Archive for July 27th, 2010

July27

Paying the BP victims — not as easy as it should be

By: Joe Newman

Kenneth Feinberg, administrator of the $20 billion BP disaster victims fund, talks about the challenges he will face in determining who gets paid and how much they will receive. Feinberg, who was at Public Citizen this afternoon to discuss his role as the Obama administration’s executive pay czar, said it’s not a matter of simply taking claims from victims and writing checks.

What if you’re a motel 40 miles from the beach and you say that business is down by a third because of the perception of the spill even though the oil never got to the beach? Is that a valid claim?

Leigh Coleman and Rachelle Younglai at Reuters have more about Feinberg’s task and how his reputation as a “fixer” is going to be put to the test.

Posted in: Climate Change, Energy, Environment0 comments

July27

BP will claim $10B U.S. tax credit because of oil spill

By: Harry Zieve-Cohen

The Washington Post reports that BP is claiming a $10 billion tax credit because of damages suffered due to the oil spill. How can this happen? That’s American tax code for ya.

Under current law, companies can take a tax credit on up to 35% of their losses. It explains why a company such as GE paid no U.S. income tax in 2009 after reporting $408M in losses.

If BP gets this tax credit, the company will receive from the government half of the money it has promised to set aside in an escrow fund.

Let’s examine the reasons for such a counter-intuitive tax law. According to the Washington Post:

Policymakers crafted the tax code this way so that companies can spread their profits and losses over more than just a calendar year. Let’s say a company earns $100 billion one year and pays the U.S. corporate tax rate of 35 percent, or $35 billion. The next year, the economy goes south, and the company loses $100 billion. Over those two years, the company earned zero dollars, but it still paid $35 billion in taxes.

Here’s a better (and likely more accurate) explanation: Congress wrote the tax code this way because

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Posted in: Activism, Campaign Finance, Congress, Energy, Environment, Open Government0 comments

July27

Blocking of DISCLOSE Act vote is partisan politics at its worst

By: Joe Newman

Holman

Today in the U.S. Senate, partisan politics prevailed over the public interest as all Republican senators marched in lockstep to the orders of Republican party leaders and blocked a vote on the DISCLOSE Act (S. 3628). The failure of even a single Republican senator to vote for debate and consideration of the bill means there will be no disclosure of who is behind the expected onslaught of corporate spending in the 2010 elections – an onslaught created by the recent disastrous Supreme Court decision Citizens United v. Federal Election Commission. Voters will be left clueless as to who is funding the “independent” TV ads promoting and attacking candidates and how much these secretive funders are paying for these ads.

This lack of disclosure is exactly what Senate Minority Leader Mitch McConnell (R-Ky.) and the national Republican Party want. This is partisan politics at its worst.

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Posted in: Campaign Finance, Congress24 comments

July27

New BP CEO must do more than give company a PR facelift

By: Tyson Slocum

Slocum

We’ve seen it before: BP installs a new CEO and promises big change.

But it doesn’t happen; witness the continuation of BP’s horrific safety record after outgoing CEO Tony Hayward was elevated to the top spot in 2007. Hayward promised to focus “like a leaser beam” on safety. So much for that.

BP’s culture of recklessness runs deep. Cutting corners in the name of efficiency is the company’s MO. As a consequence, we saw the 2005 Texas City refinery explosion that killed 15 workers and came right after a consultant warned about perilous conditions at the refinery, the 2006 Prudhoe Bay pipeline spill and the current Gulf of Mexico disaster. It is clear that BP prioritizes short-term profits at the expense of worker safety and the environment.

Incoming CEO Robert Dudley must initiate a top-to-bottom reconstruction of the company and resist the urge to simply do a PR facelift of the kind favored by Hayward and his predecessor, Lord John Browne. Americans rightly demand corporate responsibility, and Dudley must deliver by fixing a broken BP culture and instituting reforms that prioritize safety and environmental stewardship. Such a commitment must be felt in the ranks of managers and employees – not simply echoed on expensive TV ads.

Just as important, Dudley owes it to the communities in the Gulf and beyond to pledge the full resources of the company to paying what is owed. Dudley must assure families harmed by the ongoing crisis that he will take no steps to shield BP’s assets from exposure to liabilities stemming from the Gulf disaster. If the company is genuine in its claim to wanting to turn the company around, this would be a good start.

Tyson Slocum is the director of Public Citizen’s Energy Program.

Posted in: Climate Change, Energy, Environment0 comments

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