Andrés Rivero (Photo by Jordan Hollender)
This article was adapted from the Kindle Single ebook “Crude Awakening,” by Michael D. Goldhaber, available Aug. 20 on Amazon.com.
When Ecuadorean plaintiffs first sued Chevron Corporation over oil pollution 21 years ago, R. Hewitt Pate was a recent U.S. Supreme Court clerk reviewing documents in the warehouses of Virginia. With the passage of time, antitrust document review became the province of humble contract attorneys. Pate ascended to Chevron general counsel. And the Ecuador case kept going, and going, shifting at Chevron’s behest from courts in the United States to Ecuador and then back. There was no doubt that Chevron suffered from forum shopper’s remorse, as we called it in our April 2010 cover story.
The question was: Could Chevron exact forum shopper’s revenge?
As 2011 approached, the environmental trial was at last lurching to a close in the Amazon jungle town of Lago Agrio. Pate knew it was nearly certain to end with a multibillion-dollar judgment against Chevron. He believed the plaintiffs’ case was laced with fraud. And through creative discovery in U.S. court, he was piling up proof. But the Amazonian plaintiffs were a historically determined foe. To fight them to the finish, Pate would need to commit over half a billion dollars, by our reckoning. For virtually any other company, this would be unthinkable. But for the world’s third most profitable oil major, it was merely the cost of a few offshore platforms.
Pate’s grand strategy was to tell the story of the plaintiffs’ litigation fraud in two neutral forums. Gibson, Dunn & Crutcher would sue the plaintiffs team for racketeering and fraud in New York. King & Spalding would tell an arbitral panel, overseen by the Permanent Court of Arbitration in The Hague, that Ecuador had violated its treaty duty to treat foreign investors fairly. Chevron would ask both forums to halt the trial in Ecuador or, if they couldn’t, to halt collection of the judgment. And although the power of either U.S. judges or international arbitrators to stop enforcement was (and is) uncertain, Chevron would produce such overwhelming evidence of corruption that no enforcing court could respect the judgment.
The dispute came to a furious head on Feb. 1, 2011. That was the day Gibson Dunn began reviewing the hard drives of their opponents’ lead lawyer, Steven Donziger. They were the holy grail of discovery. Securing them was the result of 15 months of flailing away at Donziger’s privilege. But a judgment was coming in Ecuador, and there was no time to waste. On the very same day, Gibson Dunn filed its fraud counteraction—styled Chevron v. Donziger—and asked the New York court to halt the proceedings in Ecuador. A week later, U.S. District Judge Lewis Kaplan ordered Chevron’s foes not to push forward with the Lago Agrio trial. And the next day, the arbitrators ordered Ecuador not to push forward. The wheels of justice were spinning. But it was no use. On Valentine’s Day 2011, Ecuador’s court handed down a sweetheart $19 billion judgment against Chevron (which would be reduced on appeal to $9.5 billion). On paper, Pate had just lost the largest non-U.S. verdict in history.
Then things got worse. The next January, the U.S. Court of Appeals for the Second Circuit vacated Kaplan’s order, in a narrow statutory ruling that was wrapped in a broad invocation of respect for foreign courts. Chevron warned that the plaintiffs would try to collect on their judgment in a “red hot second.” And indeed, the plaintiffs quickly filed enforcement actions in Argentina, Brazil and Canada. So what if they possibly committed fraud before the judgment, the plaintiffs argued; the judgment itself was pure. It was enough to make Pate feel nostalgic for his days doing antitrust document review in a musty warehouse.
But Pate stood by his strategy. He always knew that seeking an injunction was a bit of a flyer. In the end, the surest way for Chevron to prevail was by compiling so much evidence of fraud that no decision maker could deny it. And above all, it needed to find evidence of fraud in the judgment itself. In retrospect, Chevron’s crucial move on the eve of the judgment was not its request for an injunction. What mattered more was imaging Donziger’s hard drives.
The day the Lago Agrio judgment came out, Chevron chief scientist Sara McMillen studied it until 4 a.m. Was it possible the plaintiffs had ghostwritten their own judgment? It seemed lunatic to do such a thing while U.S. courts were scrutinizing their every move. But the judgment could have been ghostwritten in Ecuador, where the plaintiffs believed they were beyond the reach of U.S. discovery. And if the plaintiffs thought they could get away with it, might they not try?
Before she went to bed, Chevron’s Nancy Drew spotted two bush-league errors in the judgment that she had found earlier in the plaintiffs’ own database of samples—which was not in the court record. First, the judgment repeated the plaintiffs’ mistake of overstating certain results 1,000 times by using milligrams per kilogram instead of micrograms per kilogram. Second, the judgment repeated the plaintiffs’ mistake of reporting the presence of mercury and aromatic hydrocarbons where none existed. The reason was that the plaintiffs’ database systematically deleted the “less than” sign. For instance, if a chart marked the level of mercury as <7 mg/kg, meaning that mercury could not be detected at the minimum discernible level, then the plaintiffs and the judgment would say 7 mg/kg. McMillen went to sleep sure the judgment was ghostwritten, but not yet sure she could prove it to the world.
The next day she found the clincher. All 70-odd field samples cited in the judgment ended with the notation “sv.” Selva Viva—meaning “the trees live”—was the entity formed by Donziger to pursue the Ecuadorean litigation. And the only other place sv showed up was in Selva Viva’s proprietary database. It was almost as if the judge had put a plaintiffs lawyer’s initials on every soil and water sample. By bedtime on Feb. 15, McMillen believed that she could prove that the plaintiffs wrote the judgment.
But she wasn’t stopping there. Poring over the judgment, McMillen focused on the phrase “formation waters have hydrocarbon solvents.” That was scientific nonsense, she thought. The only place she’d ever encountered it was in a report by the plaintiffs’ expert Dick Clapp. She checked and found surrounding material lifted almost verbatim. Ding, ding. The Clapp report was not in the court record. It was only on Donziger’s hard drives General Counsel.
Plagiarized documents from Donziger’s hard drives would provide the most persuasive proof that the Lago Agrio judgment was ghostwritten. Chevron hired forensic linguists to match the judgment against the hard drives. They found seven documents with serious overlap. In early April 2011, Gibson associate Christopher Spiker ran the first document—the “Fusion memo”—through open source software designed to catch student plagiarism. Right off the bat, he found a string of more than 150 nearly identical words. Other passages drew from a memo by the plaintiffs’ Australian legal intern, which would explain why the opinion relies on Australian law (incorrectly, according to an ex-chief justice of New South Wales) and even cites Australian sources for generic principles. All told, material drawn from plaintiffs’ documents was found on about 60 pages of the 188-page judgment. A student plagiarist that obvious would be tossed out of college before midterms.
The plaintiffs’ first reaction was to say that Chevron couldn’t prove the material wasn’t in the record. Then Chevron hired one expert who confirmed that it wasn’t by reading, page by page, all 236,000 pages in the court record, and another who confirmed it electronically. The plaintiffs’ other rejoinders smacked of conspiracy thinking. Larry Veselka, who briefly represented the Ecuadorean parties in New York, floated the idea at a discovery hearing that Chevron itself might have secretly “slipped” Donziger’s files to the judge who handed down the $19 billion verdict, to discredit the final ruling. Judge Kaplan was bemused: “So they wrote parts of this decision hammering them as bad as anybody in world history has ever been hammered so that they could then attack it because the judge copied the bad stuff from them? Oh, please, Mr. Veselka. No. If I misunderstood you, please tell me … I have to give you credit for imagination on that, Mr. Veselka. I mean, really.”
As the case wended its way toward a fraud countertrial in New York, Chevron’s lawyers felt that they had established the judgment fraud through unrefuted forensic evidence. But, lacking the power of discovery against the lawyers in Ecuador, they could not establish the details of the judgment fraud’s execution. Then Alberto Guerra saw which way the wind was blowing, and asked for a chat.
Guerra had served as the judge at the outset of the trial in Lago Agrio. After rotating off the case under preset procedures, he lost an internal power struggle and was thrown off the bench, ostensibly because he prejudged some issues in favor of Chevron. Within the Lago Agrio legal community, he was widely known for his close connections with the judge who ultimately wrote the judgment, Nicolas Zambrano.
For the delicate job of flipping Guerra, Chevron sent a trusted lawyer who was used to the FBI doing the dirty work. Andrés Rivero was a former Miami corruption prosecutor who attended law school in Berkeley on a scholarship, and did well enough in private practice (he’s a name partner at Rivero Mestre) to pay it forward by funding law scholarships at Berkeley for the next generation. The grandson of Cuba’s last prime minister, Rivero had lost a Florida political race as a young man because his Spanish wasn’t good enough, and studied hard to make sure he was never again at a disadvantage. Rivero was far from a stereotype—he told friends that he came from the most Prussian of Cuban families—but he found it useful to play to the Latin American image of Cubans as chummy jokesters.
Rivero first met Guerra at the Quito Marriott on June 5, 2012, alongside his partner in the operation, Yohir Akerman, who was a Colombian junior chess champion before he became a detective at Custom Information Services. Guerra began to spin tales, and to feel out how much his information was worth. Chevron’s people were intrigued but cautious. As they scheduled their next meeting, Guerra’s day planner fell open, and the investigators saw a notation about “Nicolas.” What’s this? they asked. Oh, that’s a record of payment from Zambrano. Now they were convinced Guerra was for real. And they realized that corroborating his story with documents would be crucial.
The next two-and-a-half meetings were recorded. They are as cringe-worthy as any Mafia tapes for the crass banality of the crooked man being flipped, and the transparent flattery of the agents doing the flipping. As Guerra grew more comfortable, he spoke in the same breath of his infidelity to his wife and his devotion to his grandparents’ “ethics, morals, principles, values.” Then, moving toward the heart of matter, Guerra explained that he routinely wrote the opinions in Zambrano’s civil cases, and Zambrano authorized him to throw each case to the highest bidder.
A “ghostwriter,” Akerman said. Guerra didn’t understand. A “phantom writer,” explained Rivero. “The one standing behind.” At trial Guerra preferred to call himself a “behind-the-scenes writer,” perhaps displaying a touch of professional pride.
Guerra described Zambrano with fearful admiration as “a special guy”: strong, strict, a bit cold, not expressive like Guerra, very mistrustful. When a man delivered a flash drive with the ghostwritten judgment in another case, Zambrano patted him down like a gangster. “Shit, I was about to faint because I had never gone through something [like that]. And the man was all seriousness,” said Guerra. “Like a movie, like a movie,” responded Rivero.
Zambrano knew his way around a criminal case, Guerra said. “But in the other matters, damn, a most elemental divorce proceeding or a late birth registration [laughter] … he would send me suits for uncontested divorce.” In a later meeting, Guerra said of the plaintiffs: “I am completely certain that they [wrote the Chevron opinion]. Zambrano was, damn, incapable of doing that.”
Guerra asserted that the plaintiffs’ team did far more than pay him to ghostwrite interim orders. They ghostwrote their own final judgment, he said, with Guerra providing the finishing touches. And though he was vague about it, Guerra said he thought he had a draft of the final judgment on his computer.
At the end of their second meeting Chevron’s representatives pressed Guerra to produce the goods.
“Did you bring any documents today, or nothing?” asked Akerman.
“Such wolves!” Guerra shot back.
So you’ll bring them next time, pushed Rivero.
“A lesser crook than you.”
The third meeting only got down to business after a long disquisition by Guerra on sexual endurance and tips for maintaining vigor by cleansing the blood and colon. Rivero provided encouragement.
“You take your vitamins, but above all else, this buddy’s key—right?—keep your colon clean.”
“Uh, eat well, right.”
“No, the colon, the colon. Fiber.”
“Uh fiber, very interesting.”
“Makes sense, makes sense.”
At last Rivero offered Guerra $18,000 for his first batch of physical evidence. “Couldn’t you add a few zeros?” Guerra asked. Rivero then detoured with an uncomfortably apt joke. Have I told you the one about the crooked lawyer, he asked, “who would get drunk and would go withdraw [money from an ATM] with his attorney’s card”?
By now Guerra knew Rivero well enough to finish the joke himself. Guerra delivered the punchline in shorthand: The ATM cried, “‘Thief, thief!’ And the lawyer said, ‘Damn, I’ve put in my attorney’s credential.’”
The transcript does not indicate whether the crooked attorney and the honest attorney playing a crooked attorney laughed as they nervously edged into the ritual bargaining portion of the program.
“Well, regarding the other issue …”
“Buddy, in cash,” offered Rivero.
“Yes but,” he laughs. “This is, this is very little.”
“Well, the Americans have a saying that I believe is good also. They say ‘Money talks.’”
“There’s a saying here, and I think it’s worldwide. For silver, the male dog dances. For gold, the male and female dog dance.”
Rivero offered no comment on Guerra’s pungent sociology. That afternoon they sealed a deal for $18,000 in return for his first batch of evidence. Guerra handed over daily planners in which he’d noted payments for 2012 and the second half of 2011. (He said he lost his 2011 book midyear, and rather than waste money on a new one, scribbled his dates in an unused 2003 book.) Chevron’s men eagerly took his computer and flash drives.
On these they found nine draft orders from the Chevron case during Zambrano’s tenure, and opinions from over 100 of Zambrano’s other cases. This confirmed the first parts of Guerra’s story. But the ghostwritten Chevron judgment was nowhere to be found.
Rivero and Akerman came calling two weeks later at Guerra’s 5,400- square-foot house in Quito, with stately wooden double doors in front and tacky neon lights in the guest room. There were enough new jokes and tips on personal hygiene to fill a down-market magazine for mature men. But with the tape recorder running, Guerra changed his story on one crucial point. The judgment, he now said, was on “Fajardo’s laptop,” referring to the plaintiffs lawyer Pablo Fajardo. That placed the draft in Ecuador, out of range of discovery.
Both Guerra and Chevron expected at first that Zambrano himself would strike a deal to testify for Chevron, but Zambrano ignored Rivero’s overtures. With the allegedly ghostwritten draft itself out of reach, the Chevron camp needed to find whatever other corroboration it could, and if possible persuade Guerra to testify. In the ensuing weeks and months, Guerra handed over daily planners noting regular payments from “Nicolas” while he was on the court, and shipping records showing that they regularly exchanged packages during the same period. Usually Guerra took cash. But his bank account showed one $300 deposit from Zambrano, and two deposits of $1000 from an international woman of mystery named Ximena Centeno.
Within hours of Guerra’s sharing the bank slips with its field investigators, Chevron struck gold again. Deskbound detectives from a second boutique that helped crack the case, Investigative Research Inc., recognized the name from a privilege log. Ximena Centeno was the plaintiffs’ office administrator—and the signature and code on the slip matched her national ID card. Chevron filed a new discovery action against the plaintiffs’ bank, and found that each of the Centeno deposits came exactly one day before $1,000 withdrawals from the plaintiffs’ account.
Meanwhile, the detectives went back over their email trove and found powerful new meaning in a pair of coded emails about a puppet and puppeteer. On Oct. 27, 2009, Fajardo had written Donziger: “The puppeteer won’t move his puppet until the audience pays him something.” Two days later there was a $1,000 withdrawal from the plaintiffs’ account and a $1,000 deposit to Guerra’s account. On Nov. 27, 2009, another colleague emailed Donziger that “the budget is higher in relation to the previous months, since we are paying the puppeteer.” Sure enough, there was a $1,000 withdrawal from the plaintiffs’ account the day before, and a $1,000 deposit to Guerra’s account the next day.
On a rooftop near the U.S. embassy in Quito in the late fall of 2012, Chevron’s field investigators confronted Guerra. The toothpaste was out of the tube, they said. Once it became known that Guerra had given Chevron evidence, his safety in Ecuador could never be assured. It took some time for Guerra to absorb the idea and convince his family and work out the details. But having come this far, he had little choice. Chevron would relocate the Guerras, help them seek asylum and pay them $12,000 in monthly living expenses for at least two years. Judge Guerra would testify at Chevron’s countertrial in New York.
Before the plaintiffs could collect their billions, Chevron would tell its story in a neutral court of law. Steven Donziger didn’t attend the seven-week trial religiously. But Hew Pate sure did.