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U.S. lawyer denies bribery at trial in Chevron-Ecuador case

Attorney Steven Donziger shows pictures of a pool of oil which has seeped out from an oil waste pit left behind by Texaco at an oil pump sit
Attorney Steven Donziger shows pictures of a pool of oil which has seeped out from an oil waste pit left behind by Texaco at an oil pump sit

By Joseph Ax

NEW YORK (Reuters) - A U.S. lawyer on Tuesday denied using bribery to win a multibillion-dollar judgment against Chevron Corp in Ecuador, even as the oil company's lawyer raised tough questions about evidence that he said suggested the payments were made.

Chevron has claimed that the lawyer, Steven Donziger, used fraud to obtain the $18.5 billion judgment for villagers to compensate them for contamination at an oil field in northeastern Ecuador. The judgment was reduced to $9.5 billion by Ecuador's highest court last week.

Chevron hopes that a verdict in its favor from U.S. District Judge Lewis Kaplan, who is presiding over the non-jury trial in New York, will help it defend against attempts to enforce the judgment around the world.

The judgment in Ecuador concerned pollution between 1964 and 1992 at an oil field operated by Texaco, which was later acquired by Chevron. Chevron claims Texaco remediated the site after ceasing operations.

Former Ecuadorean judge Alberto Guerra had testified earlier that he was paid $1,000 a month to ghostwrite orders for the judge overseeing the Ecuadorean case, Nicolas Zambrano. Guerra said that the Donziger was aware of the arrangement and the U.S. lawyer had thanked him at a restaurant meeting in Quito, Ecuador.

Donziger denied that claim, testifying that Guerra asked for $500,000 at that meeting and that Donziger turned him down.

"I would never do that," Donziger said. "Whatever money we had, it would not be used to bribe a judge."

A lawyer for Chevron, Randy Mastro, said bank records showed that a woman working for an organization affiliated with Donziger deposited $1,000 into Guerra's account.

Mastro asked about emails sent from an Ecuadorean lawyer on the case to Donziger that referred to a "puppeteer" and a "puppet." In one email, the lawyer said the puppeteer would not move the puppet unless the "audience pays him something."

Despite Mastro's suggestion that those were codenames for Guerra and Zambrano, Donziger said he did not believe the emails were referring to them.

Mastro also questioned Donziger about a report submitted by a court-appointed expert, Richard Cabrera, in Ecuador that found Chevron liable for billions of dollars in damages.

Donziger acknowledged that a consulting firm working with his team had drafted the executive summary as well as other portions of the report, a fact that had been kept hidden. In a news release Donziger drafted in 2008, he called Chevron's claim that Cabrera had cooperated with the plaintiffs "completely false."

"There were times when I wasn't fully accurate about that relationship," he said on Tuesday. "This may have been one of those times."

He also testified that the team paid Cabrera out of a separate account because the court was shut down at times due to what he said were Chevron's attempts to delay the case.

"That was the reason he was paid outside the court process," Donziger said.

But he said he believed the process that led to the Cabrera report comported with Ecuadorean "law, custom and practice."

The case is Chevron Corp v. Steven Donziger et al, U.S. District ABBCourt for the Southern District of New York, No. 11-0691.

(Reporting by Joseph Ax; editing by Jackie Frank)

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