Sempra denies firing whistleblower executive over bribery accusation

By City News Service

A former executive at San Diego-based Sempra Energy charges that the company fired him after he alleged that Sempra was bribing Mexican officials, a possible violation of U.S. law, and built a luxurious seaside retreat for the company president, it was reported Sunday.

The San Diego Union-Tribune says Sempra rejects the charges. A company spokesman said the charges were leveled by a disgruntled ex-employee making “outlandishly false claims and misrepresentations.”

The allegations are reported in a joint investigative project by the newspaper and KGTV News10, the San Diego ABC affiliate.

The alleged payoffs to Mexican officials, if true, could violate the U.S. Foreign Corrupt Practices Act. It prohibits U.S. companies from paying bribes to foreign officials.

That’s what is claimed by fired Sempra employee Rodolfo Michelon, who says he was fired when he complained about a $17 million oceanfront villa and conference center the company was building at its Costa Azul LNG terminal, near Ensenada.

“It’s the Taj Mahal of conference centers,” claimed Micehlon in an interview with News10. “It’s a monument to excess and greed.”

Michelon provided the Union-Tribune with copies of e-mails that indicate the company directed him to “have cash” to pay Mexican authorities who were evicting a man from land to which he claimed ownership — land now occupied by the massive Costa Azul project.

The company said the $8,200 in cash was not a bribe, but a cash bond required by Mexican police conducting an eviction to clear the way for legal construction work.

Costa Azul is a $1.5 billion energy import project built by the San Diego company to unload supercold liquified natural gas from tankers originating in Indonesia and Russia, reheat it and ship it north to Tijuana and San Diego. Sempra built the terminal in Mexico to get a jump ahead of competitors seeking to build LNG terminals in California, where environmental regulations delayed and eventually killed those proposals.

The Costa Azul installation sits in a fortified compound, guarded by armed private security officers, at an unmarked exit from the Ensenada Toll Road about 55 miles south of Tijuana.

In a lawsuit he filed in San Diego on Nov. 4, Michelon said he complained that a $17 million “Casa Azul” conference center being built inside the compound was a nonbusiness-related expense.

Michelon told the San Diego Union-Tribune that Casa Azul was an oceanfront vacation home being built for Sempra chief executive Donald Felsinger at the expense of ratepayers for two Sempra-owned subsidiaries — San Diego Gas & Electric and the Southern California Gas Co., which serves Los Angeles and Orange counties.

Michelon was told by Sempra officials he would lose his job as Sempra’s financial controller for its wholly-owned Mexican subsidiaries if he kept complaining.

Sempra spokesman Doug Kline called those charges “patently false” in an interview with the Union-Tribune. He said the compound is owned by Sempra’s subsidiaries that are sister companies to the utilities, and as such not subsidized by ratepayers.

But Michelon said San Diego’s Sempra office divided expenses for Casa Azul between the two regulated utilities owned by Sempra, and the company’s unregulated LNG firms.

“Michelon repeatedly questioned the propriety of the manner in which the CEO was directing Casa Azul, as well as the manner in which Casa Azul would be used for nonbusiness related expenses, but was repeatedly told that he was to stop asking such questions if he wanted to keep his job,” the suit said.

Sempra categorically rejects the allegations in the lawsuit.

“There were no direct or indirect billings for construction of the Casa Azul project to any of Sempra’s utility customers — period,” spokesman Kline told the Union-Tribune.

A spokesperson for the California Public Utilities Commission told the Union-Tribune that the agency would watch the lawsuit to see if there is evidence that the regulated utilities acted with taxpayer funds in Mexico.

A resident of Baja California has also sued Sempra, claiming the company illegally seized his beachside ranch in 2006 to build Costa Azul. That suit has also been vigorously contested as false by Sempra, and is pending in Mexican federal courts.