Big Oil Taking $1.9 Billion in CARES Act Tax Breaks Aimed at Helping Small Businesses in ‘Stealth Bailout’: Report

Jerri-Lynn here. Alas, our Congress critters didn’t neglect the interests of their true constituents – including Big Oil and other fossil fuel companies – in its CARES Act tax breaks.Those subsidies were intended to help bail out small businesses pummelled by the pandemic and allow them to keep workers employed. Instead, $1.9 billion of it is instead being funnelled upstairs, to fossil fuel executives. Surprise, surprise.

Hats off to the Trump administration, which continues to pursue its pro-fossil fuel agenda as the pandemic unfolds, as it has done with other policy priorities: immigration, judicial nominations, corporate legal immunity.

Yet subsidy legislation has been a bipartisan achievement.Senator Sanders has called out this fossil fuel travesty. Rage On, Bernie! Where are your Democratic colleagues? (And Republicans too, for that matter.)

I’ve been a keen student and observer of the role of money in politics since  the presidency  of the peanut farmer from Georgia. And I think I am fairly clear-eyed – cynical even – when I examine who wins – and who loses – from tax and spending decisions. Yet even I am stunned to see the extent to which the hogs are feeding at the trough – and this at a time when so much of America – not least, its economy – is collapsing before our eyes. Oink, oink.

By Eoin Higgins, staff writer at Common Dreams. Originally published at Common Dreams

Sen. Bernie Sanders was among critics outraged that the fossil fuel industry is using tax breaks in the CARES Act meant to help businesses keep workers employed to avoid paying millions of dollars in taxes—and then delivering that money to executives.

“Good thing President Trump is looking out for the real victims of the coronavirus: fossil fuel executives,” Sanders tweeted sarcastically Friday.

Reporting Friday from Bloomberg News showed that “$1.9 billion in CARES Act tax benefits are being claimed by at least 37 oil companies, service firms, and contractors”—what watchdog group Documented senior researcher  Jesse Coleman described as a “stealth bailout” of the climate-killing industry.

“In the name of ‘small business,’ we’re shoveling out billions of dollars to big corporations and rich guys,”  Steve Rosenthal, a senior fellow with the Urban-Brookings Tax Policy Center, told Bloomberg.

Bloomberg used the example of how Diamond Offshore Drilling Inc. manipulated the bailout to explain the tax scheme:

As it headed toward bankruptcy, Diamond Offshore Drilling Inc. took advantage of a little-noticed provision in the stimulus bill Congress passed in March to get a $9.7 million tax refund. Then, it asked a bankruptcy judge to authorize the same amount as bonuses to nine executives.

According to Bloomberg’s reporting, Diamond’s refund pales in comparison to some of its larger competitors, “including $55 million for Denver-based Antero Midstream Corp., $41.2 million for supplier Oil States International Inc. and $96 million for Oklahoma-based producer Devon Energy Corp.”

The fossil fuel industry was already in financial trouble before the outbreak, which has effectively crippled Big Oil’s ability to make money—even with the generous subsidies given by the federal government. Access to bailout tax break funding is helping fossil fuel companies prosper, along with other climate-destroying industries like mining companies, which have also reaped millions from coronavirus relief legislation.

“The Trump administration’s favor factory hasn’t stopped with a global pandemic,” Accountable.US spokesperson Jayson O’Neill said in a statement Friday. “As millions of jobs disappear week after week, the Trump administration is prioritizing aid for wealthy, well-connected corporations before small businesses.”

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25 comments

  1. crittermom

    These facts are exactly what every American needs to know, so when either Trump or Biden (take your pick. Same agenda) begin to cut such ‘entitlements’ as SS, Medicare, Medicaid to pay for ‘all the help we received’ during this crisis, the pitchforks may finally come out as we stand together as a nation saying, “No. You squandered it, you claw it back from them!

    Same with the PPP, CARE stimulus and other crumbs that have been ‘handed’ to us mopes as we’re expected to kiss the ring of our king in gratitude.

    Most everyone I talk to is shocked to find out that many major corporations (like Amazon) pay little, if any Federal taxes. It gets them thinking how much THEY have to pay out of their meager income and their response is usually, “That’s not fair!”

    We’re long past due for an awakening of such infuriating facts. (I try to enlighten as many as I can, but in truth I have little contact with others).

    Keep up the great work, NC.

    Reply
  2. a different chris

    Well as I read this the only good thing I could think of was “well they’ll blow that so fast it won’t make any real difference” and sure enough:

    : Diamond Offshore takes $9.7m from American taxpayers, then earmarks the same amount to execs as bankruptcy bonuses.”

    I’m sure the rest of the money will go in similar fashion. They think of themselves as cowboys, and aren’t happy unless they are acting like there is no tomorrow. It’s too bad it affects the rest of us, too.

    Reply
  3. The Rev Kev

    If there are loopholes in that Act that lets major corporations take advantage of it to get billions for themselves instead of the small businesses that it was designed for, then those loopholes were deliberately built in in coordination with those corporations. And I may be wrong but I am pretty sure that it was the Democrats that wrote the CARES Act rather than Trump and the Republicans.

    And as far as Bernie’s tweets is concerned, he lost his right to criticize this Act when he helped vote for it rather then make a stand. That Act went through the Senate in a unanimous vote. People may say that he is only one person but when he ran for office, he certainly did not say as his campaign motto “Hey, I’m only one guy.” – ¯\_(ツ)_/¯

    Reply
    1. Krystyn Podgajski

      Yes, this!

      And as far as Bernie’s tweets is concerned, he lost his right to criticize this Act when he helped vote for it rather then make a stand.

      Can anyone explain why they vote for this stuff? I mean, what is their plan? The D’s are in a codependent relationship with the R’s and they need to break up already.

      Reply
      1. JBird4049

        “You scratch my back and l’ll scratch yours.” The gravy must flow. Both parties could block the payments favors legislation (tax breaks, loopholes, funding, lobbyists’ written laws, etc) that were purchased requested with the bribes campaign donations; most of Congress is just theater with very little legislation being done especially as most of the staff needed to research and write the legislation has been cut over the the past forty years. Sometimes it’s lobbyists who are writing the legislation with the Congress critters (at least the junior ones) often never have a chance to read what they are voting on. Most of the speeches and soundbites are pretend with the negotiations being done behind closed doors with the goal of providing enough services to the monied class to get paid and enough cover for the game to continue.

        Since both parties are just pay-for-play with increasingly aligned ideologies (Chris Hedges has said the Democrats have gone conservative and the Republicans insane.) although the Republicans actually have the goal of finishing the gutting of the federal government and having a very, very conservative judiciary. The Democrats don’t particularly care about that. They just want their gravy. There is supposed to be a plan to hijack the Constitutional Convention if it finally gets enough states to approve one.

        I

        Reply
    2. mpalomar

      I am pretty sure that it was the Democrats that wrote the CARES Act

      -Probably penned in part by anonymous bipartisan lobbyists.

      Reply
      1. polecat

        One would be compelled to wonder what recently pummeled energy stocks members of both the House & Senate .. of either (s)tripe, have Gots in THEIR hot little Pockets ..

        As for Sanders – He’s still receiving HIS sinecures, trolling us all the whiles!

        Reply
    3. NoBrick

      Bingo Rev…
      The LIEpartisan whoopsholes are painted as rump’s doing, by the so-called accountable
      kites of the unsound fable. Oink, oink, Santa Joe is coming to clown…

      Reply
      1. Rod

        I agree. It is on you now, and me, and everyone else that has had enough.
        Find the resolve,find the voice and find the like minded, and then begin with the noise.
        That’s how I am interpreting Not me, Us.

        Reply
        1. polecat

          Well, if THAT’S the case, Why root for Sanders towards grabbing the presidential gauntlet at all these last umpteen months ?? We’ve all been played for chumps.

          After 14 years of waiting for real material changes to materialize, we continue to have zilch!

          Reply
          1. JBird4049

            Fourteen years? I’ve been waiting for thirty-five. And the current corrupt cesspool got going about two decades before that. Reformers, real ones, have wandering the wilderness a lot longer than forty years.

            Reply
  4. trhys

    Folks,

    To imagine that pointing out the loopholes crafted into the legislation is going to have any effect on the sensibilities of the legislators is pure folly. Let’s face it; our legislators are bought and paid for servants of concentrated money. This looting of the public purse is a pure power play and as the ancient wisdom proclaims: “the strong do what they will and the weak suffer what they must”.

    The only thing that will have a prayer of any effect is direct action; general strikes, universal rent and mortgage strikes, etc. The only question is what, should the above actions take place, the police and military personnel decide to do.

    I’m a pessimist. I don’t think there is much chance of the majority of people figuring out who their real enemies are (concentrated money). The constant propaganda has done a very effective job of dividing people into angry tribes.

    Reply
    1. mpalomar

      To imagine that pointing out the loopholes crafted into the legislation is going to have any effect on the sensibilities of the legislators is pure folly.

      At least they could blush immodestly at their shameless corruption.
      Isn’t the hope that once pointed out voters would respond at the polls? Otherwise one assumes as you say, that the population hasn’t figured who their enemies are and should their vague but growing dissatisfaction devolve from voting to street actions, chaos would ensue.
      However that may be very close to where we are.

      Reply
  5. Roberto

    $9.7m was misused by bankruptcy bound Diamond. What evidence is there that the other $1b or so was misappropriated?

    Reply
    1. mpalomar

      “What evidence is there that the other $1b or so was misappropriated?”
      I’m not sure about misappropriated but how about misspent?
      Diamond’s refund pales in comparison to some of its larger competitors, “including $55 million for Denver-based Antero Midstream Corp., $41.2 million for supplier Oil States International Inc. and $96 million for Oklahoma-based producer Devon Energy Corp…
      The fossil fuel industry was already in financial trouble before the outbreak, which has effectively crippled Big Oil’s ability to make money—even with the generous subsidies given by the federal government. Access to bailout tax break funding is helping fossil fuel companies prosper, along with other climate-destroying industries like mining companies, which have also reaped millions from coronavirus relief legislation.”

      Reply
  6. earthling1

    I fear only a nuclear exchange will wake the American people from their stupor, but only briefly.

    Reply
  7. John

    Throwing money at business while ignoring the dire need of people is a bipartisan program.

    And what pray tell, is a bankruptcy bonus? Sounds like a reward for going broke. I am astonished that one of the Randian super-heroes, rugged individuals all, would accept.

    There is a real race to the bottom in Congress and in the executive suite.

    Reply
  8. Jeff

    The powers that be understand there’s a few inflection points that would cause Americans to sharpen pitchforks and light torches, and here they are:

    – trash stops getting picked up
    – power goes out
    – cell phones stop working
    – internet goes down ‘with no estimated time of resolution’

    Note I didn’t say clean water stops getting delivered to our homes. Apparently we’re good with getting Flinted.

    Brownouts in CA were serious enough in 2005 for California to elect a Republican governor. That’s when you know the brown material hit the rotating blade.

    Reply

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