Five CEOs representing the five biggest oil and gas producers in the United States appeared before the Senate Finance Committee this past Thursday. As Ricky Ricardo used to tell wife Lucy, they had some ‘splaining to do.
As you may have heard, our country is now experiencing a financial crisis of Biblical proportions and everyone is being asked to roll up their shirt sleeves and pitch it, make some sacrifices. You may have also noticed that, among other things, gas prices are hovering around the $4.00 a gallon mark. And in some places it’s over $4.00.
Congress is now in the process of cutting stuff that costs money, stuff like Medicare, Medicaid, Social Security, federal employees’ pay, union collective bargaining rights, and so on.
So this past Thursday the Senate Finance Committee asked these five very well-to-do executives to come in for a pow-wow and explain why their companies, even though they’re making record profits, should continue to receive billions of dollars in tax breaks.
One of the barons at the hearing, John Watson, 54, the CEO of Chevron argued: “Tax increases on the oil and gas industry…will hinder development of energy supplies needed to moderate rising energy prices. It will also mean fewer dollars to state and federal treasuries…and fewer jobs–all at a time when our economic recovery remains fragile.”
It should be noted here, lest you be too sympathetic with Mr. Watson, that in 2010 he was paid $14 million, this according to an AP analysis.
Prior to the day’s appearance before the committee James Mulva, CEO of ConocoPhillips, sent out a press release entitled “ConocoPhillips Highlights Solid Results and Raises Concerns Over Un-American Tax Proposals at Annual Meeting of Shareholders.” Democratic members of the committee wanted to know if Mr. Mulva considered their committee, and them individually, to be un-American. Squirming noticeably in his chair, Mr. Mulva eluded repeated questions along that line. And if anyone on the committee expected an apology from Mr. Mulva, they went away from the meeting disappointed.
During the course of the meeting, when he wasn’t eluding questions concerning his un-American comments, Mr. Mulva complained to the committee: “We have shackles on us. Put us back to work.”
It should be noted that Mr. Mulva’s shackles are quite expensive. He wears nothing but the best shackles money can buy. Over the past 5 years
Senator John D. Rockefeller IV (D-W.Va) told the gang of 5: “You’re deeply out of touch.” Not just out of touch mind you, but “deeply” out of touch.
Exxon Mobil’s CEO, Rex Tillerson, took exception to that remark. He says, “I want to assure you I’m not out of touch.” He went on to explain how his company, between 2005 and 2010, paid an average of 32 percent in US income taxes and that a tax increase would have an impact on investment decisions and possibly result in their taking their business outside the country. No doubt there was weeping in the galleries.
But before you weep too much, it should be noted that Mr. Tillerson received $29 million in total compensation last year. That’s just for one year. One year.
With his making that kind of money, why would anyone accuse him of being “out of touch.” Quite frankly, if I made that kind of money, I would most definitely be out of touch.
It’s estimated that the oil industry saves in the neighborhood of $4.4 billion each year through special tax breaks that is intended to promote domestic drilling. Not a bad neighborhood to be living in. It’s also estimated that pre-tax profits could run around $200 billion this year alone.
Says Christine Tezak, a senior Energy and Environmental Policy Analyst at Robert W. Baird & Company: “When you see profits that include the word billions, people automatically think someone is getting screwed.”
Yep, pretty much.