On September 12, Chevron’s lawyer, Richard E. Nielson of Pillsbury, demanded that I remove posted information on my website and recall my E-=FORUM posts claiming that “Chevron cheated on taxes and owes the City of Richmond at least $24 million.” Click here for a copy of Mr. Nielsen’s letter.

Chevron’s demand is based on an alleged violation of the California Revenue and Taxation Code, and the Confidentiality Agreement between Chevron and the City of Richmond dated September 1, 2007.

Chevron alleges that I have violated the following provisions of the Revenue and Taxation Code:

7284.7.  (a) It is unlawful for any employee, officer, authorized

agent or contractor of a local jurisdiction levying a utility user's

tax, that obtains access to information contained in utility user tax

records of a local jurisdiction, to disclose any information

obtained from the records of a utility or other company required to

report or pay a utility user's tax to the local jurisdiction as a

result of an audit, or any other information obtained in the course

of an on-site audit, to any person who is not an employee, officer,

authorized agent, or contractor of the local jurisdiction with

administrative or compliance responsibilities relating to the utility

user's tax ordinance.

   (b) Any violation of this section is a misdemeanor and is

punishable by a fine not exceeding one thousand dollars ($1,000), by

imprisonment in a county jail not exceeding one year, or by both, in

the discretion of the court.

   (c) This section shall not be construed to prohibit the divulging

of information to the State Board of Equalization for the purposes of

its administration of the Energy Resources Surcharge Law (Part 19

(commencing with Section 40001) of Division 2 ).

   (d) Notwithstanding subdivisions (a) and (b), this section shall

not be construed to prohibit an employee, officer, authorized agent,

or contractor of a local jurisdiction levying a utility user's tax

from doing any of the following:

   (1) Disclosing to a taxpayer information derived from the records

of a utility or other utility service provider, if the information is

used to calculate the utility user's tax of that taxpayer; or,

disclosing that information in a tax collection action, provided that

the information is subject to a protective order issued by a court.

   (2) Disclosing to a tax officer of the state or federal

government, pursuant to a written reciprocal agreement, information

obtained from the records of a utility or other utility service

provider, if the information is used to calculate the local utility

user's tax.

   (3) Disclosing the gross utility user's tax revenues collected

from the customers of a utility that is owned or operated by the

local jurisdiction that imposes the utility user's tax.

   (e) For purposes of this section:

   (1) "Local jurisdiction" means any city, county, city and county,

including any chartered city or city and county, district, or public

or municipal corporation.

   (2) "District" means any agency of the state, formed pursuant to

general law or a special act, for the local performance of

governmental or proprietary functions within limited boundaries.

   (f) Nothing in this section shall be construed to create an

exemption from disclosure under subdivision (k) of Section 6254 of

the Government Code, or to prohibit the disclosure of records

pursuant to Section 6254.16 of the Government Code or subdivision (i)

of Section 6254 of the Government Code.

Next, Chevron claims that I violated paragraph 9 of the Confidentiality Agreement, which provides:

..all Utility Tax information provided to city by Chevron with respect to the determination of Chevron’s liability for Utility User Tax, including any audit report or other work product of City incorporating such information, shall be fully and unconditionally protected from further disclosure, or from use for any other purpose, in accordance with the terms and conditions of this Confidentiality Agreement… 

First of all, I did not disclose the fact that Chevron owes the City money from utility taxes. The matter was disclosed by Councilmembers Viramontes and Marquez, who authored a report for an agenda item posted for the September 2, 2008, City Council meeting. Click here for a copy. The report stated “Legislation was approved in 2006 by the City Council to conduct a utility use study on the Chevron Corporation to determine utility tax payments. It was determined on a preliminary basis that the Chevron Corporation owes the City of Richmond and action needs to be taken to collect delinquent payments.”

That report became a public document. It was and still is posted on the City’s website and distributed to the public. The cat was out of the bag. Information in it became fair game for anyone to use or quote. It was the basis for my contention, later posted on my website, that Chevron owed the City money for utility taxes. If Chevron has a problem with it, they should be talking to Viramontes and Marquez – not me.

The intent of the Confidentiality Agreement was to protect Chevron from disclosure of technical information about their energy use that they believe might divulge trade secrets (“..directly or indirectly the nature or amount of natural gas, electricity, or other energy consumed by Chevron…or the amount of Utility Tax incurred by Chevron”). There is no way that the allegation of a partial unpaid utility tax liability, or even an estimate of that amount is going to enable someone to determine Chevron’s use of “natural gas, electricity, or other energy” or Chevron’s total amount of utility tax liability. This fragment of information simply cannot be teased into a coherent picture. It has no value and does not violate either the substance or the intent of the agreement.

Finally, the city attorney is on my case for allegedly violating Government Code Section 52963 that prohibits disclosure of confidential information that has been acquired by being present in an authorized closed session. As I have previously stated, the allegation that Chevron owes the City money from utility taxes had already been publicly disclosed by Councilmembers Viramontes and Marquez. It was no longer confidential information. I simply placed a number on it which was a guess on my part. It was not a firm number provided in a closed session, and I have never seen any calculations to back it up or any qualitative analysis of what is based on. Someone seeking information about Chevron’s utility usage can get far more information from the Chevron Energy and Hydrogen renewal project EIR.

However, pending clarification from my own counsel, I am acceding to Chevron’s demand and hereby recalling my mail entitled Telling the Candidates Apart, September 7, 2008. If you received this email, please do not read it. Destroy it. Tomorrow morning, I will remove access to that email from my website www.tombutt.com. With that, I consider the matter closed. Thank you, Mr. Nielsen, for bringing this travesty to my attention.