Tag Archives: corporate welfare

Big Oil’s Dirty Fingerprints

You don’t have to be a detective to find Dirty Energy’s oily fingerprints all over our current national political debate on expanding oil drilling. But it helps that there are still investigative journalists who look into these things every now and again.

Yesterday, the U.S. House of Representatives passed the “Restarting American Offshore Leasing Now Act” by a 266 to 149 margin. Today, the Huffington Post reveals that the sponsors of the bill, which would expand oil drilling in the Gulf of Mexico and open the coastal waters of Virginia for exploration, received $8.8 million in contributions from Big Oil.

I’m sure you join me in believing fervently that the industry’s millions have absolutely zero influence on the motivations of the bill’s sponsors. Not.

According to the Huffington Post:

“The oil and gas industry is one of the most politically active interests groups in Washington. In the 2010 mid-term election cycle alone it spent $30 million in contributions to federal candidates… And those figures pale in comparison to the amount the industry spends on lobbying. In 2010, oil and gas companies spent just under $146 million employing the service of nearly 800 lobbyists.”

The “Restarting American Offshore Leasing Now Act” passed by Big Oil’s friends in the House is just the first of a series of largely GOP-supported, fast-tracked bills intended to loosen restrictions on offshore drilling. The three bills passed the House Committee on Natural Resources in April.

Closer to home for Californians, one of the next steps is to put to a House vote HR 1231, or “Reversing President Obama’s Offshore Moratorium Act,” which would require that each five-year offshore leasing plan include lease sales in the areas containing the greatest known oil and natural gas reserves. Every five years, the federal government would be required to lease at least 50% of available unleased acreage off the West Coast, Alaska, the Gulf of Mexico and much of the East Coast.

It’s been called the “Law of Eventually Drilling Everything” by Richard Charter, senior policy adviser for Defenders of Wildlife. A vote on the House floor is expected next week.

According to California Watch:

“Under existing law, the government decides which areas to lease. This new law would effectively double the current level of offshore drilling. And states, such as California, would have no say in the matter. ‘Earlier versions of bills like this generally allowed a state to veto projects,’ said Regan Nelson of the Natural Resources Defense Council. ‘Californians have consistently made it clear that they oppose new offshore drilling off their coast. This bill is so out of sync of what people want. They’re willing to put oil production over all other considerations.'”

Considerations like the clear environmental hazards of drilling, and risks to the public’s health and safety. It was only a year ago that the BP Deepwater Horizon oil rig exploded in the Gulf of Mexico, creating one of the largest environmental catastrophes ever.

It’s mind-boggling that in light of that very recent disaster, federal lawmakers including those that represent California are considering encouraging more drilling off the West Coast.

California Congressman Jeff Dunham claims that he supports the series of bills allowing more drilling in part because domestic energy production will “bring relief at the pump.” Rep. Denham is joined by fellow Californians Rep. Tom McClintock and Rep. Jim Costa in supporting the bills.

But a study conducted by the federal government’s Energy Information Administration showed that new drilling off the country’s coasts would only reduce gas prices by a few cents. (Oops! So much for that argument.)

Compare those pennies to the millions of dollars in contributions being doled out by the oil industry, and suddenly certain lawmakers’ urgent calls to allow more risky offshore drilling makes more than enough “cents.”

Speaking of something that makes no sense (or cents) for us taxpayers… Americans are still paying for billions of dollars in oil industry tax breaks, despite record oil industry profits and despite the fact that a recent poll found that 74 percent of voters support eliminating tax breaks to oil companies.

According to the national League of Conservation Voters, ExxonMobil recently announced nearly $11 billion in profits; BP announced $5.5 billion profits; and ConocoPhillips announced $3 billion in profits-all in the first three months of 2011. Obscene is the word that comes to mind.

Next week, Senate Majority Leader Harry Reid is expected to bring to the floor a bill, authored by Senator Max Baucus, that would end the billions of dollars in tax breaks for large oil producers–estimated to cost taxpayers $5 billion each year–and increase breaks for clean-energy producers.

As national League of Conservation Voters President Gene Karpinski says of the handouts to Big Oil:

“And as ire over gas prices grows, so will frustration with Members of Congress who remain close to Big Oil. So while Speaker Boehner and others may be confused about where they stand on the issue, the choice is clear: end the Big Oil handouts now or see what the voters think in eighteen months.”

California voters made it clear what they thought of Dirty Energy’s election meddling last fall by overwhelmingly defeating an oil industry-funded attempt to repeal our landmark clean energy law. I expect we’ll once again make it clear in the 2012 elections what we think of elected officials covered in Big Oil’s fingerprints–in other words, those who put oil industry profits above the needs of the Californians they claim to represent.

Scaled-Back Prison Bill Done, Water Bill Not

Notes from yet another long session in the Legislature:

The Senate could wait no longer for the Assembly to get their act together, so they passed a reduced prison package along the Assembly’s lines, one that falls $200 million short of projections and does not have a sentencing commission.  The Governor has announced he’ll sign the bill.  It’s marginally worthwhile for the parole reforms, but really nowhere near what’s needed.  And so the federal judges will in all likelihood order a mass release, and because little is being done to address root causes, the cost of prisons and the population as a whole are both still likely to increase.  The cowards in the Assembly who think they have designs on higher office after this travesty should know that this vote will have importance, but not in the way they think.

The bill to waive CEQA requirements (California Environmental Quality Act) to put a football stadium in Southern California – without an NFL team, mind you – did not get by Darrell Steinberg, despite lots of energy and effort from special interests.  He’s giving the various parties more time to negotiate a settlement.  Sports stadiums are among the biggest corporate welfare projects we have in America.

The much-ballyhooed water deal has been scuttled, as Karen Bass announced she did not have the votes to move it.  The Speaker may ask for a special session on water, and the Governor would probably move that as well.  The middle-of-the-night rush obviously didn’t work, so some transparency would be preferable.

Still waiting on the renewable energy standard bill, which would put California in the vanguard of the nation in terms of its portfolio (33% by 2020).

Budget Ugliness Continues To Reveal Itself

The California Budget Project has done a preliminary report on the “solution” (and I’m glad they put it in quotes) reached yesterday and expected to be signed by the Governor today.  They demystify the fact that this is, once again, a short-term fix that will actually worsen our budget situation in the future.  The $42 billion dollar hole from this year is a direct result of constant short-term fixes over the past several decades, pushing off the problem until the current legislators are out of office.  Even in this budget, it is balanced through $6 billion in borrowing, which might as well be magic since we have the worst bond rating in the country.

The worst part of this is the spending cap, which could cripple future budget and severely ratchet down state services well beyond demand or even the rate of inflation and population increases.  We have seen from other states how this is a hammer on the heads of the least of society and it must be fought in the May 19 special election.  But the CBP is just as perturbed about the massive tax cuts, at a time of a $42 billion dollar deficit, to large multinational corporations:

Give multi-state corporations the option to choose between two different formulas for determining how much of their income would be subject to tax in California. This provision would be in effect in tax years beginning on or after January 1, 2011 and would cost $650 million in the first full year of implementation, eventually increasing to $1.5 billion annually. This provision provides no benefit to small businesses that only operate in California.

The tax breaks for movie companies and new construction home buyers and for hiring new workers (which history has shown doesn’t end up increasing employment but increasing employer chicanery with their payrolls) are all temporary, as are the tax increases.  The only PERMANENT tax in the entire plan is this giveaway to giant corporations like Exxon.  This is why Richard Holober claims that big business is the “only winner” in this budget.

The worst of the business tax cuts is a permanent change in the formula for calculating the income tax for multi-state and multinational corporations. This produces an initial big business tax cut of about $700 million a year. The State Senate analysis estimates the recalculation will eventually yield a corporate tax reduction – and state revenue loss – of $1.5 billion a year. This is not tax fairness. Combined with the tax hikes on everyday Californians, it is redistribution of income away from workers and consumers and into the pockets of our state’s biggest businesses. And it provides no tax savings for the mom and pop businesses that we usually count on to provide the camouflage for these corporate welfare schemes.

Another major sin in this budget are the agreements secured by Republicans to essentially increase greenhouse gas emissions by relaxing environmental regulations for large diesel vehicles.  This is another example of Arnold Schwarzenegger being a complete hypocrite, running around the country painting himself as the “green governor” while ramming through a provision directly contrary to that.

Like the budget itself, AB 8 XX was not the subject of any public hearings. The measure’s scaling back of emission controls was one of many concessions sought by Republicans in order for three of them in the Assembly and three in the Senate to vote for the budget.

Since there were no public hearings on the measure, it was easy for the GOP to side with the construction industry and ignore the majority of its members who want California to reduce greenhouse gas emissions and improve air quality.

A 2006 statewide by the Public Policy Institute of California found that 62 percent of Republicans strongly support state action to ratchet down greenhouse gas emissions. So do 73 percent of Democrats and 70 percent of independent voters.

That same poll found that two-thirds of likely voters for rolling greenhouse gas emissions back to 1990 levels by 2020. That is the legislation that became AB 32.

Finally, there is $5.8 billion that will be on the ballot for voters to agree upon, including a privatization of the lottery (which assumes a $5 billion sale… who is lining up to buy the California Lottery?) that would be a net loss of revenue for the state in the long-term, and $800 billion in raids from various voter-approved funds for things like mental health treatment.  Considering how unpopular the legislature is these days, there is no guarantee that any of these will pass, which will leave another hole to fill by June.

These are just some of the details that reinforce the object lesson that major fundamental reforms, in particular repealing the 2/3 rule, are desperately needed.  None of the above measures help the state.  They were put in to placate a fanatical minority who is emboldened by a conservative veto.  Sign the pledge to repeal 2/3.

Fourth Amendment For Me But Not For Thee

Are you poor?  Black?  Hispanic?  Congratulations!  The city of San Diego wants to look at everything you own without a warrant!  All of this is in the context of ensuring that there are no “cheaters” and that money distributed to the poor by the state is being done legitimately.  This is actually a Constitutional question that was upheld in 1971.  Oddly enough, and sit down for this one because it’s shocking, it’s only ever applied to the poor and not the literally millions of other entities, whether corporate or agricultural, who receive the same type of largesse.

If waiving one’s Fourth Amendment rights based on the receipt of government funds were applied outside of the impoverished, most people would instantly see the problem. Given the number of people who benefit from some kinds of government subsidy, the government could simply abrogate the Bill or Rights through its spending power. This can’t be right. And whether or not it’s unconstitutional, certainly these kinds of searches without cause are bad policy, for the same reasons. As soon as executives at Archer Daniels Midland agree to waive their Fourth Amendment rights, we can start talking about welfare recipients.

I know that the Fourth Amendment is no longer operative, so this may be something of a moot point.  But it’s so clear that those quick to jump on the indigent for “ripping off the taxpayer” has no similar fervor for those in corporate America.  I was astonished when I heard Bill Richardson use the phrase “corporate welfare” at the Yearly Kos Presidential Forum.  Maybe some of our more progressive cities might want to start barging in to some corporate offices just to make sure their books are the same as they claim.  Who knows, maybe we can end welfare as we know it again.

Arnold’s Canadian Vacation – All-Expenses Paid!

This is about the eighth time I've seen a report simliar to this one that undisclosed donors are financing a Schwarzenegger trade mission.

Fifty-two business delegates will join Schwarzenegger on the trip, according to a list the Governor's Office released Friday. A third of those going represent interests that have donated to Schwarzenegger's campaigns.

The governor's trip will be financed by the California State Protocol Foundation, a tax-exempt organization not required to disclose its donors. California Chamber of Commerce leaders, including President Allan Zaremberg, serve as the group's officers.

The foundation is not required by law to disclose its contributors and has not done so. In 2005, the last year for which IRS forms were available, the group received nearly $2 million in revenue. It reported $1 million in travel expenditures that year after Schwarzenegger led a weeklong trade mission in China.

The excuse put forth by the Governor's spokespeople is always the same: this SAVES taxpayer money because they don't have to finance these trade missions!  Really?  What about all the corporate welfare checks that get cut as a result of this access?  What about all the watered-down regulations that cost taxpayers, not only with money but with public health and quality of life?  What about the state contracts that could go to lower bidders who don't have the same relationships (read: bribery poke) with the Governor?


Frank Russo is right:

Take a look around and you'll see that this is a bipartisan problem that needs fixing–the same way that a true reformer, Hiram Johnson– took on the railroads which controlled our state a hundred years ago. His legacy is a California Constitutional prohibition against accepting any gifts of free transportation from railroad or other transportation companies. It needs to be extended to cover today's corruption, subtle and otherwise, of our elected officials. […]

We've seen a record of obscene campaign contributions in California the last election cycle–topping $600 million dollars. The next campaign season is upon us, and the Governor has proposed bans on fundraising during certain months of the year when the budget is being considered and at the end of the session and bill signing times. The California Progress Report has railed against the influence of campaign contributions on the political process and the corruption of state government. But these other “gifts” to public officials also need to be scrutinized.


Action is needed, not because our elected officeholders are corrupt–any more than anyone else–but because they are human and influence is why campaign donations and private funding for trips and the like are given by private interests in this state. The same was true in when bold Progressive Reforms were needed in 1911 and human nature is the same today. Only now it's not the railroads.

 It should frankly be outlawed for a private company with business before the state to finance the Governor's travel, especially when it's supposed to be official business.  This is government for sale from the guy who was supposed to be such a big reformer because he was richer than dirt.  This is also why I've been so adamant about the CDP-Chevron donation.  Influence peddling in the capital is an epidemic that needs to stop.