NEW ORLEANS (CN) - Stephen Baldwin threatened to leak personal information about Kevin Costner to The New York Times if the actors could not resolve a $21 million dispute over a contract with BP for oil-separating machines, a former associate of Baldwin testified Wednesday.
Scott Smith, CEO of a company that contracted with BP, said he hired Baldwin as a promotional salesman for his company. Smith said Baldwin claimed he could help cut through the hordes of contractors seeking contracts from BP after the massive oil spill.
Baldwin and Spyridon Contogouris sued Costner and his business partner Patrick Smith - no relation to Scott Smith - for $21 million in December 2010. The plaintiffs claim Costner and Smith tricked them into selling their shares in Ocean Therapy Solutions just before the company sold BP 32 oil-separating centrifuges for $52 million.
Baldwin got $500,000 for his shares. He testified Monday that he would have held out for more had he known the company had agreed to the deal with BP.
Scott Smith was called as a witness Wednesday afternoon by Costner's attorneys.
Smith told Costner's lawyer Lesli Harris that during a car ride from New Orleans to Grand Isle in November 2010 Baldwin told him about the legal dispute with Costner over the contract with BP, and that he planned to smear Costner's name if Costner did not do what he wanted.
During that trip, Smith said, he also heard Baldwin talking on the phone about his plans to leak Costner's personal information.
"I said 'Stephen, that's blackmail,'" Smith said in court.
Smith said Baldwin responded, "I have to be careful how I do it."
Scott Smith testified that on the same drive from New Orleans to Grand Isle, Baldwin said that he and Contogouris had known they should not sell their shares in Ocean Therapy Solutions when they did, but that they needed money.
Scott Smith said Baldwin contacted him in October 2010 about working as a promoter for his company.
During the initial phone call, Baldwin told him a lot of information, Smith said: that he was working on a documentary about the oil spill; that he was working with Plaquemines Parish President Billy Nungesser; and "that he's been in a Blackhawk helicopter." He also said he could put Smith and Nungesser in touch and could get Smith $1 million in contracts, Smith testified.
Smith said that Baldwin made good on his promise to put him in touch with Nungesser and get contracts for his oil-separating technology in areas hit by the oil spill.
In December 2010, Smith testified, he learned that Baldwin's attempts to get Costner to do what he wanted had been unsuccessful and that the upcoming litigation would be high profile.
The next day, Baldwin contacted New York Magazine, saying he was Scott Smith's "equity partner," Smith testified.
Smith's company makes foam that attracts oil and repels water.
"I was very upset," about Baldwin saying he was equity partner, Smith testified. Since Baldwin already had been paid through the next month, Smith said, he took his time to "carefully phase out" his relationship with Baldwin.
Costner testified last week that he never saw Baldwin do anything while he was still a member of Ocean Therapy Solutions, and called the company "dysfunctional."
At the height of the 87-day oil spill, as Baldwin and Contogouris sold their shares in Ocean Therapy Solutions, BP ordered 32 of the centrifuges. It sent a few of them to the Gulf in June 2010.
The well was capped at the end of July 2010.
The trial is in its second week. Testimony could end as early as this afternoon.
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