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Chevron’s Trial to Avert Ecuador Liability Takes John le Carre Turn

MANHATTAN (CN) - A judge who ordered Chevron to pay billions for oil contamination in Ecuador claimed to have taped a phone conversation in which the oil giant's lawyer made "unseemly proposals."

In his third day of testimony Thursday, Nicolas Zambrano, a former judge in Lago Agrio, Ecuador, spoke of a call he received this past January from Chevron attorney Andres Rivero.

Zambrano's name appears on the 2011 decision that forces Chevron to pay more than $8 billion for drilling by its predecessor Texaco, which operated in the rainforest from 1972 to 1992. Ecuadorean courts later raised the penalty to $19 billion, after Chevron refused to apologize for the pollution and opposed collection of the judgment.

A transcript of Zambrano's conversation with Rivero shows the lawyer wanting to give Zambrano "major news" about Chevron's quest to invalidate the judgment.

Rivero said he did not want to talk about the details over the phone, but said that the development involved Alberto Guerra, the first judge to hear the case in Ecuador.

"He has already told me the truth about the situation," Rivero said, referring to Guerra. "I know you have a relationship with..."

"I see, what..." Zambrano interrupts, before Rivero cuts in again.

Guerra, who ultimately signed up as a witness for Chevron, recently testified that Chevron's courtroom opponents bribed him to ghostwrite the judgment against the oil giant in return for a cut of the award. He said that he stitched together the text from a fraudulent scientific report by court-appointed expert Richard Cabrera, who allegedly adopted findings by the firm that formerly represented Chevron's opponents: Stratus Consulting.

Stratus executives are among the droves of Chevron's former foes now testifying in support of their extortion claims.

Lawyers for the Ecuadoreans, in turn, allege a far-flung conspiracy of their own: that Chevron has bribed and bullied its courtroom opponents to avoid accountability for an environmental disaster.

Both narratives faced off during Zambrano's three days of testimony.

On Tuesday, Zambrano showed a poor understanding of the ruling that he allegedly wrote when given a pop quiz by Chevron's attorney Randy Mastro. The former judge said he had forgotten the decision's main legal theory of causation, and what the ruling labeled "the most powerful carcinogenic agent considered in this decision." He testified that he dictated the decision to his 18-year-old secretary, who supposedly helped him research citations in French and English, languages neither of them could understand.

Reeling from Zambrano's poor test performance, a spokesman for the Ecuadoreans insisted that "language and cultural barriers" in the questioning led to "misleading 'gotcha' moments" in court. He attributed the English and French citations to the Ecuadorean Supreme Court decision in the case of Caso Esmeraldas.

Although Zambrano said he threw out all of his notes documenting how he reached the ruling, Chevron claims that Guerra turned over its drafts while signing up as an expert witness for the company. Among the other physical evidence is a $300 deposit slip from Zambrano to Guerra. Chevron characterizes the payment as part of a bribery conspiracy, and Zambrano insists it's a loan to a friend who had fallen upon hard times.

Attorneys for the Ecuadoreans attempted to patch up such damaging testimony as they took over questioning on Zambrano's second day on the hot seat. First up was Rainey Booth of the Texas-based firm Littlepage Booth, representing Steven Donziger, the American lawyer who spearheaded the case against Chevron.


Zambrano quickly denied having ever met or spoken to Donziger, let alone having taken bribes from him. "No one has paid me, nor would I accept that," he said when asked if he was paid for his testimony.

Guerra, on the other hand, freely admits to accepting tens of thousands of dollars in cash from Chevron in a suitcase and entering a contract for at least $326,000 total on top of the services of an immigration lawyer, plus a car and other perks. Chevron defended these payments as transparent and necessary to guarantee the safety of Guerra and his family to protect them from retribution in Ecuador. The company says that Guerra's physical evidence corroborates his tale.

On Wednesday, Zambrano supplied an explanation for how that evidence wound up in Chevron's hands: that he allowed his trusted friend Guerra to use his office and computer when he was not there.

During opening argument, lawyers for the Ecuadoreans asserted that Chevron's case relies largely on the credibility of these two judges, and both parties took turns sullying and cleaning up Zambrano's reputation. Mastro noted that the Plenary Judicial Council disciplined Zambrano and another judge for freeing an alleged drug trafficker believed to be linked to the FARC, a Columbian guerrilla group.

Meanwhile, Zambrano may have an indirect financial stake in his testimony through his current job at Refineria Del Pacifico - a firm in which Ecuador's state-run oil company Petroecuador invests. Chevron blames that company for much of the oil pollution attributed to Texaco.

Julio Gomez, a New Jersey-based lawyer for two of the indigenous Ecuadoreans, asked questions painting Zambrano as the protagonist of a Horatio Alger story, pulling himself up by his bootstraps. The first lawyer in his family, Zambrano obtained a legal doctorate after serving in the Ecuadorean Air Force, working as a prosecutor before assuming the bench. Zambrano said that he brought charges against the cousin of an Ecuadorean president in a particularly "delicate" case.

Public attention to his work intensified between October 2011 and February 2012 when he served as the final judge in the case against Chevron. Zambrano said that the prior judge had closed the evidence-collection phase of the case, known in Ecuadorean procedure as an autos pera sentencia.

By his own admission, Zambrano lied to journalists about the case early in his tenure when he announced that he had 500 cuerpos - the term for a 100-page file - before he started on a verdict. He said that he already had been writing the decision by that time, but he insisted that only wanted the reporters to stop "harassing" him.

Chevron scoffed at the idea that he could have reviewed the 236,000-page case file and written the 188-page, single-spaced decision in that four-month time span. The Ecuadoreans suggested that it had been filled with repetitious and resolved Chevron motions.

Zambrano claimed to have noticed that he was being followed shortly after the ruling, but he was not allowed to detail those allegations on the witness stand because they were deemed irrelevant. Hints of the subject nevertheless found its way into the record through the transcript of Rivero and Guerra's phone chat.

Early in the chat, Rivero remarks, "Alberto Guerra has mentioned my name to you. And has given you my business card and also some articles about me."

Zambrano claims that this handoff occurred at an Ecuadorean airport in August 2012, about a year and a half after the ruling. He also asserted that Guerra told him that Chevron could make him a millionaire.

In the transcript, Rivero appears curiously knowledgeable about Zambrano's whereabouts.

"I am precisely in Manta," Rivero said, according to the transcript. "I could be at your home, I know you are not alone at home, but I could be at your home in 5 minutes. Or, at the hotel you may wish, or the exclusive restaurant, as you wish. But the truth is that it is important... You need to talk to me."

When Zambrano replies that he wants to check to see if "Dr. Guerra has told you anything," Rivera responds, "Doctor, next week there will be major news in the case. Everyone in this case will be protecting themselves next week."

Later that month, Chevron announced that Guerra signed up as a witness.

Zambrano continues to insist that he is being followed both in Ecuador and New York.

Advocates for the Ecuadoreans protest that they should be able to raise the issue to argue that Chevron has "unclean hands" in its lawsuit.

But U.S. District Judge Lewis Kaplan, who is hearing the case without a jury, said the alleged espionage never has been traced to Chevron, and that the law would not recognize such a connection as relevant to the case even if it were proven.

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