Big Oil Buys the Senate, Says Feingold.

Editor's Introduction:

On September 23, the U.S. Senate voted 51 to 47 in favor of an amendment by Senator Kay Bailey Hutchison, Republican of Texas, that saves oil companies from paying $66 million a year in royalties to the government. The Interior Department wanted the oil companies to have to pay royalties based on the market price of oil instead of a lower price they themselves determine. Before the vote, Senator Barbara Boxer, Democrat of California, took to the floor to oppose the amendment. And Senator Russ Feingold, Democrat of Wisconsin, argued that this amendment showed how campaign contributions were corrupting the system. His outspokenness created a stir on Capitol Hill. Even some of his Senatorial allies on campaign finance reform said he was out of line. Here are his remarks, along with interruptions from Senator Craig Thomas, Republican of Wyoming, and Mary Landrieu, Democrat of Louisiana, who both supported the bill.

Mr. Feingold: Mr. President, since we have been engaged in debate on the Interior bill, four major oil companies have reached tentative agreements with U.S. prosecutors who accused them of cooperating in schemes to shortchange the government through their royalty payments by millions of dollars. A tentative settlement, which was filed in federal court in Lufkin, Texas, involved about $185 million in payments and would end a case that alleged that companies underpaid royalties by undervaluing oil extracted from federal and American Indian lands.

Though the settlement has not yet been finalized, it is a very serious matter. Chevron USA, Inc., BP American, Inc., Amoco Oil Co., and Conoco, Inc., agreed in principle to settle for $95 million....

These recent settlements aren't even the first of their kind. Several companies have been negotiating settlements. The Mobil Corporation agreed last year to pay $45 million, and Occidental Petroleum Corporation agreed in early September to pay $7.3 million.

I think this is a very troubling trend as these lawsuits are settled. I am very concerned that Congress is abdicating its responsibility. Unintentionally or not, Congress is making it possible for this issue to continue to go unaddressed because the royalty underpayment situation is the issue that this rulemaking we are debating seeks to correct....

So this raises the question: Why is Congress doing nothing about this problem? I think, certainly, the public will want to know why. The alleged underpayments involve more than 6,000 onshore and offshore leases in Texas, Louisiana, Mississippi, California, Alabama, Alaska, Oklahoma, Arkansas, Colorado, Arizona, Florida, Kansas, Michigan, Montana, North Dakota, Nebraska, New Mexico, Nevada, South Dakota, Utah, and Wyoming.

So this is not just a Coastal States problem, or even just a Western problem. It affects a broad number of states, and it deserves attention as a national problem, the kind of attention the Senator from California has brought to it.

I have no doubt that one of the factors contributing to Congress's inaction on this issue of great importance to American taxpayers is the role of campaign contributions in the political process. So I want to review the figures I briefly presented when I "called the bankroll" last time I joined the Senator from California on the floor. I call the bankroll from time to time in this Chamber to remind my colleagues and the public about the undeniable, but sometimes hidden, role that money plays in the decisions we make.

During the 1997-1998 election cycle, the very large oil companies that will benefit from this amendment gave the following political donations to the parties and to federal candidates:

Exxon gave more than $230,000 in soft money and more than $480,000 in PAC money; Chevron gave more than $425,000 in soft money and more than $330,000 in PAC money; Atlantic Richfield gave more than $525,000 in soft money and $150,000 in PAC money; BP Oil and Amoco, two oil companies that have merged into the newly formed petroleum giant, gave a combined total of more than $480,000 in soft money and $295,000 in PAC money.

So if you put that together, that is more than $2.9 million just from those four corporations in the span of only two years. They want the Hutchison amendment to be part of the Interior appropriations bill. As powerful political donors, I am afraid they are likely to get their way.

You will notice that all of these companies except for Exxon gave more to the political parties in soft money than their PACs gave to individual candidates. So, remember--and this is a key thing about soft money, which I don't think everybody in the country realizes, it took me a while to get it--soft money comes right out of the corporate treasury, right out of the treasury. This isn't money where you form a PAC and you get employees to contribute to it; it comes straight out of the corporate treasury....

I would have thought a few years ago that these kinds of donations were illegal. They are supposed to be essentially illegal under our federal elections law.

The Tillman Act passed way back in 1907 in the Senate and in the Congress prohibited corporations from making campaign contributions. That statute, which was codified in title 2 of the United States Code, at section 441(b), reads as follows: "It is unlawful for any national bank, or any corporation organized by authority of any law of Congress, to make a contribution or expenditure in connection with any election to political office...."

That sounds pretty simple and straightforward. Yet unfortunately, in 1978, the Federal Election Commission made a ruling that opened up this soft money loop-hole and allowed the political parties to begin accepting unlimited contributions of soft money from corporations such as Exxon, Chevron, and Atlantic Richfield to pay for party-building activities and things such as get-out-the-vote campaigns and voter registration. That is what it was supposed to be for. Let me remind my colleagues that we all believed, based on the Tillman Act, that contributions--

Mr. Thomas: Mr. President, I make a point of order that the subject matter is not germane.

Mr. Feingold: Mr. President, I certainly dispute that. I believe this is entirely relevant. I am talking about corporations and interests that are very much behind this matter. I would certainly suggest that it is appropriate.

The Presiding Officer [Mr. Peter Fitzgerald, Republican of Illinois]: The Chair would remind the Senator that under the cloture, speeches must be relevant to the issue at hand.

Mr. Feingold: Mr. President, I believe this presentation is entirely relevant to this issue. I am going through the way in which these corporations can technically legally provide this kind of help to this cause of trying to make this change. That is merely the background I am giving at this point. So let me return to the present. Soft money has grown exponentially since those early days when corporate contributions were just going to give the parties a little breathing room to cover party-building activities, not campaigns. In the last Presidential campaign, in 1996, the parties raised $262 million in soft money, three times as much as in the 1992 election cycle. The experts project we will see perhaps as much as $500 million or even $600 million in this next election, and about 65 percent of the money is coming from corporate treasuries

So as we look at an issue, such as Senator Boxer's concern with the Hutchison amendment, we have to realize that what is before us is not simply an amendment. It is an amendment supported by interests that have been involved in an immense infusion of corporate cash that, unfortunately, is totally legal, even though I certainly don't think it should be. We wonder why the American people are skeptical of what we are doing. We have heard the horror stories again and again. Parties have special clubs for big givers and offer to the donors exclusive meetings and weekend retreats with office holders. And it is totally legal. In other cases, in other bills, so we know this isn't an isolated incident, the tobacco companies have funneled nearly $17 million in soft money to the national political parties.

Mr. Thomas: Mr. President, I raise a point of order again that campaign finance is not the issue we are talking on, and I raise a point of order on it.

Mr. Feingold: Mr. President, if I may be heard in response.

The Presiding Officer: The Senator from Wisconsin.

Mr. Feingold: Mr. President, I believe it is clear that what I am saying is not simply in the context of a debate on campaign finance reform, and that the members of the Senate and the American people should hear and understand the kind of money that is behind legislation on the floor of the Senate.

I think it is relevant to this debate. I think it is relevant to the debate on the subject matter involved. I have in the past on a number of occasions taken the opportunity to raise this issue. I have spoken about campaign money in connection with nine or ten other bills, without objection from anyone, to point out the money that is involved in those bills. As you know, my presentation here has not been exclusively on the topic of campaign money. I have talked about the merits as well. I believe both are relevant, and I certainly would dispute the notion that this is in any way appropriate for a point of order.

Mr. Thomas: Mr. President, I think it is totally inappropriate. You can talk about the campaign finance issue on any issue. On this issue, we had a vote. This issue was designed to proceed for thirty hours. This issue was not to be done on campaign finance. I continue to raise a point of order, and will continue to raise a point of order.

Mrs. Boxer: Mr. President, may I be heard on this point of order? I ask unanimous consent that I may be heard on this point of order.

The Presiding Officer: Is there objection?

Mr. Thomas: I object. I at least would like to have some limit as to the amount of time.

The Presiding Officer: For how long does the Senator wish to speak?

Mrs. Boxer: I want to make a point in response, and I can do it, and raise a question for the Senator from Wisconsin, because he still controls the time.

Mr. Thomas: I have no objection.

Mrs. Boxer: Thank you very much.

The Presiding Officer: The Senator may yield for a question.

Mrs. Boxer: I just got unanimous consent to speak. So I would take that, and I thank my friend.

I want to make a point in support of Senator Feingold's amendment to campaign contributions, but I want to do it in a way that I think is very objective.

If you look at The New York Times article-he should make sure he looks at this New York Times article as well--I say to all of my friends, the title of this article is "Battle Waged in the Senate Over Oil Royalties by Oil Firms." The essence of the article goes to the heart of what my friend is saying. It goes to the heart of the issue of campaign contributions.

So I surely believe the Senator from Wisconsin is in full order to connect this amendment to the number of contributions that oil companies give, and I think his comments are on point and in order.

The Presiding Officer: The Senator from Louisiana.

Ms. Landrieu: Mr. President, I would like to object. I would like to take issue, as respectfully as I can, with my colleague from California, who came earlier to this floor. I don't have the quote, but I remember.

Mrs. Boxer: Mr. President, what is the order?

Ms. Landrieu: The order is--

Mrs. Boxer: Mr. President, could I ask what the order is in speaking? I thought the time belonged to the Senator from Wisconsin, and that it was his chance to continue his remarks.

Ms. Landrieu: I am objecting to his remarks.

Mrs. Boxer: The Senator from Wisconsin got time to make a speech when he has the floor, and he has an hour's worth of time. I would ask for a ruling as to who asked for time.

The Presiding Officer: The time of the Senator from California has expired.

Mr. Thomas: We just completed this question on germaneness. If you would like me to read the ruling, I would be happy to do that.

Mrs. Boxer: That is fine with us.

The Presiding Officer: Without objection, it is so ordered.

Mr. Thomas: On germaneness of debate, if the Senate is proceeding under cloture, debate must be germane. `Germane' means you have to be on the subject. It doesn't mean you can sway off the subject to some irrelevant subject. This says it must be germane, and I again raise a point of order.

Ms. Landrieu: The only way it would be germane is if the Senator from Wisconsin--

Mrs. Boxer: Mr. President, who has the time?

Ms. Landrieu: On giving contributions--

Mrs. Boxer: Mr. President, who has the time?

The Presiding Officer: The Senators will suspend. There are precedents of the Senate that permit nongermane debate even under cloture, notwithstanding the precedent cited by the Senator from Wyoming. The Senator from Wisconsin has the floor.

Mr. Feingold: Mr. President, I appreciate having the floor returned. I appreciate the ruling of the Chair.

Let me say that any attempt to gag the discussion on the floor of the Senate about the impact of soft money on this place is something I will fight tooth and nail with my colleagues on, and I was prepared, if necessary, had the Chair ruled against me, to appeal. But I am grateful for the ruling and the precedents.

There is a notion that somehow saying the oil companies have contributed money means we are accusing somebody of something illegal, or something that can't be done. But that isn't a necessary conclusion. Contributions can be given innocently, but if the impact is that the process is greatly affected and the judgment is affected by the power of that money, I think it is relevant to this debate.

That is my concern about soft money. It is not so much the contributions given to individual Senators. Individual members can't take soft money. It is this new phenomenon of the very large soft money contributions being given to political parties that I think has changed this place in a way that is extremely troubling and has allowed some amendments such as the one before the Senate today to get the kind of credibility I don't think they would have had without the power of soft money....

I am not suggesting that these parties or industries are involved in illegal activity; it is legal, but it should be illegal. It is distorting to the process.

Calling Bankroll

BP and Amoco
   $480,000 soft money
   $295,000 PAC money
   $775,000 total

Chevron
   $425,000 soft money
   $330,000 PAC money
   $775,000 total

Exxon
   $230,000 soft money
   $480,000 PAC money
   $710,000 total

Arco
   $525,000 soft money
   $150,000 PAC money
   $675,000 total

Contributiions during the
1997-1998 election cycle to
the parties and federal candidates.