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NEW YORK – A federal judge has ruled that the Dow Chemical Co.’s former fraud investigator can pursue a claim that she was unlawfully fired for finding financial misdeeds, including CEO Andrew Liveris’s expenses for family vacations and payments to The Hellenic Initiative, a Greek charity co-founded by Liveris.
Kimberly C. Wood claims she was fired in October 2013 she told her supervisor that there was ‘financial statement fraud’ in an ethylene plant project. She had previously issued reports that flagged spending by Liveris, who is also chairman of Dow.

Dow’s bid to dismiss the case was denied Dec. 15 by U.S. District Judge Thomas L. Ludington, in Bay City, MI.
The case was filed under the whistle-blower provisions of the Sarbanes-Oxley Act and Bloomberg News noted that it “may bring unwanted attention to Liveris, who was accused of a series of ‘broken promises’ last month by Third Point LLC, a hedge fund that has called for Dow’s breakup. Dow is giving the activist investor two board seats, and Third Point, founded by Daniel Loeb, agreed to stop disparaging the company for a year.”

Rebecca Bentley, a Dow spokeswoman issued an email statement that described
Wood as “a disgruntled employee making false allegations in retaliation for Dow’s denial of ‘unearned benefits’’” according to Bloomberg.

“Most of the claims in an earlier state case were dismissed, and the federal court’s ruling made no determination on the truth of Wood’s allegations, she said,” and Bloomberg quoted her that “While we strongly believe the case should have been dismissed outright, we will move forward and defend the merits of the case vigorously.”

The full Dow statement reads:
“There is simply no merit to any of the allegations. In every way, this continues to be a baseless lawsuit by a disgruntled employee who is making false allegations in an attempt for personal gain. When Ms. Wood’s request for unearned benefits was denied, her regrettable response was to retaliate by attacking the reputation and integrity of Dow employees and family members. While we strongly believe the case should have been dismissed outright, we will move forward and defend the merits of the case vigorously.

“The vast majority of claims have already been dismissed in state court. This latest District Court decision only allows the case to survive based on a handful of allegations and inferences made by the plaintiff. It is important to note that this was a decision about whether the case would go forward only on the pleadings and was not a review at any level of the actual facts of the case. The court made no determination that the merits of the case are true, but rather only whether the case could move forward for consideration. Interestingly, the court noted this by stating, “…complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.”

Victor Mastromarco Jr., Wood’s attorney, called her a “career employee” of Dow who didn’t want to leave the company and said “She was nipping at the wrong heels…They wanted to get rid of her.”
According to Bloomberg, “Wood, a 25-year Dow employee, was a company fraud investigator in 2009 when she found the renovation of the Dow-owned H Hotel in Midland had exceeded its $13 million budget by $20 million, according to court papers. A Dow employee was fired for trying to limit cost overruns and the involvement of Liveris’ wife and her friend, according to Wood’s complaint…Wood alleges that Dow in 2012 was ‘funneling money’ to The Hellenic Initiative, a Greek charity co-founded by Liveris, court documents show.”
Wood claims that New York advisory firm Teneo Holdings LLC billed Dow for work done for THI and Bloomberg reported that “Teneo’s founders were on the board of the charity, and Dow tripled its annual payment to Teneo to $16 million, from $5 million, in the middle of the contract year, Wood alleges in court papers. A spokesman for Teneo declined to comment on the claims.”

Among Wood’s findings was that Dow paid for Liveris and his family to take an African safari vacation, a $218,938 trip to the 2010 Super Bowl, a trip to the 2010 World Cup in South Africa and a trip to the 2010 Masters Tournament.
In a 2011 regulatory filing, Dow reported that Liveris agreed to repay $719,923 after the matter was audited and the expenses were found not to have been business related. “Wood claims the disclosure misrepresented what transpired…Wood claims her supervisor responded to the investigation by telling her in December 2012 that “nothing from the CEO’s past was to be looked at again,” according to Bloomberg, which noted that “Her final investigation alleged Dow managers improperly recorded expenses to hide cost overruns at the Olefins 2 ethylene project, which she flagged to her supervisor as fraud on Oct. 9, 2013. She was told the next day that Oct. 31 would be her last day at Dow, according to the complaint.”

The post Court Rules Dow Employee Can Pursue Claims Re: CEO Liveris Alleged Misdeeds appeared first on The National Herald.

Source: The National Herald
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