Witness Testifies Stephen Baldwin Threatened to 'Blackmail' Kevin Costner

Stephen Baldwin Kevin Costner Split - H 2012
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Stephen Baldwin Kevin Costner Split - H 2012

In an ongoing trial over whether Kevin Costner and his partners tricked other associates, including actor Stephen Baldwin, out of shares of a technology that separated water from oil, Scott Smith, CEO of Opflex Solutions, told the jury that Baldwin threatened to leak personal information about Costner to The New York Times if the $21 million dispute wasn't resolved.

Smith was one of Costner's witnesses and is in the oil-spill business, having worked with BP, whose Deepwater Horizon rig exploded and dumped massive amounts of oil into the Gulf of Mexico in 2010. Smith says he heard about the Costner dispute while driving with his "good friend" Baldwin in a car from New Orleans to Grand Isle in November 2010.

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During the ride, Baldwin allegedly said he would damage Costner's reputation if the business dispute wasn't put to bed, according to Fox News' recap of the trial hearing Wednesday.

Smith quotes Baldwin as saying, "I have to be careful how I do it."

"I said, 'Stephen, that's blackmail,' " says Smith.

The latest testimony came during a New Orleans federal court trial where Costner is battling Baldwin and Spyridon Contogouris, both of whom once owned shares in a company called Ocean Therapies Solutions (OTS), which had an exclusive agreement with Costner's CINC to market the oil spill technology.

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Costner says he spent $20 million and 10 years developing oil-separating technology in the 1990s without much luck. The plaintiffs have been attempting to show that Costner failed as a businessman before being drawn back in after the Deepwater Horizon rig exploded.

Ultimately, the main question at trial is whether Costner and his partners did anything nefarious before Contogouris and Baldwin sold shares in OTS for $1.9 million, which preceded BP's $52 million order for 52 centrifuges. The plaintiffs claim that they were excluded from a meeting where BP indicated its willingness to make an order and that Costner's team ordered them to put up additional money without explanation. Costner's team allegedly created the impression that BP wasn't going to make an order.

Last week in the case, Costner testified that even after his efforts in the 1990s, he remained active in the business, continuing to work on centrifuges with a partner in a side project.

Costner spent some of his time over the years urging the use of the oil-separating technology, partly at Contogouris' behest, but the actor says he was more than a public face.

"I'm not just a celebrity," said Costner on the stand, according to CNS. "I'm not just a person who opens doors. ... I probably know more about oil spills than almost anyone in the world. ... The way some people like musicians, I like engineers and scientists."

Costner also had harsh things to say about Baldwin. The actor testified that OTS had become "dysfunctional" and about Baldwin, "I never saw him do anything."

Costner got some support from his partner Patrick Smith, who testified that at the time that BP's payments were conditional and since BP represented the best hope for OTS to make money, Contogouris was nervous about going forward.

The plaintiffs have attacked that line of defense.

Costner and partner Smith "came down and squeezed out the Louisiana guys by fraudulently deceiving them," said Baldwin's attorney during the trial.

Baldwin, who received $500,000 after selling his OTS shares, also got a chance to testify earlier this week. He told the jury that Costner had felt "undervalued" and that he had offered to give up 5 percent of his ownership stake in OTS to appease Costner when the business partners first negotiated their ownership interests. Later, Baldwin says he was excluded from the now-infamous June 2010 dinner meeting at which BP executive Doug Suttles committed to ordering the centrifuges and, soon thereafter, relied on Contogouris' advice in deciding to sell his shares.

Baldwin says his primary motivation wasn't money but rather the impact of the technology itself, and that even though he was involved in bankruptcy proceedings, he would have invested more. "I could have asked my big brother," he said, referring to fellow actor Alec Baldwin.

Unlike Costner, Baldwin says he knew his role was modest. "My job was to market and promote," Baldwin said. "I had no responsibilities relevant to getting the devices in the water."

During Smith's testimony on Wednesday, the oil spill executive didn't reveal the nature of what personal information Baldwin had on Costner.

The trial is expected to wrap up Thursday.

"My name is at stake," said Costner on the witness stand.

E-mail: eriq.gardner@thr.com

Twitter: @eriqgardner