Obama, Oil, Lies and Money

Ann Robertson

Ann Robertson

The BP oil disaster in the Gulf region, which is irreversibly destroying sensitive wildlife habitats while putting thousands of people out of work whose livelihood depended on the environment, offers yet one more example of how the government operates, whether Democrats or Republicans are at the helm. It should come as little surprise to discover that once again an administration has lied or told half-truths in order to downplay how it pathetically panders to big money interests, which in this case is the powerful oil industry. Unfortunately for the Obama administration, the oil leak is one problem it cannot blame on teachers.

To begin with, after the oil rig explosion, Obama did not insist that BP make an accurate accounting of the amount of oil leakage and instead allowed BP to continually supply the public with lowball estimates. As the disaster grew, Obama then announced a moratorium on permits for drilling new offshore oil wells and a halt to an environmental waiver, such as was given to the rig that exploded while operated by BP. However, as reported by The New York Times (May 24, 2010), despite the so-called moratorium, the administration allowed “at least seven new permits for various types of drilling and five environmental waivers have been granted, according to records.”

Why such a stunning betrayal of the public trust and a persistence in obsequious behavior towards the oil companies? In all fairness, one should acknowledge that some blame extends beyond the Obama administration, because the Department of Interior, which oversees the oil industry, has a long history of excelling in corruption. During the past century, for example, it denied Native Americans billions of dollars in royalties for the use of their land simply by continually refusing to keep proper records. And when Native Americans went to court, they won ruling after ruling. Nevertheless, they will only receive a fraction of what they are owed, again because there are no accurate records.

Several years ago, the Department achieved a new low in corruption when it was discovered that some officials were accepting “gifts, drugs, and sexual favors” from the oil companies that they were supposed to be regulating. Needless to say, the oil companies have done very well when it comes to regulations. But we are left wondering if the oil representatives themselves offered the sexual favors or paid others to do it for them.

When Obama became president, there was some talk of cleaning up the Department of Interior, but as things turned out, little to nothing was done. A New York Times “news analysis” article (May 31, 2010) offers an explanation of this spectacular failure, but in a remarkable way identifies the root cause with the normal mode of operation of the federal government: “The answer may have as much to do with the workings of business as usual in Washington and the long-entrenched influence of the oil industry in Washington politics as it does with anything more sinister.”

In other words, once again huge sums of money in the hands of the corporate-elite trump public welfare. The New York Times continues its explanation: “Members of the Senate Energy and Natural Resources Committee [that oversees the agency that regulates the oil industry], for instance, have taken in an average of about $52,000 from individuals and groups associated with the oil and gas industry this election cycle, compared with $24,000 for others in the Senate, according to data from the Center for Responsive Politics.”

The New York Times, however, failed to mention that Obama has been a major recipient of campaign contributions from BP. On May 5, 2010, Reuters announced: “During his time in the Senate and while running for president, Obama received a total of $77,051 from the oil giant and is the top recipient of BP PAC and individual money over the past 20 years, according to financial disclosure records.”

For reasons like these, the oil companies have a long history of receiving favors at the public’s expense. For example, The New York Times reported (March 27, 2006): “But last month, the Bush administration confirmed that it expected the government to waive about $7 billion in royalties over the next five years, even though the industry incentive [for this waiver] was expressly conceived of for times when energy prices were low. And that number could quadruple to more than $28 billion if a lawsuit filed last week challenging one of the program’s remaining restrictions proves successful.” The article then went on to quote one Congressman critical of government policy toward the oil industry as observing: “’Taxpayers are being asked to provide huge subsidies to oil companies to produce oil – it’s like subsidizing a fish to swim.’”

Even worse, these tax subsidies were provided when the oil companies were “making more money than they can comfortably spend.” “The world’s 10 biggest oil companies earned more than $100 billion in 2004, a windfall greater than the economic output of Malaysia.” (The New York Times, February 11, 2005).

And in 2006, according to The New York Times (July 14, 2006), “With time running out on the current two-year session, oil company lobbyists have helped tie up or kill almost a dozen bills considered hostile to the industry, including a plan to tax windfall profits and a proposal to regulate refineries as public utilities.”

In other words, instead of properly funding public education and social services, the federal government – whether under Obama or Bush – has chosen to bestow lavish gifts on the most profitable industry on the planet. David Leonhardt, one of The New York Times economics writers, has called for ending the subsidies to the oil companies as a deficit-reduction step and for the federal government to increase its aid to states in order to stimulate the economy. He included this crucial observation in support of his recommendation: “History has shown that state aid [from the federal government], which prevents layoffs of teachers, emergency medical technicians and other workers, is the single most effective form of stimulus.” (The New York Times, June 2, 2010).

And given that the coal industry has cultivated the same kind of relation with the government, there can be little wonder that both Obama and Bush defaulted on the issue of global warming, which will continue unabated until both the oil and coal industries are reined in.

Meanwhile, the Obama administration has signaled its willingness to reduce the federal budget deficit by attacking such programs as Social Security, which ordinary people depend on as a lifeline after retirement. There has been no talk of curtailing subsidies to the big oil companies, let alone raising their taxes. The choice for working people is becoming more stark: support the Democrats and quietly watch everything of importance taken away as money and corruption wield their influence; or break with the Democrats, form a labor party, and fight for the interests of the majority. It is time to put up a fight.

About the Author:
Ann Robertson is a Lecturer at San Francisco State University and a member of the California Faculty Association. She is a writer for Workers Action and may be reached at sanfrancisco [at] workerscompass.org.