Study Says ChevronTexaco Evaded Taxes in Price Scheme
The New York Times
September 13, 2002
The following is an excerpt:
By NEELA BANERJEE and DAVID CAY JOHNSTON
"ChevronTexaco, the world's fourth-largest oil company, evaded $3.25 billion
in federal and state taxes from 1970 to 2000 through a complex petroleum pricing
scheme involving a project in Indonesia, according to a new
research paper by two accounting professors.
Accusations of tax evasion were first raised against Chevron in the early
1990's by the district office of the Internal
Revenue Service in San Francisco, where ChevronTexaco is based.
The company paid $675 million to settle the
dispute, far less than the $1 billion it had set aside as a reserve
in case it lost the case, which covered the years
1979 through 1987.
Later the I.R.S. district office continued to investigate, but the company
refused to provide requested documents, touching off a brief fight in Federal
District Court in San Francisco. Hundreds of documents about the Indonesia oil
deal ultimately entered the public record.
The case was closed after officials at the I.R.S. headquarters in Washington
overruled the district office.
The authors of the research paper reviewed the documents that became public
and said that the I.R.S. had ground to
reopen the case and should do so.
"What we believe is that the evidence is there that fraud exists," said one of the authors,
Jeffrey Gramlich, a visiting professor at the University of Michigan Business School and
professor at the University of Hawaii. "The national office
of the I.R.S. settled for far less - something like a quarter on the dollar - than what is really owed."
After reviewing the research paper, ChevronTexaco said last night the allegations
were a rehash of old issues that
had been settled with the I.R.S.
"All of the issues they're raising have been thoroughly investigated, fully
examined and resolved and closed by the
I.R.S.," said Fred Gorell, a spokesman for ChevronTexaco. "There's absolutely nothing
new here. All of those issues
they've raised are without merit."
An I.R.S. spokesman said that federal law prevented the agency from commenting."
The records from the court case are online at www2.Hawaii.edu/~gramlich/caltex/home.html.
nytimes.com Norbert Walter is chief economist at Deutsche Bank Group.
Copyright 2002 The New York Times Company |
