Butler's testimony began the final day of plaintiffs' witnesses in Victoria and Jason Keenan's civil-rights case against Butler and his Aryan Nations church. The defense is expected to begin laying out its case Tuesday.
Right after the last witness for the plaintiffs was called, the judge in the case denied a defense motion to dismiss a claim for punitive damages, saying the Aryan's outrageous conduct makes such damages awardable, reports CBS News Correspondent Stephan Kaufman.
Butler has contended that the guards were renegades who violated Aryan Nations rules in racing off the group's compound near Hayden Lake to chase the Keenans.
The Keenans seek unspecified damages for the July 1, 1998 incident, in which they were chased by three Aryan Nations security guards, shot at and assaulted after stopping in front of the group's headquarters north of here.
Attorneys for the plaintiffs want to use punitive damages to bankrupt the Aryans.
The Keenans also took the stand Friday and described their ordeal.
Both said they have suffered lasting psychological problems.
Dr. Paul Domitor, a Spokane, Wash., clinical psychologist, testified the Keenans suffer from post-traumatic stress disorder, similar to shell-shock suffered by war veterans.
Anthony Potter, a security executive at Harborview Medical Center in Seattle, said trained security guards would never have left the compound in case the car they were chasing was a diversion.
Earlier, under questioning from plaintiffs' lawyer Richard Cohen, who is with the Southern Poverty Law Center, Butler acknowledged he had directed his security guards to be alert for possible harassment or attack from the Jewish Defense League or a local human rights organization prior to a July 1998 march.
"I told them to watch," Butler said.
He testified that he wasn't sure whether all Aryan Nations members were responsible to him for their actions. But Cohen produced an Aryan Nations handbook that says Butler is the sect's absolute authority.
Cohen had Butler read from depositions taken from the Aryan Nations newsletters Butler wrote that proclaimed the group to be at war. One passage said: "Hatred is our law. Revenge is your duty."
Butler acknowledged honoring people who have committed violence on behalf of the Aryans, such as Bruce Pierce, a member of The Order, a violent offshoot of the Aryan Nations. But he said he has never advocated violence.
"It's a war of ideas," Butler said.
Under cross-examination by Edgar Steele, the lawyer representing him, Butler was asked about an article he had written in which he said he agreed with Adolf Hitler that Jews are a virus tat must be wiped out.
Butler said the passage was "a call to arms" and that Hitler didn't advocate killing Jews, but only called "for removing them from the territory of Germany."
"I renounce the fact that it means we're out to kill anybody, or remove anybody that is not a threat to our race," Butler said when asked by Steele to renounce the Hitler passage.
Butler said he renounces the use of violence except in defense of the white race. He also said on the stand that he is a racist and defined racists as those who love their race.
Butler characterized his security teams as unpaid volunteers under the direction of his second-in-command, "Colonel" Michael Teague.
The Aryan Nations, the political arm of the White Identity Church of Jesus Christ-Christian, doesn't have the resources to check the backgrounds of and train its security staff, Butler said.
"We're not a multinational outfit like you are," Butler told Cohen. "We're a small business."
Butler said he didn't learn the details of the assault on the Keenans until months later. He said he still isn't sure whether the Keenans were agents sent by the JDL or human rights groups.
Named in the Keenans' suit, in addition to Butler and Teague, are former security chief Jesse Warfield, former guard John Yeager and a third former guard who is a fugitive, as well as Saphire Inc., a corporation Butler set up to protect the church assets. Warfield and Yeager were convicted of assaulting the Keenans and are serving prison sentences.
If the jury finds for the Keenans and awards compensatory and punitive damages, the Keenans could go after the Aryan Nations' 20-acre property.
Irv Rubin, head of the Jewish Defense League, says he sees a positive outcome for the plaintiffs when the trial resumes Tuesday.