Court records and a study by the New York Times suggest that the oil industry has been regularly shortchanging Washington on tax payments for oil and gas taken from lands own by the government, aka, you and me.
For all the defenders of BIG OIL...
In Alabama, we have been DEFRAUDED by Exxon Mobile corporation, to whom the state leased production of oil and natural gas from its state-owned waters in the Gulf of Mexico.
DEFRAUDED by BIG OIL
Perhaps you may recall my citation of the recently adjudicated suit wherein the judgement amounts to nearly $3000 for every man, woman and child in Alabama.
That's the amount they defrauded children, teachers, Law Enforcement Officers, firefighters, and others in Alabama...
"But those Big Business folks are nice!," some may claim.
Right. Sure... whatever you say.
And the moon is made of blue cheese.
Now... consider also the following.
Big Oil can count on Interior motives
By John Farmer
Newhouse News Service
Tuesday, December 05, 2006
http://www.nj.com/columns/ledger/farmer/index.ssf?/base...842265690.xml&coll=1
(Published in The Huntsville Times, pB1, Sunday, 10 December 2006; headlined
"Don't pity oil millionaires; The industry cons Congress into $10 billion in tax incentives)
It came in the mail the other day, a solicitation for a small- cap oil company stock that promised to make me a millionaire almost overnight.
"You'll be a card-carrying member of the easy-money crowd," it promised in suitably purple prose; be a part of "the cartel of smart Texans who send out a secret radar to their pals about where piles of money are stashed as they blow across west Texas' dusty roads in their hot-rodded Rolls Royces, Corvettes and Escalades." You can, it cooed, "be filthy rich." Fancy that.
Don't know just who put this impassioned pitch together, but he's slick. Probably got a sideline selling cemetery sites in Baghdad and perhaps a past peddling Enron stock to widows and orphans. But in the process he (or she?) offered this insight into why the awl bid ness, as Texan Molly Ivins would put it, is hyper profitable today and promises to remain so in the immediate future: The oil industry won't spend a penny of its obscene profits for new exploration.
Instead, he bragged, it has conned Congress into forking over $10 billion in tax incentives to help it find more of the black gold to sell at exorbitant profits.
Congress has justified the $10 billion boodle for the oil barons on the grounds that America needs new sources of petroleum and that new oil production will yield a bonanza in new federal tax revenues. That the nation needs new petroleum sources is undoubtedly true -- though it's equally true that it needs a large investment in renewable, nonpolluting energy. But about that new tax revenue, well, the record isn't reassuring.
Court records and a study by the New York Times suggest that the oil industry has been regularly shortchanging Washington on tax payments for oil and gas taken from lands own by the government, aka, you and me.
A series of lawsuits under the federal False Claims Act, either by whistle-blowers (private citizens in some cases, government employees in others) either alone or with the Justice Department, has recouped some $440 million from 15 oil companies, including from such giants as Mobil ($40 million), Chevron ($95 million) and Shell ($110 million.) It's unclear how much these oil hotshots may have shortchanged the states in which their oil leases were located.
The first-blush reaction is to blame the Bush administration, a more or less wholly owned subsidiary of the oil industry. But the failure to properly audit oil companies' activities or enforce the tax laws or both seems to involve previous administrations as well.
The locus of the failure is the Interior Department. The cause is the corruption inherent in a Washington system that inclines too many regulators to identify more with the industry and the industrialists they regulate rather than with the public interest they're hired to protect. Presidents and administrations come and go, but in the departments those below the very top political level, those who actually run the government day in and day out, stick around.
They make friends with indus try leaders and lobbyists who too often are treated as sources of po tential future employment.
Earlier this year, Congress, prompted by whistle-blowers, began looking into the workings of the Interior Department and got an earful from the department's inspector general, Earl Devaney. De vaney told the lawmakers -- to no one's surprise -- that the department was guilty of cronyism, shoddy management, lousy data collection practices and a tendency to cave in to the oil giants on things like taxes and concession payments due Uncle Sam.
"Short of crime," Devaney told Congress, "anything goes at the highest levels of the Department of the Interior." And you wondered why gasoline prices and the federal budget deficit are so high. Silly you.
The good news in this sorry story is that Democrats, who are about to take control of the next Congress, have sworn an oath to roll back all or part of the tax bonanza President Bush, egged on by Vice President Dick Cheney (R- Halliburton), granted the oil millionaires. Moreover, Congress has directed the Government Accountability Office, its nonpartisan watchdog, to put its sleuths to work on what in the world is going on at Interior, why it doesn't use its clout to maximize the tax take from the oil companies and how it knows how much petroleum the oil companies take from government land -- if it knows at all.
The suspicion is that it knows only what the oil companies report. Would they lie?
John Farmer is The Star-Ledger's national political correspondent. He may be reached at jfarmer@starledger.com.
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