Ecuador Map SC

They called it the “rainforest Chernobyl.” When Texaco left Ecuador, in 1992, it allegedly left behind open pits overflowing with black sludge and rivers laced with chemicals. The damage was so bad that a number of indigenous tribes almost died out completely. Those that remained, according to a group of Ecuadoreans who waged a nearly hopeless battle against Texaco for reparations, were plagued by miscarriages, birth defects, and poisoned fish and livestock.


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The lawsuit lasted 18 long years, and one judge in New York died before he could make a ruling. It even outlasted Texaco, which Chevron purchased in 2001. It wound its way through a dozen American federal courts to a lonely concrete courtroom in the Ecuadorean jungle, where Judge Nicolás Zambrano at last rewarded the Ecuadorean plaintiffs for their epic struggle—to the tune of $18 billion. It was the largest sum ever awarded in an environmental lawsuit.

But all is not what it seems.

The integrity of the plaintiff team, led by Steven Donziger, a tenacious American environmental crusader, has come under scrutiny. So has the notoriously corrupt Ecuadorean court system. A 2009 documentary, Crude, contained scenes where Donziger appeared to suggest bribing various people associated with the case in order to get a whopper settlement. He also implied that the scientific evidence used to condemn Texaco was “just a bunch of smoke and mirrors and bull[….].” Indeed, just a few days ago, an affidavit posted on Chevron’s website describes in great detail how one of the Ecuadorean judges essentially gave Donziger and his team the power to ghostwrite the court’s judgment in return for $500,000.

Meanwhile, Donziger recruited a group of hedge funds to provide the capital his team needed to pursue the case, in exchange for a cut of the final award if it succeeded. They call this “litigation finance.” “These arrangements are unregulated and controversial,” Patrick Radden Keefe wrote in the New Yorker. “But for Donziger they presented a crucial opportunity to keep the litigation alive. He offered investors a high-risk, high-reward proposition. The judgment could run to billions of dollars, he said, with attorneys’ fees making up roughly a third of that figure. In confidence, he noted that his personal fee alone could amount to two hundred million dollars.”


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Read More at The American Interest . By Walter Russell Mead.


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