State to sue over 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.
Chevron’s back tax
Lawyers are sought to sue the
oil firm for half a billion dollarsStar-Bulletin staff
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.
State of Hawaii
