“Chevron Ecuador Burford Capital Accuses Steven Donziger Of Fraud,” is a blockbuster story. The latest news in the lawsuit pitting plaintiff’s lead by New York Lawyer Steven Donziger (who claims to represent Ecuador’s indigenous people) against American oil company Chevron.
Burford Capital is one of the investors in the lawsuit that Ecuador and American lawyers led by Donziger have filed against Chevron. But it turns out that Burford discovered that they too had been lied to by Donziger, and in an effort to get a $15 million investment from the organization and to the work behind the lawsuit. What did that money, $5 million of which was paid as a first tranche, go to? Paying the lawyers and a battery of PR people and interns, and, it is said, as bribe money to get certain Ecuadorians involved in the case.
The basic story is that Chevron never produced oil in Ecuador, Texaco did but Chevron bought Texaco in 2001; Texaco’s subsidiary, a firm called “TexPet,” (representing Texaco) stopped oil production in Ecuador in 1992, turning over oil production to the state-run company Petroecuador. Chevron, through TexPet, invested $40 million in the environmental clean-up at the time; by contrast, Petroecuador, which owned two-thirds of TexPet (hence the name “TexPet”), reportedly lacked enough money to properly maintain the oil production facilities. The result has been a large number of oil spill incidents since Texaco / Chevron left the country.
Seeing a chance to make billions Steven Donziger became involved in an already active lawsuit that wasn’t going anywhere because of the complicated relationships muddling the case – a realistic look at the situation would really find Ecuador suing itself. But Steve focused on the fact that while the Ecuador government was compromised in bringing a lawsuit, the people who lived on the land that was damaged by Petroeucador were not. That, he felt, was his key to make billions:
Donziger has been accused of forging signatures to fake the involvement of 48 of the 30,000 Ecuadorians he says were impacted by Chevron, but really have been harmed by Petroecuador. For example, Maria Aguinda, a woman who’s name is on the official lawsuit “Aquinda v. Chevron” told the makers of the movie Crude that she didn’t know she was suing Chevron. In other words, her name, and signature, and words were being used without her knowledge.
This video by Chevron explains the fraud, and it’s explosive:
Burford Capital recently discovered all of this, but only after playing a heaving hand in the lawsuit. For example, Burford Capital had told Donziger and company that they were not to settle for less than $900 million and because they were concerned about ‘an “unnaturally low” settlement.’
But after learning of Donziger’s activities, Burford Capital wrote this letter on September 29, 2011:
Re: Maria Aguinda y Otros v. Chevron Corporation
We are writing in connection with the funding agreement dated as of October 31, 2010
(the “Funding Agreement”) between, among others, Treca Financial Solutions (“Treca” or the “Funder”), the plaintiffs in the proceeding entitled Maria Aguinda y Otros v. Chevron Corporation in the Provincial Court of Justice of Sucumbios, Ecuador [No. 2003-00020] (collectively, the “Claimants”) and El Frente de Defensa de la Amazonia (the “FDA”), Capitalized terms used herein but not otherwise defined have the meanings ascribed thereto in the Funding Agreement.
As you know, Burford Group is the investment adviser to Treca and conducted the due diligence and negotiations that resulted in Treca’s entry into the Funding Agreement.
It is clear from the evidence that has come to light subsequent to our discussions with you and Treca’s entry into the Funding Agreement that Claimants, the FDA, their affiliates and their attorneys (collectively, “you”) have engaged in conduct and activity that gives rise to numerous material breaches of the Funding Agreement. In addition to breaching the Funding Agreement — through misrepresentations and other material failures — the conduct discovered amounts to fraud.
Indeed, now that we are in possession of more facts — facts only revealed through discovery in the proceeding before Judge Kaplan — we believe that you and particularly your US representatives engaged in a mult-month scheme to deceive and defraud in order to secure desperately needed funding from Treca.
The letter was directed to the following:
Steven R. Donziger
c/o 245 West 104th Street, # New York, New York 10025
Luis Francisco Yanza Angamraca
c/o Frente de Defensa de la Amazonia Calle Progreso y Eloy Alfaro, esquina Nueva Loja, Sucumbios
This means that, even as Donziger and company file lawsuits against Chevron in Canada and other parts of the World, their investment money has dried up. Moreover, it means that the very people who invested in them are now turning their backs to them.