Woo vs. Harmon - Witness Albert Chee, Jr.

THE UNITED STATES DEPARTMENT OF JUSTICE

OFFICE OF THE U.S. TRUSTEE

David C. Farmer, Successor Trustee
vs.
Bobby N. Harmon

(Formerly Mary Lou Woo vs. Harmon and James Nicholson vs. Harmon)

CV05-00030 DAE/KSC

United States District Court, District of Hawaii

Judges: David A. Ezra; Kevin S. Chang

—

DEFENDANT’S WITNESS

ALBERT CHEE, JR.

Attorney for Chevron Hawaii.

Email: comment@chevron.com

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NEW DISCOVERY (05-11-09): More undisclosed conflicts of interests between Judge Barry Kurren, Faye Kurren, Albert Chee, Linda Chu Takayama, Dan Inouye, Ted Stevens, Robert Wrede, etc.:

April 15, 2002

Oil companies note loophole
in gas price proposal

Pacific Business News (Honolulu) - by Prabha Natarajan

Oil companies say a legislative proposal to regulate gas prices doesn't address the 50 percent of Hawaii's gas stations that are company operated, since it doesn't specify any price cap for them and doesn't require dealers to pass on savings to drivers.

These factors could lead to a situation where wholesale prices are held down, but not necessarily retail gas prices, said Albert Chee, spokesman for Chevron Hawaii.

"This proposal doesn't ensure, require or regulate that dealers pass on savings to consumers," Chee said. "The proposal relies on dealers to pass on savings out of the goodness of their hearts."

Lawmakers are attempting to institute prices controls after a lawsuit by the state against the oil companies was settled out of court. The state settled its $2 billion lawsuit, filed in 1998 against Chevron, Texaco, Shell, Unocal and Tosco, for $20 million. In 1999, the state settled with Tesoro Hawaii and BHP Hawaii for $15 million.

Lawmakers who support price regulation argue it's in the interest of Hawaii's consumers to bring prices more in line with those charged on the mainland.

"I'm not a fan of regulation," said Rep. Ed Case, D-Manoa. "But we have no open market here. The state's antitrust lawsuit was not able to demonstrate it. The next step is to either wait for a market remedy that may lead us in the wrong direction, or go for regulation. Even if oil companies file a lawsuit against us, we have enough evidence to prevail."

Chevron will consider legal action if price controls are enacted, but hopes it doesn't come to that, Chee said.

"Most lawmakers agree; we don't want to rush to a conclusion. We don't want more lawsuits and, therefore, want to proceed with caution," Chee said. "We settled the lawsuit at 1 percent of the claim. That is a clear indication of nothing wrong going on here."

"Instead of acting hastily, we suggest they pause, take a look at all the information and determine what needs to be done," Chee added. "If measures are not given thorough examination, there could be unintended consequences of it."

Market forces should rule, said Faye Kurren, president of Tesoro Hawaii.

"We are a firm believer that the consumer is ultimate," Kurren said. "They are the ones who should decide, not government."

A group of bipartisan House representatives supported a measure to establish a wholesale gasoline price based on the average price of crude oil in four markets. The proposed price formula was introduced in a House bill at the beginning of session by Rep. Paul Whalen, R-N. and S. Kona-Ka`u, but it was not heard by the Senate.

The House later inserted the proposal in a Senate bill to keep the measure alive for discussion during conference committee.

The proposed price-setting formula in the bill calls for an average price per barrel of West Texas Intermediate, Alaska North Slope, Saudi Arabian Light and North Sea Brent crude oil, multiplied by 0.035 to arrive at the cost per gallon.

Whalen said he arrived at that number after speaking with mainland oil industry officials who look at the cost to produce oil and that the number is used within the industry to calculate the actual cost to produce a gallon of gas. Using this formula would reduce oil prices by at least 40 to 50 cents a gallon, Whalen said.

If the formula were applied to current rates of oil as reported in The Wall Street Journal on April 8, the wholesale price of gas comes to 89 cents a gallon....

Hosie, a San Francisco attorney, represented the state in its antitrust lawsuit, arguing oil companies reaped profits of 50 to 60 cents a gallon here, compared to 10 cents on the West Coast and 2 to 3 cents for the rest of nation....

Between 1988 and 1998, Chevron's average after-tax return on investment in Hawaii from dealer stations was 20.8 percent, compared to 1.9 percent in Los Angeles and 9.8 percent in San Francisco, according to the deposition.

"Without a doubt, for the past decade oil companies have made huge profits at the expense of Hawaii's consumers," said Rep. Kenneth Hiraki, D-Downtown-Ala Moana, House Consumer Protection and Commerce Committee chairman.

http://pacific.bizjournals.com/pacific/stories/2002/04/15/daily2.html

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Albert Chee, Jr. is expected to testify regarding his business, professional, personal and political relationships with Chevron Hawaii, Aloha Petroleum, James Ahloy, Tesoro Hawaii, Judge Barry Kurren, Faye Kurren, The Nature Conservancy, Earl Anzai, Lyn Anzai, Guido Giacometti, Susan Tius, Mary Lou Woo, Mark Bennett, Linda Lingle, Mark Bennett, Bob Awana, Shelton Jim On, Judge David Ezra, Hill & Knowlton, Miller & Chevalier, Kitty Lagareta, Frank Young, Enterprise Hawaii, Allen Uyeda, First Insurance Company, Kamehameha Schools/Bishop Estate, Constance Lau, Nainoa Thompson, Kirk Belsby, Eric Yeaman, Edwina Clarke, Hawaiian Electric Co., Michael Mae, Paul Alston, Stanford Carr, Blenn Fujimoto, Central Pacific Bank, Colbert Matsumoto, Vito Galati, Cades Schutte, Hawaii Energy Policy Project, Michael Chun, John Waihee, Jennifer Cartmell, Heddington Insurance Ltd., Marsh & McLennan, Marsh Affinity Services, St. Paul Travelers, Chubb Group, First Insurance Co., Allied World Assurance, Mark McConaghy, PricewaterhouseCoopers, Goldman Sachs, Judith Neustadter Fuqua, Steven Guttman, Sidney Ayabe, Robert Wrede, Ted Stevens, Dan Inouye, Robbie Alm, Sukamto Sia, Diane Plotts, Linda Chu Takayama, and others to be named upon discovery.