Accountant Says Bribes Were Rampant

By Pat Broderick

Daily Journal Staff Writer

SAN DIEGO - A former controller for Sempra Global in Mexico filed a lawsuit in San Diego Superior Court, alleging that the energy company required him to bribe government officials, among other charges.

Sempra officials counter that Rodolfo Michelon is a "disgruntled ex-employee," out to "extract money from the company." Michelon v. Sempra Global, 37-2010-00103591-CU-FR-CTL, San Diego Super. Ct., filed Nov. 4, 2010)

The allegations come at a time when California-based energy providers increasingly look to Mexico, in particular Baja California, to help meet the state's power needs.

Michelon, who was promoted to the controller position by Sempra in 2005 and let go in March, claims that he was wrongfully terminated for a number of reasons. Among them, according to his complaint, was Michelon's "repeated questioning, protests and open skepticism of the Sempra CEO Donald Felsinger's pet project to build, at the utility ratepayer's expense, an oceanfront vacation home in Baja California."

As controller, Michelon said that he oversaw the financing of a project that he said was being built for Donald Felsinger, known as Casa Azul.

Michelon contends that, "Casa Azul was abnormal, not only because of the excessive price tags," including $60,000 in mattresses, a fully stocked wine cellar, $100,000 home theater system, a $55,000 bar, "but also because the CEO's abnormal hands-on approach in directing every aspect of Casa Azul."

According to Michelon, he was told to stop questioning the project, "if he wanted to keep his job."

But in a statement released Friday responding to the lawsuit, Sempra officials described Casa Azul as a conference center, which is part of Sempra LNG's $1 billion-plus operations complex for Energia Costa Azul, a liquefied natural gas receipt terminal in Baja California.

"Mr. Michelon's claim that utility ratepayers had to pay directly or indirectly for the construction of Casa Azul is patently false," the company stated.

Michelon further charges that his termination was the result of "deceit, trickery and fraud," committed by Sempra officials in their attempt to acquire land owned by local rancher Sanchez Ritchie. A suit on that matter is pending in Mexican courts.

In his complaint, Michelon also claims that he was fired for demanding that Sempra provide a safe workplace in Baja California.

Michelon also charges that Sempra regularly required him to transfer funds and account for "illegitimate expenditures that boiled down to bribes of government officials," including "fraudulent trusts" to purchase fire-fighting equipment for Mexican governments, paying off local fishermen to move their operations away from Sempra facilities, falsely stated assets, and wiring "huge amounts" of money to "consultants" throughout Mexico."

Sempra denies his bribery charges, noting that it "has complied with all applicable laws in its business dealings on both sides of the border."

After hearing Michelon's claims earlier this year, Sempra said its board of directors "promptly ordered" an independent investigation by an outside law firm.

"The investigation was extensive and found his claims to be completely without merit," Sempra wrote.

Michelon is seeking unspecified damages that his attorney said could amount to seven figures.

"Bribery is part of doing business in Mexico, and while this isn't unique to Sempra, they were willing to play the game," Daniel M. Gilleon, a partner with the Mitchell Gilleon Law Firm in San Diego, who is representing Michelson, said. "This boils down to Mr. Michelon adhering to his ethical obligations as a CPA, and, to the extent that he protested having to do things inconsistent with his ethical obligations under California law, this is a wrongful termination."

According to the company, Michelon's position was eliminated as part of a corporate reorganization in April, which cut 90 positions.

While Sempra offered him and others a severance package and outplacement support, "Mr. Michelon rejected these offers and, instead, is demanding money from the company by making these allegations and claims."

As for any impact the suit might have on how the energy company conducts in Mexico, Gilleon is skeptical.

"My sense is that Sempra has gotten to the point that it is so large, so powerful and so connected, I'm not sure that suit is going to affect how they do things," he said. "I can't imagine this is going to change much."

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