Ecuadoreans seek payout of $9B judgment against Chevron in case unfolding in NY

NEW YORK, N.Y. – In an epic legal battle pitting Amazon rainforest tribes against energy giant Chevron, a former Ecuadorean judge claims another judge there took a $500,000 bribe. The second judge, however, says it’s all a lie.

“I would never do so because it would go against my principles. … No one has paid me, nor would I accept that,” said Nicolas Zambrano.

The unusual — and at times, bizarre — clash of judicial brethren has played out at a high-stakes trial in federal court in New York City that will decide whether a multibillion-dollar judgment in Ecuador against Chevron should be enforced in the United States. Zambrano, for reasons unclear, at one point wore a red knit cap, overcoat, scarf and gloves while on the witness stand.

In February 2011, Zambrano issued an $18 billion judgment against Chevron in a lawsuit brought on behalf of 30,000 Amazon rainforest residents for environmental damage caused by Texaco during its 1972-1990 operation of an oil consortium in the rainforest. Chevron later bought Texaco.

But Chevron has long argued that a 1998 agreement Texaco that signed with Ecuador after a $40 million cleanup absolves it of liability. It claims Ecuador’s state-run oil company is responsible for much of the pollution in the oil patch that Texaco quit more than two decades ago. The Ecuadorean plaintiffs say the cleanup was a sham and didn’t exempt third-party claims.

Last week, Ecuador’s highest court upheld the verdict there but reduced the judgment to about $9 billion.

In New York, U.S. District Court Judge Lewis A. Kaplan has been hearing evidence for the last month without a jury as Chevron tries to stop collection of the award. The company claims that the judgment was obtained through fraud and deceit. Kaplan is not expected to rule until weeks after the trial, which continued Monday.

So far, Kaplan has heard the two judges effectively accuse each other of lying.

The other former judge, Alberto Guerra, said he brokered a deal for Zambrano to receive $500,000 to rule for the plaintiffs.

Guerra testified that Zambrano paid him $1,000 a month to ghostwrite dozens of Zambrano’s court orders over a two-year period and had let him fine-tune and polish the Chevron decision because it was written by representatives of the plaintiffs and he needed “to make it look as if it had been written by a judge in the court.”

The two judges had first sought to solicit bribes from Chevron, but the company rejected them, Guerra said.

“Judge Zambrano and I obviously believed that Chevron was in quite a better financial situation than the plaintiffs and that as a consequence of this, a larger financial benefit could be obtained, especially for Mr. Zambrano and to some degree for me.” He added that Zambrano was “discouraged, dispirited” when Chevron turned them down.

Guerra admitted that he had accepted bribes to issue favourable rulings in other cases at least 10 times when he was a judge. He testified he has been paid tens of thousands of dollars by Chevron to provide evidence in its effort to block collection of the judgment. He said Chevron has also arranged to move his wife, two sons and a daughter to the United States, where he now seeks asylum.

Zambrano was dismissed from his judgeship a year after the Chevron award for improperly freeing an alleged drug trafficker. He now works as a legal analyst at the largely Ecuadorean government-owned Refinery of the Pacific.

The former judge testified through an interpreter that he agreed to travel to the United States to testify because “Alberto Guerra had made or given statements that were not, that were not close to reality.”

He was asked by attorney Rainey Booth, who represents the American lawyer who spearheaded the case against Chevron, whether anyone on the plaintiffs’ side had offered him a bribe.

“Never, from no one,” he said.

But at times, Zambrano seemed to lack familiarity with parts of his decision, insisted he had destroyed all his notes and claimed he did not know that the Ecuadorean government supported the Ecuadorean plaintiffs and had praised his decision. He claimed he had no help on his 188-page, single-spaced ruling, except for some Internet research done by his 18-year-old secretary who typed the ruling as he dictated it to her.

Zambrano at times had to leaf through his decision when questioned by Chevron attorney Randy Mastro about what it contained.

During a sidebar, Kaplan told lawyers: “The witness is being, shall we say, not totally responsive.”