Chevron: Another twist in the Ecuador pollution case.

Humberto Piaguaje, a leader of the Secoya people in the Ecuadorian rainforest, traveled a great distance to testify yesterday on behalf of Steven Donziger, the embattled New York plaintiffs’ attorney targeted by Chevron (CVX). Piaguaje took the witness stand in federal court in Lower Manhattan wearing a traditional crimson tunic, long strings of beads, and a multi-hued, disk-shaped headdress. Speaking via a translator, he demanded that Chevron clean up widespread pollution in his home region in northeastern Ecuador.

All this was to be expected on the final day of testimony in Chevron’s six-week civil-racketeering suit against Donziger. The company has accused the plaintiffs’ lawyer of using fabricated evidence and bribes to secure a $19 billion verdict against Chevron in an Ecuadorian court. What wasn’t expected yesterday was Piaguaje’s testimony that he and the other indigenous Ecuadorians represented by Donziger for two decades had limited the American’s role as their lawyer last January, in part, because they believed he had failed to account adequately for some $25 million he raised in their name to fight Chevron.

Describing a meeting in January in Ecuador at which an indigenous council asked Donziger to explain how he had spent money raised for the contamination case, Piaguaje said the Ecuadorians were dissatisfied by his failure to provide a detailed accounting of how he had spent $25 million he said he had raised since 2010. As a result, Piaguaje added, the council “terminated his functions.”

The Secoya leader explained that, in addition to the differences over accounting, the Ecuadorian council was concerned that Chevron’s racketeering suit against Donziger in the U.S. had become a distraction from the pollution litigation in Ecuador. “We also took action because of Donziger’s attitude,” Piaguaje testified.

Called as a witness by the U.S.-based legal team defending Donziger and the Ecuadorians in the rainforest, Piaguaje cast a cloud of confusion over the proceedings before U.S. District Judge Lewis Kaplan. At a different point in his testimony, Piaguaje reiterated that the Ecuadorian plaintiffs had “suspended” Donziger “from his functions.” He also said, though, that Donziger remained a lawyer for the Ecuadorian plaintiffs. Piaguaje’s tone remained calm throughout his testimony. After several hours in the chilly courtroom, he slipped a dark coat over his traditional tunic.

Donziger has attended much of the racketeering trial, but he was not in the courtroom yesterday. His spokesman, Chris Gowen, said via e-mail: “This is a civil case that Mr. Donziger considers to be a show trial with no legal remedy and no legal basis. Mr. Donziger has no obligation to appear in court every day, as is the case with defendants in every civil case in our country.” Donziger has repeatedly denied wrongdoing, although he has conceded that he made “mistakes” in how he pursued the Ecuadorian litigation against Chevron.

Gowen added: “Mr. Donziger is good friends with Mr. Piaguaje and has known him for almost two decades. They are getting together socially and to discuss case-related issues while he is in New York.” As for the $25 million in litigation financing, Gowen said: “Mr. Donziger always has provided an adequate accounting to his clients for the expenditure of all funds spent on the case. Many documents have been introduced in this case that show parts of that accounting.”

Chevron filed its racketeering suit against Donziger to discredit the $19 billion verdict he won in 2011. While the oil company has pressed its case in New York, Ecuador’s top court recently upheld the liability finding against Chevron but halved the damage amount to $9.5 billion.

Closing arguments in the racketeering case are scheduled for Tuesday. In what might be a preview, Donziger’s team put out a press release late yesterday that accused Judge Kaplan of “suppressing critical witness testimony” and “demonstrating his deep-seated animus toward the Ecuadorian communities victimized by Chevron’s pollution.” Since Kaplan is hearing the case without a jury and has broad discretion to rule as he sees fit, such personal attacks indicate that Donziger’s side has already concluded that it will lose and is laying the groundwork for an appeal.

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