Five Biggest Recipients Of Corporate Tax Breaks Spent $8 Million In 2010 Elections (UPDATED)
This story has been updated.
WASHINGTON -- The top five recipients of large federal corporate tax breaks in 2009 are also among the biggest spenders in the U.S. political system -- they shelled out a combined $7.86 million in campaign contributions during the 2010 elections (in political action committee and individual employee contributions), according to analysis from the New York City Public Advocate's office. Bill de Blasio, the public advocate, is now calling on these companies to verify that no taxpayer dollars will be used in future election spending, warning such a move could "carry financial risk to the [companies'] bottom line."
De Blasio, a Democrat, has aggressively gone after campaign finance accountability and successfully used his bully pulpit to convince several Wall Street firms not to spend any corporate dollars on political advertising.
According to the analysis by de Blasio's office, ExxonMobil, Bank of America, General Electric (GE), Chevron and Boeing had combined profits of $77.16 billion in 2010 but paid $0 in current federal income taxes in 2009. [ExxonMobil's spokesman contacted The Huffington Post and disputed this figure. See below.] It should be noted, however, a Chevron spokesman said the company paid current taxes of $1.5 billion and deferred taxes of $162 million for 2010.
At the same time, these companies gave a combined $7.86 million in political contributions during the 2010 election cycle -- a 7 percent jump over their 2008 political spending.
Charts via the Office the Public Advocate:
According to the Center for Responsive Politics, all five of these companies ranked among the top 100 biggest political spenders between 1989 and 2010, with Chevron and ExxonMobil giving more heavily to Republicans, and the other three corporations generally balancing donations between the two parties.
In 2010 alone, Boeing ranked 28th in political giving ("on the fence" in political leanings), GE ranked 30th ("leans Democratic"), Bank of America ranked 37th ("leans Republican") and ExxonMobil ranked 93rd ("strongly Republican"). Chevron was not in the top 100 overall donors for the year.
"[Corporate] tax breaks were put in place to promote growth and create jobs, not bankroll the political causes of corporate executives," said de Blasio in a statement. "The unencumbered and anonymous spending in elections let loose by the Citizens United ruling has opened the door for a gross misuse of taxpayer dollars. No company that can afford to spend millions of dollars to influence our elections should be pleading poverty come tax time."
The Supreme Court's landmark ruling in Citizens United cleared the way for a federal court's decision in Speechnow.org v. FEC, which opened the floodgates for unlimited election spending by certain independent political groups, as long as they do not coordinate their activities with political candidates or party committees. These groups can raise unlimited funds from individuals, corporations and unions. Thanks to the ruling, the five companies could have contributed even more than the $7.86 million than was disclosed in 2010.
De Blasio sent letters to the heads of each of the corporations, expressing concern over the use of their federal tax credits. He urged each company to "ensure full disclosure of its political spending to demonstrate that these funds and other corporate treasury dollars are not being used for political spending and electioneering." He also asked all of them except GE to adopt policies that prohibit their trade association dues from being used for political contributions and electioneering.
His office is also launching a campaign to ask the public to email ExxonMobil and urge the company to "adopt the proposed shareholder resolution on disclosure of political spending," which will be considered at the company's May 25 shareholders meeting.
In response to de Blasio's statement, ExxonMobil spokesman Alan Jeffers told The Huffington Post in an email that the company complies with all tax laws and disclosure requirements. He also addressed some criticism of ExxonMobil's federal taxes.
"Recent media reports have highlighted efforts by lawmakers to end economy-wide tax deductions for U.S. oil companies that were established to support manufacturing jobs in the United States and prevent U.S. companies from paying double taxation on income earned outside the country," Jeffers wrote. "ExxonMobil is one of the largest taxpayers in the United States," he added. "During the first quarter of this year, on earnings of $2.6 billion in the United States, we incurred U.S. tax expenses of $3.1 billion."
Boeing held its shareholders meeting on Monday and according to a spokesman, 67 percent of shareholders voted with the management against publishing amounts contributed to trade associations. The company already publishes its other political contributions online.
"Like most of its competitors, Boeing does not publish amounts contributed to trade associations or otherwise mandate disclosure of funds spent for non-political purposes that are later used by the third parties to support political activity," reads the Board of Directors' statement in opposition. It cites problems with potentially revealing corporate strategy to competitors through this information and problems in compelling third parties to reveal whether they used Boeing-contributed funds for political purposes.
GE spokesman Andrew Williams sent a statement that, like Exxon's, did not address the issue of political contributions and also took exception to media reports on the company's tax liability.
"We will file our 2010 tax returns by September," he wrote to The Huffington Post. "We expect to have a small federal income tax liability. In 2010, GE paid significant federal income taxes for prior years. We also paid about $1 billion in 2010 in other state, local and federal taxes in the U.S." Williams said the company's federal tax rate was low in 2010 because the company "lost billions of dollars in GE Capital, our financial arm, as a result of the global financial crisis. Similarly, in 2009 GE Capital's losses were so large that the total company lost money on its U.S. operations." He added that GE expects its tax rate will be higher in 2011 as GE Capital recovers.
In March, however, GE told shareholders that the company expected to get back a $3.2 billion tax benefit from the federal government.
Last year, Bank of America agreed to begin publishing a summary of its political donations online.
"We comply with all state and federal campaign regulations," said Bank of America spokesman Jerry Dubrowski. "Our policy is not to make corporate contributions to candidates for public office."
In a statement, Chevron wrote, "Chevron is committed to adhering to the highest standards of ethics and transparency in engaging in any political contributions. We have strict policies and internal approval processes so that decision making and reporting on political contributions comply with the letter and spirit of all applicable laws. A list of corporate contributions made during 2010 is available on Chevron.com." It also defended its taxes, stating, "Between 1998 and 2008, the oil and gas industry paid $1 trillion in total income taxes. ... In 2010, Chevron, as an example, paid $12.9 billion in taxes on pretax income of $32.1 billion, or an effective tax rate of 40 percent."
Former Wisconsin senator Russ Feingold, who now runs the Progressives United political action committee, launched a campaign pressuring GE CEO Jeffrey Immelt on the issue. And in April, there were massive protests in Washington state over the Democratic-controlled legislature proposing cuts to public programs over closing corporate tax loopholes.
For the past month, Sen. Bernie Sanders (I-Vt.) has been publicly shaming what he calls the "worst corporate income tax avoiders" in an effort to share the burden of deficit reduction more equally, rather than letting it fall more on programs that assist low-income and middle-class individuals. The top five federal corporate tax break recipients have been particular targets of Sanders' campaign.
UPDATE: 10:41 p.m. -- ExxonMobil spokesman Alan Jeffers disputes the $156 million 2009 federal tax benefits figure, arguing the company paid $500 million in US income taxes in 2009. De Blasio's office based its number on ExxonMobil's publicly available SEC filing documents (form 10-K filed in 2010). Politifact has a longer analysis of ExxonMobil's taxes here.
This article has also been updated to include a statement from Chevron.
The chart originally provided by de Blasio's office incorrectly identified 2009 federal income taxes as being from 2010. Federal 2009 taxes are the most recent taxes paid by all corporations listed. The 2010 profits are the most recent profits reported. De Blasio's original chart can be viewed here.
The story was also changed to include Chevron's 2010 tax filings.