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Thursday, April 6, 2000

Gasoline-Paying the Price

Chevron rep
lied to state

The gas firm has used false
testimony and tried 'to bury'
the state with data to hamper
the probe into high prices, says
a former public relations executive

By Rob Perez


Chevron Corp. tried to "bury" the state with information in an effort to thwart a long-running investigation of Hawaii's high gas prices, a former Chevron public relations executive has testified in confidential court proceedings.

During the 1989-1995 investigation, the company's strategy "was to bury (the state) with as much stuff as (it) could," Dave Young, Chevron's local PR manager for that period, was quoted in court documents as testifying.

Young also admitted under oath that he gave false or misleading testimony on behalf of Chevron to the state Legislature, according to a federal judge's ruling issued yesterday.

The Legislature for years has held hearings on Hawaii's gas prices, which used to be the highest in the country. Young said his legislative testimony was prepared by Chevron lawyers.

Attorneys for the state questioned Young last fall to gather evidence for its $2 billion antitrust suit against Hawaii's oil companies. The lawsuit alleges the companies conspired to keep gas prices artificially high in the islands. Chevron, the state's market leader, is among the defendants and, like the others, has denied any wrongdoing.

The disclosure of Young's testimony is the first indication that the state is relying on a longtime industry insider to help build its case. Young spent 22 years with Chevron, including the last 14 as Hawaii public relations manager. He left the company in September 1998, about a month before the state filed the lawsuit, and now works for the state Department of Business, Economic Development and Tourism.

Young's testimony was cited in a ruling by Magistrate Francis Yamashita, who ordered Chevron to give the court certain confidential company documents sought by the state. The court will determine whether the state can use the documents to try to prove a fraud allegation against Chevron.

Albert Chee Jr., a Chevron spokesman, last night declined comment on Young's testimony, saying he had not seen the judge's ruling. "It's all a matter before the courts, and we will continue to ... defend ourselves there," said Chee, who succeeded Young at the company.

Young declined comment, citing a court ban against discussing confidential testimony.

The state is using his testimony to buttress allegations that Chevron and its lawyers obstructed the gas price investigation, drafted false and misleading testimony for the Legislature and launched a dishonest media campaign to justify Hawaii's high gas prices.

For the media campaign, Young testified, Chevron and its competitors used certain themes or strategies when making statements to the public. Young disclosed that he would "compare notes" with the other companies to ensure consistency in the statements.

Sometimes one company would "try out" an argument, and responses would be coordinated among the group, he testified.

Yamashita's ruling is considered a setback for Chevron because it could open the door for the state to gain access to sensitive attorney-client communications.

Chevron has cited the attorney-client privilege in trying to keep the documents confidential. Normally, not even judges are allowed to see such materials.

But Yamashita ruled that the state has presented sufficient facts to warrant a court review.

Chevron also cited the attorney-client privilege when it instructed Young last fall not to answer certain questions from the state during his deposition.

Yamashita, however, ruled that Young must answer the questions and that the court will determine subsequently whether the state can use the information.

The lawsuit, originally scheduled to go to trial in February, is now set for a September 2001 start.

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