Congress needs to end its dependence on all special interest money

by David Donnelly, national campaigns director for Public Campaign Action Fund, and Steve Kretzmann, executive director of Oil Change International – 08/02/11

Reposted from The Hill

Noticeably absent from this week’s debt ceiling deal between President Obama and Congressional Republicans were the billions in taxpayer subsidies Congress continues to dole out to Big Oil, despite overwhelming support among Americans to end these handouts and in the face of staggering oil company profits released last week. When it came to taking on Big Oil, Congress and the Obama administration blinked.

Cutting Medicare for low and middle-income seniors? On the table. Closing loopholes for profitable, multinational corporations? Not under discussion.

The world’s largest oil companies announced another round of billion dollar profits last week. BP made $5.6 billion. Shell got even more, with over $8 billion. And ExxonMobil’s profits were $10.7 billion – an astounding $117 million a day from April to June. Gas prices are still at record levels and everyday taxpayers are footing the bill for billions of dollars in wasteful subsidies these companies get every year. Big Oil is making big profits—and the American people are paying the price. In fact, we’re paying it twice – once when we fill up our tanks and once when we pay taxes.

And while the 12-member “Super Congress” that will be appointed as part of the deal would technically put cuts to these subsidies on the table, you can bet oil companies will harness their significant political clout to keep their free money. With just 12 members to focus on—instead of 535–that pressure might be even stronger.

Why do these oil companies have so much sway? Just follow the money. A recent report from Public Campaign Action Fund and the League of Conservation Voters found that 93.5 percent (159 of 170) of U.S. House members who received campaign contributions from the political action committees (PACs) of the largest oil companies in the first half of the year voted to maintain these wasteful subsidies. And the three top Republicans in the House – House Speaker John Boehner (R-Ohio), House Majority Leader Eric Cantor (R-Va.), and House Majority Whip Kevin McCarthy (R-Calif.) – received a combined $96,000 in dirty energy money from these PACs in the first six months of the year alone.

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photo – Washington DC – Capitol Hill: United States Capitol, by wallyg  Available under a Creative Commons Attribution-Non Commercial license. 

By ThinkProgress War Room, Jul 6, 2011

Reprinted from Think Progress from the Center for American Progress

GOP Tax Giveaway of the Day: Big Oil Subsidies

Oil from a ruptured ExxonMobil pipeline is coursing through the picturesque Yellowstone River as we speak, but Big Oil’s real gusher is located on Capitol Hill. Big Oil’s best friends in Congress make sure that year after year, billions of dollars in taxpayer funds flow into the coffers of the most profitable companies the world has ever known. In return, Big Oil spends millions each year to make sure that its friends keep their seats.

Here’s why it’s time to make the easiest of all choices — the one to end taxpayer-funded giveaways to Big Oil.

WHAT: Wasteful and unnecessary taxpayer subsidies for oil companies

HOW MUCH THEY WASTE: $77 BILLION from 2011-2021

WHO BENEFITS: Oil companies large and small, including the five largest oil companies who raked in $32 BILLION in profits in just the first quarter of 2011. ExxonMobil alone made nearly $11 billion in profits during the first quarter of this year.

WHO ELSE BENEFITS: Big Oil’s friends in Congress benefit from millions in campaign cash from the oil and gas industry. During the 2010 election cycle alone, the oil and gas industry pumped more than $21 MILLION into congressional campaign accounts — more than three-quarters of which went to Republicans. These same Republicans have voted repeatedly — and nearly unanimously — in favor of keeping oil subsidies over the past several months. In addition to lavish spending on direct campaign contributions, the oil and gas industry also spent a whopping $145 MILLION last year to lobby Congress.

DINNER TABLE FAST FACTS:

The average American pays an effective federal income tax rate of 20.4 percent, while ExxonMobil had an effective tax rate of just 17.6 percent over the past three years. That is of course far below the statutory corporate tax rate of 35 percent.
Even Big Oil CEOs themselves admit that they don’t need the subsidies. ConocoPhillips CEO Jim Mulva told Congress: “With respect to oil and gas exploration and production, we do not need incentives.”

IN ONE SENTENCE: Instead of ending Medicare to pay for more tax breaks for millionaires, billionaires, and huge corporations, we need to end the billions in taxpayer giveaways to Big Oil.

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From the CBS Business Network blog comes an article about the recent achievement of the Publish What You Pay coalition of which Justice in Nigeria Now is an active member:

Bono Versus Big Oil: The Resource Curse Battle Moves to the SEC

By Kirsten Korosec | August 17, 2010

Activists, including U2 frontman Bono, cheered — while Big Oil blasted — an 11th-hour insertion into the Dodd-Frank financial reform law last month that will require all companies registered with the SEC to disclose their royalties, bonuses and other payments to foreign governments for the extraction of oil, gas and minerals. But the fight isn’t over. It’s just moving to the SEC.

How can I be so sure? The American Petroleum Institute, the powerful oil and gas lobby group, told me so. API spokeswoman Misty McGovern wouldn’t go so far as to reveal the group’s plans, saying only that they were “in the early stages of formulating a strategy.” But she did confirm that the SEC will be the next battleground.

The amendment, inserted by Sens. Richard Lugar, R-IN., and Ben Cardin, D-MD., aims to end the so-called resource curse, in which underdeveloped countries are paid handsomely for their natural resources, but monies aren’t passed down to the poverty-laden population. The amendment not-so-coincidentally pulls directly from Lugar’s now-idled Energy Security Through Transparency Act.

The law now heads to the SEC, where the agency has about nine months to craft the wording of the regulation. Oil, gas and mining companies will lobby the commission to keep the annual reporting requirements as vague as possible. Their ideal scenario? To get the SEC to only require companies to provide aggregated information, McGowen said. For instance, instead of Exxon (XOM) having to disclose detailed payment information of each project in the foreign country where it’s operating, the company would only have to provide the lump sum paid out that year.

Companies, including Exxon, argue the law will put U.S. businesses at a distinct competitive disadvantage because their international rivals would be able to see how much they’re paying for rights to develop oil and gas fields or extract minerals.

That’s not entirely accurate. The disclosure rule forces any company registered with the SEC to follow the rules. That means companies like UK-based BP, Australia’s mining giants BHP Billiton (BHP) and Rio Tinto (RTP), Brazil’s Petrobras (PBR) and even a few Chinese energy companies, like CNOOC, have to make the same disclosure as U.S.-based Chevron (CVX). That being said, there are some national oil companies — or NOCs — that aren’t registered with the SEC and in those cases, it would be a competitive disadvantage for all the SEC-listed ones.

Exxon and the like are more supportive of what they call a more inclusive international requirement, specifically, the Extractive Industries Transparency Initiative. It’s not that EITI isn’t a worthy organization. It is. But the new disclosure law is powerful because it’s widespread and not voluntary, which makes it far more attractive to activists seeking change right now.