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Chevron: State taking
liberties in lawsuit

By Rob Perez
Star-Bulletin

The state's lawyers are trying to revise history to bolster its antitrust lawsuit against Hawaii oil companies, but their attempts are transparent and without merit, says Chevron Corp.

Chevron, one of the defendants in the case, said in court documents this week that the state lawyers are changing history "for litigation purposes."

The company's profit margins that the state lawyers now say are grotesque and excessive, for instance, are lower than those of which the state was aware of in 1990, according to Chevron. State investigators back then determined the profit levels weren't excessive.

The state also is claiming Chevron withheld key profitability documents from state investigators in 1992, but the documents were not requested, the company says.

Even though the state eight years ago was satisfied with the documents Chevron turned over for the government's gas-prices investigation, it now is claiming that records were fraudulently withheld, the company says.

Chevron's contentions were included as part of a response to a recent filing in which the state said the company's own documents corroborated the testimony of a key state witness, David Young, a former Chevron executive who now works for the state.

The documents and Chevron witnesses supported Young's testimony that Chevron willfully obstructed the gasoline price investigation, withheld key profitability documents and lied to the Legislature, the state said. But Chevron said the documents did not corroborate Young's testimony.

The state's position, in essence, is that because it alleges the gasoline market is not competitive and because its employee, Young, now says he agrees with his new employer, "it is somehow a crime or fraud for Chevron to defend itself and express its position that the market is competitive and that prices are set by the competitive forces of supply and demand," the company said. "Nothing in the law supports such a chilling outcome."

Spencer Hosie, the San Francisco attorney heading the state's case, could not be reached for comment.