BP’s latest outrage: $9.9 billion tax break for spill damages

When BP announced creation of a $20 billion fund to clean up the Gulf of Mexico and compensate gulf coast residents for damages caused by the Deepwater Horizon disaster, it seemed as if the company was serious about promises to “make things right” after the worst oil spill in history.

This week however, BP signaled that it expects American taxpayers to share its burden. The firm announced it will take advantage of U.S. tax laws and claim a $9.9 billion tax credit against the $32 billion it says it has lost because of the spill.

As White House press secretary Robert Gibbs noted on Tuesday, the 35 percent tax credit on business losses that BP plans to exploit is a longstanding part of the tax code.

Still, said Common Cause president Bob Edgar, “BP’s use of the provision is disappointing – another example of the cut-costs-whatever-the-consequences mentality that appears to have led to the spill.

“And the availability of such a tax break is a sad illustration of the rewards that powerful corporate interests reap from their investments in our political system,” Edgar added.

As Common Cause documented in a report released earlier this month, executives and political action groups tied to oil and gas companies have donated more than $155 million to Congressional candidates since 2000; they’ve put another $845 million into lobbying during that period. That adds up to just over $1 billion, a lot of money even for a company as large as BP but a small price to pay for a $9.9 billion tax credit.

Congress can break up this racket by passing the Fair Elections Now Act (HR 1826 and S 752), legislation that would let congressional candidates run on a blend of small contributions from individuals and matching Fair Elections funds generated from fees paid by government contractors.

Read Common Cause’s full “Legislating Under the Influence” report on big energy’s political spending at www.commoncause.org/energyreport.