New fraud allegations in the Chevron Lago Agrio case

By Roger Parloff, senior editor

How did extensive language from the plaintiffs' internal files end up in the judge's ruling?

Editor's note: The following is a web-only companion story to "Have you got a piece of this lawsuit?" from Fortune's June 13th, 2011 issue.

Judge Nicolas Zambrano shows the lawsuit files at his office in the Lago Agrio Courthouse January 25, 2011.

FORTUNE -- Ordinarily, an allegation that plaintiffs lawyers may have been clandestinely involved in the writing of a judge's $18.2 billion ruling in favor of their clients would be getting a lot of attention. But in the environmental case against Chevron taking place in Lago Agrio, Ecuador, it's hard to raise eyebrows anymore.

That is the latest disturbing allegation that's been leveled in this monumentally troubled lawsuit.

This is the case that seeks to hold the oil giant liable for damage to the Ecuadorian Amazon rainforest and its inhabitants from Texaco's oil drilling there between 1964 to 1990. Chevron (CVX), which acquired Texaco in 2001, maintains that, among other things, Texaco settled its Ecuadorian environmental issues in 1998.

Many readers are probably thinking that they read about this scandal last year. But that was actually a different scandal. That was the one in which the Lago Agrio plaintiffs lawyers allegedly ghostwrote a key evidentiary report that was then passed off as the work of Richard Cabrera, a purportedly independent court-appointed expert, to Ecuadorian and U.S. courts, government officials, and media. That alleged scheme stretched from early 2007 until mid-2010, when Chevron finally went to federal court in Denver and pried English-language drafts of key portions of the so-called Cabrera report out of the files of the plaintiffs' U.S. consulting firm. This March U.S. District Judge Lewis Kaplan found "ample evidence" that certain Lago Agrio plaintiffs lawyers, including lead U.S. counsel Steven Donziger, had, in fact, perpetrated a scheme to ghostwrite "all or much of" the Cabrera report. For that and other reasons Kaplan entered a preliminary injunction barring the Lago Agrio lawyers from enforcing the judgment outside Ecuador. That ruling is now on appeal. More

Posted in: Ecuador, Forensic science, Texaco, United States

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