Canada warned against getting entangled in the Chevron Shakedown

Back in September we reviewed the unexpected decision by Canada’s highest court to entertain the long discredited case of Steven Donziger and his corrupt Ecuadorean allies against energy giant Chevron. Given the number of times this issue has been shot down in both American and European battles and the widespread findings of fraud and judicial misconduct on the part of the Ecuador court, it’s something of a mystery as to why Canada would want to become enmeshed in this sink hole. Weighing in on the subject this past week was the founder of Canada’s National Post and prolific author / analyst, Conrad Black. He provides a lengthy history of the entire shakedown before digging into the specifics of Canada stepping on this stage. The author is something of a skeptic of American jurisprudence and a critic of the avarice of the international legal cartel, but even Black sees danger in his home country getting their hands dirty in this mess. (National Post)

In September of this year, the Supreme Court of Canada authorized an Ontario court to hear a request from Donziger et al. to enforce in Canada the Ecuadorian ruling. The case should wash all the dirty linen from the Kaplan judgment, and it is inconceivable that an Ontario court would give greater weight to the confessed corruption of Ecuador over an American decision which, though the U.S. is a jurisdiction that Canada should always regard with skepticism, has in this case adduced a great deal of hard evidence almost completely destructive of the original complaint. Chevron’s Canadian assets would cover the full quantum of the final Ecuadorian finding of U.S.$9.5 billion, but they are not held directly by the defendant company in the original action and it isn’t clear what recourse Donziger and his clients would have even if they were victorious in Ontario, as our Supreme Court did not comment on the original case, only on the Ecuadorians’ right to sue here.

The Toronto law firms involved are all good firms, and all of them have acted for me at different times over the years, but the acceptance by the Canadian courts of this dubious action where Canada has no possible jurisdiction illustrates above all the self-perpetuating avarice of the international legal cartel. It is not otherwise clear, apart from the call of lucre and imitation, why Donziger is being further enriched and Chevron slightly inconvenienced by extending this vulgar and venomous Hollywood farce into this country. The worthy Alan Lenczner, representing Donziger’s clients, said a few months ago that the evidence of bribery in Ecuador is “very suspect.” I don’t think so, and any honest Canadian lawyers and judges should tread warily in this foreign jungle, no matter what sugar plums of money and publicity are dancing in their heads.

Conrad brings up a couple of good points and one nagging question which should be troubling to most observers. First of all, you have to wonder how much of the fascination with this case revolves around the huge legal costs involved. When there’s a lawsuit brought against an entity the size of Chevron the promise of vast sums of cash can quickly cloud the vision of plenty of people. Which side wins doesn’t really matter so much when you’re talking about the legal costs… the lawyers win either way. God only knows how much money Chevron has spent on their defense and ensuing pursuit of Donziger and his allies, and the legal teams trying to pick their pockets have clearly done well for themselves also. But that’s really the point here, isn’t it? Donziger likely assumed from the beginning that Chevron would prefer to pay off what were essentially extortion demands rather than be tied up in court for years on end. He’s probably rather shocked to see that Chevron had finally grown tired of these tactics and decided to fight them tooth and claw across the globe rather than simply handing over the loot.

The second question raised in the editorial, however, is of even more interest. Black notes that a federal judge in New York has found “criminal wrongdoing” on the part of Donziger and his allies which could, upon conviction, “bring Donziger a longer prison sentence than Bernard Madoff’s challenging 150 years.” And yet New York chief prosecutor Preet Bharara has shown no interest thus far in pursuing a case against the would be pickpockets. Why? Conrad isn’t the first to ask the question. Fortunate Magazine pondered the same thing more than a year ago.

If Judge Kaplan’s findings are sound, Donziger’s conduct vis-à-vis Chevron has constituted a marathon obstruction spree the likes of which the American court system has seldom known. Worse, if Kaplan’s ruling is right, Donziger’s crimes are ongoing. He and his colleagues are still trying to enforce the judgment that Kaplan has found to be crooked, ghostwritten, and the product of bribery, and a coterie of financiers around the world–having been promised stakes in that judgment–are continuing to help him. If Kaplan’s right, this is a crime in progress.

Yet, so far, we’ve heard nothing from Preet Bharara. Why?


The truth is, a prosecutor who brings a case against Donziger runs a realistic risk of losing before a jury. Donziger is at his most skillful when politicizing a cause, throwing mud at his accusers, setting up smokescreens, and arguing that anyone who questions his methods has joined forces with the oil giant to crush the indigent and the indigenous. So long as the merits of the underlying environmental case against Texaco remain an open question—and, unfortunately, they do remain so—jury nullification is a realistic possibility. Donziger would see to it that the prosecutor would be publicly vilified as a modern-day Inspector Javert.

Every analysis seems to indicate that there’s a criminal case to be pursued against Donziger, but Bharara likely doesn’t want to stick his neck out on the line for fear of facing a jury in a liberal town who would be swayed by the “save the Earth” ranting of the defendant. That’s a sad, but likely realistic analysis. Still, it plays into the larger question of why anyone in Canada would want to get involved in this mess. As always, the answer will probably come down to cold, hard cash.

If you’re unfamiliar with this years long saga, you can catch up on our coverage of the Chevron Shakedown here.