Battle Erupts Over Allegations in Honda Trial : Courts: Defense says jury should know Japanese managers condoned ‘gifts.’ Prosecution says firm’s U.S. officials took bribes.

A courtroom battle erupted Thursday over whether a jury should be told about rumors and allegations that Japanese managers of American Honda Motor Co. knew of a massive bribery ring in the company.

The government is trying to prove that two Americans who are former top officials of American Honda took millions of dollars worth of bribes from car dealers.

Prosecutors have not presented any evidence of Japanese wrongdoing and say the defendants acted only out of greed, not loyalty to their company.

American Honda has said all along that it was defrauded and is a victim of the scam.

Defense attorneys are trying to convince the jury the defendants were operating under normal business practices at Honda and that the company’s Japanese managers condoned the activity.

“The government has reams of documents that show the Japanese knew about these practices,” defense attorney Paul Twomey said in court.

Assistant U.S. Atty. Michael Connolly argued the documents contain only “hearsay and rumors” and should not be allowed into evidence.

Earlier in the trial, key prosecution witness Stanley Cardiges alleged he had “heard” that Japanese managers accepted gifts from dealers. But he later said he had been “stretching for a defense” and had no firsthand knowledge of any wrongdoing by the Japanese.

Cardiges, 49, of Laguna Hills, pleaded guilty Feb. 7 to racketeering and other charges in one of the biggest bribery schemes in the history of the American car industry.

Over strenuous objections from prosecutors, defense attorneys Thursday tried to get Cardiges to admit he knew the government had many documents containing rumors of Japanese wrongdoing. In the end, most of the documents were excluded from evidence.

Cardiges was the government’s key witness at the trial of his former boss, John Billmyer, and former colleague Dennis Josleyn.

Prosecutors have charged that between 1979 and 1992, Cardiges and other former American Honda officials received $15 million in cash and merchandise kickbacks for granting franchises of coveted Honda cars, particularly the Acura.