U.S. attorney grilled over role in Chevron-Ecuador judgment

Reuters

By Joseph Ax

NEW YORK, Nov 18 (Reuters) - Steven Donziger, the U.S.attorney accused of using bribery to secure amultibillion-dollar pollution judgment against Chevron Corp in Ecuador, took the witness stand for the first time onMonday and was immediately challenged on his claim that he wasnot in charge of the Ecuadorean case.

In a series of pointed questions, Chevron attorney RandyMastro sought to undermine Donziger's claim that he did not leadthe legal team in Ecuador but merely offered his advice.

"Isn't it a fact that you've described yourself as the leadlawyer?" Mastro asked.

"At times I have, yes," Donziger said.

Chevron filed a lawsuit in Manhattan federal court in 2011claiming that Donziger used fraud to obtain an $18 billionjudgment - later increased to $19 billion - for a group ofvillagers over the contamination of an oil field in northeasternEcuador.

Last week, Ecuador's highest court cut the amount to $9.5billion. Donziger has denied the bribery allegations.

The start of Donziger's testimony marked the mostanticipated moment since the trial began last month, with morethan 70 people in a packed courtroom looking on - including themusician Sting, who with his wife, Trudie Styler, has offeredsupport for the villagers.

As part of his defense, Donziger has downplayed his role inleading the Ecuadorean litigation. In a witness statement filedwith the court, Donziger emphasized that another lawyer inEcuador, Pablo Ferjado, was the lead attorney and that Donzigerserved at the pleasure of the plaintiffs.

"I work for them; they do not work for me," Donzigertestified.

During 90 minutes of questioning, Mastro sought to underminethat claim, focusing on the fees Donziger stands to collect ifthe judgment is enforced.

He asked Donziger about invoices that showed he was earningapproximately $150,000 a year, while Ferjado was paid closer to$24,000.

"But you say you work for him," Mastro said. "He doesn'twork for you?"

"Yes," Donziger said.

"He must be a very generous boss," Mastro saidsarcastically, earning a rebuke from the judge.

Mastro also pointed to Donziger's 2011 retainer agreement,which called for him to receive nearly one-third of anycontingency fee. Even with the award slashed in half last week,his portion would still be worth $600 million, Mastro said.

He quoted Donziger in various documents referring to himselfas the "lead lawyer," saying he had an "integral role" inshaping strategy and giving instructions to the rest of thelegal team.

Ferjado himself referred to Donziger as "cabeza," theSpanish word for head, and as "commander," though Donzigerinsisted the latter was a joke.

The Ecuadorean judgment was based on contamination between1964 and 1992 at an oil field operated by Texaco, later acquiredby Chevron. Chevron claims that Texaco cleaned the site afterceasing operations and handing control of the field over tostate-controlled Petroecuador.

Since 2011, the villagers have sought to enforce thejudgment against Chevron entities in Canada, Brazil andArgentina, since Chevron no longer holds any assets in Ecuador.The company hopes a victory before Kaplan would give itammunition to fight such efforts in foreign courts.

A former Ecuadorean judge testified during the trial that hewas paid to ghost-write orders for the judge who issued thejudgment and that Donziger was aware of the scheme. The judgewho released the decision, Nicolas Zambrano, denied takingbribes in his testimony.

Donziger is expected to continue testifying on Tuesday.Chevron previously asked Kaplan to strike large portions ofDonziger's witness statement as irrelevant, a decision Kaplanhas not yet made.

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

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