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The oil and gas industry is waging a massively funded campaign to keep oil and gas severance taxes below 2 percent in Colorado.
The oil and gas industry is waging a massively funded campaign to keep oil and gas severance taxes below 2 percent in Colorado.
Courtesy of flickr
Big oil and gas pumps $10.3 million - most ever raised - into anti-Amendment-58 campaign
Pro-Amendment-52 group raises another $300K from industry to keep severance tax down
By David O. Williams

September 25, 2008 — Even as a shadowy conservative group backed by oil and gas money works to reclaim a state Senate majority for Republicans in 2010, other issues committees are taking a much more direct approach to fighting off attempts to end tax subsidies for the industry in November.

Coloradans for a Stable Economy has raised $10 million from oil companies to fight Gov. Bill Ritter’s Amendment 58 ballot initiative, which would pull the plug on a nearly 90-percent property-tax exemption for the industry and raise more than $300 million more a year for college scholarships, wildlife preservation, road improvements and renewable energy projects.

And Better Roads Now, an issues committee formed by state Rep. Frank McNulty, R-Highlands Ranch, has raised another $300,000 from three oil companies in California and Texas to support Amendment 52, which he sponsored with state Sen. Josh Penry, R-Grand Junction.

That initiative would keep the state’s oil and gas severance tax at its current rate of less than 2 percent in some cases (with the current property-tax exemptions) but divert the money to road improvements along Interstate 70. Amendment 58 would impose a flat 5-percent severance tax, and critics claim Amendment 52 was floated primarily as a diversionary tactic.

The anti-58 people “are exclusively funded by oil and gas, as is [Amendment] 52, by the way,” said George Merritt, a spokesman for A Smarter Colorado, an issues committee and 501(c)(4) nonprofit set up to support 58.

“We knew this industry would try all kinds of gimmicks to distract the voters from the fact that they get a $300 million subsidy, and they have shown that they will say or do anything, including threatening Colorado water projects.”

Opponents of Amendment 52 charge that too much of the money (about $60 million a year) goes to fix just one of the state’s major highways, that too much money would be diverted from critical water projects, and that it’s a drop-in-the-bucket approach to fixing the entire state road system.

McNulty told in a previous interview that some have positioned 52 as an alternative to Ritter’s tax increase in the form of 58, but that 52 is in fact just an attempt to use existing funds to make a “down-payment” on fixing and maintaining the state’s deteriorating road system.

McNulty’s Better Roads Now group has raised $100,000 each from Occidental Oil and Gas of Los Angeles, Berry Petroleum of Bakersfield, Calif., and Plains Exploration and Production Co. of Houston — a curious group of donors to be interested in improving Colorado roads.

Coloradans for a Stable Economy, the group fighting Amendment 58, has raised $1 million each from Exxon/Mobil, Chevron, BP, Encana, Williams, Conoco Phillips, Anadarko and Noble. With donations totaling nearly $2 million from smaller energy firms, the group has raised nearly $10 million overall.

The group has spent nearly $8.5 million of that already, primarily on a highly aggressive television advertising campaign portraying 58 as a Ritter tax hike aimed at funding his pet projects. One ad has called the pro-58 claim to be a tax-subsidy rollback instead of a tax increase a “scandal.”

Dan Hopkins, a spokesman for Coloradans for a Stable Economy, did not return a call requesting comment. Hopkins is the former spokesman for Ritter’s predecessor, Republican Gov. Bill Owens, a former oil and gas lobbyist who is on the executive board of the Western Skies Coalition.

That organization, which is set up to operate as a 501(c)(4) social-advocacy nonprofit and therefore is not required by the Internal Revenue Service to reveal its donors, has recently been running TV ads in key state Senate races portraying the Republican candidates as friends of renewable energy despite histories to the contrary.

Several sources told that Penry and McNulty helped form Western Skies in a bid to reclaim a GOP state Senate majority by 2010, and that the group is funded by many of the same oil and gas companies that have contributed to Coloradans for a Stable Economy. McNulty would not discuss funding for the group but did admit to signing the Western Skies Energy Action Plan pledge.

The pro-58 group A Smarter Colorado is set up as both an issues committee and 501(c)(4) nonprofit. While the initiative has a great deal of support from higher-education groups, the bulk of the more than $2 million raised by A Smarter Colorado came from the Nature Conservancy. All the group’s donors, as well as those of the opposition, are available on the Colorado Secretary of State’s Web site. That’s not the case with the Western Skies Coalition.

“There are reporting guidelines, particularly around the intervention in elections, that are getting fuzzy and are getting a little bit difficult to follow,” said David Donnelly, director of Campaign Money Watch, a Washington, D.C., 527 group that’s a project of a 501(c)(4) called Public Campaign Action Fund.

“When a 501(c)(4) spends money in the last 60 days of an election, which we’re in right now, it has to disclose to the Federal Election Commission how much money it spent and any donation for $1,000 or more that it has received for the purpose of that advertising.”

Which means the relentless ads from the fully disclosed groups opposing and supporting Amendment 58 will undoubtedly continue right up until Nov. 4, while Colorado voters have likely seen the last of the Western Skies ads this election cycle because of the group’s more subtle agenda and desire to remain anonymous.

“The law is pretty specific that if the donation is not solicited for a particular expenditure for a C4, you don’t have to report it,” Donnelly said. “There’s a lot of winking and nodding going on. I’m sure it’s happening all over the country as we speak with C4s.”



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