STEALTH BAILOUT GIVES MILLIONS TO BIG OIL
May 20, 2020 - Douglas Myser
Stealth bailout gives millions to big oil. 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. The rig operator is one of dozens of oil companies and contractors now claiming hundreds of millions of dollars in tax rebates. They are employing a provision of the $2.2 trillion stimulus bill, called the CARES act, that gives them more latitude to deduct recent losses. "This is a stealth bailout for the oil and gas industry," said Jesse Coleman, a senior researcher with Documented, a watchdog group tracking the tax claims. It's geared to companies "that have been losing money over the last few years--and now they get that money back as a check from the taxpayers. That's exactly what the oil industry has been in doing." The change wasn't aimed only at he oil industry. However, its structure uniquely benefits energy companies that were raking in record profits in 2018 as crude prices reached $76.41 per barrel, only to see their fortunes flip a year later. Stealth bailout gives millions to big oil.
More than $1.9 billion in CARES Act tax benefits are being claimed by at least 37 oil companies, service firms and contractors, according to a Bloomberg News review of recent filings with the Securities and Exchange Commission. Besides Diamond Offshsore, which declined to comment, recipients include oil producer Occidental Petroleum Corp, and refiner Marathon Petroleum Corp. Other oil companies say they didn't lobby Congress for the change, which is widely available across all industries. "We did not request any benefit, but we are obligated to follow the tax laws as passed by Congress, which apply to all corporate manufacturers nationwide, said Jamal Kheiry, a spokesman for Marathon, which got a $411 million benefit.
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