Will Steven Donziger Be Held In Contempt In Federal Court?

Donziger has apparently refused to comply with both Judge Kaplan’s RICO decision against him and another default civil judgment award against non-appearing Ecuadorian plaintiffs and other co-conspirators.

Forbes - Michael Krauss 15/10/2018

Photo: Forbes

[Note:  Steven Donziger was offered an opportunity to comment on a draft of this column, but never did communicate with me.]

This column has provided a detailed history of the attempt to extort billions from Chevron. This effort, ostensibly meant to benefit Ecuadorean nationals who were most likely injured by an Ecuadorean state corporation, failed lamentably. Conspirators attempted in vain to enforce in the US, Canada, Brazil, Argentina, and Gibraltar the fraudulent judgment they obtained against Chevron in Ecuador. An exhaustive review by renowned federal judge Lewis A Kaplan in the Southern District of New York found that Steven Donziger, the spearhead of the suit against Chevron, engaged in multiple acts of racketeering. An international arbitration panel has forbidden efforts to enforce the Ecuadorean judgment elsewhere. And Donziger has been suspended from the Bar in New York State and in the District of Columbia, which as far as I know are the only jurisdictions where he was authorized to practice law.

But Chevron’s legal battles continue, as Donziger has apparently refused to comply with both Judge Kaplan’s RICO decision against him and with another default civil judgment award against non-appearing Ecuadorian plaintiffs and other co-conspirators. As a result, Chevron on October 1 filed a motion to have Donziger held in civil contempt of court. The currently available allegations of Chevron’s motion, much of which is redacted, are simply shocking.  Here are a few highlights:

Donziger had been ordered to transfer to Chevron all moneys traceable to the Ecuadorean judgment. He has made no transfers, but he apparently has received lots of money. Chevron alleges that he has been selling interests in the fraudulent Ecuadorean judgment to credulous “investors” despite an explicit prohibition against doing so in both the RICO and civil judgments. Donziger’s defense, that he was merely collecting money to help the impoverished Ecuadoreans pay their litigation expenses, is undercut by Chevron’s discovery that since 2016, 94.5% of the funds going into Donziger’s personal and firm accounts combined originated from investors buying purported interests in the Ecuador judgment.

1. Donziger has testified that “[f]or the time period from 2014 to the present,” his “only sources of income [ we ]re remuneration . . . paid out of litigation expense funds raised with [his] assistance, [and] a modest monthly income generated by two properties.” But a Canadian law firm, Lenczner Slaght Royce Smith Griffin LLP (“Lenczner Slaght”) transferred$625,940 to Donziger in six payments made between May 10, 2016, and February 21, 2017. $125,000 more came from other sources.  In addition, over $342,000 was transferred to Donziger by “public interest lawyer” Aaron Marr Page, who according to Chevron received a $50,000 kickback in May 2018.  Donziger used judgment proceeds to pay personal expenses, with the top recipient being his wife, Laura Miller, who received $297,000 and also incurred $54,037.01 in American Express charges during 2016 that was paid out of the Donziger bank accounts.” Donziger used these “investment proceeds” to pay his bills, including a $14,040 gym membership, a $5,225 bar tab, and $2,578 to Acme Fine Wines. Of the $725,940 originally deposited into his law firm accounts from sales of the Ecuadorian judgment, ostensibly to help pay litigation expenses for Ecuadorean peasants, over $500,000 was transferred to his personal accounts. Donziger’s claims that he is the “lifeline for people in Ecuador to raise money” are belied by the fact that these clients have represented to courts in enforcement actions that they lack funds even to pay court costs. These clients have represented in proceedings in Brazil, Argentina, and Canada that they are bereft of funds, while at the same time, Danziger was depositing hundreds of thousands of dollars into his personal account.
2. Donziger claims currently to have only one client, the Amazon Defense Fund (FDA by its Spanish acronym). But the FDA is neither the creditor of the fraudulent judgment nor a named plaintiff in foreign enforcement proceedings for that judgment, so has nothing to sell and no litigation to fund.
3. Chevron maintains that Donziger has used some of the proceeds of these “investments” to continue his defamation of Chevron. He has allegedly paid “a phalanx of activists and journalists to produce inflammatory media coverage against Chevron.” Chevron says it has evidence that these include substantial payments or interests in the judgment given to, among others, Page and his law firm Forum Nobis; to Rex Weyler, a Greenpeace activist who wrote a blog post titled “Chevron’s Amazon Chernobyl Case moves to Canada” in a vain effort to apply pressure for Canadian enforcement of the Ecuadorean judgment; to Pink Floyd’s Roger Waters, who provided “star power” to Donziger’s Canadian efforts;  and to Amazon Watch’s senior strategist Kevin Koenig, who attended Chevron’s shareholder meeting and contributed to the hostile media coverage surrounding it.
4. The figures listed in this column total approximately $1 million. This is only part of the total investor payments on behalf of Donziger;  the actual total of funds traceable to the Ecuadorian judgment is larger and, according to Chevron, this will become obvious once the redacted portions of the contempt motion are released.

In clear and unambiguous language, paragraphs 1 and 5 of Judge Kaplan’s RICO judgment awarded Chevron equitable relief and enjoined Donziger and the other defendants from benefiting from their corrupt and fraudulent conduct. [See 974 F. Supp. 2d at 639.] If Chevron’s allegations are proven, Donziger should be thankful if all he ends up with is a substantial fine for civil contempt. The United States Attorney’s office for the Southern District of New York might well have a criminal contempt charge up its sleeve as well.