Industries set to cash in on campaign investments

Monday, November 17, 2003

WASHINGTON -- Energy industries that have invested millions of dollars in lawmakers' campaigns would reap billions in tax breaks and potential new business from compromise Republican legislation.

President Bush took office promising to develop a new energy policy. Since then, energy-related businesses have contributed nearly $70 million to lawmakers and political parties, with about three-fourths of it going to Republicans, according to an analysis of Federal Election Commission records by the Center for Responsive Politics.

The energy sector also gave an additional $67 million -- $50 million of it to Republicans -- during the 2000 election cycle, when Bush won the presidency and Republicans regained control of the Senate.

The House and Senate are expected to vote this week on the final compromise developed by GOP negotiators. The measure is designed to boost energy production, improve reliability of the electricity grids and make it easier for energy companies to develop oil and gas on federal land.

Energy interests have been "giving heavily to the Republicans for a long time, and this is what it's all about in the end. It looks like they got an energy bill that they wanted," said Larry Noble, executive director of the Center for Responsive Politics, a bipartisan research group.

Environmental groups, which lobbied unsuccessfully for measures to cut energy use or promote cleaner renewable energy sources such as solar and wind power, made only $2.3 million in political contributions during the past three years.

One of the biggest political contributors over the years has been Illinois-based Archer Daniels Midland, the largest producer of corn-based ethanol. The company was one of the biggest winners in the energy agreement, which doubles the use of ethanol as a gasoline additive to 5 billion gallons a year.

Since 1999, ADM has given $2.4 million in unregulated donations to political parties, $1.5 million to Republicans and $874,000 to Democrats. Such soft money donations were outlawed by the campaign finance law that took effect last year.

The company also has contributed $371,450 directly to federal candidates since 1999, including more than $200,000 to Republicans.

There was bipartisan support for the ethanol provision among farm-state lawmakers. Two major proponents were Sen. Charles Grassley, R-Iowa, the lead Senate negotiator, and Minority Leader Tom Daschle, whose home state of South Dakota has nine ethanol plants.

Manufacturers of the gasoline additive MTBE, which has been found to contaminate drinking water, also won big when congressional negotiators agreed to protect them from product liability lawsuits.

The bill also authorizes $1.75 billion over seven years in "transition" assistance to MTBE manufactures, including oil companies and refiners, as they scale back production because of state bans on the product. The bill would extend a Senate-proposed federal MTBE phaseout from four years to 10 years.

About three-fourths of the MTBE producers are based in Texas and Louisiana, and the liability protection was championed by three Republicans from those states: House Majority Leader Tom DeLay of Texas, Rep. Billy Tauzin of Louisiana, the lead House negotiator, and Rep. Joe Barton of Texas.

Major MTBE producers include Lyondell Petrochemicals of Houston, which has contributed $41,500 to federal candidates this year, including $10,000 to DeLay, $5,000 to Tauzin, $3,000 to Barton and $2,500 to Grassley.

Koch Industries of Wichita, Kan., another major MTBE manufacturer, has contributed $160,000 to federal candidates this year, including $5,000 to DeLay and $3,500 to Grassley; Valero Energy of San Antonio has given $139,000 to the congressional candidates, including $5,000 each to DeLay, Tauzin and Barton.

Large electric utilities got one of their long-standing priorities, repeal of the Depression-era Public Utility Holding Company Act that restricts their activities.

They also fought off a federal effort to establish greater national control over the design and operation of transmission systems.

Electric utilities have contributed more than $23 million since Bush took office, with two-thirds going to Republicans. Among the biggest contributors were the Atlanta-based Southern Co., $2.3 million; Exelon Corp., $1.5 million; Dominion Resources, $1.5 million; and TXU Corp., $1.3 million.

Southern, which owns entrenched electric utilities across the South, had lobbied hard for a provision that gives electricity for their customers priority on transmission lines. The company also favored a measure that would make it easier for a company like Southern to get rival independent power producers to pay for grid improvements.

Political contributions from oil and gas industry sources have totaled nearly $30 million since Bush took office, with 80 percent of it going to GOP candidates or parties.

Oil and gas companies got much of what they wanted in the legislation. Successes include federal royalty relief for developing deep-water natural gas resources, measures that will make it easier to get oil and gas permits on federal land, and loan guarantees for building an Alaska natural gas pipeline.


Associated Press writer H. Josef Hebert contributed to this report.

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