ecuador in 1990 and left the country in 1992 when the consortium contract expired. After fulfilling an agreement with the government to clean up the oil sites, Texaco was released from all legal and environmental claims in 1998.

Deep-pocketed oil companies make for inviting targets. In 1993 and 1994, U.S. trial lawyers filed federal lawsuits in New York, claiming to represent 30,000 Amazonians harmed by the oil operations. Those cases were eventually dismissed as being in the wrong jurisdiction.

So in May 2003, using the names of 48 Ecuadoreans as plaintiffs, Donziger and his team of lawyers and activists filed a lawsuit in the Superior Court of Nueva Loja, Ecuador, Maria Aguinda et al. v. Chevron-Texaco. Their initial claims of $6 billion of damages rose to $27 billion and now to $113 billion. To make their case, the plaintiffs have concocted fraudulent “scientific reports,” applied rough political pressure to the Ecuadorean courts and tirelessly attacked Chevron as a greedy exploiter of Third World people.

Greed does indeed lie at the heart of the litigation — the greed of trial lawyers who have corrupted the legal process in the pursuit of billions of other people’s money.

Carter Wood has blogged about the Chevron-Ecuador litigation on, the blog of the National Association of Manufacturers, his employer. This series, which is based in part on material gathered in Ecuador on a trip funded by Chevron, reflects only Wood’s views, not those of NAM.

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