Gas price-fixing case
may have lasting valueThe issue: Chevron Corp.
says resolution of a lawsuit
vindicates the company.OIL companies may gloat over their settlement of the state's price-fixing lawsuit. However, their satisfaction in the courts -- if an agreement to pay out $35 million is really that satisfying -- could be a fleeting one, subjecting them to closer scrutiny in the future. Information disclosed in the case should be used in keeping a watchful eye on gasoline prices and oil industry practices.
The state sought nearly $2 billion in the suit, filed in 1998, in compensation for having to pay the highest gas prices in the nation. Two companies -- BHP Hawaii Inc. and Tesoro Petro-leum Corp. -- agreed two years ago to pay $15 million and be dismissed as defendants. The remaining five defendant companies agreed in January to settlements ranging from $1.7 million to $5 million.
Chevron Corp. maintained last week that the settlement "reinforces the fact that this case was baseless and our pricing has been lawful and fair." Although the settlement allows the companies to deny any wrongdoing, any inference that they have been vindicated, as Chevron claims, is absurd.
The state agreed to the settlement under the pressure of a September 1999 ruling by the 9th U.S. Circuit Court of Appeals that circumstantial evidence was inadequate to support price-fixing allegations in a lawsuit against a manufacturer of citric acid. The 9th Circuit's jurisdiction includes Hawaii, and the oil industry's don't-write-it-down policy had produced no direct evidence of price-fixing. Senior U.S. District Judge Samuel P. King indicated that the 9th Circuit's decision may have fatally damaged the state's case, which relied heavily on circumstantial evidence.
"Faced with the fact that the judge wanted to throw the case out, we had to make a choice," Governor Cayetano said in response to Chevron's celebratory statement. "I feel if we had been able to present our case, we would have made a good case." Perhaps in the court of public opinion, but, alas, not before Judge King.
The fact remains that while the Persian Gulf war resulted in Chevron's loss of $148 million on consumer product sales nationally, it made a profit of $9.5 million in Hawaii. "Even the Texas accounting firms couldn't hide that money," said petroleum analyst Tim Hamilton. He said the figures, revealed in recently unsealed court documents, appear to confirm the huge profits that Chevron has made in Hawaii, compared with the mainland.
Those court documents should be examined to better understand company practices in gouging Hawaii's motorists. Information derived from them could prove valuable in evaluating future gas prices and taking appropriate action.
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Ferry and high-rise
project may stay afloatThe issue: Investors are
considering Honolulu Harbor
for a high-rise complex and
ferry terminals.AN investment group's interest in developing an interisland ferry system and high-rise complex at Honolulu Harbor appears to fit in with the state's own fledgling plans for water transportation. Although previous efforts have failed, technological advances in water craft, a growing need for transportation options and profit potentials could lend the necessary sense of purpose for a ferry system to succeed.
With the state's backing of a $45 million revenue bond, Rainbow Pier Development proposes to link ferry terminals and hotel-office high-rises at Piers 5 and 6. The company believes the real-estate segment and ferry system would each be profitable, but says separate financing for one would not be possible without the other.
The hotel-office complex will likely generate some opposition to putting up structures on a prime section of the harbor. Skeptics may see the linkage as a lure for the state to loosen its hold on harborside development since it also has been looking for a private business to operate ferry transport at terminals.
The benefits of a ferry system would be tremendous. Vessels carrying commuters from central and Leeward Oahu would alleviate traffic congestion and lessen the need for continued road construction. Residents, who may have balked at ferry travel in the past, may be more willing to leave their cars at home now that driving has become more time-consuming.
Interisland travel and cargo transport would not depend solely on airlines, which will probably become more expensive and less convenient if the merger of Aloha and Hawaiian goes through.
A ferry system could increase tourism and open employment and housing opportunities on the neighbor islands if people are able to get from one island to another quickly. Rainbow says a ferry trip from downtown Honolulu to Lahaina would take about an hour and 40 minutes, which seems lengthy compared to a 35-minute flight from Honolulu Airport to Kahului. However, when driving, check-in and security times are factored in, the ferry commute measures up well.
The group appears optimistic that its proposal will succeed and Hawaii badly needs travel choices. If the project could enhance the harbor area, increase state revenues and offer residents and tourists another way to get around the islands, it should be given the opportunity.
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Published by Oahu Publications Inc., a subsidiary of Black Press.Don Kendall, Publisher
Frank Bridgewater, managing editor 529-4791; fbridgewater@starbulletin.com
Michael Rovner, assistant managing editor 529-4768; mrovner@starbulletin.com
Lucy Young-Oda, assistant managing editor 529-4762; lyoungoda@starbulletin.comJohn Flanagan, contributing editor 294-3533; jflanagan@starbulletin.com
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