Chevron to pay $1.7m to settle case alleging improper payments from state fund

Chevron USA, Inc. and Texaco Downstream Properties, Inc. will repay the state $1.7 million to settle a lawsuit alleging they accepted money from a public fund for gas station cleanups without disclosing reimbursements from their insurers, Attorney General Martha Coakley said Wednesday.

The Massachusetts Underground Storage Tank Petroleum Product Cleanup Fund uses money collected from gas tank registration and delivery fees to compensate gas station owners and operators for the costs of cleaning up environmentally hazardous leaks. Claimants must notify the state if they seek reimbursements from other sources, including insurance companies, and return money to the fund if they succeed.

Coakley alleged that Chevron and Texaco, before and after their 2001 merger, made improper claims for cleanup money in Massachusetts. The merged company, Chevron Corporation of San Ramon, Calif., will pay $825,000 to the cleanup fund and $875,000 to the state’s general fund.

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A spokesman for Chevron denied any wrongdoing by the company, saying Chevron “acted at all times in good faith and believes its dealings with the state’s underground storage tank fund have been proper and without fault.”

“It is advantageous for both sides, however, to bring this matter to a conclusion, and we have done so,” said the spokesman, Brent Tippen.

The settlement is the second Coakley has won from oil companies she alleged misused the cleanup fund. In April, Sunoco, Inc. of Philadelphia agreed to a $2.2 million settlement in a similar case. Coakley also has sued Hess Corp. of New York for false cleanup fund claims. Hess could not be reached Wednesday.

“While the UST Fund program continues to be a great resource for our environment, it requires honesty from its participants in order to be effective and efficient,” Coakley said. “We will continue our efforts to determine whether some oil companies may have sought or recovered money from their insurers without proper disclosure or reimbursement.”

Chevron Corporation, the post-merger name for Chevron and Texaco, will pay $825,000 to the cleanup fund and $875,000 to the state’s general fund.