Witness claims U.S. lawyer used inflated estimate in Chevron case

Thu Oct 17, 2013 6:06pm EDT
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By Joseph Ax

NEW YORK (Reuters) - A U.S. lawyer used inflated estimates to pursue what eventually became an $18 billion pollution judgment against Chevron Corp (CVX.N: Quote) in Ecuador, despite warnings that the numbers were "wildly inaccurate," his former consultant said on Thursday.

The consultant was called as a witness in federal court in New York by Chevron, which claims that lawyer Steven Donziger used fraud to obtain the judgment from an Ecuadorean court in 2011 on behalf of a group of villagers.

David Russell said Donziger asked him in 2003 to assess what Donziger said was widespread pollution at an Ecuadorean oil field that had been operated by Texaco. Texaco was acquired by Chevron in 2001.

Russell said that his initial estimate of more than $6 billion was based in part on assumptions given to him by Donziger about the extent of the damage and on Donziger's desire for a figure that could be used to put pressure on Chevron.

By late 2005, however, he said he had become "thoroughly disillusioned" with his estimate, after testing that showed contamination was less severe. He claimed he repeatedly asked Donziger to stop referring to it in press releases and other statements, a request he said Donziger ignored.

The non-jury trial, which is being heard by U.S. District Judge Lewis Kaplan, comes after years of litigation over environmental contamination in Ecuador between 1964 and 1992.

Chevron, which asserts that Texaco cleaned up before ceding control of the field to a state-owned oil company, is seeking to prevent Donziger and the residents of the village of Lago Agrio from using U.S. courts to enforce the $18 billion judgment.

Donziger has denied using fraud.   Continued...

A Chevron gas station sign is seen in Del Mar, California, April 25, 2013. REUTERS/Mike Blake