This Attorney Took On Chevron. Then Chevron-Linked Judges and Private Prosecutors Had Him Locked Up.

After spending more than 700 days under house arrest, a human rights and environmental lawyer was found guilty last month of criminal contempt in a legal saga that has demonstrated the deep-rooted conflicts of interest layered throughout the judicial system when it comes to climate justice. In Steven Donziger’s conviction, the initial judge who referred him to trial, the second judge who was asked to lead the trial, and the private prosecutors who tried him all had deep ties to Chevron, the company Donziger had won a landmark multibillion-dollar ruling against.

The story began in 2011 when Donziger brought litigation against Texaco (now Chevron) in Ecuador for the harm it caused the Indigenous people in the Ecuadorian Amazon, where the fossil fuel company decided to deliberately discharge 16 billion gallons of toxic waste from its oil sites into rivers, groundwater, and farmland. A refusal from Chevron to adhere to environmental regulations—which earned the company an extra $5 billion over 20 years—led to more than 30,000 Ecuadorians being directly harmed by the oil giant’s actions, the judges in that case found. The case Donziger led made it all the way to the Ecuador Supreme Court, and successfully secured $9.5 billion in environmental damages for the Amazonian communities in a historic climate justice decision.

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In a letter sent to the Administrative Office of the U.S. Courts at the end of last month, Sens. Ed Markey and Sheldon Whitehouse brought into question specifically the use of private prosecutors in the contempt case against Donziger. The three prosecutors that Kaplan appointed, Brian Maloney, Sareen Armani, and Rita Glavin (who is also Andrew Cuomo’s personal lawyer), were all at the time with the law firm Seward & Kissel. That firm had represented Chevron as recently as 2018. “These prosecutions,” the senators wrote, “are highly unusual and can raise concerning questions of fundamental fairness in our criminal justice system.”

Indeed, the apparent conflict of interest the private prosecution had is directly at odds with Supreme Court precedent. In the 1987 decision of Young v. United States ex rel. Vuitton et Fils, the Supreme Court ruled that, when it comes to private prosecutors pursuing criminal contempt cases, they “certainly should be as disinterested as a public prosecutor who undertakes such a prosecution.”

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“Public confidence in the disinterested conduct” of the private prosecutor, the court warned, is essential to maintaining the integrity of the judicial system. That means that even the appearance of interest on the part of the private prosecutor can be considered a violation of Vuitton.

“Appearances are really functionally important for the rule of law, and for our judiciary,” said Guha Krishnamurthi, an associate professor of law at the University of Oklahoma. Krishnamurthi argues that one of the “biggest protections” of the criminal justice system is a disinterested prosecutor who can determine whether or not pursuing a case is to the benefit of the criminal justice system. The fact that a public prosecutor is accountable to the government and to the public, he says, reinforces this protection in a way that private prosecutors do not.

“I think it’s such a clear abuse that it violates the defendant’s constitutional right to due process. You can’t have someone who’s got a conflict of interest, who has personal reasons for wanting to see a person they’re prosecuting convicted,” said Louis Raveson, a professor of law at Rutgers Law School and the founder of the university’s Environmental Law Clinic. “That’s not an appropriate procedure, and, in my view, it’s not a constitutional procedure.”

“This is a perversion of justice, the whole idea that you can have a lawyer who previously worked for Chevron then prosecuting Donziger in the criminal case,” said Martin Garbus, Donziger’s attorney and a prominent veteran of human rights litigation. “It’s clear that it violates the law. … If you look at the body of law that deals with disinterest, people are disqualified for something far, far less than the involvement here.”

Raveson acknowledged that in certain instances, like police brutality cases or other times when the government is being asked to prosecute itself, private prosecutors can be truly beneficial. A private prosecutor there would likely be necessary in order to ensure disinterest and justice, as the public prosecutor works for the government. Often, though, they’re used in cases like Donziger’s, after a disinterested public prosecutor declines to pursue the charge and the judge decides to move forward anyway. “That’s all the more reason that judges need to err on the side of no possibility of a conflict,” Raveson said. Speaking of the Donziger case, he added, “It appears that a conflict is almost inevitable … and clearly that’s not by accident.”

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When it comes to the decisions that could prevent one of the largest climate justice judgments of the past decade from taking effect, such appearances of conflict of interest are incredibly significant—and could be detrimental to future climate justice litigation.

It’s scary going after a large corporation [and] it’s scary going after governments because they have so much power and so much influence that they can do a lot of damage to someone’s life,” Raveson said. “If the lawyers who bring [environmental justice cases like Donziger’s] are subject to biased determinations as to whether or not they should be punished … it’s going to have a deterrent effect on lawyers to bring these kinds of cases.”

Such a deterrence could have massive consequences for the climate, especially at a time when, as this week’s new report from the Intergovernmental Panel on Climate Change showed, the world is barreling further toward climate catastrophe, a crisis that is driven in no small part by fossil fuel companies like Chevron. “It’s up to the judiciary to really ensure that that kind of chilling and deterrence … doesn’t happen,” Krishnamurthi added. “And the way you do that is by having more than just the formality of the rules, [but] having a true fidelity to conflicts of interest and disqualifying where necessary.”

Bucket Shops: unethical brokerages

What Is a Bucket Shop?

A bucket shop is a brokerage firm that engages in unethical business practices. Historically, the term was used to refer to firms that allowed their customers to gamble on stock prices, often using dangerously high levels of leverage.

More recently, the term is associated with firms that practice bucketing, which involves profiting from a client’s trades without their knowledge.

KEY TAKEAWAYS

  • A bucket shop is a brokerage firm that engages in unethical business practices.
  • Historically, they would facilitate gambling on stock prices, often encouraging their clients to use dangerous levels of leverage.
  • Today, bucket shops are associated with so-called bucketing transactions, which involves illegally profiting from clients’ trades.

 

Understanding Bucket Shops

Bucket shops are brokerage firms that have clear and unmitigated conflicts of interest with their customers. Traditionally, they functioned as gambling houses in which customers were encouraged to take on substantial leverage in order to speculate on future stock prices. When customers occasionally profited on their trades, the gains would be advertised by the bucket shop to recruit new customers. In most instances, however, the customers would face large or even total losses. As with all gambling activities, the bucket shops benefited from their customer’s losses.

Bucket shops became common in the late 1800s, when the spread of new communications technologies, such as the telegraph, made it possible to speculate on stock prices in a timely manner. Bucket shops emerged to let clients gamble on stock prices in the same way that they might otherwise bet on racehorses,

One possible explanation for the origins of the name “bucket shop” has to do with another technique used by these firms to profit off their clients. After executing their trades throughout the day, bucket shops would sometimes throw the trade tickets into a bucket. After mixing the tickets together, the firm would then allocate winning and losing trades to specific clients based on their assessment of which clients would likely generate the most profit for the firm. This practice is of course prohibited by today’s legal and regulatory standards.

Today, the term is used more precisely to refer to brokerage firms that unethically profit from their clients’ transactions. Specifically, it refers to firms that engage in bucketing, which is the practice of misleading clients about the actual price at which a requested transaction was executed and using this deception to profit from their trades.

 

Real World Example of a Bucket Shop

To illustrate bucketing, consider a case where a client asks to purchase 1,000 shares of stock at a price of $20 per share. An unscrupulous broker might tell the client that the shares were purchased for $20, when in fact they were purchased for $19.

The difference of $1 per share would be pocketed by the broker as profit, without disclosing this fact to the client. Effectively, the broker would have stolen $1,000 worth of profit from the client. This type of transaction is known as bucketing, and firms which engage in it are described as bucket shops.

Bolton Slams Trump, Suggests Foreign Policy Guided By Personal Interest | Andrea Mitchell | MSNBC

Former national security adviser John Bolton derided President Donald Trump’s daughter and son-in-law during a private speech last week and suggested his former boss’ approach to U.S. policy on Turkey is motivated by personal or financial interests, several people who were present for the remarks told NBC News. Aired on 11/12/19.

Judge Signals Skepticism About Trump’s Bid to Block Subpoena for Financial Records

Judge Mehta’s questioning left little doubt that he was deeply skeptical about the arguments from Mr. Trump’s legal team, led by William S. Consovoy.

Mr. Consovoy essentially argued that the Constitution does not give Congress the power to investigate potential presidential corruption because determining whether someone broke the law is a function reserved for the executive branch. But Judge Mehta pointed out that under that logic, many famous historical congressional oversight investigations were illegitimate.

Is it your view that the Whitewater and Watergate investigations were beyond the authority of Congress?” the judge asked, referring to congressional inquiries of the Nixon and Clinton presidencies. “They were looking at violations of criminal law.”

Judge Mehta, a 2014 appointee of President Barack Obama, also said he saw no need for further briefings or arguments because the dispute turned on a question of law, and the Constitution does not permit Mr. Trump’s legal team to compel the House to turn over internal documents as evidence. He said he would let lawyers submit any additional materials they wanted through Friday, then he would make his decision.

Any ruling by Judge Mehta is likely to be only the beginning of the case. Both sides acknowledged that an appeal was virtually certain, and Mr. Consovoy asked the judge, if he does rule against Mr. Trump, to stay his ruling pending appeal so that the subpoena deadline for Mazars USA, the accounting firm, is not set off before the litigation fully plays out.

But Douglas Letter, the general counsel for the House, asked the judge not to stay any such ruling — or, if he does, to make it conditional on the Trump team expeditiously filing an appeal. The larger threat, he said, was that the Trump team could use the courts to run out the clock on this Congress, thwarting its ability to perform oversight.

“Any delay undermines the House’s ability to do what the Constitution allows it to do,” Mr. Letter said.

The judge’s comments and questioning suggest he is likely to agree with the House that the information it is seeking is within its legitimate oversight roles, rejecting the Trump team’s argument that the subpoena is an illegitimate effort to obtain political dirt without any tie to Congress’s function of deciding whether to enact new laws.

Hypocrisy in Interests, not Wealth (Paul Krugman)

There are only two sure things in life: death, and Donald Trump refusing to release his taxes. At this point hiding his taxes isn’t even supposed to be an option: the law says that the House of Representatives has the right to see his returns, and IRS officials are breaking that law if they fail to comply. But this isn’t the America we used to know. It will be a big surprise if the Trump administration complies with the law, and most Republicans will surely support Trump in his defiance.
What will we see, if those returns ever become public?

  • Maybe that Trump isn’t as rich as he claims;
  • probably evidence of corrupt practices, before and after taking office; and
  • we will definitely see clear, unconstitutional conflicts of interest in his dual role as president and business tycoon.

.. Hypocrisy is pretending to care about the public interest when you’re actually serving your own interests. Opposing things that would be to your personal benefit, and supporting things that would make you a bit poorer, isn’t hypocritical at all — if anything, it deserves a little extra respect, because you’re making at least some sacrifice in support of your beliefs.
Democrats of all people should realize that being rich — which, by the way, none of the candidates are, as the truly rich assess such things — doesn’t prevent a politician from helping ordinary working families. Ever heard of a guy named Franklin Delano Roosevelt?
I have to admit that Sanders’s reluctance to release those returns, and his vague, almost Trumpian promises to release them “soon” were starting to worry me. Was there something actually bad in them? But right now it seems that he was just being foolish.
Trump, by contrast, almost surely has some very strong reasons he doesn’t want us to see his taxes — reasons strong enough to push him into defying the law. And that’s exactly why the public interest demands that those returns get released.

Former Trump Adviser Pushed Saudi Nuclear-Plant Plan, Report Says

Mike Flynn and others within the White House ignored repeated legal and ethical warnings, according to House report

Former national-security adviser Mike Flynn and others within the White House ignored repeated legal and ethical warnings as they pushed early in President Trump’s tenure a plan to build dozens of nuclear-power reactors in Saudi Arabia, according to a report released Tuesday by the House Committee on Oversight and Government Reform.

The report describes how Mr. Flynn and Derek Harvey, whom Mr. Flynn brought to the National Security Council staff to oversee Middle East affairs, worked closely on the plan with a group of retired U.S. generals and admirals who had formed a private company to promote it.

Despite the warnings from career White House staff—and an order by the NSC’s top lawyer to stand down—the White House officials and their private-sector allies worked to place the idea on Mr. Trump’s agenda during a phone call with Saudi Arabia’s King Salman, and to be discussed during the U.S. president’s May 2017 trip to Riyadh, his first overseas trip as president, the report says.

The Wall Street Journal first reported many of the details of the Saudi plan and Mr. Flynn’s efforts to advance it inside the White House in a series of articles in 2017.

The plan for U.S. companies to build nuclear power plants in Saudi Arabia, part of an ambitious “Middle East Marshall Plan,” was billed by advocates as a way to revive the moribund U.S. nuclear industry, create jobs and reassert American influence in the region.

But one unnamed senior official quoted in the report derided the idea as “a scheme for these generals to make some money.

.. Another key player in the Saudi nuclear effort was Tom Barrack, a Trump ally who chaired his Inaugural Committee. according to the committee’s report.

“Tom Barrack has been thoroughly briefed on this strategy and wants to run it for you. He’s perfect for the job,” Robert “Bud” McFarlane, a one-time adviser to President Reagan who was an adviser to IP3 International, a private firm pitching the nuclear plan, wrote to Mr. Flynn on Jan. 28, 2017.

.. Mr. Flynn’s involvement in the project was controversial because he had worked as a paid adviser to an IP3 subsidiary, Iron Bridge Group Inc., from June to December 2016, while a senior adviser to Mr. Trump’s presidential campaign.

.. On Jan. 30, 2017, the National Security Council’s top lawyer, John Eisenberg, instructed the NSC staff “to cease all work on the plan” because of potential conflicts of interest and other legal concerns, the report says.

Despite that order, and Mr. Flynn’s firing, “officials inside the White House continued to move forward on the IP3 nuclear plan,” the report says. It says that more than five individuals recall Mr. Harvey saying during a meeting on March 2, 2017, that “I speak with Michael Flynn every night.” That was more than two weeks after Mr. Flynn was fired.