ISLAND VOICES
Give the public Chevron data

By Sen. Ron Menor
Chairman of the state Senate Committee on Commerce, Consumer Protection and Housing

Many legislators, including myself, were surprised and disappointed to learn of Winston and Strawn's decision not to pursue litigation to recover taxes ChevronTexaco owes the state.

The statements attributed to them in the news media represent a complete reversal of the position that the firm's local counsel, Michael Green, communicated in his testimony before the Senate Commerce, Consumer Protection and Housing Committee last January. At that time, the committee was informed the law firm was ready and willing to pursue the matter on behalf of the state and assume all costs of litigation.

This position created the unmistakable impression that the state had a strong case against the oil companies and that, in effect, the state had "all to gain and nothing to lose" by pursuing a lawsuit. The representations of Winston and Strawn's local counsel indicated that there was an even stronger case than suggested by the evidence professors James Wheeler and Jeffrey Gramlich presented. Mr. Greene was even quoted saying that not only did the law firm want to pursue the case, but "they see things in this case that may go far beyond what's before this committee."

Based in large part on such assurances from Winston and Strawn's local counsel and spokesman, editorials appeared after the hearing in both Honolulu daily newspapers urging that legal action be taken. The testimony of Mr. Greene and others also prompted the Legislature to pass a concurrent resolution supporting litigation against ChevronTexaco.

Given the importance of the issue to the public, the governor's office should seek authorization from the oil company to make available for public inspection all data and information it relied on to arrive at its decision.

Although ChevronTexaco officials refused to appear and answer questions from the Senate, if the oil company were willing to make information clearing them of wrongdoing available to the governor's office, then it should now be willing to release this information to the Legislature and to the public so others with a stake in this matter can judge for themselves whether pursuing litigation has merit.

In this regard, legislators and the public need to receive more cooperation from the administration. Recently, I requested a phone conference with a partner from Winston and Strawn to determine if there had been any change in its position on pursuing the case. To my surprise, the firm's local counsel informed me that they had been instructed by the attorney general's office not to speak to my office about the case.

Aside from the recovery of unpaid taxes and despite Winston and Strawn's change of heart, the state administration should still seriously consider pursuing legal action if there is evidence of wrongdoing. This is a matter of principle. If laws have been broken, the state should be willing to pursue the matter whether the violator is a Hawai'i resident or a large multinational corporation.

If the state administration believes that — contrary to the evidence presented to the Legislature — there was no wrongdoing, the attorney general and the governor should be able to substantiate their position with persuasive information and data. As it is, they are basically asking us to take their word on the matter.

Interestingly, local counsel for Winston and Strawn represented to me just a few weeks ago that there was evidence of wrongdoing, but that the law firm had concerns about the amount of damages that it would be able to collect from the oil company.

To avoid situations in the future in which the state administration can short-circuit legal actions against corporate tax evaders, without producing any verifiable justification, I will be introducing a bill in the 2004 legislative session authorizing citizen lawsuits for violations of our state's tax codes.