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“This is a stealth bailout for the oil and gas industry,” senior researcher with Documented Jesse Coleman said.
More than US$1.9 billion in Coronavirus Aid, Relief and Economic Security (CARES) Act tax benefits intended to help small businesses are being requested by at least 37 U.S. oil companies, service firms, and contractors, a report published Friday by Bloomberg News has revealed.
“This is a stealth bailout for the oil and gas industry,” senior researcher with Documented, a watchdog group tracking tax claims, Jesse Coleman, told Bloomberg.
It’s geared to companies “that have been losing money over the last few years - and now they get that money back as a check from the taxpayers. That’s exactly what the oil industry has been doing.”
To explain the tax maneuvering, the report took the example of the Diamond Offshore Drilling Inc. which profited from a little-noticed provision in the stimulus bill to get a US$9.7 million tax refund.
It subsequently asked a bankruptcy judge to allow the same amount as bonuses to nine executives. Bloomberg’s report describes Diamond's refund as insignificant when compared to some of its larger competitors.
“Dozens of other oil businesses have reported reaping the benefits, including (US)$55 million for Denver-based Antero Midstream Corp., (US)$41.2 million for supplier Oil States International Inc. and (US)$96 million for Oklahoma-based producer Devon Energy Corp,” the report says.
"In the name of 'small business,' we're shoveling out billions of dollars to big corporations and rich guys," senior fellow with the Urban-Brookings Tax Policy Center, Steve Rosenthal, told the news outlet.
Even with the abundant subsidies offered by the federal government, the fossil fuel industry was already in financial trouble before the coronavirus outbreak, which has effectively hampered its possibilities of generating money.
Access to bailout tax break funding is thus helping Big Oil companies, along with other climate-destroying industries like mining companies, to prosper thanks to the coronavirus relief legislation.
"The Trump administration’s favor factory hasn't stopped with a global pandemic," Jayson O'Neill, a spokesperson for Accountable.US, a watchdog group against corruption, said in a statement Friday.
"As millions of jobs disappear week after week, the Trump administration is prioritizing aid for wealthy, well-connected corporations before small businesses."
U.S. Senator Bernie Sanders also joined his voice to those who sharply criticized the fossil fuel industry for using legislation meant at supporting small businesses through the pandemic.
"Good thing President Trump is looking out for the real victims of the coronavirus: fossil fuel executives," Sanders tweeted ironically Friday.
The U.S. federal government had signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law on March 27.