API President Jack Gerard

by Lee Fang, via the Republic Report

When oil companies need help in Washington, they call Jack Gerard. But in January of next year, assuming he wins the presidency, Mitt Romney may be dialing Gerard for political support. According to media reports in his native Idaho, Gerard is on the shortlist to become Romney’s White House chief of staff.

Gerard is the president of the American Petroleum Institute, the largest oil lobbying associations in the country. Using a budget that is rumored to be in the hundreds of millions (funded by all of the major oil companies, including Chevron, ExxonMobil, etc.), Gerard finances pro-oil propaganda on network television, academic studies to promote his policy positions, front groups to hold rallies in pivotal swing states, and of course a large teams of lobbyists from D.C. to over a dozen state capitals across the country. For his work, he’s one of the highest paid lobbyists in the Beltway, making $6.4 million in 2010 alone.

Rumors are again circulating that Gerard, a prominent Mormon and close ally to the Romney campaign, may be selected to take the top slot in a Romney administration. And there’s other evidence that Gerard has already ingratiated himself with the Romney campaign:

– Senator Jim Risch (R-ID) told the Idaho Statesman that he thinks Gerard may be selected as Romney’s chief of staff. “Gerard is a heckuva player in Washington, D.C.,” Risch told the newspaper. “He’s well thought of, well connected, has incredible street cred. He’s certainly got the qualifications to do any of that.”

– Former Senator Jim McClure (R-ID), Gerard’s former boss when he worked on Capitol Hill, predicted that Gerard would be Romney’s chief of staff had he won in 2008.

– Breaking a tradition of trade association nonpartisanship, Gerard endorsed Romney during the Republican primaries this year, and indicated the he is close to the Romney family.

– Jack Gerard’s son, who shares the same name, is now a spokesman for the Romney campaign.

The Romney campaign, like most political campaigns, has remained largely silent about its future staffing plans.

Lee Fang is a reporter with the Republic Report. This piece was originally published at the Republic Report and was reprinted with permission.

Mitt Romney has adopted a Big Oil platform for the elections, appointing oil shale billionaire Harold Hamm as an energy adviser and fully embracing the House Republican budget, which preserves tax loopholes for the industry.

Illustrating the candidate’s ties to the oil industry further, Big Oil’s chief spokesman, API President Jack Gerard, has long backed Mitt Romney. Gerard and his family have donated $7,440 to the Romney campaign, and the campaign in turn has publicly thanked Gerard:

On Super Tuesday, Ann Romney publicly thanked him for helping her husband in his bid for the presidency. According to the Center for Responsive Politics’ OpenSecrets Web site, Gerard has given $2,470 to Romney and his family members have given $4,970 for the 2012 campaign. He has raised much more by hosting fundraisers, including one at the District Chop House in 2010. He was a supporter of Romney in 2008, too, and some former API employees think he hopes to land a job in a Romney administration.

“Romney has a business background that would be helpful to get us back on track,” Gerard says. “They’ve asked us to support them, and we have. They’re good people.” He and his wife “believe the president’s approach to date is not consistent with what the people need or the country needs for sound energy policy.”

The candidate has pulled some serious support from the oil and gas industry, taking more than $750,000 from oil and gas and another $1 million for the pro-Romney Super PAC Restore Our Future.

API promised to play a heavy hand this election cycle and has dropped $4.3 million in the last three months alone. API launched ads a few weeks ago to protect the industry’s tax breaks, even as Big Oil is making record profits off of higher gas prices. Like his favored candidate, Gerard is one of America’s 1 percent, receiving one of the largest salaries of any trade group executive at over $6.4 million.

American Petroleum Institute President Jack Gerard wants you to know: “We get no subsidies in the oil and gas business.” Of course, the industry receives a total $40 billion in tax breaks over 10 years. Speaking today at a House Energy and Commerce subcommittee hearing on gas prices, Gerard defended the political favoritism citing an out-of-context finding from a Congressional Research Service study.

Gerard claimed gas prices would increase as a result of ending big oil tax breaks. His testimony echoed API’s previous statements that Obama’s call to end oil subsidies is “discriminatory“:

It calls for “all-of-the-above” then threatens the companies that could lead an energy renaissance with $85 billion in discriminatory tax increases.

The likely report Gerard seized on is the same House Speaker John Boehner has used from the Congressional Research Institute finding “On what would likely be a small scale, the proposals also would make oil and natural gas more expensive for U.S. consumers and likely increase foreign dependence.” The key point is the negligible impact, considering the $137 billion the big five oil companies made last year. Yet another CRS report, dated May 2011, debunked the oil industry’s defense of subsidies, finding gas prices won’t go up:

It is widely accepted that a proportional change in taxes on profit affects neither the firm’s incremental costs or revenues, and therefore does not change its its behavior with respect to output. Since output does not change, there is little reason to believe that the price of oil, or gasoline, consumers face will increase.

The oil industry is one of the most heavily subsidized industries, with “tax breaks available at virtually every stage of the exploration and extraction process,” the New York Times writes. The industry is also one of the most politically influential, spending over $146 million on lobbying in 2011 alone. API itself has lobbied with over $25 million since 2008 and spent $30,500 on House candidates last year.

It’s unsurprising Republicans in the same room as Gerard today — taking $5.6 million in career contributions from oil and gas — sat idly by while the oil lobby defended subsidies.

The oil lobby American Petroleum Institute weighed in on President Obama’s corporate tax reform that closes an array of tax loopholes, including $4 billion in subsidies for the oil industry. Not surprisingly, API is unhappy. API President Jack Gerard played victim, calling the plan “discriminatory” against an industry that “receives not one subsidy”:

One day after the Obama administration unveiled a sweeping corporate tax reform plan, the oil and gas industry’s top lobbyist went on the attack against the president’s proposal.

Calling it “discriminatory,” Jack Gerard, president and CEO of the American Petroleum Institute, said the administration’s outline was more of a “Swiss cheese approach that we’re trying to get rid of in this country.”

“The industry receives not one subsidy,” Gerard claimed. “It takes tax deductions the same or similar to what all other American companies get to recover their costs of doing business.”

Here’s a fact for Gerard: tax deductions are subsidies, as API has previously admitted. In one API document, the organization discussed “subsidies for alternative fuels” including “preferential tax treatment.”

Here’s another fact: the industry receives a whopping $7 billion in tax breaks each year.

Gerard also claimed big oil pays one of the highest effective tax rates, and yet Exxon Mobil – the most profitable oil company – paid a 17.6 percent federal effective tax, lower than the average American. The company paid zero taxes to the federal government in 2009. The oil industry is fighting to keep its handouts, despite posting record-breaking profits of $137 billion in 2011.

So far, it seems like it’s American families who are being discriminated against, in favor of Big Oil.

Yesterday, CNN/Fortune profiled American Petroleum Institute CEO Jack Gerard, who took the reins in October 2008 and “has pretty much been in crisis mode since.” In his time in his position, he pared back over two dozen priorities to just six – axing alternative energy research to focus on protecting Big Oil’s tax breaks and expanding drilling in America’s oceans and public lands. And in an effort to “change the perception that Big Oil and Republican politics are inextricably bound,” he also hired Sen. Dick Durbin’s (D-IL) nephew Marty Durbin and “organized fly-in lobbying visits by African-American, Hispanic, and female oil workers.”

The profile also details API’s influence after the BP disaster in the Gulf – the largest and most devastating oil spill in American history. API launched ultimately successful rallies to help “derail the ‘spill bill’ Democrats aimed to enact in the wake of the BP disaster.” To maximize their efforts, the oil industry giant went about building an astroturf movement complete with “a slick corporate production”:

Last summer, after the House passed a tough bill to boost safety standards for offshore drilling and remove a liability cap for oil spills, Gerard mounted a round of rallies in regions far from the oilfields. At one, in suburban Chicago, more than 500 union workers assembled for a slick corporate production stage-managed to look like a working-class event.

And while API lobbied hard against safety measures for oil drilling, they’ve been supportive of recent bills to speed up the permitting process. And Gerard also kicked off the 2011 congressional session by calling for opening additional areas to expanded drilling, flying in the face of recommendations from the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Operations that rules for prevention and containment of spills need to be improved before drilling operations are expanded.

This isn’t the first time the American Petroleum Institute has been involved in artificial organizing. Back in 2009, Think Progress reported on a leaked memo from Gerard calling on oil company leadership to urge employees to take part in “Energy Citizen” rallies in opposition to cap and trade legislation. And the New York Times reported that “many of the people attending the demonstration were employees of oil companies who work in Houston and were bused from their workplaces.”

The American Petroleum Institute already has a wide-reaching influence in the public policy debate. In 2010 and 2009, API spent $7.3 million on lobbying each year. So far in 2011, API has spent $2.07 million on lobbying activities. And earlier this year, the group announced it would begin making direct contributions to political candidates.