Under the Influence: Money and Power in Politics

Support for Proposed Oil Tax Limited To Green, Faux Slate Mailers

Employees at a West L.A. Oil Field (Amy Silverstein)A committee supporting a proposed oil-extraction tax for Los Angeles has spent almost all of its money so far on an unlikely pair of slate mailers, one of which was the subject of some controversy.

"The Committee To Support Measures O and P" has so far received $11,500 in contributions and spent $8,000 of that on slate mailers, according to campaign disclosure statements.

One of the mailer groups that the committee paid for an advertising spot is "Californians Vote Green," which would seem to make sense for a measure targeting the oil industry. But the other, Newport Beach slate mailer "Continuing The Republican Revolution," not so much.

"They just bought advertising on one of our mailings, that's all...we're a vendor," said Scott Hart, who heads the firm that produces "Continuing The Republican Revolution."

Last October some Republicans cried foul when Hart's group sent out a mailer with the Republican National Committee elephant logo and quotes from Ronald Reagan, but policy positions completely counter to the RNC platform.

Oil Well (Amy Silverstein)Payments to the two slate mailing groups are the only expenditures that the committee supporting the tax have made as of February 24th, when the last campaign filing was due.

"There was a limited amount of money... [I]t really wasn't much of a campaign," said Parke Skelton, who said he helped select those slate mailers for the committee to support Measures O and P to advertise on.  "Basically the oil companies have bought up virtually everything...so it was very difficult to find anywhere that hadn't already got substantial sums of money from the oil companies."

Measure O, on the March 8 ballot, would impose a $1.44 tax on every barrel of oil extracted within the City of Los Angeles. The City Council says the tax would bring in $4 million each year to the City. The tax isn't exactly environmentally-focused, because the revenue would not go to renewable energy. Instead, that $4 million would go to the general fund.

Even though all but one Los Angeles City Council member voted in favor of putting Measure O on the ballot, proponents of the tax have received a small fraction of the money that the opposition committee has received — $400,000 as of the February 24 filing deadline, according to campaign disclosure forms from the City Ethics Commission.

"Stop The L.A. Oil Tax, No On Prop O, Sponsored By California Independent Petroleum Association" has spent some of that money on consultants and campaign literature. And one study claiming the tax would be terrible for the local economy was written by a paid consultant.

Plains Exploration & Production Company, based in Houston, contributed $100,000 to the "Stop the L.A. Oil Tax" campaign, more money than any other single company. Other contributions are flowing in from smaller oil companies, who claim that an extraction tax would "drive up gas prices at the pump."

Gregory C. Brown, BreitBurn Energy (Amy Silverstein)However, it's unlikely that this tax would significantly affect the price of local oil.

"It's definitely true that the price of oil is set on a global basis," conceded Gregory C. Brown, Executive Vice President of BreitBurn Management Company. Brown was quick to point out that local supply and demand do affect the price at the pump, but not dramatically.

BreitBurn Energy and Operating companies have contributed a combined total of $30,000 this year to oppose Prop O.

Speaking at a press conference held at a small oil well in West Los Angeles Wednesday, Brown cited a study claiming that, if Measure O is passed, Los Angeles will lose $5 billion in a span of 10 years. More immediately pressing, the study also claims that about 200 to 300 jobs will be lost in a year and a half.

The author of that study, Thomas Tanton, was paid $10,300 in the past month for campaign consulting by "Stop The L.A. Oil Tax," according to the disclosure statements.

Tanton is a former senior fellow at the Pacific Research Institute, which received $75,000 from Exxon Mobil in 2009, according to the corporation's own website. He is also a former Vice President of the Institute For Energy Research, which has also received money from Exxon Mobil.

Representatives from various business groups continue to stress that there are no large oil corporations in the City of Los Angeles, and that the tax proposed in Measure O is double the average for neighboring cities.


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