by Jason Tanz, via OnEarth Magazine

Perhaps you recall Milo Minderbinder, the ambitious World War II mess hall officer from Catch-22. An avatar of capitalist ambition, Minderbinder expands his modest operation into a full-fledged multinational corporation.

It starts innocently enough — Minderbinder starts buying eggs from Sicily, then arranges a series of increasingly ludicrous deals to turn a profit. The absurd logic of untrammeled capitalism soon drives him to outrageous action, including accepting money from the Germans to bomb his own platoon. He justifies his behavior by pointing out that, as everyone in the troop is an investor — “everybody has a share,” as his catchphrase has it — they are in fact profiting from their own demise.

In Steve Coll’s new book Private Empire, a history of ExxonMobil in the years since the March 24, 1989, Valdez spill in Alaska, CEO Lee Raymond doesn’t quite reach Minderbinderian levels of amorality, but he gets mighty close. His company pays the torture-happy Singaporean military to protect its oil fields from rebel forces. He hires a team of scientists to browbeat researchers attempting to assess the damage from Valdez. He publicly dismisses the very notion of climate change, even as his company explores how global warming might offer new opportunities for oil exploration and profit. “Don’t believe for a minute that ExxonMobil doesn’t think climate change is real,” Coll quotes a manager as saying.

Coll conducted hundreds of interviews to compile this exhaustive — sometimes exhausting — history of one of the world’s most secretive companies. In piercing Exxon’s crude-black veil, Coll is doing more than describing the inner operations of a successful multinational. He is investigating an organization that, in size and influence, may as well be its own nation with its own sovereign interests — a “corporate state within the American state,” as Coll puts it. In capturing the mind-boggling scope of Exxon’s activity, Coll also offers crash courses in the finer points of oil exploration, the bizarre and brutal history of Equatorial Guinea, the rise of piracy in Nigeria, the eco-guerilla movement, resource management in post-Soviet Russia, the finer points of campaign-finance law, the apportionment of oil field contracts in post-war Iraq, and the battle for Acehnese independence. (NB: This is a much-abridged list.)

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by Daniel J. Weiss and Rebecca Leber

Together the big five oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—earned a combined $33.5 billion, or $368 million per day, during the first quarter of 2012.

Recall that these companies made a combined record profit of $137 billion in 2011, mostly due to high oil and gasoline prices. Their ongoing huge earnings mean that these companies do not need $24 billion for a decade’s worth of tax breaks, particularly since the three American companies pay relatively low effective federal tax rates.

Profits for Chevron continued to grow during the first quarter of 2012 compared to this time last year, while they fell slightly for Shell and ConocoPhillips. ExxonMobil and BP saw a decline in first-quarter profits mainly due to reduced oil production (both) and very low natural gas prices (Exxon).

Cumulatively, profits were 7 percent lower than the first quarter of 2011. And more than one-quarter of these profits were used to repurchase companies’ stock. Meanwhile, CEO compensation grew by a whopping average of 55 percent.

Below we dig a little deeper into the big five’s latest earnings—including how they spent them—and explain why companies this profitable should not be receiving billions in tax breaks especially when this money could be spent on other national priorities.

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Last year, ExxonMobil, one of the world’s most profitable companies, earned $1,300 in profits per second. As consumers paid record-high springtime gas prices, Exxon posted first quarter profits of $9.45 billion.

This is down slightly from the first quarter of 2011, when Exxon posted $10.65 billion in profits. Exxon benefited from the high price of oil, but analysts expected slightly lower profits due in part to the cheap price of natural gas, which the company is heavily invested in.

A by-the-numbers look shows how Exxon’s executives and Big Oil’s allies are rewarded generously for the company’s billions, while Americans are stuck with rising gas bills:

$9.45 billion profits, or almost $104 million per day in the first three months of the year.

13 percent: The tax rate Exxon paid last year, lower than the average American family.

60 percent of its first quarter earnings, or $5.7 billion, on buying back stock. Became world’s largest dividend payer by increasing dividends 21 percent.

$1,091,000: Political contributions sent to federal politicians for the 2012 election cycle, making it the largest oil and gas spender.

91% of these contributions went to Republicans.

More than $52,000,000: Lobbying for the first three years of the Obama presidency, 50 percent more than in the Bush Administration.

$34.9 million: Exxon CEO Rex Tillerson’s salary for 2011, a 20 percent raise.

$52,300: Political contributions from Exxon CEO Rex Tillerson in the 2012 cycle, alone.

No. 2: Fortune 500 list of richest companies and for highest-paid CEO.

Exxon not only used 60 percent of its Q1 profits to buy back its stocks, enriching executives and largest shareholders, but it funnels money through political groups like American Legislative Exchange Council (ALEC) and American Petroleum Institute, to influence legislation in its favor.

The Senate minority who last week blocked a vote on ending Big Oil subsidies received more than four times the oil and gas contributions than the 51 senators voting to end them. Exxon Mobil, the world’s most profitable corporation, has helped preserve these and other loopholes for oil and gas by building a Washington force tied intimately to conservative lawmakers, Steve Coll reports in this week’s New Yorker. The corporation relies on an algorithm to determine tiers of oil industry allies and sent 90 percent of contributions to Republicans last year.

Lacking the same connections it had from the Clinton and Bush administrations, Exxon’s strategy has shifted in Washington to pursuing a “blocking strategy” that thwarts climate and tax reform legislation:

During both the Bush and the Obama Administrations, ExxonMobil has concentrated its efforts in Washington on preventing certain tax and regulatory bills from being enacted, such as Obama’s proposal, this winter, to strip away industry tax advantages. The corporation has invested mainly in a blocking strategy, focussing its PAC donations on Republicans who can try to assure that no damaging laws go through. “Whoever’s in power in the House has almost dictatorial power,” a Washington consultant who has worked on oil-industry issues says. “If you control what’s going on in the House, you have huge influence over the final” legislation, as well as over the budgets and spending mandates that shape regulation.”

In the past decade, the leading recipient of ExxonMobil PAC contributions has been Representative Joe Barton, a Republican from Texas, who has held senior positions on the House Energy and Commerce Committee, where most legislation affecting the oil industry originates. Anne Northup, a former Republican congresswoman from Kentucky, who now serves on the Consumer Product Safety Commission, received the second largest amount of campaign money. ExxonMobil’s ten leading campaign contribution recipients in that decade were all House Republicans, according to research done by the journalist Ann O’Hanlon.

Exxon is the largest political contributor in the oil and gas industry, spending nearly a million so far in the 2012 election cycle and another $12.7 million in 2011; it also funds corporate front group American Legislative Exchange Council (ALEC). The strategy has paid off for Exxon, which made 35 percent higher profits last year on higher gas prices, yet paid a lower federal tax rate of an estimated 13 percent.

Exxon Mobil, the most profitable of the big five oil companies, made $41.1 billion in profits last year. Although Exxon made 35 percent more profits since 2010, its estimated effective tax rate actually dropped. Citizens for Tax Justice reported Exxon paid only 17.6 percent taxes in 2010, lower than the average American, and a Reuters analysis using the same criteria estimates that Exxon will pay only 13 percent in effective taxes for 2011. Exxon paid zero taxes to the federal government in 2009.

Reuters compares the 45 percent tax rate Exxon claims it pays to the effective rate estimated by Citizens for Tax Justice — a rate that’s even lower than Mitt Romney’s tax rate. Chevron, which made $26.9 billion profit in 2011, paid 19 percent:

Citizens for Tax Justice considers U.S. profits and U.S. taxes paid only. By that measure, Exxon Mobil paid 13 percent of its U.S. income in taxes after deductions and benefits in 2011, according to a Reuters calculation of securities filings.

It is a far cry from the 35 percent top corporate tax rate.

Still, the three-year average for telecom companies is 8 percent; for information technology services companies, it is 2.5 percent, according to CTJ.

Chevron CEO John Watson recently claimed “We’re the highest taxed industry that I’m aware of” while the American Petroleum Institute has claimed the industry pays a tax rate at more than 40 percent. But as Reuters explains, the oil industry uses a different methodology to claim it pays an artificially higher tax rate to the public. The industry “lumps together U.S. and foreign taxes. It includes taxes that are deferred and thus not paid yet. U.S. companies must pay taxes on profits earned abroad, but they can defer these taxes until they bring the cash into the country.” The big five use this tactic of hoarding cash oversees in tax havens, cutting their tax rates drastically. Exxon uses at least 20 tax shelters. These tax loopholes permit Exxon to pay a rate in-line with Mitt Romney, who’s also notorious for tax dodging.

With international tensions and Wall Street speculation pushing gas prices up, experts are floating the possibility of $5 gas prices this summer. Conservatives have seized on unsubstantiated explanations for higher gas prices, from President Obama “wanting” expensive gas to restricting domestic production, despite it being at an eight-year high.

Today, Exxon Mobil CEO Rex Tillerson said that the “supply and demand is fine” — the driving factor is “concerns about the rhetoric” over Iran. As Tillerson points out, hawkish rhetoric is enough to fuel oil speculation and gas prices:

As I look at just the supply and demand fundamentals, I would not expect to see prices reach that [$5] level. Again, the unknown in here is if the markets view of the political risk, if the rhetoric gets more heated, if there’s a problem someplace else in the world that flares up, then certainly it can drive these prices up further.

Even during last year’s price spike, Tillerson admitted the major role speculation played, adding up to $40 more per barrel.

Exxon is not especially interested in oil production levels or easing gas prices, despite lambasting “dysfunctional regulation.” Not only is supply and demand “fine,” but Tillerson noted the company cares less about production than maximizing profits:

Rather than immediate production, Mr Tillerson said a priority for the company was to do “a lot of studying” to understand how to maximise the long-term value of its resources.

“A lot of the players in this space are more cash-flow driven. We’re return-driven. We don’t have ongoing cash flow to maintain our holding around these resources. It’s really about how are we going to develop these over the next 20 to 30 years and have them really generate good profitability.”

Of course, this is not the story the industry tries to tell the public. Big oil benefits from the higher gas prices — no matter whether it’s driven by speculation on international conflict. The big five are slated to take at least $5.8 billion more profit from higher prices for the first three months this year.