Witnesses say U.S. lawyer used fraud in Chevron case in Ecuador

Thu Oct 17, 2013 8:37am EDT
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By Mica Rosenberg

NEW YORK (Reuters) - A U.S. lawyer used fraud to win a historic $18 billion judgment against Chevron Corp (CVX.N: Quote) for polluting the Ecuadorean jungle, witnesses said at a trial in New York on Wednesday.

The witnesses were testifying in federal court on behalf of Chevron, which is seeking to prevent lawyer Steven Donziger from profiting from the award, which he won for a group of Ecuadorean villagers in 2011.

Christopher Bogart, the head of a firm that helped finance Donziger's case in Ecuador, said he ended his investment in the case after mounting concerns of misconduct by Donziger.

"There was quite a lot of disturbing information coming out," said Bogart, who is the chief executive of litigation financing firm Burford Capital.

In a sworn statement in April, which became part of the Wednesday's proceeding, Bogart said he learned from emails that plaintiffs' lawyers knew they were engaging in misconduct.

The high-profile trial, which began this week, is the latest chapter in a dispute over environmental contamination between 1964 and 1992 at an oil field in northeastern Ecuador operated by Texaco, which Chevron bought in 2001.

Chevron says Texaco cleaned up its share of waste before turning the field over to state-owned Petroecuador. An Ecuadorean court disagreed and in 2011 awarded $18 billion to people from the village of Lago Agrio, which was affected by the pollution. The court subsequently increased the award to $19 billion to cover fees.

Burford provided $4 million in financing to Patton Boggs, a prominent Washington firm working with the Ecuadoreans on their environmental lawsuit. But Bogart said in his statement that Burford terminated the funding agreement in 2011 over concerns about actions by lawyers for the Ecuadoreans.   Continued...

A Chevron gas station sign is seen in Del Mar, California, April 25, 2013. REUTERS/Mike Blake