Big Oil Buys the Senate, Says Feingold - Senator Russ Feingold - 9/23/99 floor speech on oil company clout in Congress

Progressive, The, Dec, 1999

Editor's Introduction:

On September 23, the U.S. Senate voted 51 to 47 in favor of an amendment by Senator Kay Bailey Hutchison, Republican of Texas, that saves oil companies from paying $66 million a year in royalties to the government. The Interior Department wanted the oil companies to have to pay royalties based on the market price of oil instead of a lower price they themselves determine. Before the vote, Senator Barbara Boxer, Democrat of California, took to the floor to oppose the amendment. And Senator Russ Feingold, Democrat of Wisconsin, argued that this amendment showed how campaign contributions were corrupting the system. His outspokenness created a stir on Capitol Hill. Even some of his Senatorial allies on campaign finance reform said he was out of line. Here are his remarks, along with interruptions from Senator Craig Thomas, Republican of Wyoming, and Mary Landrieu, Democrat of Louisiana, who both supported the bill.

Mr. Feingold: Mr. President, since we have been engaged in debate on the Interior bill, four major oil companies have reached tentative agreements with U.S. prosecutors who accused them of cooperating in schemes to shortchange the government through their royalty payments by millions of dollars. A tentative settlement, which was filed in federal court in Lufkin, Texas, involved about $185 million in payments and would end a case that alleged that companies underpaid royalties by undervaluing oil extracted from federal and American Indian lands.

Though the settlement has not yet been finalized, it is a very serious matter. Chevron USA, Inc., BP American, Inc., Amoco Oil Co., and Conoco, Inc., agreed in principle to settle for $95 million....

These recent settlements aren't even the first of their kind. Several companies have been negotiating settlements. The Mobil Corporation agreed last year to pay $45 million, and Occidental Petroleum Corporation agreed in early September to pay $7.3 million.

I think this is a very troubling trend as these lawsuits are settled. I am very concerned that Congress is abdicating its responsibility. Unintentionally or not, Congress is making it possible for this issue to continue to go unaddressed because the royalty underpayment situation is the issue that this rulemaking we are debating seeks to correct....

So this raises the question: Why is Congress doing nothing about this problem? I think, certainly, the public will want to know why. The alleged underpayments involve more than 6,000 onshore and offshore leases in Texas, Louisiana, Mississippi, California, Alabama, Alaska, Oklahoma, Arkansas, Colorado, Arizona, Florida, Kansas, Michigan, Montana, North Dakota, Nebraska, New Mexico, Nevada, South Dakota, Utah, and Wyoming.

So this is not just a Coastal States problem, or even just a Western problem. It affects a broad number of states, and it deserves attention as a national problem, the kind of attention the Senator from California has brought to it.

I have no doubt that one of the factors contributing to Congress's inaction on this issue of great importance to American taxpayers is the role of campaign contributions in the political process. So I want to review the figures I briefly presented when I "called the bankroll" last time I joined the Senator from California on the floor. I call the bankroll from time to time in this Chamber to remind my colleagues and the public about the undeniable, but sometimes hidden, role that money plays in the decisions we make.

During the 1997-1998 election cycle, the very large oil companies that will benefit from this amendment gave the following political donations to the parties and to federal candidates:

Exxon gave more than $230,000 in soft money and more than $480,000 in PAC money; Chevron gave more than $425,000 in soft money and more than $330,000 in PAC money; Atlantic Richfield gave more than $525,000 in soft money and $150,000 in PAC money; BP Oil and Amoco, two oil companies that have merged into the newly formed petroleum giant, gave a combined total of more than $480,000 in soft money and $295,000 in PAC money.

So if you put that together, that is more than $2.9 million just from those four corporations in the span of only two years. They want the Hutchison amendment to be part of the Interior appropriations bill. As powerful political donors, I am afraid they are likely to get their way.

You will notice that all of these companies except for Exxon gave more to the political parties in soft money than their PACs gave to individual candidates. So, remember--and this is a key thing about soft money, which I don't think everybody in the country realizes, it took me a while to get it--soft money comes right out of the corporate treasury, right out of the treasury. This isn't money where you form a PAC and you get employees to contribute to it; it comes straight out of the corporate treasury....

I would have thought a few years ago that these kinds of donations were illegal. They are supposed to be essentially illegal under our federal elections law.