Is Chevron’s Vendetta Against Steven Donziger Finally Backfiring?
Steven Donziger, the human rights lawyer who spent nearly three decades fighting Chevron on behalf of 30,000 people in the Ecuadorian rainforest, has been sentenced to six months in federal prison for “criminal contempt.” On October 1, in a lower Manhattan federal courtroom, Judge Loretta Preska justified imposing the maximum penalty by asserting that Donziger, now 60, had not shown contrition. She said, “It seems that only the proverbial two-by-four between the eyes will instill in him any respect for the law.”
In May, Preska had found Donziger guilty after a trial without a jury. And now Donziger, along with his family and scores of supporters, had to listen to the federal judge compare him to a mule who needed to be beaten with a piece of wood before complying.
Prior to sentencing, Donziger reminded the court in a polite and at times emotional statement that he had already spent 787 days under house arrest in his New York City apartment, a confinement that had put great pressure on his wife and teenage son. He explained that the court-imposed restrictions meant that his son had a father who was “unable to travel, leave his home except under narrow exceptions with court permission 48 hours in advance, unable to even go out for dinner, unable to have a father capable of doing all the things a father can do and should do with a child, including act with spontaneity.”
But even though Donziger was facing prison, he told the court he would not back down: “I have been attacked and demonized for years by Chevron in retaliation for helping Indigenous peoples in Ecuador try to do something to save their cultures, their lives, and our planet in the face of massive oil pollution. That’s the context for why we are here today.”
In response, Preska read out a prepared 50-minute statement for her harsh sentence. “Mr. Donziger spent the last seven plus years thumbing his nose at the US judicial system,” she said. “It’s now time to pay the piper.”
Donziger will not go to prison immediately. His attorneys will challenge the criminal contempt conviction, and they will also ask a higher court to put off his prison sentence pending that appeal. But Preska will keep him under house arrest, once again calling him a “flight risk.” In the past, she has warned that he “has ties to Ecuador,” insinuating that he would abandon his family and his New York City apartment to go live in the rain forest.
You can’t understand this latest injustice without looking back at Chevron’s long campaign against Donziger, who won a landmark pollution case against the oil giant in Ecuadorian courts in 2013. Chevron was ordered to spend $9.5 billion to clean up a contaminated area the size of Rhode Island, and to pay for the health care of the 30,000 plaintiffs whose communities have seen a rising number of cancer cases. Instead of following the legal order, Chevron launched a case in New York, and in 2014, a federal judge, Lewis Kaplan, found Donziger and some of his Ecuadorian allies civilly liable for racketeering, bribery, and fraud. Then, Kaplan asked the federal prosecutor for the Southern District of New York to put Donziger on trial for “criminal contempt” connected to the original conviction. The federal prosecutor refused, so Kaplan handpicked an attorney from a private firm, Rita Glavin, to prosecute—a nearly unprecedented legal maneuver.
As Chevron’s vendetta continued, international outrage grew. Just before sentencing, the United Nations High Commissioner for Human Rights issued an opinion in Donziger’s favor, ruling that his two years of house arrest was illegal under international law and that he had been denied the right to a fair trial. A panel of five prominent jurists called that confinement “arbitrary” and said that both judges, Kaplan and Preska, had shown “a staggering lack of objectivity and impartiality.” In court, Preska briefly acknowledged the UN findings only to dismiss them.
Once again, the mainstream media is largely ignoring Chevron’s campaign of retaliation against Donziger. The New York Times, Donziger’s hometown newspaper, reported nothing in the two days after the verdict, and has barely mentioned the case for the past seven years.
Back in 1993, Donziger, fresh out of Harvard Law School, joined an ongoing fight for environmental justice. The struggle against Texaco, which was taken over by Chevron in 2001, began in the late 1980s in eastern Ecuador, where the oil company drilled and operated wells from 1972 to 1992. Texaco had disposed of its drilling wastes by methods that in some cases would have been illegal in the United States. (More details are here.) Local people began organizing against the pollution in their rivers and streams and in oil-soaked stretches of their land. The case started in the New York federal courts, but then a judge ordered it sent back to Ecuador—a move that Chevron’s lawyers welcomed at the time. So, in 2003, the legal battle re opened in the eastern oil frontier town of Lago Agrio.
The case wound its way up through three levels of the Ecuadorian courts, and in the end, after Chevron exhausted all appeals, its guilt was confirmed. Meanwhile, though, its counterattack back in New York was underway. Chevron charged that Donziger and his allies had committed bribery and fraud in Ecuador to win their case, and it used the Racketeer Influenced and Corrupt Organizations Act (RICO), which had been designed to prosecute the Mafia. Donziger and the codefendants expected they would face a jury, but at the last minute, Chevron dropped its demand for financial damages. Under RICO law, this meant the defendants lost their right to a jury, and Kaplan alone would decide the case.
Donziger’s supporters objected to Kaplan’s pro-corporate statements and hostility toward the human rights lawyer during the RICO trial. Kaplan is a career corporate lawyer turned judge, with no experience in Ecuador or anywhere else in the Global South. Yet he decided which witnesses to believe and which to disregard—and in 2014 he found Donziger and the others guilty.
Only a corporation like Chevron worth billions could have financed such a prosecution. The oil giant paid for a disgraced former judge named Alberto Guerra and his family to move to the United States. Chevron’s lawyers rehearsed Guerra’s testimony with him 53 times before he went on the witness stand, where Guerra claimed that Donziger and an Ecuadorian lawyer had offered him a $500,000 bribe and that the pair had ghostwritten the final judgment against Chevron. Donziger and his defense team estimate that Chevron has spent $2 billion on legal fees and other costs. (Chevron’s designated spokesman, James Craig, declined to give the corporation’s own figure for how much it has spent on the case. Craig also declined to say if Chevron is still paying Guerra or if he is still living in the United States.)
Chevron’s attacks against Donziger did not stop after it won the racketeering verdict. The current contempt case began when the oil corporation petitioned Kaplan for access to Donziger’s personal computer and cell phone. Donziger declined, arguing that his electronic communications would give Chevron’s lawyers “backdoor access to everything we are planning, thinking, and doing.” He said he would wait until the US Court of Appeals heard his argument, and if it required him to, then he would hand over his electronics. Preska dismissed his defense and convicted him in May—again, without a jury.
It’s vital to recognize Chevron’s role in this legal persecution. Its attorneys show up at every Donziger legal case—even the ones that don’t directly involve the company. At the same time as Donziger was defending himself against the criminal contempt charge, he was also fighting the effort to take away his license to practice law in New York. The state bar association appointed a special officer named John Horan to preside over open hearings, and he found in Donziger’s favor. Horan, a former prosecutor, had harsh words for Chevron: “The extent of [Donziger’s] pursuit by Chevron is so extravagant, and at this point so unnecessary and punitive, [that] while not a factor in my recommendation, [it] is nonetheless background to it.”
Months later, a higher New York state court tossed out Horan’s finding and disbarred Donziger.
Putting Donziger in a federal prison for six months is more than vindictiveness. The $9.5 billion judgment against Chevron in Ecuador still stands, but the oil giant unloaded its assets there. That means the plaintiffs must collect in other countries where the corporation has holdings. Kaplan’s racketeering verdict specifically prohibited the Ecuadorians from forcing Chevron to pay the judgment in the United States. But there are promising possibilities in Canada and elsewhere. Donziger is forced to put those fights on hold while he tries to stay out of prison.
But there are signs that Chevron has gone too far, and that relentlessly pursuing a human rights lawyer is damaging its international reputation. The United Nations High Commissioner for Human Rights is only the latest sign of concern and anger. Sixty-eight Nobel Laureates have shown their solidarity; another 475 lawyers and human rights defenders have signed a letter that calls his prosecution “one of the most important corporate accountability and human rights cases of our time.” Representative Jim McGovern, a Democrat from Massachusetts, said after the prison sentence that “it’s the executives at Chevron,” not Donziger, “who should be behind bars.”
What’s more, a movement to boycott Chevron is in the early stages. Big Oil is under scrutiny because of its role in the climate crisis, and divestment campaigns on college campuses and elsewhere are starting to have an impact. Large institutional investors may also start to pay attention. CalPERS, the giant retirement investment fund for California government employees, is headquartered in Chevron’s home state, and the teachers and municipal employees who contribute to it may ask why it holds $456 million of the oil giant’s stock.
Chevron must have hoped that its long retaliation campaign would force Donziger to abandon the fight for environmental justice—but it appears its aggressive strategy is backfiring.
When Reputation Matters, Leaks Like the Pandora Papers Can Be Very Effective
Some reports on the Pandora Papers have featured colorful and scintillating headlines (“Secret money, swanky real estate and a Monte Carlo mystery”), but there is a drab, depressing familiarity to the nearly 12 million leaked confidential financial records that throw light on the opaque wealth of powerful public figures around the world.
We see the same ominous pattern as in the Panama Papers leak of 2016 and the Paradise Papers leak of 2017: legalized corruption at the highest levels, on an almost unimaginably vast scale. And it appears that the people most empowered to end this nightmare are the most heavily invested in prolonging it for their own benefit.
Each successive leak drives home the same message: Abandon any hope that government will serve the people or that the rule of law will be applied equally to all, the foundational premises of modern government.
Yet there is some cause for optimism, even if it’s not in the form we might expect. New laws aren’t coming to the rescue, because they probably can’t be created quickly enough or made comprehensive enough to effect meaningful change. But there is evidence that technology and public opinion are shifting the balance against elites’ use of the offshore financial services industry.
For nearly 15 years, I’ve researched that world from the inside, earning certification as a wealth manager and then traveling the globe to study practitioners at work. What I learned is that “tax havens” aren’t really for avoiding taxes: They exist to help elites avoid the rule of law that they impose on the rest of us. The offshore financial industry is generating much of the economic and political inequality destabilizing the world.
Many of the individuals exposed in the Pandora Papers are politicians — more than 330 of them, from 90 countries, including 35 current and former heads of state — and their lifestyles are made possible by exploiting the nations they purport to serve. The revelations highlight several politicians who campaigned on vigorous anti-corruption platforms, like Prime Minister Andrej Babis of the Czech Republic, President Uhuru Kenyatta of Kenya and President Volodymyr Zelensky of Ukraine.
In 2016, Mr. Babis scolded the wealthy Czechs whose names appeared in the Panama Papers and, in a 2020 interview, proclaimed that a governing philosophy was to “cut off the heads of the ‘corruption-Hydra.’” Now he’s accused of using a string of offshore shell companies to purchase luxury real estate on the French Riviera, including a chateau worth $22 million. (Mr. Babis has denied any wrongdoing and dismissed the report as politically motivated.)
That so little has changed after the Panama Papers and the Paradise Papers is not lost on the public. By my count, there have been fewer than 10 convictions resulting from previous offshore leaks, and only one involved a politician.
People are angry and they know they are being ripped off, but watching successive iterations of public corruption on flamboyant display, followed by no consequences, is an affront to the spirit of democracy. As the economist Thomas Piketty noted even before the Panama Papers broke, many respond to the appeal of ethnonationalist politicians, who promise to crack down on elite corruption.
Yet we do see forms of accountability being imposed that are effective despite being outside the realm of the law. As my own and other recent research on high-net-worth individuals has shown, reputational costs weigh more heavily on them than the threat of fines or prosecution. The laws are no match for the legal armory that the wealthy individuals in this world can afford. And there is evidence that public opinion is changing quickly, in a way that imposes the reputational costs that matter most.
When Mitt Romney ran for president in 2012, many Americans — even on the left — shrugged at the news that his wealth (estimated at the time at $250 million) increased through offshore investments. But in the wake of the Panama Papers, public opinion has grown significantly more negative toward tax avoidance, which, while often legal, is increasingly regarded as immoral and unpatriotic. This mirrors the rapid change that occurred earlier in the 21st century, in which public neutrality toward corporate tax avoidance turned to public outrage and successful pressure campaigns within a few short years.
The Pandora Papers’s reputational impact may deliver some instant karma to Mr. Babis. The Czech police say they will “act upon” his use of offshore shell corporations, and a much swifter public verdict could arrive this week in parliamentary elections that could dislodge the prime minister from power. “He preaches water and drinks French wine,” the leader of an opposition party said.
Technology also offers more reason for hope. It has made it much easier to impose these costs, by facilitating the dissemination of vast troves of data to journalists and the public. The past five years have revolutionized the possibilities for whistle-blowers to maintain anonymity through the use of tools like PGP encryption, allowing them to deliver huge quantities of data from offshore while protecting themselves from retaliation. Five years on, we still do not know the identity of “John Doe,” who leaked the Panama Papers, nor of the person or people who leaked the Paradise Papers four years ago.
That’s remarkable in an era of digital surveillance and will encourage more whistle-blowing. As I found in talking with wealth managers all over the world, a significant number understand that their work has contributed to dangerous levels of economic and political inequality; they want to do something, and many understand that one of the most effective uses of their insider position would be to pull back the veil of secrecy that makes so much of offshore corruption possible.
Formerly, these potential whistle-blowers would have been deterred by the fate of figures like Hervé Falciani, who in 2009 brought forward evidence of widespread tax fraud by private individuals facilitated by his employer, HSBC in Switzerland. Mr. Falciani has been hounded by investigators and caught up in legal limbo ever since, including being convicted in absentia and given the longest sentence ever handed down by a Swiss court for violation of the country’s draconian bank secrecy laws.
But it’s now possible for insiders to act on their conscience without ruining their lives and careers, as well as those of their families. We already see momentum building in the form of the enormous size of the Pandora Papers, which is even larger than the Panama Papers — formerly the biggest data leak in history — and involves information from 14 offshore sources instead of one.
This suggests that whistle-blowers are not only emboldened now, but also may be cooperating internationally, to do what lawmakers cannot: holding accountable the most wealthy and powerful people in the world in the court of public opinion.
Brooke Harrington (@EBHarrington), a sociology professor at Dartmouth, is the author of “Capital Without Borders: Wealth Managers and the One Percent.”
Five Justices Did This Because They Could
Emergency appeals have become the tool of choice for the conservative movement.
The conservative majority on the Supreme Court was so eager to nullify Roe v. Wade, the 1973 precedent securing the right to abortion, that it didn’t even wait for oral arguments.
Instead, in the middle of the night, five of the high court’s conservatives issued a brief, unsigned order allowing a Texas law that bans abortion at six weeks. The law also gives private citizens the authority to sue anyone who “knowingly … aids or abets” an abortion and rewards them with $10,000 if successful, essentially placing a bounty on anyone wishing to end a pregnancy, and anyone who might help them. Texas is now rewarding residents who snitch to the state on the most intimate details of other people’s lives.
“Last night, the Court silently acquiesced in a State’s enactment of a law that flouts nearly 50 years of federal precedents,” Justice Sonia Sotomayor wrote in her dissent. “The Court should not be so content to ignore its constitutional obligations to protect not only the rights of women, but also the sanctity of its precedents and of the rule of law.”
Also remarkable was that the Supreme Court acted through its “shadow docket,” the decisions the justices make regarding emergency appeals such as death-penalty cases. Under normal procedure, cases take time to work their way through the lower courts, and are received at the Supreme Court with extensive records, briefs, and oral arguments. Ideally, this allows the justices to ensure that their hugely consequential decisions are properly informed and made as carefully as possible, weighing all the relevant legal and constitutional issues. But there are some circumstances in which the Court needs to act quickly to prevent some imminent or irreversible harm. There’s nothing inherently sinister about that. The shadow docket, though, now resembles a venue where the conservative legal movement can get speedy service from its friends on the Court.
Over the past few years, the cases on the shadow docket have risen in significance, with the justices quietly making major changes to American law without the scrutiny or attention that comes with holding oral arguments or writing major opinions. Trump-administration attorneys found the Court’s conservative majority delighted to allow many of their most controversial policies to go forward. Under President Joe Biden, by contrast, the conservative justices have acted rapidly to block administration decisions, or to force Trump-era policies to remain in place.
“The term shadow is meant to evoke the understanding that what the Court is doing is not the way that decision making on an ordinary merits docket would happen,” says Melissa Murray, a law professor at NYU who clerked for Sotomayor while she was a federal judge. “I think it’s clear that it has become a shadowy way to effect substantive decisions in cases where the Court, in the light of day, would be more reluctant to move aggressively.”
The shadow docket has been a tremendously successful venue for the right. Stephen Vladeck, a law professor at the University of Texas at Austin who has closely followed the shadow docket, counts at least 41 requests for “emergency relief” submitted to the Court from the Trump administration, compared with eight under the Obama and Bush administrations combined. And he counts only four occasions during the Trump administration on which the Court denied “the government’s request outright.” That deference has not continued into the Biden administration.
“During the Trump administration, it was on the shadow docket that basically all of Trump’s controversial immigration policies affecting millions of people were allowed to go into effect, including the travel ban,” Vladeck told me. “During the Biden administration … perhaps the biggest shadow-docket ruling so far was the ruling last week that froze and effectively killed the CDC’s revised eviction moratorium.”
Under Trump, the justices allowed policies such as the administration’s travel ban targeted at mostly Muslim nations, its prohibition against trans people serving in the military, and its restrictions on asylum to go into effect. Under Biden, they have barred the administration’s attempt to prevent evictions because of the coronavirus pandemic and accepted a lower-court ruling demanding that the White House reimpose the controversial Trump-era “Remain in Mexico” policy, which forced migrants into “precarious conditions in dangerous Mexican border cities where thousands became victims of kidnappings, rapes and extortion,” according to The Washington Post. The decision compels the Biden administration to renegotiate an agreement with a foreign country reached during a prior administration; deference to the president’s constitutional authority to set foreign policy, which the justices had memorably cited in Trump-era cases, was suddenly absent.
“What is so troubling about this trend is its continuing acceleration, not in volume, but in quality,” Vladeck said. “The Court seems increasingly untroubled by deciding big questions that affect lots of people this way.” Having a conservative-dominated tribunal determine such questions, however, is an ideal arrangement for a party that has not won a majority of the votes in a presidential election since Tobey Maguire was Spider-Man, and that sees the popular majorities that vote against it as composed of illegitimate semi-citizens who have no right to govern.
The shadow docket has begun to look less like a place for emergency cases than one where the Republican-appointed justices can implement their preferred policies without having to go through the tedious formalities of following legal procedure, developing arguments consistent with precedent, or withstanding public scrutiny. And so after initially allowing the Texas law banning abortion before most women know they are actually pregnant to go into effect, five conservative justices told Republican-controlled states they could disregard Roe while insisting that wasn’t what they were doing at all.
Instead, the justices in the majority argued in their unsigned opinion that because the case presented “complex and novel antecedent procedural questions,” their hands were tied. This is ludicrously dishonest. If Texas passed a law granting $10,000 bounties to private citizens if they sued anyone who held or enabled an indoor church service during the pandemic, the Court’s conservative wing would not feign confusion about whether the constitutional right to freedom of worship had been violated because of the supposed novelty of the scheme.
This ruling is less a description of a complex legal challenge than a road map. As Mary Ziegler writes, the Texas law was strategically designed to evade legal restrictions, and the majority read the script that was handed to it. Republican-run legislatures now know that they can pass such laws and the Supreme Court will pretend to be unable to block them.
Among the Republican appointees, only Chief Justice John Roberts had enough respect for the right’s purported doctrines of judicial minimalism to vote to wait for the case to reach the high court through normal procedural channels. Ironically, though, the unsigned majority decision reflects a careful study of Roberts’s years of successfully managing the Court’s reputation. The decision does not say “Roe is hereby overruled,” but it tells states exactly how they can effectively ban abortion if they want to. In that, it echoes Roberts’s own tendency to hide his preferred outcomes behind legal technicalities, the better to mime fidelity to constitutional principle.
“Although the Court denies the applicants’ request for emergency relief today, the Court’s order is emphatic in making clear that it cannot be understood as sustaining the constitutionality of the law at issue,” Roberts wrote in his dissent. But because five justices allowed the law to go into effect—and by implication, laws in any other state that wishes to emulate Texas—Roe has been neutralized. The only question is whether that decision is temporary, and whether the Court will eventually enact any restraints on the particular legal scheme Texas has pioneered.
“I don’t think those in the reproductive-rights community who are sounding the alarm that [the Court] really effectively overruled Roe in Texas are being hyperbolic,” Murray told me yesterday, prior to the Court’s written opinion. “The fact that the Supreme Court of the United States allows a law that patently contradicts its own statements about the right to an abortion to go into effect is essentially the Court signaling that it does not care about this right and it does not think this right should exist.”
Neutralizing Roe through normal channels would have taken time, and the Supreme Court’s conservatives did not want to wait. Thanks to the shadow docket, they didn’t have to. Five conservative justices invalidated the constitutional right to an abortion simply because they could, because they felt like it, and because they don’t believe anyone can stop them.
Adam Serwer is a staff writer at The Atlantic, where he covers politics.