Thursday, July 31, 2008

The Corrupting Influence Of Oil Money

Go to Original
By Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Benjamin Armbruster, Ali Frick, Ryan Powers, and Brad Johnson

The world has never looked better for the Big Five oil companies. This morning, Exxon Mobil, the world’s largest oil company, announced its "second-quarter profit rose 14 percent, to $11.68 billion, the highest-ever profit by an American company. Exxon broke its own record." Joining Exxon Mobil as the only oil companies to "earn more than $10 billion in a single quarter, Royal Dutch Shell said its profit rose to $11.56 billion." ConocoPhillips and BP last week reported their "massive second-quarter profits." The fifth oil major, Chevron, will release its earnings report tomorrow. Yesterday, Interior Secretary Dirk Kempthorne announced "a new five-year leasing plan for offshore oil drilling" to give oil companies a "head start" on attacking protected waters, should the Congress follows President Bush, who recently lifted the presidential moratorium on offshore drilling "first issued by his father in 1990." Rep. Ed Markey (D-MA) described Kempthorne’s announcement as a "Going Out of Business Sale" on behalf of Big Oil. The unprecedented profits for Big Oil come at the expense of practically everyone else in the form of a collapsing economy, international instability, rampant commodity inflation, and deadly climate change. However, Big Oil’s windfall has also meant largesse -- and criminal levels of corruption -- for some in Washington.

RECORD PRICES, RECORD PROFITS: Since 2001, gasoline prices have more than doubled, and oil companies have made more than half a trillion dollars in profits. The price of oil has surged from below $30 a barrel to over $125, a fourfold increase. The Big Five oil companies could make a "projected $168 billion in profits" this year alone. The United States has only two percent of the world’s oil reserves but consumes 25 percent of the world’s oil. "At current oil prices," conservative oil man T. Boone Pickens argued, "we will send $700 billion dollars out of the country this year alone." If we continue on the same path for the next ten years, "the cost will be $10 trillion -- it will be the greatest transfer of wealth in the history of mankind," he added. The surging price of oil is due in part to demand growing faster than supply, but also to factors such as "the war in Iraq and the value of the dollar" and unregulated, Enron-like speculation. Instead of investing in 21st century energy, the oil companies are plowing most of their profits into stock buybacks, a windfall for their rich investors.

OIL’S GIFTS: In a "state-shattering tremor in an earthquake of change in Alaska politics," Sen. Ted Stevens (R-AK) "was charged on Tuesday with concealing more than $250,000 worth of gifts, including home renovations, that he received from an Alaska oil services company," VECO Corp, "the top Alaska-based contributor to federal politics for at least five election cycles." The federal indictment "accuses Stevens, a former chairman of the powerful Appropriations Committee and the longest-serving Republican senator ever, of using his position and office in the Senate on behalf of VECO between 2001 and 2006." Uncle Ted’s indictment represents the culmination of a multiyear oil corruption scandal of Alaska’s "bullying, nepotistic political culture": five state legislators (including Stevens’s son Ben), four other officials, and Alaska’s congressman Don Young (R) have also been implicated for their involvement with VECO CEO Bill Allen (Allen once told a state lawmaker, "I own your ass"). Over his career, Stevens has funneled over ten million dollars from his oil-funded war chest to other conservative politicians. Politicians who benefited from the $340,000 in campaign contributions from Ted Stevens’s Northern Lights PAC this year alone are being pressured to return the money. Senate conservatives met yesterday to fill the positions vacated by Stevens, whose indictment forced him to give up "his plum committee posts."

MCCAIN’S EMBRACE: On June 13, 2008, Sen. John McCain (R-AZ) declared, "I am very angry, frankly, at the oil companies not only because of the obscene profits they’ve made but at their failure to invest in alternate energy to help us eliminate our dependence on foreign oil." Since then, McCain’s tenor on Big Oil has completely changed, now championing the views of "oil executives." "My friends, we have to drill offshore. We have to do it. ... The oil executives say within a couple of years we could be seeing results from it. So why not do it?" he said recently. McCain’s reversal took place on June 16, when he headed to Texas for oil-sponsored fundraisers and "declared support for offshore drilling." In the following month, his campaign’s embrace of a Big Oil agenda has grown tighter. The campaign arranged an oil-field photo shoot after McCain had to cancel a planned visit to an oil platform in the Gulf of Mexico because of a hurricane and an "untimely" oil spill. And Big Oil has embraced McCain, now that he has climbed aboard the Big Oil express. The day after his speech, "McCain raised $1.3 million at a closed-door luncheon and reception at the San Antonio Country Club." The Washington Post reported recently, "Campaign contributions from oil industry executives to Sen. John McCain rose dramatically in the last half of June. ... Oil and gas industry executives and employees donated $1.1 million to McCain last month -- three-quarters of which came after his June 16 speech calling for an end to the ban -- compared with $116,000 in March, $283,000 in April and $208,000 in May."

Under The Radar

ENVIRONMENT -- STATES AND ENVIRONMENTAL GROUPS TO SUE EPA TO GET EMISSIONS RULES: A coalition of states and environmental groups intends to sue the Environmental Protection Agency (EPA) "if it does not act soon to reduce pollution from ships, aircraft and off-road vehicles." California Attorney General Jerry Brown is set to send a letter to the EPA in which he will "accuse the Bush administration of ignoring their requests to set restrictions" on greenhouse gas emissions. The EPA will have 180 days to respond. Under the Clean Air Act, "a U.S. district court can compel the EPA to take action to protect the public’s welfare if the agency delays doing so for an unreasonably long time." "It’s a necessary pressure to get the job done," Brown said of the lawsuit. "The issue of reducing our energy dependence and greenhouse gas emissions is so challenging and so important that we have to follow this judicial pathway." In the last year, states have also sued the EPA for dragging its heels in regulating carbon dioxide and for having lax smog standards. This week, lawmakers called on EPA Administrator Stephen Johnson to resign because he has become "a secretive and dangerous ally of polluters."

ECONOMY -- NEW YORK AND MARYLAND GOVERNORS URGE FEDERAL ACTION ON ECONOMY: Citing President Bush’s record deficit, rising food and energy costs, high unemployment, stagnant wages, and a "shell-shocked stock market," Govs. Martin O’Malley (D-MD) and David Patterson (D-NY) write in a Washington Post op-ed today that they have come to Washington, D.C. "to call on the federal government to help all states navigate an economic crisis the likes of which we have not witnessed since the Great Depression." They note that in their respective states, they have "stepped up where the federal government has fallen down" by investing in clean, renewable energy, education, infrastructure and health care. O’Malley and Patterson urge the federal government to "pass a second stimulus package that includes investments in our nation’s infrastructure" and provides "additional extension of unemployment insurance and assistance for low-income Americans." They also demand fiscal responsibility from the federal government and urge it to examine its "irresponsible spending" over the last seven years. O’Malley will discuss his views on progressive fiscal responsibility today at the Center for American Progress.

JUSTICE -- WHITE HOUSE DIRECTED AGENCIES TO HIRE 108 PEOPLE WHO ’LOYALLY SERVED THE PRESIDENT’: A "little-noticed" passage in Monday’s Department of Justice Inspector General (IG) report on the politicization of the department revealed an e-mail from the White House political affairs office clearly urging federal agencies to hire Bush loyalists. The May 2005 e-mail directs agencies to find jobs for 108 people on a list of "priority candidates" who "loyally served the president." "We simply want to place as many of our Bush loyalists as possible," the e-mail said. The New York Times notes that the message "urged administration officials to ’get creative’ in finding the patronage positions." Two days later, the White House’s liaison to the Justice Department replied exuberantly, "We pledge 7 slots within 40 days and 40 nights. Let the games begin!" Yesterday, IG Glenn Fine testified before the Senate Judiciary Committee and said that former Attorney General Alberto Gonzales "said he wasn’t aware of what was going on" in his agency. White House spokeswoman Dana Perino refused to say whether President Bush is "disappointed" in Gonzales.

Think Fast

Exxon Mobil broke its own record for "the highest-ever profit by a U.S. company," as second-quarter profits rose 14 percent. "Net income in the quarter rose to $11.68 billion, or $2.22 a share, from $10.26 billion, or $1.83 a share, last year."

Citing reductions in violence in Iraq, President Bush said this morning that "combat tour lengths for U.S. troops will be reduced to 12 months from 15 months." While 147,000 U.S. troops remain in Iraq, Bush said troop reductions might be possible because the "terrorists are ’are on the run.’"

Senate conservatives debated yesterday whether to threaten a government shutdown as a way to force a vote on offshore drilling. Congress would have to pass a continuing resolution in September to keep the government functioning, and conservatives are mulling a filibuster.

The Department of Health and Human Services is "reviewing a draft regulation that would deny federal funding to any hospital, clinic, health plan or other entity" that does not allow employees to opt out of providing birth-control pills, IUDs, and the Plan B contraceptive. The draft considers certain contraceptives as destroying "the life of a human being."

Iraq and the U.S. "are close to a deal on a sensitive security agreement" that satisfies Iraq’s "desire to be treated as sovereign and independent." The agreement "guarantee[s] that there would no longer be foreign troops visible on their land -- and leaves room for them to discreetly ask for an extended American presence should security deteriorate."

11: The number of U.S. troops killed in Iraq this month. That is "the lowest monthly toll since the 2003 invasion, according Pentagon figures, highlighting what US commanders say is a marked drop in overall violence."

More than 3.7 million Americans have had their full-time jobs cut to part time because of weak business, which is "the largest figure since the government began tracking such data more than half a century ago." The loss of pay has reinforced "the downturn gripping the economy" for millions of American families because "paychecks are shrinking just as home prices plunge and gas prices soar."

And finally: Grassley prescribes a legislative laxative. Yesterday, Sen. Chuck Grassley (R-IA) complained about "Democratic leaders stymieing his tax-extenders legislation" by using "a metaphor to which many of his silver-haired colleagues could relate." "Issues are building up," said Grassley. "The Senate is constipated. This body needs a...laxative."

No comments: