Chevron advocate and friend-of-Letters-Blogatory Doug Cassel is back with his take on the judgment ghostwriting issue. I’ll respond to some of his points in the comments.

In a January 7 post Ted Folkman makes an ambitious—albeit “tentative”—effort to assess the voluminous evidence of fraud committed by Steven Donziger and certain other plaintiffs’ attorneys in the Ecuadorian proceedings in the Lago Agrio case. Ted focuses on (1) plaintiffs’ ghostwriting of the report of the court’s supposedly independent and impartial expert on damages (Cabrera); (2) plaintiffs’ alleged bribing of the trial judge (Zambrano) and ghostwriting of the judgment; and (3) corruption of the Ecuadorian judiciary “as a whole.”

Ted finds “little or no question” about Donziger’s “dealings with Cabrera.” (The evidence shows that Donziger and certain of his colleagues bribed Cabrera, ghostwrote his report, and attempted to conceal their communications with him.) However, Ted concludes cautiously that “on balance, and given the burden of proof …, the better view is that Chevron hasn’t really proved” that the judgment, too, was ghostwritten. Finally, Ted argues that only if the Ecuadorian judicial system is “rotten through and through” can Chevron make its “strongest” case against enforcing the judgment.

My own review of the evidence and pleadings in Chevron’s RICO case against Donziger (and in Chevron’s related arbitration case against Ecuador) reaches somewhat different conclusions. Like Ted’s, mine are also necessarily tentative. Neither of us was present in court at the RICO trial. In contrast, the experienced federal judge who presided over the trial, Judge Lewis Kaplan, had an opportunity to observe the demeanor of the witnesses and thereby to assess their credibility. In addition, with the assistance of his law clerk, Judge Kaplan will have had far more time than Ted or I to pore over the mass of testimony and documents before he reaches his judgment. (Since final post-trial briefs are not currently due until January 21, we will probably not see his ruling before February, if then.)

Before turning to Ted’s main focus—whether the judgment was ghostwritten—I comment briefly on his other two issues.

The Cabrera Report

I agree that there is “little or no question” (indeed, no question at all) that plaintiffs bribed Cabrera, the Ecuadorian court’s damages expert, and ghostwrote his report. But I would add that this discredits not only Cabrera’s report, but also the ensuing judgment. Even though the judgment purports not to rely on Cabrera, the judgment’s damage assessment relies on data and conclusions whose only record source is the Cabrera report. The judgment is thus unworthy of enforcement by any honest court—whether or not it was ghostwritten.

Ecuador’s Judiciary

I also agree that Chevron’s case against enforcing the judgment would be strongest if Ecuador’s judiciary were “rotten through and through.” In fact, the reality is a bit more precise. As documented by numerous independent evaluations, the systemic corruption is two-fold. First is extensive financial corruption (as illustrated by the sordid careers of Judges Guerra and Zambrano, and their roles in Lago Agrio, discussed below).

Second, the Ecuadorian judiciary—at all levels—is politically compromised at least in cases where President Correa takes a special interest. That is only a small minority of cases. However, it most definitely includes the Lago Agrio judgment—which Correa publicly calls the most important in the nation’s history. As I detailed in prior posts, Correa has stacked both the National Court and the Constitutional Court with political cronies. It was no surprise, then, that the National Court recently upheld all but the most transparently indefensible element of the Lago Agrio judgment (its conditional award of $9 billion in punitive damages, contrary to civil law and previously unheard of throughout Latin America). The National Court declined even to consider the evidence of plaintiffs’ fraud (not even in the Cabrera affair). One may expect that the Constitutional Court, if asked, will likewise decline to dismember Correa’s favorite judgment. For an Ecuadorian judge to cross the boss in this case could be a career-ending move (or worse). It is thus purely theoretical to observe, as Ted does, that if the “only wrongdoing” in Lago Agrio were the Cabrera affair, then Ecuadorian courts “could correct whatever error resulted.” In reality, they cannot and will not.

Ghostwriting the Judgment

Former Ecuadorian judge Alberto Guerra testifies that the plaintiffs ghostwrote the judgment, which Guerra then edited. Former judge Nicolas Zambrano claims instead that he alone wrote the judgment. Absent corroboration, neither is reliable: Guerra is admittedly corrupt, while Zambrano was removed from the bench for apparent corruption. On balance, Ted favors Zambrano’s version over Guerra’s. Ted also views emails, written by plaintiffs’ lawyer Pablo Fajardo shortly before the judgment, as “pretty good evidence that [plaintiffs] were in the dark about what the judgment would say …”

I respectfully disagree. Guerra’s version is convincingly corroborated—by forensic and documentary evidence and by Zambrano’s own testimony. In contrast, Zambrano’s version is contradicted by the forensic evidence. Finally, in order to assess Fajardo’s emails, one must recall that their recipients included counsel who were likely being kept in the dark about the ghostwriting.

Guerra

There is no longer any reasonable doubt that Guerra was in fact Zambran’’s ghostwriter during the years in question. Digital forensic expert Spencer Lynch found that Guerra’s computer contains over 100 draft Zambrano rulings—including nine in the Chevron case—for the period from July 2009 to January 2012. (The Lago Agrio judgment was issued in February 2011.) TAME airline shipping records show repeated deliveries during the same period between the two men, including numerous receipts personally signed by Zambrano.

Ted has previously questioned the authenticity of the airline records, and his recent post cites a report, issued by an expert for the Republic of Ecuador, asserting that some documents on Guerra’s computer were supposedly created after Zambrano issued the orders in question. Chevron’s expert—Lynch—explains persuasively why Ecuador’s expert was wrong. But no matter: there is no longer any dispute that Guerra was Zambrano’s ghostwriter. In the RICO trial Zambrano was asked whether Guerra “was helping you with drafts in the cases you were assigned to decide in the period from 2009 through 2012, correct, sir?” Zambrano’s answer: “Correct.”

In other words, Guerra’s testimony that he was Zambrano’s ghostwriter is corroborated, not only by real evidence (his computer), forensic evidence (Lynch), and documentary evidence (airline records), but also by Zambrano’s own admissions. (Zambrano still claims that the Lago Agrio case was an exception to the ghostwriting.)

There is also documentary corroboration of Guerra’s testimony that plaintiffs bribed him with multiple payments of $1,000, usually by handing him cash, but on two occasions by making deposits directly into his bank account. His statement attaches purported copies of two Ecuadorian bank deposit slips showing cash deposits of $1,000 into his account. Both bear the national identity number of an administrator in plaintiffs’ office. One also clearly shows her signature (the signature on the other is less legible). Questioning their authenticity, Ted has argued that Chevron should have had the bank authenticate them. Yet, as I have previously noted, any Ecuadorian bank imprudent enough to testify for Chevron in this case, and thereby to incur Correa’s wrath, would risk losing its license. In contrast, the bank could provide evidence for plaintiffs (if there were any) without risk. Yet Donziger produced no evidence at trial—not from the bank, nor even from plaintiffs’ former office administrator—to challenge the deposit slips. A fair conclusion is that they further corroborate Guerra’s testimony.

Plaintiffs’ internal emails and bank records add circumstantial corroboration. For example, on October 27, 2009, Fajardo emailed Donziger, reporting that “[t]he puppeteer won’t move his puppet unless the audience pays him something.” Two days later, plaintiffs withdrew $1,000 in cash from their bank account, and $1,000 in cash was then deposited in Guerra’s account.

In fact, the numerous cash withdrawals of $1,000 from plaintiffs’ bank account coincide precisely with Zambrano’s tenure on the case (and Guerra’s as his ghostwriter). The first was made in October 2009, eight days after Zambrano formally took over the case, and the last in February 2012—one week before Zambrano was removed from the bench.

Even Donziger’s own testimony corroborates that bribes were discussed between Guerra and plaintiffs. Guerra testified that, during a meeting with Donziger and Fajardo at the Honey & Honey Restaurant, Guerra solicited a $500,000 bribe for Zambrano (plus an unspecified amount for Guerra). In return, plaintiffs could ghostwrite the judgment. According to Guerra, “Mr. Donziger replied that at the moment they did not have that sum of money to pay us.” (Guerra adds that Zambrano told him later that plaintiffs agreed to pay the bribe out of any eventual proceeds from the judgment.)

Donziger admits the meeting with Guerra. He further admits receiving the bribe request. But he claims that he turned it down and was “saddened” and “concerned.” Yet plaintiffs’ subsequent conduct was hardly consistent with Donziger’s version. They continued to meet with Guerra twice in the next year. They even asked whether, in return for a payment of $5,000, Guerra might testify for them as an expert in the U.S. on “the suitability of the Ecuadoran legal system.”

Zambrano

Zambrano testified that he alone wrote the judgment on his “new” computer. He was certain of this, because his “old” computer was supposedly out for repairs while the judgment was written.

But his testimony is contradicted by forensic evidence. Digital forensic expert Lynch reviewed forensic data from Zambrano’s computers, as reported by experts appointed by the Ecuadorian prosecutor’s office, and found no evidence that “any text” from the judgment existed on Zambrano’s new computer until 2012—over a year after the judgment was issued. Lynch also found that information reported by the Ecuadorian experts was “consistent with the fabrication and manipulation of evidence” on Zambrano’s computers. Lynch noted, for example, the deletion of a folder named “Caso Texaco” from Zambrano’s old computer in late 2012, and the placement of a draft judgment on Zambrano’s new computer, also in 2012, “well after Mr. Zambrano had been dismissed as a judge.”

Even the Republic of Ecuador’s expert inadvertently impeached Zambrano. In a misleading declaration filed by plaintiffs in the RICO case, the expert claimed to have found a draft of the judgment on Zambrano’s old computer—not the new computer on which Zambrano claimed to have written it. The expert also claimed that the draft, initiated in October 2010, had been edited for a total of 3,571 hours. This meant that Zambrano would have had to work on the draft seven days a week, for 22 hours a day (including Christmas and New Year’s), for over four months, in order to produce the judgment in February 2011.

If the computers had in fact backed up Zambrano’s testimony, Donziger and co-defendants could have arranged to submit the computers in evidence at the RICO trial. In fact, they opposed the admission of any evidence of the forensic analysis of the computers. Meanwhile, Ecuador denied Chevron access to the Zambrano hard drives for a forensic examination.

Ted offers that perhaps Zambrano’s misstatements about his computers “don’t do anything more than discredit his own testimony.” What about affirmative evidence of ghostwriting?

In Ted’s view, the judgment’s reliance on “material not in the record but in the plaintiffs’ files” amounts to no more than “equivocal” evidence of plaintiffs’ ghostwriting. Even in the United States, he notes, court files sometimes omit documents that were in fact filed (even if only “very rarely”).

But there are several reasons to give significant weight to the verbatim inclusion—in some 29 pages of the judgment—of texts otherwise found only in plaintiffs’ private files. First is Latin American judicial formalism: it was undisputed in the RICO trial that, in Ecuadorian proceedings, every page of every document submitted to the court must be hand numbered by the clerks and sewn into volumes called “cuerpos.” Second, the material incorporated verbatim in the Lago Agrio judgment comes from not one, but no fewer than seven separate documents from plaintiffs’ internal files. Third, not only is there no record of these documents in the court files, there is also no evidence from plaintiffs to show when or how they supposedly submitted them for the record. (For example, there are no transmission letters.) Fourth, the form and language of the documents are not those of submissions to a court, but of internal working documents.

Cumulatively, this affirmative evidence would be prima facie sufficient to show ghostwriting—even if there were not also (1) Guerra’s substantially corroborated testimony, (2) forensic evidence contradicting Zambrano’s purported explanation of how he wrote the judgment, and (3) forensic evidence of subsequent tampering with both of Zambrano’s computers.

Finally, one should not ignore that Zambrano knows (or recalls) very little about what he calls his “most important decision” as a judge. In the RICO trial he could not identify what the abbreviation “TPH” (total petroleum hydrocarbons) stands for—even though it appears in the judgment 38 times and was the basis for $5 billion in damages. He did not know what the judgment described as the “most powerful carcinogenic agent” (benzene). He could not recall what the judgment described as the statistical evidence of “highest importance” (the San Sebastian health study). Jurist Zambrano could not even recall the judgment’s theory of causation (“sufficient causation”). Nor did he know the meaning of the English word “workover” (he does not speak English), even though it appears twice in one of plaintiffs’ internal memos, and therefore appears twice in the judgment as well.

In the face of all this evidence, and even if there had been no corroborated testimony by Judge Guerra, Zambrano’s claim that he alone wrote his nation’s most important judgment is not credible. Even without Guerra’s testimony, the evidence shows at least a prima facie case of plaintiffs’ ghostwriting—one left unrebutted by Donziger and co-defendants in the RICO trial.

Fajardo’s emails

Ted cites emails sent by plaintiffs’ lawyer Fajardo to his co-counsel, shortly before the judgment was issued, making statements such as “no one knows when the judge may issue his judgment,” and “we are behind schedule with this memorandum of law, which could have serious consequences for the case.” Ted sees these contemporaneous emails as “pretty good evidence” that plaintiffs did not know what the judgment would say, and therefore could not have ghostwritten it.

In fact, those emails are not at all inconsistent with plaintiffs’ – and, in particular, according to Guerra, Fajardo’s—ghostwriting of the judgment. The email recipients included a range of lawyers, including lawyers in major U.S. law firms, at least some of whom were not likely aware of the ghostwriting scheme. (Fajardo and Donziger had likewise kept U.S. co-counsel in the dark about the ghostwriting of Cabrera’s report.) Hence Fajardo’s emails could give no indication that he might know what the judgment would say. But he was concerned about its timing. The team was behind in preparing plaintiffs’ official filing to the Lago Agrio court. If not submitted in time, it could delay the issuance of the judgment. So Fajardo urged the team to get their filing in, pronto. Nothing in his emails was inconsistent with his knowledge—not shared with all members of the team—that the sooner the filings were done, the sooner plaintiffs could ask Zambrano to adopt their ghostwritten judgment.

Conclusion

In my view, the evidence is persuasive that plaintiffs ghostwrote, not only the Cabrera report (as Ted appears to agree), but also the judgment. I sympathize with Ted, however, in the daunting task of trying to make sense of the mass of evidence, without either of us having attended the trial, and with less time for scrutiny of the full record than we would both prefer. So my conclusions, like his, are tentative. Fortunately, we will soon have the benefit of a comprehensive assessment of the evidence by an independent and impartial federal judge.