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Former Ecuadorean judge testifies to bribery in Chevron case

A Chevron gas station sign is pictured at one of their retain gas stations in Cardiff, California October 9, 2013. REUTERS/Mike Blake
A Chevron gas station sign is pictured at one of their retain gas stations in Cardiff, California October 9, 2013. REUTERS/Mike Blake

By Bernard Vaughan

NEW YORK (Reuters) - A former Ecuadorean judge testified on Wednesday that he ghost-wrote rulings for a judge who ordered Chevron Corp to pay $19 billion to villagers whose land had been polluted by oil exploration.

The former judge testified at a trial in New York in which Chevron accuses U.S. lawyer Steven Donziger of bribing the Ecuadorean judges to win the award for the villagers.

Donziger has denied bribing the officials.

On the witness stand on Wednesday, the former judge, Alberto Guerra, said he met in 2009 with Donziger and other representatives of the villagers at Honey & Honey, a restaurant in Quito.

Guerra said another lawyer representing the villagers had already agreed to pay him $1,000 a month to ghost-write court orders for the presiding judge, Nicolas Zambrano. Zambrano, who was also being paid, agreed to expedite the case and limit procedural avenues by which Chevron could delay it, Guerra said.

Donziger was fully aware of the arrangement, Guerra said.

"Mr. Donziger thanked me for the work that I was going to do," Guerra said of the restaurant meeting.

Randy Mastro, a lawyer for Chevron, asked Guerra if he understood he was violating Ecuadorean law by agreeing to ghost-write Zambrano's orders.

"It hurts me to say so, but yes," Guerra, wearing a gray suit, said calmly through an interpreter.

Guerra testified that Zambrano would typically give him court documents on Friday afternoons, often outside a Quito airport. Guerra would study them and prepare court orders over the weekend before delivering them to Zambrano on Sunday afternoons, he said.

Zambrano is also expected to testify in the trial.

Once Guerra started ghost-writing in the case, another lawyer for the villagers would periodically meet Guerra on a Quito street corner to deliver a blank envelope filled with $1,000, denominated in $20 and $50 bills, Guerra said.

The U.S. dollar is Ecuador's official currency.

Some payments were also made directly into his savings account, Guerra said.

Guerra is a key witness for Chevron, which is seeking to discredit the $19 billion award.

Chevron wants U.S. District Judge Lewis Kaplan, who is presiding over the trial without a jury, to prevent Donziger and villagers he represents from collecting the award in U.S. courts or from profiting from it in any way.

The award stemmed from environmental contamination between 1964 and 1992 at an oil field in northeastern Ecuador operated by Texaco, which Chevron bought in 2001. Chevron says Texaco cleaned up its share of waste before turning the field over to state-owned Petroecuador.

But in 2011, Zambrano awarded $18 billion to people from the Lago Agrio area, which was affected by the pollution. The court subsequently increased the award to $19 billion to cover fees.

Mastro asked Guerra to identify Donziger in the courtroom.

Guerra said Donziger was the person who had just smiled, before describing the dark suit Donziger was wearing. "He knows me. He has seen me. We've been together."

Donziger's lawyers are expected to cross-examine Guerra on Thursday.

They have questioned Guerra's credibility, saying Chevron is paying him for his testimony. In January, Chevron said it relocated Guerra's family to ensure his safety and paid him $38,000 for the costs of providing his evidence. Chevron also confirmed that it agreed to pay Guerra's family $10,000 per month for living expenses and $2,000 for housing.

Guerra, who had presided over the Ecuadorean case before Zambrano, also testified that he and Zambrano initially offered a similar proposal to Chevron.

"Judge Zambrano and I obviously believed that Chevron was in quite a better financial situation than the plaintiffs," Guerra told Mastro.

A lawyer for Chevron said he would relay the offer, which was rebuffed weeks later in a telephone call, Guerra said. The lawyer said that "under no circumstances would Chevron agree to any sort of agreement," Guerra said.

Zambrano, Guerra said, was "discouraged, dispirited," before soliciting Donziger's team.

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

(Reporting by Bernard Vaughan; Editing by Marguerita Choy and Steve Orlofsky)

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