I’m sorry to have to report that advocates for the Lago Agrio plaintiffs or Steven Donziger have again issued a press release making false accusations of impropriety. This time, the target is Judge Kaplan, and the claim is that he failed to disclose a financial interest in Chevron:

Javier Piaguaje, a leader of a coalition of villagers that won the judgment against Chevron in Ecuador and a defendant in the U.S. case, said Kaplan’s failure to disclose his holdings “is yet another disturbing example” of why the U.S. judicial proceeding has “no legitimacy” in the eyes of the villagers.

“It was obvious throughout that Judge Kaplan conducted a show trial where he served as a prosecutor for Chevron and judge at the same time,” he said. “The fact he had investments in Chevron and never told us is more brazen than what I could have imagined.”

So what was Judge Kaplan’s financial interest? He owned shares in two mutual funds, which in turn owned shares in Chevron:

Federal law requires U.S. judges to disqualify themselves “in any proceeding in which” the judge’s “impartiality might reasonably be questioned.” By not disclosing his specific investments in Chevron, Kaplan deprived the Ecuadorians and Donziger of their right to seek his recusal on these grounds, said Chris Gowen, an ethics professor the Washington College of Law at American University and a member of the team that defended the villagers and Donziger.

Really? This is a serious allegation of failure to comply with disclosure laws. Is it right?

Well, no. Under 28 U.S.C. § 455(d)(4), ownership of mutual fund shares does not give a judge a financial interest in the companies whose shares the fund owns that requires recusal. Under the Ethics In Government Act, judges are required to file financial disclosures, but the statute says very clearly that the holdings of a publicly traded mutual fund need not be disclosed except in unusual circumstances.

I hate to see Donziger and the LAPs, who have strong arguments on appeal, damage their own credibility with irresponsible allegations of wrongdoing. Who is the audience here? What is the point of a press release that any lawyer can tell makes an unfounded allegation? Again I advise: chill.