Boy, this Enron "cesspool" just gets bigger and bigger.
It's fun to look up prior associations between conservatives and Enron....<s>
DOLING OUT LEGISLATION
In September 1992, Dole won passage of an amendment renewing a generous tax credit called "section 29," which subsidized natural gas taken from geologic formations that are difficult to access. First passed in 1980 during the energy shortage, section 29 sought to foster American energy independence by spurring production of alternative fuels. Since Kansas is a major producer of natural gas, Dole's motives seemed obvious enough.
But were they? By the mid-1980s, a glut of natural gas had severely depressed gas prices. When the amendment was up in 1992, most senators from natural gas states--including Republican Don Nickles of Oklahoma and Democrat John Breaux of Louisiana, patron saints of the petroleum industry--wanted to kill the credit to discourage overproduction. The Natural Gas Supply Association, which represents 90 percent of the nation's natural gas suppliers, opposed the Dole rider, as did the American Petroleum Institute. Also against the program were the independent natural gas producers of Kansas, a consortium of smaller companies from Dole's home state.
But a handful of large companies with the resources to embark on these projects--Amoco, Arco, Coastal, and Enron, plus a few other large corporations with investments in drilling--were making a killing off the subsidy. Because the credit was so generous and the price of gas so low, the few companies producing the gas were getting a credit equal to about 92 percent of the price of the commodity they were producing. In other words, for every dollar of gas they sold, the companies also received 92 cents in tax credits.
By 1992, Coastal and Enron were banking heavily on section 29's renewal. According to World Oil, a trade magazine, the two companies had accelerated their efforts on drilling projects eligible for the subsidy. By the fall, the magazine said, section 29 covered 78 percent of Coastal's gas drilling and 80 percent of Enron's. Officials from Enron and Amoco, which also drilled hundreds of section 29 wells in 1992, told World Oil they would eliminate virtually all such projects in 1993 if the tax credit expired, because they would no longer be economical.
Amoco, Arco, Coastal, and Enron are all longtime backers of the Dole Foundation and Dole's campaigns. Since 1987, the companies' executives have given at least $48,000 to the Dole campaigns and more into the Dole Foundation. Coastal, in particular, has been extremely generous with its corporate jets, allowing Dole to use them four times in 1992 alone, including a trip to the Republican National Convention in Houston. Coastal CEO Oscar Wyatt held a $1,000-a-person fundraiser for Dole during convention week, where Enron executives gave at least $7,000, while Coastal officials put up at least $9,000.
Also profiting from section 29 was AT&T, which went into the gas business for the tax benefits. AT&T, it turns out, has given Dole at least $20,000 since 1987 through its PAC, while the AT&T Foundation has given Dole's foundation at least $100,000. Gerald Lowrie, AT&T's senior vice president for government affairs and the company's top lobbyist, serves on the board of the Dole Foundation and helps raise funds for the group.
Apparently, the investment caught Dole's attention. Dole brought his amendment to the floor in September 1992--only a month after the fundraiser at Wyatt's mansion. Dole contended the subsidy was vital to America's energy security, even though the nation then (as now) enjoyed an abundance of cheap fuel. Because the debate was so complicated and obscure, the press barely noticed. Nobody bothered to investigate whether "energy security" was the real explanation for Dole's motives.
Despite some substantial opposition--spearheaded by New Jersey Senator Bill Bradley--Dole prevailed on the Senate floor with support from Senators representing energy-consuming states whose citizens benefited from the low natural gas prices. The measure, however, died in the House-Senate conference committee, after conferees decided the government couldn't afford sustaining the giveaway.
prospect.org |
