THE MATING OF
HONEYMOON IN HAWAII
Sightings from The Catbird Seat
~ o ~
From the Chevron website:
Protecting the earth's natural resources is as important to Chevron as providing the energy sources so essential to improving our quality of life. Beyond meeting the world's energy needs, our goal is to be recognized and admired everywhere for having a record of environmental excellence.
Going Beyond Requirements
Chevron's values, business strategies and field operations reflect the highest possible environmental standards. The company is committed to continually improving its processes for minimizing pollution and waste, conserving natural resources, responsibly stewarding our products and enhancing a broader understanding and management of the environmental aspects of its businesses...
Key to Profitability
We also know that a record of environmentally sound operations makes us more competitive in the global marketplace, helps us gain permission to operate and is essential to profitability. Chevron's leadership is dedicated to developing a corporate culture that's committed to protecting the environment in which we live and work...
Sponsor and Partner
Grants, sponsorships and partnerships in support of a great diversity of programs also contribute to environmental progress.
For example, our contributions to the Nature Conservancy in Canada helped purchase 320 acres at Coyote Lake, which helped protect diminishing natural habitat in one of Alberta's richest biological areas.
In Wyoming, we played a major part in protecting bald eagles by constructing special platforms on top of power poles, helping this threatened species land safely.
And in Louisiana, Texaco donated over 8,000 acres around Cypress Island to the Nature Conservancy between 1990 and 2001, contributing to the largest remaining block of forest in that area's watershed....
February 3, 2006
Chevron Spin Cannot Hide Company’s
Legal Woes Over Multi-Billion Dollar
Liability In Ecuador
After Call For SEC Investigation, Oil Giant Issues
Bizarre Press Release That Misrepresents Data
Quito (Feb. 3, 2006) -- The first official court report in Chevron’s multi-billion class-action pollution trial in Ecuador’s rainforest found the company had left massive amounts of life-threatening contaminants in a site that it claimed to have remediated.
The report offered additional proof that Texaco (now Chevron) committed fraud during its “clean-up” of what is believed to be the world’s worst oil-related ecological catastrophe, according to the Amazon Defense Coalition, the group representing 30,000 people suing the oil giant.
These basic facts were not mentioned by the Chevron public relations team, which, on February 2nd, issued a bizarre press bulletin claiming the court report completely exonerated the company.
Coalition spokesperson Luis Yanza, representing the villages suing the oil giant, characterized the Chevron press release as “inaccurate” but “unsurprising given their posture in the litigation which denies obvious conclusions one can draw from the evidence.”
Said Yanza: “The Chevron people have spun the facts so fast they have propelled themselves into a parallel universe completely disconnected from the reality on the ground in Ecuador.”
Contrary to Chevron’s Feb. 2 press release, the Ecuador court report found a well site known as Sacha-53 had high levels of toxic contaminants, according to scientific experts for the plaintiffs. The court report also found 28 separate water and soil samples that contain harmful chemicals in violation of Ecuadorian norms, generally considered more lax than those in the United States; dangerous levels of carcinogens such as cadmium and other toxins such as barium, nickel and lead; and levels of Total Petroleum Hydrocarbons more than 100 times higher than maximum allowable levels in most U.S. states for cases where groundwater could be contaminated, as is the case in Ecuador.
The Feb. 2 Chevron press release came one day after the environmental group Amazon Watch called on the Securities and Exchange Commission to investigate Chevron management for possible fraud after failing to disclose the company’s liability in the Ecuador litigation to shareholders. The liability has been estimated by Amazon Watch to be between $10 and $20 billion, if one includes clean-up costs and personal damages to thousands of victims. Though the trial began in 2003 and is expected to end next year, Chevron has never mentioned it in its public filings.
Texaco, which is now owned by Chevron, is accused in the lawsuit of having dumped 18 billion gallons of toxic waste water into the Amazon rainforest. That pollution included more than 30 times more crude oil than the Exxon Valdez spill. The suit alleges that the dumping has led to the near-extinction of two indigenous tribes and elevated rates of cancers, spontaneous miscarriages, and other oil-related health problems. The trial has generated a transcript more than 80,000 pages in length.
“The Chevron press release is corporate cynicism writ large,” said Bill Powers, who has visited the sites as a guest of the affected communities and who has studied the court report.
Atossa Soltani, Executive Director of Amazon Watch, who sent the letter asking for the SEC to open an investigation of Chevron, added: “With this press release, the company is again providing further evidence that it is misleading the public markets and its shareholders by covering up its massive potential liability in Ecuador.”
Chevron has not denied Texaco dumped toxic waste water into the rainforest, but claims the government released it from further clean-up obligations after it completed a remediation program in the mid-1990s. The remediation cost the company $40 million, while the plaintiffs estimate a comprehensive clean-up would cost at least $6.14 billion, based on an independent assessment by the American firm Global Environmental Operations. The plaintiffs assert that the limited clean-up work by Texaco was performed fraudulently to deceive the Ecuadorian government.
The court’s scientific report from Sacha-53 is the latest in a series of 44 reports submitted by technical experts for both sides that cover 22 contaminated sites inspected by the judge. Both Chevron’s scientists and technical experts for the villagers have found extensive contamination covering 100% of the 22 sites reported, according to the Coalition. This report was different in that it was submitted by experts appointed directly by the judge in the case to assess the expert reports by both sides.
Powers, a petroleum engineer with engineering and environmental consultancy E-Tech, who recently visited the contaminated sites in Ecuador and reviewed the latest court report, said: “Chevron’s press bulletin misrepresents the Ecuadorian court expert’s report. The company must spend its time focusing on clean-up of a major public health threat rather than trying to spin a sampling program the company specifically designed to avoid testing the contamination hotspots.”
- For full details, including independent scientific reports, of the landmark Ecuador lawsuit and the international campaign to hold Chevron to account, visit www.chevrontoxico.com or www.texacotoxico.com
November 15th, 2006
Investigation Cites Seven Examples of
Chevron Fraud in Ecuador Rainforest
Indicates Oil Giant Paid Less Than 1% of Actual
Cost Of Clean-Up, Then Lied About Results
Click here to read the full memo on Chevron's Fraud and Deceit in Ecuador.
Quito – A new investigative report on Chevron’s controversial operations in Ecuador’s Amazon rainforest details seven examples of fraud committed by the oil giant to hide a potential multi-billion dollar liability from shareholders and the financial markets.
The 19-page report, titled Rainforest Catastrophe: Chevron’s Fraud and Deceit In Ecuador, was written by lawyers representing 30,000 rainforest residents who are suing the company for clean-up of their ancestral lands. Chevron is accused in the lawsuit of dumping more than 18 billion gallons of toxic waste into Ecuador’s rainforest between 1964 and 1992, containing 30 times more crude oil than that spilled in the Exxon Valdez disaster. Some experts believe it is the largest oil-related contamination on the planet.
The lawsuit charges the dumping and the abandonment of roughly 1,000 toxic waste pits threatens five indigenous groups and would cost at least $6.14 billion to remediate. Dr. Ann Maest, a noted American chemist who has testified for the U.S. Department of Justice in environmental cases, considers the area in Ecuador where Chevron operated – roughly the size of Rhode Island – to be unfit for human habitation.
The frauds committed by Chevron that are cited in the report include:
• Chevron paid only $40 million for a clean-up to secure a legal release, or less than 1% of the real $6 billion cost of a comprehensive remediation;
• Chevron illegally hid the existence of dozens of open-air toxic waste pits during negotiations with Ecuador’s government over its clean-up obligations;
• Chevron used an illegal laboratory test to falsely lower levels of toxic contamination to deceive Ecuador’s government into granting it a legal release;
• Chevron used a clean-up standard in Ecuador that allowed 50 times more toxic contamination in the soil than the standard in the U.S. at the same time;
• Chevron has not disclosed that it has employees targeted by an ongoing criminal investigation in Ecuador into the company’s fraud;
• Chevron is violating its social responsibility and governance policies in Ecuador but not respecting local communities that are suffering cancers and other oil-related diseases;
• Chevron’s fraud is continuing today during the trial against the oil giant in Ecuador, as company scientists try to hide actual levels of contamination to deceive the court.
In addition to the burden of the civil trial in Ecuador, Chevron is facing increasing pressure from various regulatory bodies with jurisdiction over the company. Already, Ecuador’s lead national prosecutor is investigating Chevron on possible fraud charges while in the U.S. the Securities and Exchange Commission is probing whether the company violated regulations by misleading shareholders as to the extent of its liability.
Embattled Chevron executive, Richard Reis Veiga, the Chevron Vice President who negotiated and supervised the controversial remediation in Ecuador, was put under oath on Nov. 8 by Ecuador’s government as part of a multi-billon dollar civil case in U.S. federal court between the company and Ecuador’s Attorney General. Reis Veiga is also reportedly the target of the criminal investigation in Ecuador.
The Ecuador trial is to determine how large the contamination liability is, while the U.S. case between Chevron and Ecuador’s government is to determine who pays the liability.
The investigative report is available in English at www.chevrontoxico.com, and in Spanish at www.texacotoxico.com. The trial in Ecuador is expected to end in the latter part of 2007, while the U.S. case is scheduled for trial in March of next year.
November 15th, 2006
Mother Who Testified About Toxic Pollution In
Chevron Rainforest Trial Dies of Cancer
Family In San Carlos Has Suffered Multiple Deaths
San Carlos, Orellana—A woman with three teen-aged children from a community in the Amazon rainforest known as the “cancer zone” has died of the fatal disease just months after accusing Chevron in court testimony of having dumped tons of toxic waste near her small farm.
Maria del Carmen Villota Mainaguez, 42, a resident of the town of San Carlos in Ecuador’s Amazon region, died on Nov. 8 after battling uterine cancer for two years. Her father, Faustino Villota, also died of cancer four years ago in San Carlos after drinking tainted water for years near the family farm.
The class action civil lawsuit where Villota testified last March accuses the oil giant of having dumped 18 billion gallons of toxic waste into the rainforest and abandoned approximately 1,000 open-air waste pits filled with toxic sludge and oil waste. Texaco, which was bought by Chevron in 2001, built and operated 350 wells in the area from 1964 to 1992. Clean-up is estimated at $6 billion.
The lawsuit accuses Chevron of violating Ecuadorian and U.S. law by using sub-standard practices in Ecuador to save money. It is estimated Chevron made $30 billion in profit from its Ecuador operations, and saved an estimated $5 billion by failing to use technology then in use in the U.S. that re-injected the toxic waste into well cavities to avoid an environmental impact.
The area where Villota Mainaquez lived sits at the intersection of two of Chevron’s large separation stations, Sacha Central and Sacha Sur. Both were used to separate the crude oil from the toxic “produced water” and in both places the waste was dumped into streams that served as the water supply for the town.
According to Rosa Moreno, a nurse in San Carlos, 27 town residents have died of cancer since Texaco began its operations in the area. The entire population of San Carlos is only 500 people, she said, prompting residents to call it the “cancer zone”.
“Texaco’s delaying tactics are all the more disgraceful when people like Maria Villota are dying,” said Luis Yanza, Coordinator of the legal case for the affected communities...
As with the other residents of San Carlos, drinking water obtained from wells and streams had to have a light slick of oil pushed to the side before being consumed. The people of the entire region have been bathing, cooking and washing in such water for decades, their children subjected to the toxins the water carries from the time of their birth.
On March 8 of this year, Villota testified at a court-ordered inspection of the Sacha Sur Oil Station in which the judge asked her where she then lived. She responded that she was now renting a place in La Joya de los Sachas having been forced to move from San Carlos after selling everything she had to pay for her treatment.
Villota explained to the judge that when she lived in San Carlos she collected water from a nearby stream that she knew to be contaminated, but had no choice but to use it.
Villota leaves three children aged 18, 14 and 12.
In the area of La Joya de los Sachas alone, where Villota spent the last few months of her life, Texaco was responsible for spills of over 20 million gallons of crude over the course of its 30 years of operation in the area.
The lawsuit claims the pollution has forced two indigenous tribes (the Cofán and Secoya) to the brink of extinction and led to the extinction of a third, the Tetete.
November 14, 2006
Oil discovery brings caution for Cambodia
By Troy Graham, The Philadelphia Inquirer
PHNOM PENH, Cambodia - The good news in this country of 14 million, where one-third of the people live on less than 50 cents a day, is that they've struck oil.
But the bad news is that the discovery may make things even worse.
Early analyses indicate that the income from crude and gas could quickly exceed the current gross domestic product. A rapid acquisition of wealth fuels fears that autocratic, repressive leaders could become even less responsive to the needs of their impoverished people.
The American company Chevron holds a 70 percent stake in the first of six proposed offshore tracts in the Gulf of Thailand. In 2004 and 2005 it sank five exploratory wells, and found oil in four of them.
Chevron plans 10 more wells in the next two years, although it won't speculate on how much oil it will find. Estimates from others have varied from 121 million to 700 million barrels.
Although the oil - and revenue - may not flow for three or four years, many people here are already asking whether the discovery hasn't come too soon for a country still recovering from the ravages of the Khmer Rouge genocide of the 1970s. Its democracy is still fragile.
"Is it too early?" asked Douglas Gardner, the resident coordinator for the United Nations Development Programme in Phnom Penh. "I don't think one can say. It's arrived."
While Cambodia's valuable light crude may not have a huge impact on the world market, the revenue would have an enormous effect on such a poor nation.
A U.N. analysis in January estimated that Cambodia's oil and gas could be worth $6 billion to $7.5 billion a year over the next two decades. The country's gross domestic product is only about $5 billion a year.
"This is perhaps the biggest opportunity, but also the biggest threat," Gardner said. "The experience around the globe has not been great with sudden natural resource flows."
Such discoveries can produce what is known as a "resource curse," when new wealth from natural resources makes a country poorer and less democratic. Nigeria, a corrupt and violent nation, is often cited as the best example of the phenomenon. It has exported more than $400 billion in oil in the last three decades, while 70 percent of its people continue to live on less than $1 a day.
Cambodia seems particularly susceptible to the curse. Prime Minister Hun Sen and his Cambodian People's Party have been accused of using violence to maintain their lock on the government.
The judiciary and police are widely criticized as corrupt, and they often silence the government's critics under laws making defamation a criminal offense.
Meanwhile, the nation's health care is so poor that 30,000 children die every year from preventable diseases, according to the United Nations Development Programme, and half the children never complete their primary education.
Cambodia plans to take 67 percent of the profits from the oil - money that could either alleviate the country's problems or make them worse.
"The money almost all goes to the government. ... The only way Cambodians will benefit is if the government spends the money on the people," said Michael Ross, a political-science professor at the University of California, Los Angeles. "A lot depends on the quality of governance."
One problem with the oil industry, he said, is that it creates almost no local jobs. And with the oil lying offshore, imported skilled labor could work without ever setting foot in Cambodia.
Once the oil revenue hits the government coffers, it can create inflation. That may drive up the price of the nation's other industries and widen the gap between rich and poor - a recipe for civil unrest.
Perhaps the worst problem, Ross said, is that oil money often makes autocratic governments even less responsive to the people's needs.
"There's more money sloshing around, and this tends to encourage corrupt behavior," he said.
Experts say Cambodia would need to diversify its economy, reform its institutions, and tackle corruption to avoid the resource curse. Not everyone thinks Cambodia's rulers are up to the challenge.
"Our concern is that this is a government that doesn't disclose anything and isn't transparent about much," said Sophie Richardson, deputy Asia director for Human Rights Watch. "It doesn't bode well."...
Cambodia's minister of information, Khieu Kanharith, said recently that Hun Sen has made good governance a centerpiece of his administration.
Cambodia is open, he said, in part because it relies heavily on outside aid agencies that demand transparency.
"We have to follow the rules of these institutions like the IMF and World Bank," Khieu Kanharith said. "If we don't have good governance with these institutions ... we can't ask for a loan."
But many experts fear that oil wealth, in freeing the government from its reliance on foreign aid, could allow it to ignore international standards on human rights and other issues.
"With revenue like this, the government becomes even more impervious to the kind of leverage some governments would use to improve their human-rights situation," Richardson said.
The United Nations has invested heavily to rebuild Cambodia since the Khmer Rouge years. It is focusing now on the short time remaining before a country that was a virtual slave camp a generation ago becomes the world's newest petrol-state.
"The right decisions need to be made before the oil wealth starts flowing," Gardner said. "All of this matters even more now."
July 12, 2006
Mainland Gas Price Spike, Hawaii Prices Still Highest
by Kristine Uyeno, KHNL
(KHNL) - Gas prices across the country keep increasing, but around Hawaii, the cost has pretty much stabilized.
It's about $3.30 a gallon for regular unleaded on Oahu....
Experts say enjoy it now because prices in Hawaii should increase by the end of the summer.
Energy expert Fereidun Fesharaki says that's how long it'll take for the current increase in crude oil prices to reach us.
Experts blame crude oil costs and growing tension with Iran and North Korea for high gas prices. Locally, Fesharaki says we'll likely approach the $4 mark next year.
"But as we go forward between 2008 and 2010, the price will likely be $5 a gallon," said Fesharaki....
While Americans think they're paying too much for gas, drivers in other countries are shelling out a lot more.
Experts say drivers in London pay the most, about $8 a gallon.
April 4, 2006
Chevron's Performance Fuels Record 2005 Financial
Results; Robust Strategies Create Strong
Foundation for Future Growth
Chevron Press Release
HOUSTON -- Chevron Corporation had a momentous year in which the company achieved record financial results, effectively responded to natural disasters and continued to build a strong foundation for future growth, Chevron Chairman and CEO Dave O'Reilly said at the company's 2006 annual stockholders meeting in Houston, Texas....
O'Reilly told stockholders the acquisition of Unocal Corporation in 2005 has strengthened Chevron's oil and gas position in key regions around the world and created new opportunities for significant value creation.
O'Reilly praised Chevron's employees for delivering world-class performance while at times overcoming a number of unexpected challenges, such as the Asian tsunami and the hurricanes on the U.S. Gulf Coast. He also said the company is investing in emerging energy technologies such as advanced batteries, hydrogen and biofuels.
Peter Robertson, vice chairman of the board, told stockholders that 2005 was the company's second consecutive year of record earnings. For the year, the company achieved net income of $14.1 billion and a return on capital employed of 22 percent.
Robertson said Chevron in 2005 also increased the quarterly dividend by 12.5 percent, the 18th consecutive increase in as many years; completed a $5 billion stock buyback program and launched another program of up to $5 billion over three years; and set a capital and exploratory budget of approximately $15 billion, roughly 34 percent higher than the company's 2005 spending level.
"Our strong earnings and cash flows are enabling us to return cash to our stockholders and, at the same time, fund a robust capital program, which in 2006 will be the highest annual spend in our history," said Robertson.
George Kirkland, executive vice president, Upstream and Gas, told stockholders the company continued its track record as an industry-leading explorer: "In 2005, we continued our strong exploration program by making 31 new discoveries that resulted in a 58 percent success rate. Major discoveries were made in the deepwater U.S. Gulf of Mexico, Venezuela, Trinidad and Tobago, and Nigeria," he said....
Eight proposals were voted on by Chevron stockholders, and the preliminary report of the Inspector of Election is as follows:
Item 1: More than 1.7 billion shares, or about 96 percent of the votes cast, were voted for the 13 nominees for election to the board of directors.
Item 2: More than 1.7 billion shares, or about 98 percent of the votes cast, were voted to ratify the appointment of Pricewaterhouse Coopers LLP as the independent registered public accounting firm.
Item 3: The stockholder proposal to amend company bylaws for proponent reimbursement for expenses incurred in presenting proposals for stockholder consideration was defeated. Approximately 66 percent of the votes were cast against the proposal.
Item 4: The stockholder proposal to report on environmental implications
related to oil and gas drilling in protected and sensitive areas was
defeated. Approximately 90 percent of the votes were cast against the
Item 5: The stockholder proposal to disclose policies and procedures for political contributions as well as all political contributions was defeated. Approximately 86 percent of the votes were cast against the proposal.
Item 6: The stockholder proposal to adopt an animal welfare policy was defeated. Approximately 93 percent of the votes were cast against the proposal.
Item 7: The stockholder proposal to adopt a comprehensive human rights policy was defeated. Approximately 75 percent of the votes were cast against the proposal.
Item 8: The stockholder proposal to report annual expenditures in Ecuador from 1993 to 2005 was defeated. Approximately 91 percent of the votes were cast against the proposal....
April 15, 2004
Things to think about when pumping gas
BY ANTHONY PIGNATARO, MauiTime Weekly
We who drive cars fitted with internal combustion engines that burn gasoline for fuel live in tough times. Gas prices, high all over the U.S., are hovering at nosebleed levels on Maui. In fact, the $2.36 we pay for a gallon of straight 87 Octane unleaded is not only the highest in the nation, but is six cents more than this time last year.
Tanks for nothing
Now the conspiratorial automatically leap to the guy sitting in the White House--old oil man George W. Bush, hails from an old Texas oil family, takes gobs of campaign money from Texas oil interests--thinks about how National Security Adviser Condoleeza Rice used to have a Chevron Tanker named after her (she was once a member of the Chevron board of directors), remembers the low gas prices of the last years of Bill Clinton's administration and says "Ahhh! That's it!"
Now I'm not saying that there's a connection between record-high U.S. gas prices and the well-documented friendship between the current administration and the oil industry, but there are lots of things you should think about the next time you shove the gas pump into your V8-powered SUV:
* Bunches of local officials oppose the Act 77 state-mandated price cap on gasoline that's supposed to go into effect on July 1, but they have precious few solutions to offer. "I personally just close my eyes and pump it," Republican Representative Brian Blundell told The Maui News on Apr. 6. "I don't know what the solution is yet, but I know this isn't it," added Republican Representative Kika Bukoski.
* In late 2002, state Attorney General Earl Anzai hired the law firm Winston & Strawn to sue Chevron/Texaco for alleged tax evasion after research conducted by two professors alleged the oil giant engaged in a "fraudulent scheme" that cost Hawaii taxpayers $563 million. But within a year, the firm--which The New York Times later showed had not disclosed previous ties to Chevron/Texaco--said it could find no evidence of wrong-doing. New governor Linda Lingle cancelled the lawsuit, despite grumbling that she had taken over $5,000 in Chevron political action committee contributions during her 2002 campaign.
* As the Bush Administration was planning in the fall of 2002 to invade Iraq, U.S. Treasury officials calculated that such a war would cause a $5 "war premium" on the price of oil, according to documents recently released by former Treasury Secretary Paul O'Neill. At the time, a barrel of West Texas Intermediate (WTI) Crude went for not quite $30. Today, WTI crude is going for $36 a barrel, which is a 13-year high. Now that's planning!
* Commissioned by Hawaii Governor Ben Cayetano in 2002 during the last days of his administration, the Irvine, Ca.-based management firm Stillwater Associates found that Act 77's price caps will be "ineffective, risky, costly, open to manipulation and complicated to administer." The firm, which often advises government and energy officials, then offered that the real solution to Hawaii's gas price problems lay in deregulating the oil industry. "Repeal [the Department of Business, Economic Development and Tourism] DBEDT's extensive petroleum industry regulatory functions," reported the firm, listing "random and periodic company audit and inspection requirements" as one such responsibility.
* "High prices in Hawaii are a myth, perpetuated by the media to the level of urban legend," wrote "Kauai petroleum distributor" Brian Barbata in the Mar. 18 Honolulu Advertiser. Barbata then proceeded to insinuate that a $1.48 average pre-tax price ($2.00) for Oahu gas was the norm for the rest of the island chain.
* Since 1981, oil companies have closed more than half of all U.S. refineries. With so few refineries operational, maintenance problems in one area are enough to scare gas prices upwards. Though oil industry lobbyists say they need "more capacity," there are no plans to build any new refineries. Instead, the industry has been focusing on getting state and federal clean air standards repealed.
* Biodiesel fuel, which uses a tiny fraction of the petroleum that goes into gasoline is for sale on Maui. MTW
March 13, 2006
Chevron Opens Ethanol-Blending Facility
State Requires Ethanol Mixed In 85 Percent Of Hawaii's Gas
HONOLULU -- Gasoline with ethanol will soon be in the tanks of Hawaii drivers. Chevron Hawaii on Monday dedicated and blessed its new ethanol-blending facility on Nimitz Highway.
Chevron workers gathered for a Hawaiian blessing at the new facility. Chevron is the first energy company in Hawaii to begin blending ethanol, as required by the state by April 2.
Ten years ago, the Legislature passed a law requiring 10 percent ethanol in 85 percent of Hawaii's gas. It was designed to help the state's then ailing -- now nearly defunct -- sugar cane industry.
Ethanol can be made from sugar cane. However, it is only grown on two islands now with none on Oahu. So far, no one in Hawaii is making ethanol. All the ethanol being used by Chevron has to be imported to Hawaii. It's made either from South American sugar cane or corn from the mainland. Chevron said it actually costs them more to produce gas with the ethanol mix.
Will ethanol change the price at the pump?
"It depends on the price of ethanol it goes up and down and the price of gasoline is controlled the price cap so right now there is no difference," said Alex Ratcliff, of Chevron Hawaii.
Chevron officials said the ethanol blend will burn about the same in your engine.
Consumers will begin to see a little stick on the pump that says e10, which stands for 10 percent ethanol at the pumps.
August 12, 2004
Oil Companies Ask State To Delay Ethanol
Officials Want Ethanol To Be Hawaii Product
HONOLULU -- Representatives from the oil industry are asking state officials to further delay rules for blending ethanol with gasoline sold in Hawaii.
Ethanol is a form of alcohol made from sugarcane wastes. When blended with gasoline, ethanol produces a cleaner-burning fuel.
"If we have 10 percent ethanol in our fuel, we have 10 percent of a very clean renewable fuel that we are producing here in Hawaii. It's creating jobs in Hawaii. It's preserving jobs in Hawaii, in our sugar sector," said William Maloney of Maui Ethanol LLC.
State lawmakers passed mandates for such blending into law 10 years ago, but no rules for the process were ever proposed. State officials held a public meeting Thursday on proposed rules that would become law a year and a half after being signed by the governor.
Officials say it's too early to say when that might be, noting that the information taken from Thursday's hearing must reviewed before deciding whether the proposed rules need to be revised. Any substantial revisions would require another public hearing.
Oil companies say 18 months wouldn't be enough time for them to upgrade facilities or secure necessary property or permits that would be needed to start blending gasoline.
"Tesoro supports ethanol if it's Hawaii ethanol from Hawaii sugar. We're very concerned, looking at the rules that there's nothing in them the even encourages Hawaii ethanol," Tesoro Hawaii spokesman David Leonard said.
Advocates say the proposed rules, which were crafted more than two years ago, are fair to all sides and are needed to diversify the state's energy industry and reduce Hawaii's reliance on fossil fuels.
November 18, 2003
Ex-Governor Did Not Know
of Law Firm’s Oil Giant Ties
By Lynnley Browning and David Cay Johnston, The New York Times
A former governor of Hawaii who ordered an investigation into accusations of tax fraud by ChevronTexaco says he was unaware that the law firm hired to investigate had worked for the predecessors of the company, which the firm eventually cleared of wrongdoing.
The former governor, Benjamin J. Cayetano, said last week that the state sould not have selected the law firm, Winston & Strawn of Chicago, because of what he termed a conflict of interest.
Last July, Winston & Strawn exonerated ChevronTexaco of accusations raised by two accounting professors that it cheated federal and state coffers out of $3.25 billion in taxes, including $536 million to Hawaii, through a complex pricing method over 30 years involving a project in Indonesia.
The exoneration, which came seven months after Mr. Cayetano was voted out of office, prompted his successor, Gov. Linda Lingle, not to sue the oil company.
James R. Thompson, Winston & Strawn’s chairman and managing partner, who is a former governor of Illinois, said he saw no conflict in the firm having represented Chevron and Texaco, which became ChevronTexaco in 2001, and in investigating the merged company for Hawaii.
“No, Zero,” he said.
In documents outlining its qualifications to Hawaii’s attorney general office, the law firm wrote in November 2002 that “none of the work that we did for Chevron USA is related to the matters, facts or legal issues to be prosecuted here.” The work concerned hedging transactions and the environment, it wrote.
But Jeffrey Gramlich, an accounting professor at the University of Southern Maine in Portland, and one of the two academics who asserted tax fraud by ChevronTexaco from 1970 to 2000, said Winston & Strawn had also represented Texaco on at least three cases, in the early to mid-1980s. Winston & Strawn did not mention those specific cases in the State of Hawaii.
Hugh Jones, an assistant attorney general under Mr. Cayetano’s and Governor Lingle’s administrations, said Winston & Strawn was selected from among a dozen contenders for what he termed its tax law experience.
Stephen Gillers, professor of legal ethics at New York University School of Law, said that Winston & Strawn was “well within the clear.”
If the firm concludes that the two matters are unrelated, it can proceed without even informing the new client about the former client, especially when the previous work was so long ago, he said.
But Mr. Cayetano, who lost a bid for re-election one month after ordering the investigation, said he was upset about what he considered a conflict. Governor Lingle, who continued the inquiry, accepted campaign contributions from ChevronTexaco, according to The Honolulu Star-Bulletin.
Governor Lingle’s appointed attorney general, Mark J. Bennett, once represented Chevron as a trial lawyer at a law firm in Honolulu. Mr. Bennett recused himself from the state’s investigation with Winston & Strawn.
Mr. Cayetano turned over the process of selecting a law firm for the investigation to his attorney general, Earl I. Anzai. Mr. Anzai said last week that Winston & Strawn’s previous work “did not necessarily present a conflict of interest.”
In 1998, under Mr. Cayetano. Hawaii sued Chevron, Texaco and other oil companies (see Tesoro) for $35 million.
Questions regarding Chevron’s taxes were first raised by Internal Revenue Service auditors in San Francisco, where the company is based, who were examining the company’s returns from 1979 through 1987. The audit was shut down by I.R.S. headquarters and Chevron paid $675 million to settle the dispute.
Winston & Strawn took the Hawaii case on a contingency basis. Because it argued against suing ChevronTexaco, the law firm said it was ultimately paid nothing by Hawaii for its work. The firm examined pricing at an Indonesian venture between Texaco and Chevron’s Caltex unit.
In its joint report with the attorney general’s office, Winston & Strawn concluded last July that Chevron owed Hawaii at most $3.65 million in unpaid taxes, a fraction of the amount asserted by the accounting professors. The report also said any transgressions took place over only three years.
Professor Gramlich and his colleague, a retired University of Michigan professor, James E. Wheeler, said the law firm misused certain data in ways that favored ChevronTexaco. In its investigation, Winston & Strawn obtained access to confidential documents, including tax returns, from ChevronTexaco.
The law firm, the oil company and the state attorney general’s office have declined to make the documents public.
July 22, 2003
Chevron suit is not worth it, lawyers say
The state says authors of an incriminating
study didn't have enough information
By Tim Ruel, Star-Bulletin
The law firm hired by the Cayetano administration to pursue a tax fraud case against ChevronTexaco Corp. says there is no case and that the firm would not pursue a lawsuit even if the state paid it for the work on an hourly basis.
A report released yesterday by the state attorney general's office said that two accounting professors did not have access to enough information when they reported that the state could seek $563 million from Chevron over back taxes. Chevron owes the state nothing, according to Chicago law firm Winston & Strawn, which conducted an investigation for the state on contingency.
No other state has sued Chevron over the allegations of tax fraud, and other states have been watching Hawaii's move. "I think we're in front of the wave on this one," said Hugh Jones, a Hawaii deputy attorney general assigned to the case.
The two professors, Jim Wheeler and Jeff Gramlich, released a national report in September that said Chevron evaded billions of dollars in state and federal taxes.
The professors relied on a few documents that became public from a battle between Chevron and the Internal Revenue Service in the 1990s. The professors said Chevron inflated its costs for crude oil from an Indonesian joint venture that Chevron had with Texaco before the two companies merged in 2001.
Caltex, the joint venture, paid higher taxes in Indonesia on its income and received a kickback from the Indonesian government in the form of free oil, the professors said.
The IRS took a $675 million payment from Chevron to settle a tax audit in 1994. The professors argued that Chevron owed more than it paid and that the case could be reopened because they believed there was evidence of fraud. The professors' report covered the tax years from 1970 to 2000.
Chevron provided internal documents and sworn statements that led Winston & Strawn to conclude there was no case that the state can pursue, according to the attorney general's office. The state does not intend to make the evidence public, since taxpayer information is confidential.
The state's report said the bulk of Chevron's $675 million IRS settlement was related to issues that had nothing to do with the Caltex matter.
The attorney general's report, announced by First Deputy Attorney General Richard Bissen Jr., said in summary that:
>> Chevron paid fair market value prices for Indonesian crude oil since 1990 and did not pay inflated prices.
>> Chevron has already paid a tax adjustment to Hawaii, covering 1983 to 1986, when the Indonesian kickback arrangement occurred. The state is not disclosing what it received from Chevron. The professors assumed that the kickback occurred in additional years.
>> Even if the professors were correct in all of their economic assumptions, the state would be owed less than $4 million, not $563 million, because of a technical tax calculation error. The professors erroneously assumed a direct relationship between the amount of Indonesian oil Chevron imported to Hawaii and the company's tax liability.
Chevron said yesterday that it is pleased the state found no basis for legal action, and that it cooperated fully with the investigation. "We are gratified that after reviewing ChevronTexaco's tax filings and other related documents, Winston & Strawn has affirmed what we have always believed: The allegations were without merit," Chevron said.
The decision to drop the case, initiated in the closing days of the Cayetano administration, is sure to rankle Chevron's critics.
Hawaii has had a contentious relationship with Chevron over the state's relatively high gas prices, and Cayetano sued Chevron and other oil companies over antitrust allegations in 1998. The companies denied wrongdoing, and the state eventually settled the case for far less than it was seeking.
Former Attorney General Earl Anzai hired Winston & Strawn to investigate the tax matter on a contingency-fee basis. Winston was to pay for all litigation costs.
Some Democratic state legislators said pursuing a case made sense, since the state had nothing to lose in filing a lawsuit.
In January, Sen. Ron Menor, chairman of the Senate Commerce, Consumer Protection and Housing Committee, said, "I believe it really is a slam dunk."
Winston advised the state that despite "initial optimism" it believes litigation by Hawaii against Chevron has no grounds.
"It is clear that the evidence that the professors thought was there simply was not," Gov. Linda Lingle said yesterday.
"We came in with an open mind, and I know there was a feeling with some in the Legislature that this was a quick way to get some money into the coffers, and while that would have been nice, we wanted it to be clear that we are not going to pursue something if there is no evidence there," Lingle said.
State officials have been working on how to explain their decision to drop such a high-dollar, complex case amid strict restrictions of confidentiality. The state got a report from Winston in early June.
Wheeler, one of the two professors and a Lanikai resident who is retired from the University of Michigan, said he does not believe much of the information in the attorney general's report and that he will review it in the coming days.
Wheeler acknowledged that he and co-author Gramlich did not have access to a lot of the relevant information in the matter. Wheeler said he wants to see the information.
Jones said the state did not seek Chevron's consent to release its confidential tax information to the public because the state is confident of the work of Winston & Strawn. "There's just nothing here," Jones said.
Winston & Strawn has not received compensation for its initial work on the case, as specified by its state contract, but Bissen said yesterday that the attorney general's office wants to reimburse the firm somehow.
March 11, 2003
State still undecided
on Chevron lawsuit
The attorney general has received some
IRS documents but is seeking more
By Tim Ruel, Star-Bulletin
The state is still gathering information to decide whether to pursue a $563 million tax fraud lawsuit against ChevronTexaco Corp., which is alleged to have dodged billions of dollars in state and federal taxes through a crude oil pricing scheme in Indonesia.
The Attorney General's Office has received a limited number of confidential documents held by the Internal Revenue Service, which settled a tax investigation into Chevron in 1994 for a $675 million payment from the company. The Attorney General's Office is seeking more documents that would determine the potential amount that Hawaii could seek from Chevron.
The $563 million estimate for Hawaii's tax liability is based on 17 documents that have become public from a federal audit of Chevron. More than 500 audit documents remain under wraps.
The Attorney General's Office is asking Chevron for permission to allow the Chicago law firm Winston & Strawn to review audit documents that Chevron has already given the state.
Albert Chee, a Chevron spokesman, declined comment when asked whether Chevron would give such permission.
The state investigation was prompted by a national report in September from two accounting professors who said Chevron committed tax fraud over several decades by inflating its costs of buying crude oil from a joint venture in Indonesia.
The joint venture, known as Caltex, was owned by Chevron and Texaco, which have since merged into one company.
The report says the $675 million IRS settlement came far short of the billions of dollars Chevron allegedly owes.
The IRS settlement only covered the tax years from 1979 to 1987. It's possible that the tax scheme began as early as 1963, said James Wheeler, co-author of the report and a retired professor from the University of Michigan. Based on recent financial statements from Chevron, Wheeler argues that the firm is still using the scheme today. "I know they're still doing it," Wheeler said at a legislative hearing yesterday.
Chevron has said that the allegations are without merit and the report contains nothing new.
The large amount of money, as well as the reputations of those behind the case, have been selling points for Hawaii to file a lawsuit. Other states are considering the matter.
A potential settlement from Chevron, the second-largest U.S. oil company, could snag anywhere from $100 million to $1 billion for Hawaii coffers, Wheeler said.
Yet, Hawaii officials have warned that tax fraud is not easy to prove.
The state's interest in the case came at the end of the Cayetano administration, which hired Winston & Strawn. The state only faces a cost if the case is dropped and Winston's contract is ended. Winston has agreed to cover all the costs of a lawsuit, and hasn't run up any substantial costs.
Upon taking office last year, Gov. Linda Lingle said the Chevron tax matter was one of the top five legal issues facing the state.
"I feel very strongly about this because when anybody doesn't pay their taxes, it means that the tax burden is then spread to the rest of us to a greater extent than it would have been otherwise," Lingle said last year.
Lingle is being advised in the investigation by Kurt Kawafuchi, state tax director, and Randy Roth, Lingle's senior policy adviser. Roth and Kawafuchi have discussed the case with Wheeler. Roth said the case is still being reviewed and considered.
Yesterday, the state Senate Committee on Commerce, Consumer Protection and Housing adopted a formal resolution to urge the administration to sue Chevron over tax fraud.
September 8, 2001
Chevron settles out
of court with
rebel gas dealer
Frank Young will give up the
Kakaako station that his family
has operated since 1953
By Tim Ruel, Star-Bulletin
Chevron Corp. will pay an undisclosed sum to Honolulu gas dealer and frequent company critic Frank Young, who, in return, will vacate his Kakaako gas station as part of a confidential settlement of two lawsuits.
In 1999 the company had sued to evict Young from the Chevron dealership, run by his family since 1953, claiming that Young had failed to operate the station during proper hours.
Young countersued, saying Chevron was retaliating against him for criticizing the company publicly.
Young has frequently accused major oil companies in Hawaii, including Chevron, of overcharging consumers. The company is now battling the state, which filed a $2 billion antitrust lawsuit against it and other oil companies, alleging collusion in keeping Hawaii's gas prices artificially high....
According to a statement issued by Chevron and the dealer, Young must vacate the Queen Street station by Jan. 15 and find a new home for his auto repair business.
Chevron spokesman Albert Chee said the company will continue doing business at the station, but Chevron has not decided whether to keep the site as a dealership or switch to a company-run station.
Chee would not disclose the settlement terms, citing an agreement with Young.
Chevron's suit against Young had been scheduled to go to trial Tuesday before U.S. District Judge David A. Ezra.
In May, Ezra declined to rule the case in favor of Chevron, denying the company's motion for partial summary judgment. Ezra had made the same ruling against Chevron last year but allowed the oil company to refile the motion after Young completed discovery, the fact-finding stage of a case.
In the May ruling, Ezra said summary judgments are meant to eliminate frivolous lawsuits and that the dispute between Young and Chevron should be heard by a jury because of its significance.
Chevron had been seeking to exclude several pieces of evidence from the trial scheduled for next week, including statements that Young had run the station well and testimony that a Chevron employee had told him the hours were not important.
At the time Chevron sued, Young was one of the company's top service station operators in Hawaii, with a 92 percent increase in gas sales in a nine-month period.
September 8, 2001
Chevron, Texaco win
FTC approval to merge
The Federal Trade Commission has approved the $46.6 billion merger of Chevron Corp. and Texaco Inc., allowing the formation of the world's fourth-largest investor-owned oil company, ChevronTexaco Corp.
Under a consent order approved yesterday by the FTC, Texaco will shed several of its businesses to avoid antitrust concerns, including its interest in Equilon Enterprises LLC, a research and manufacturing joint venture with Shell.
The deal has the approval of 12 state attorneys general, including Hawaii Attorney General Earl Anzai.
"We believe this divestiture addresses the potential anti-competitive effects of the merger between these two powerful oil companies," Anzai said yesterday.
Anzai said Hawaii antitrust officials were initially concerned the merger would give the company too much control of the oil market. The state has a pending $2 billion antitrust lawsuit against the major oil companies in Hawaii for allegedly overcharging local consumers. Chevron and Texaco are included in the federal suit.
Shareholders of Chevron and Texaco will hold separate stockholder meetings on Oct. 9 to seek approval of the deal.
October 14, 2002
State to sue over
Chevron’s back tax
Lawyers are sought to sue the
oil firm for half a billion dollars
State Attorney General Earl Anzai said the state will begin a nationwide search for lawyers to make a case that oil firm ChevronTexaco Corp. owes Hawaii more than half a billion dollars in unpaid taxes.
Anzai said the lawyers must be willing to work on a contingent-fee basis. The deadline for applications is Oct. 21.
The move comes just seven weeks before the end of the term of Gov. Ben Cayetano, who last month ordered Anzai to look into a report that Chevron evaded more than $3 billion in state and federal taxes.
The report, released in September by two accounting professors who have taught at the University of Hawaii, received national attention. The professors, using documents from an earlier Internal Revenue Service case against Chevron, said Chevron paid inflated prices for crude oil to Caltex, its joint venture in Indonesia, lowering Chevron's tax liability in the United States.
Chevron paid higher taxes in Indonesia, but was reimbursed with a U.S. tax credit, according to the report.
The firm also received free oil from the Indonesian government as a "kickback," the professors said.
Chevron paid $675 million to settle an IRS audit in the 1990s. The firm has said the report revealed nothing new about the company's practices.
The accounting professors, Jeffrey Gramlich and James Wheeler, said they approached Hawaii and California officials a year ago about building a case against Chevron. The professors want state officials to issue subpoenas for more information from Chevron, so they can continue their study.
At the time, Hawaii and California officials did not proceed against Chevron. Cayetano ordered Anzai to look into the case after a Star-Bulletin report last month that estimated the unpaid state tax debt could be $563 million.
"A half billion dollars is a great deal of money for Hawaii, and I'm not inclined to walk away from it if we don't have to," Cayetano said last month. The state's total revenue for fiscal 2001 was $3.4 billion.
Earlier this year, the state settled a $2 billion antitrust lawsuit against Chevron and Hawaii's major oil companies for $35 million.
January 17, 2002
State settles oil suit for 1%
The $2 billion action overinflated gas prices finally
sputters out for a penny on the dollar
By Tim Ruel, Star-Bulletin
The state has agreed to end its three-year price-fixing lawsuit against Hawaii's major oil companies in return for a $20 million settlement from the five firms still fighting the case, a payment that would be 1 percent of the roughly $2 billion the state had been seeking.
A deal in principle was reached between all sides yesterday after six months of mediation, said attorney Clyde Matsui, who served as mediator and discovery master in the suit. The companies and the state must still negotiate specific points of the settlement, he said. Matsui would not comment on the specific amount of the settlement....
The money comes on top of $15 million the state won in a settlement in 2000 with two companies, BHP Hawaii Inc. and Tesoro Petroleum Corp., which opted out of the suit and denied wrongdoing. Still contesting the case were Hawaii's market leader, Chevron Corp., as well as Tosco Corp., Texaco Inc., Shell Oil Co. and Unocal Corp.
"If it's $20 million, we all lost," said Frank Young, a former Chevron dealer and frequent critic of the company. Chevron sued in 1999 to evict Young from the Kakaako station operated by his company since 1953, and under a confidential settlement, Young abandoned the station on Tuesday. "I'm all depressed now," Young said.
He added that he hoped the state Legislature would react to the deal by discussing regulations for Hawaii's gas prices, which have long been among the highest in the nation.
"It is a settlement that I am a little disappointed in," Gov. Ben Cayetano said yesterday morning to reporters. "But it depends on the perspective of the judges." Local oil prices have gone down since the state filed the suit, Cayetano noted.
The state sued the companies in October 1998, alleging the firms secretly formed a conspiracy to milk profits from Hawaii's drivers by keeping prices artificially high. The firms denied the charges and said that the lawsuit, filed shortly before the 1998 gubernatorial election, was political.
The settlement comes at a significant point in the case, as senior U.S. District Judge Samuel King considers motions for summary judgment argued by the oil companies in hearings in November. In summary judgment a defendant seeks to dismiss entire counts, or even a whole case, on the basis that there is not enough evidence to warrant a trial. In rebuttal the state said it had plenty of evidence, including documents that showed officials at competing companies were sharing their local wholesale prices.
The state also said it had proof that Chevron, operator of one of two oil refineries in Hawaii, would sell gasoline to the other companies with the understanding that the firms would not seek better prices elsewhere, such as by importing.
Shortly before the November hearings, King ordered that the oil companies come up with a plan to open the summary motion documents to the public. The documents, like the bulk of filings in the case, have been under seal. The oil companies have argued that the information should be secret because many of the documents contain competitive financial information. In his order, however, King noted that much of the case rests on the extent of the profits the companies have earned from the Hawaii market.
All the documents in the case would eventually become available to the public, but the oil companies would have the opportunity to blot out specific pieces of information. It is not clear how much the companies would be able to redact.
It will be interesting to see how much information about the profitability of the companies becomes public, because the data could enrage people or mean nothing at all, said Tim Hamilton, a mainland petroleum analyst who has studied Hawaii's market. The whole point of an antitrust lawsuit should be to uncover a trail of collusion, Hamilton said.
"If these documents go public, the Legislature will have a trail to follow. The public will be upset even more than it is now, and there's a chance the Legislature will take an action," Hamilton said.
In March 1998, months before the state filed suit, the Star-Bulletin published a story with an analysis by Hamilton that said Hawaii consumers were overcharged more than $81 million for gasoline in the previous 14 months because of artificially high wholesale prices. At the time, Chevron and other companies said the analysis was simplistic and flawed.
In recent court filings, the state said that any potential damages from the suit would likely go to the state highway fund, not directly to consumers. The fund generally pays for road maintenance, but some money has been transferred to the state's general fund, according to records kept by the state Transportation Department....
"This is the most intense 36 hours I've ever been through," said Matsui, who has handled mediation in lawsuits involving the former Bishop Estate and the Board of Water Supply. "We started off Monday with everyone hollering 'no.'"
The court ordered the state and the companies not to talk about details of the settlement until an agreement has been finalized, and representatives of both sides declined comment today. The settlement should be filed with the court soon for public review, and a hearing would be scheduled for King to sign off.
Because the state sued on behalf of Hawaii's residents, people will have the right to say they want to be excluded from the terms of the settlement, Matsui said. He noted that members of the public have rarely exercised that right.
- - -
The gasoline antitrust lawsuit
Key developments in the state's antitrust lawsuit:
>> March 1998: Gov. Ben Cayetano directs the state attorney general to determine whether an investigation of Hawaii's highest-in-the-nation gas prices is warranted.
>> Oct. 2, 1998: State files $500 million suit against Hawaii's two refineries and major gasoline wholesalers for allegedly overcharging local consumers for years. Named in the lawsuit are 13 corporations, including Chevron Corp., BHP Hawaii Inc., Shell Oil Co., Texaco Inc., Tesoro Petroleum Corp., Tosco Corp. and Unocal Corp.
>> March 14, 1999: Judge Samuel P. King rejects oil company motions to dismiss the state's antitrust suit.
>> March 25, 1999: State ups the amount of the lawsuit to $1.8 billion, saying the companies profited far more than first anticipated.
>> January 2000: BHP Hawaii Inc. and Tesoro Petroleum Corp. settle the suit and deny wrongdoing. They pay the state $15 million.
>> July 2001: The five remaining defendants -- Chevron Corp., Tosco Corp., Texaco Inc., Shell Oil Co. and Unocal Corp. -- file motions under seal seeking a summary judgment to dismiss the case.
>> November 2001: Judge King orders some court filings opened to the public and hears arguments over the motions for summary judgment.
>> Jan. 16, 2002: The state and five defendants reach a tentative settlement for a reported payment of $20 million.
November 18, 2003
Ex-Governor Did Not Know of
Law Firm's Oil Giant Ties
By Lynnley Browning and David Cay Johnston, New York Times
The former governor of Hawaii who ordered an investigation into accusations of tax fraud by ChevronTexaco says he was unaware that the law firm hired to investigate had worked for the predecessors of the company, which the firm eventually cleared of wrongdoing.
The former governor, Benjamin J. Cayetano, said last week that the state should not have selected the law firm, Winston & Strawn of Chicago, because of what he termed a conflict of interest.
Last July, Winston & Strawn exonerated ChevronTexaco of accusations raised by two accounting professors that it had cheated federal and state coffers out of $3.25 billion in taxes, including $536 million to Hawaii, through a complex pricing method over 30 years involving a project in Indonesia.
The exoneration, which came seven months after Mr. Cayetano was voted out of office, prompted his successor, Gov. Linda Lingle, not to sue the oil company.
James R. Thompson, Winston & Strawn's chairman and managing partner, who is a former governor of Illinois, said he saw no conflict in the firm having represented Chevron and Texaco, which became ChevronTexaco in 2001, and in investigating the merged company for Hawaii.
"No. Zero," he said.
In documents outlining its qualifications to Hawaii's attorney general office, the law firm wrote in November 2002 that "none of the work that we did for Chevron USA is related to the matters, facts or legal issues to be prosecuted here." The work concerned hedging transactions and the environment, it wrote.
But Jeffrey Gramlich, an accounting professor at the University of Southern Maine in Portland, and one of the two academics who asserted tax fraud by ChevronTexaco from 1970 to 2000, said Winston & Strawn had also represented Texaco on at least three cases, in the early to mid-1980's.
Winston & Strawn did not mention those specific cases to the State of Hawaii.
Hugh Jones, an assistant attorney general under Mr. Cayetano's and Governor Lingle's administrations, said Winston & Strawn was selected from among a dozen contenders for what he termed its tax law experience.
April 3, 2004
GOP Hypocrite of the Week:
A BUZZFLASH EDITORIAL
During his reign as the longest serving governor in the history of Illinois, they called the tall former U.S. Prosecutor, "Big Jim."
But as a member of the 9/11 Commission, James Thompson, now head of a prominent Chicago law firm, has justly earned the honor of being named the BuzzFlash GOP Hypocrite of the Week.
Thompson, along with other Republican 9/11 Commission panel members, was provided anti-Clarke information by FOX "White House Propaganda" news. In addition, we can only speculate on what unseemly message points the White House itself spoon fed to the GOP partisans on the commission.
When it came his turn to question Clarke, "Big Jim" Thompson went after Clarke's credibility like a rat on $25 brie. Thompson, however, was up against an honest man who knew that the truth can force an overzealous prosecutor into retreat. And, indeed, as Clarke received applause from the family members of those killed on 9/11, Thompson ended his ferocious attack-rat questioning by suddenly departing the hearing room in an embarrassing defeat.
Senator Dick Durbin (D-IL) appropriately noted that Thompson was just doing the bidding of "his client at 1600 Pennsylvania Ave."
But if you look at some of "Big Jim's" recent activities, as reported in the media, you might think he has some of his own credibility problems.
First of all, Thompson headed the auditing committee of the embattled Hollinger Corporation at a time that pro-Bush media baron Conrad Black and another company executive have been charged with taking shareholders to the cleaners.
Thompson's committee had to approve the deals first, but "Big Jim" claims he wasn't aware of what was going on. Let's just say, at this point, there were a lot of serious alleged financial shenanigans that passed through Thompson's committee like feed through a pig.
But "Big Jim" is standing by his handiwork. He has his integrity to protect. After all, he doesn't want to embarrass himself in front of fellow Hollinger board members, such as Henry Kissinger and Richard Perle.
Oh, by the way, did we mention that the Hollinger newspapers are notoriously Bush Cartel propaganda shills, including the London Sunday Telegraph and the Chicago Sun-Times?
No one is accusing Thompson of personally profiting from the Hollinger mess, just of closing his eyes to the worst kind of crony capitalism.
It's just like "Big Jim's" law firm that stands to profit from fundraising Thompson promises to do. You see, Thompson is committed to helping raise the money necessary to pay the attorney fees for defending another former Illinois Republican Governor, George Ryan, from felony charges. The criminal indictments against Ryan were brought by the current U.S. Attorney for the Northern District in Illinois (ironically, the position Thompson used to launch his career as Illinois Governor.)
But here's the hypocrisy rub so to speak. The firm defending George Ryan is, well, Thompson's law firm. Thompson told the Chicago Sun-Times that it "will take about $2 million to pay for the defense team led by Dan Webb, the top defense lawyer at Winston & Strawn." In short, as a supposed act of political charity, "Big Jim" will help raise a couple of million bucks to pay his own law firm fees necessary to defend a disgraced Illinois Republican Governor.
No wonder Thompson stalked out of the 9/11 Commission hearing. No matter how big you are, when you're just a run-of-the-mill GOP hypocrite hired gun, it must hurt to be slapped in the face with the honesty of Richard Clarke.
Until next week, just remember our motto at BuzzFlash.com: So many Republican hypocrites, so little time.
Catch up with you soon.
< < < FLASHBACK < < <
Rutan v. Republican Party of Illinois
497 U.S. 72 (1990)
Docket Number: 88-1872
Argued: January 16, 1990
Decided: June 21, 1990
Subject: First Amendment: Miscellaneous
Facts of the Case
In November 1980, Governor James Thompson of Illinois issued an order that prohibited state officials from hiring new employees, promoting state employees, or recalling state employees after layoffs without the approval of theGovernor’s Office of Personnel. The Office of Personnel based hiring and promotion decisions on factors such as the applicant’s contributions to the Republican Party, the applicant’s record of service to the Republican Party, and the support of local Party officials. In the jointly decided case of Frech v. Rutan, Cynthia B. Rutan and a number of other potential and current state employees challenged the patronage system, alleging that the Governor was violating their First Amendment rights by practicing unfair political patronage and party-based discrimination.
Did Governor Thompson’s practices in Illinois infringe upon the First Amendment rights of potential and current state employees?
In a 5-to-4 decision, the Court held that Governor Thompson’s practices amounted to an unconstitutional patronage system. The Court found that employees would feel “a significant obligation to support political positions held by their superiors” in lieu of their true beliefs in order to progress up the career ladder. The Court thus held that “promotions, transfers, and recalls after layoffs based on political affiliations or support” were impermissible infringements on the right to free expression of public employees. The Court noted that while the First Amendment was not “a tenure provision” protecting employees from “constructive discharge,” it nevertheless prevented the government from interfering with its employees’ freedom “to believe and associate.”
February 14, 2001
Goldman Upgrades Chevron, Texaco, Cuts ExxonMobil Rating
By TSC Staff
Goldman Sachs upgraded oil majors Chevron (CHV:NYSE - news) and Texaco (TX:NYSE - news) and auto parts supplier Lear (LEA:NYSE - news), adding them to its U.S. recommended for purchase list.
The firm previously had all three companies at market outperformer ratings.
Meanwhile, Goldman downgraded ExxonMobil (XOM:NYSE - news) to market outperformer and removed the petroleum company from the recommended for purchase list.
February 13, 2002
Texaco Alliance Trust Completes Sale of Former Texaco Refining and Marketing Interests to Shell Oil and Saudi Refining, Inc. for $3.86 Billion
WHITE PLAINS, N.Y. -- The Texaco Alliance Trust today completed the sale of its interests in refining, pipeline and retail fuel outlets to Shell Oil Company (Shell) and Saudi Refining, Inc. (SRI) for $3.86 billion, consisting of $2.26 billion in cash (including about $160 million in dividends) and the assumption of approximately $1.6 billion of the Trust's share of debt and other liabilities of the ventures....
Robert A. Falise, Chairman and Divestiture Trustee, said, "We were pleased to have been able to complete our negotiations and structure the definitive sale agreements in just two months. And we are gratified that the Federal Trade Commission and the Attorneys General of 12 States also have approved the transaction in a timely manner so that this transaction could be consummated and all parties could move forward."
Texaco's downstream business interests were transferred to the Trust on October 9, 2001, immediately before the merger of Chevron Corporation and Texaco, as a condition to completion of that merger imposed by the U.S. Federal Trade Commission and an agreement with the Attorneys General of 12 states. Mr. Falise was given full discretion to dispose of the businesses within an eight-month period following the ChevronTexaco merger.
Just before the merger of Chevron and Texaco, Shell and SRI had reached a memorandum of understanding (MOU) with Texaco outlining the basic terms of the sale.
The Trust has been advised by Goldman, Sachs & Co.
October 23, 2000
IT Implications Linger for Chevron/Texaco Merger
Julia King, (Computerworld)
Last week's announced merger of oil giants Chevron Corp. and Texaco Inc. will create the world's fourth-largest energy company.
It also will mean the integration of several electronic-business initiatives now under way at both companies, which together will boast annual revenue of more than $80 billion.
The combined ChevronTexaco Corp., to be headquartered in San Francisco, expects to cut costs by $1.2 billion per year by combining operations, officials said. Plans also include the elimination of approximately 4,000 jobs, or 7% of workers across the two companies, where rumors of a merger have been swirling since May....
A Common Challenge...
One analyst said it might not be the end of the merger activity. As a combined entity, Texaco still doesn't top $100 billion, so the company may acquire another firm to compete with the other merged giants.
On the IT front, Chevron and Texaco officials said one of the key benefits of the merger will be a broader portfolio in advanced technologies, including e-commerce ventures.
Texaco is working with consultants from New York-based
PricewaterhouseCoopers to implement buy-side procurement software from
Ariba Inc., a project it expects will be completed by the end of the year and
that will cut current procurement costs substantially, said Greg Vesey,
Texaco's vice president of e-business.
San Francisco-based Chevron is also using software from Mountain View, Calif.-based Ariba to develop PetroCosm Corp., an independent, online business-to-business marketplace for oil and gas companies that it created with White Plains, N.Y.-based Texaco.
Now, however, analysts said the Chevron/Texaco merger could raise questions among other industry players about Houston-based PetroCosm's status as an independent, neutral marketplace....
Chevron's other key online marketplace venture is Concord, Calif.-based
RetailersMarketExchange.com, an online exchange for convenience-store
retailers and their suppliers that was spun off from Chevron earlier this
Earlier this year, Texaco created an internal $20 million venture fund to finance e-commerce initiatives put forth by its various business units.
Texaco has also implemented an extensive intranet application, known as PeopleNet, which functions as a huge, worldwide knowledge base for its far-flung workers.
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