Bad Day for Ecuadoreans in Chevron’s RICO Trial

MANHATTAN (CN) - A former Ecuadorean judge testified Wednesday that he secretly wrote "a couple dozen" rulings for the judge who in 2011 handed down the world's largest environmental award of $19 billion against Chevron.

Alberto Guerra said that his eventual successor as judge on the case, Nicolas Zambrano, paid him $1,000 a month "from his own pocket" to ghostwrite the orders, including the recusal order that put Zambrano on the bench.

Guerra was testifying on the sixth day of trial in Chevron's racketeering lawsuit that accuses attorney Steven Donziger of bribing Zambrano with $500,000 and skewing test results to hold Chevron liable for massive oil pollution in the Amazon.

Donziger has denied wrongdoing, and a spokesman for the villagers he represented categorized Guerra in a statement Wednesday as a "disgraced former judge" with a "magic-bullet theory that purports to rescue Chevron's RICO case."

"The story may be entertaining but it is impossible to believe - in large part because of who is telling it," Han Shan, a spokesman for the Ecuadorean judgment-holders, added.

Guerra had been the first of several judges to preside over the case in Ecuador from May 2003 to January 2004. Zambrano, the fifth, ultimately delivered the verdict against Chevron in 2011.

According to a lengthy witness statement that Chevron posted online in two parts, Guerra said he "doubted the validity of the Ecuadorian plaintiffs' claims." He said he only let the case continue because of a "massive protest" that had assembled outside the courthouse.

Guerra attributed his May 2008 dismissal from the court to his confrontation of two judges who had succeeded him on the oil case about their issuance of what he called "several dubious and illegal rulings."

Bribes are "commonplace" in Ecuador's legal system, the statement continues, with Guerra noting that he bribed judges on Ecuador's highest courts while a practicing attorney. In exchange for letting Chevron access evidence from his personal computer, cellphones, phone records, bank records and credit card statements, Guerra said the oil giant paid him a total of $48,000.

Fearing for his life, Guerra and his family left Ecuador for the United States in January 2013, according to the statement. He said President Rafael Correa's government in Ecuador is currently investigating him "for the crime of incitement of separatism" because it supports the judgment against Chevron.

"Despite the Republic of Ecuador's and the Ecuadorian plaintiffs' efforts to silence and intimidate me, I feel duty bound to state the truth in this case," he wrote.

With Guerra on the stand Wednesday, Chevron attorney Randy Mastro with Gibson, Dunn & Crutcher asked the former judge whether he knew he was breaking Ecuadorean laws when he agreed to draft the orders.

Guerra responded: "It hurts to say so, but yes."

He also testified that he met Donziger in 2009 and other attorneys representing villagers in the back of a restaurant in Quito called Honey Honey. It was there that Guerra allegedly offered to expedite the proceedings and limit Chevron's options.

He said Donziger informed him that he "had a friendship with President Obama, that they were classmates at the same university," and that he could help out Guerra's son, who had been living in the United States illegally "for many years."

Pablo Fajardo, the lead attorney for the villagers, had also attended the meeting, and the pair "thanked me for the work I was going to do," Guerra said.

Chevron hopes Guerra is the key to discrediting the record damages awarded to the villagers in Lago Agrio left with severe health problems from the decades of oil-drilling in their region.

Though Chevron never drilled in Ecuador, Texaco, the subsidiary it acquired in 2001, had spent several decades in the country. For its part, Chevron says that Texaco already paid to remediate any damage it caused. It also says larger responsibility for the problem belongs to the state-owned oil company, Petroecuador.

Guerra said he and Zambrano had previously discussed soliciting a bribe from Chevron, and that Zambrano asked him to contact lawyers representing the oil company.

The two targeted Chevron because they believed it was "in quite a better financial situation than the plaintiffs," and that there was a "larger financial benefit [that] could be obtained" for them, Guerra said.

Chevron's attorneys declined the offer a few weeks later, Guerra testified, leaving Zambrano "discouraged, dispirited." He said that's when they solicited Donziger's team.

U.S. District Judge Lewis Kaplan is hearing the case without a jury. He's being asked to declare the award illegitimate and help it fight off collection actions against it in Brazil, Argentina and Canada.

Guerra is expected to continue his testimony Thursday.

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