Gov. Linda Lingle says her administration is continuing to research allegations that ChevronTexaco may have bilked Hawaii out of more than $563 million in taxes in a complex oil pricing scheme. Lingle searches for proof
of ChevronTexaco tax fraudBy Richard Borreca
rborreca@starbulletin.com
Her statements came yesterday as the Senate, in a 20-4 vote, passed a resolution urging the administration to sue the oil giant. Lingle, however, said her administration does not have enough information yet to start a legal challenge. She promised to have a decision within a month.
Two deputies in the attorney general's office met recently with Lingle about the potential case, but nothing was decided, the governor said.
"The reason for the time lapse is that they're continuing to get documents both from the IRS as well as from Chevron to convince themselves that there is, in fact, something to pursue," Lingle said.
Republican Sens. Fred Hemmings (Lanikai, Waimanalo), Sam Slom (Diamond Head-Hawaii Kai), Gordon Trimble (Downtown-Waikiki) and Bob Hogue (Kaneohe-Kailua) voted against the measure.
Last year, University of Hawaii professor Jeffrey Gramlich and retired University of Michigan professor James Wheeler, who lives in Lanikai, wrote a report claiming that ChevronTexaco used a complex series of transactions to evade taxes for three decades. They claimed Chevron bilked Hawaii taxpayers out of more than $563 million in income taxes by paying inflated prices for crude oil through its joint operation with Texaco in Indonesian from 1970 to 2000 to avoid U.S. taxes. The two companies later merged to become ChevronTexaco Corp.
Slom said the state first has to find "evidence that will stand up in court," before it can act.
When the charges were first alleged last year, Chevron said the professors were rehashing an old issue that had already been settled.
The Associated Press contributed to this report.
State of Hawaii