Obama's Overstatement

The Post said its report was based on an analysis by the Public Campaign Action Fund, a group that advocates taxpayer financing of political campaigns. That group's Campaign Money Watch project released a report July 31, titled "It's a Gusher: As John McCain Fights For Big Oil, They Open Their Wallets." That report refers to $1.2 million that went to "McCain's Victory '08 Fund," a joint fundraising committee. The report does not say how much actually ended up in McCain's own campaign coffers and how much went to other Republican candidates and committees.

Furthermore, the figures given by the Post don't exactly match those in the Campaign Money Watch. David Miller of Campaign Money Watch told us the Post reporter "didn't actually see our report" but was briefed on preliminary findings a few days before the report was completed. David Donnelly, the national campaigns director of the Public Campaign Action Fund, defended the Obama campaign's ad: "There's a strong case to be made that more than $2 million was given by the oil and gas industry to advance John McCain's campaign." But he's counting money to various Republican party committees, for use in supporting McCain and other candidates as well.

We judge the $1.3 million figure from the Center for Responsive Politics, which includes any money transferred to McCain's campaign, to be the most authoritative tally of oil and gas donations to the campaign. And we conclude that the $2 million figure in Obama's ad is the result of counting some donations raised during June that actually went elsewhere.

In Big Oil's Pocket?
It bears repeating, as we've reminded readers before, that oil companies themselves don't make donations. It's illegal under federal law for corporations to donate directly to candidates and has been since 1918. The ad refers to donations from executives and employees of oil companies, given either directly or through company-sponsored political action committees, or PACs.

Both candidates accept donations from individual employees of oil companies. In fact, when Obama claimed in an ad last March that "I don't take money from oil companies," we criticized him for being a little too slick. The CRP puts Obama's total from oil and gas donors at $394,465.

Based on CRP's figures, McCain's oil and gas donations account for just 92 cents out of every $100 he's raised. Obama's oil and gas total comes to 12 cents per $100. That's a significant difference between the two candidates, and it's clear that the industry is favoring McCain with its donations. Whether that puts him "in the pocket" of the industry is a judgment we'll leave to our readers.

Correction, Aug. 6:  Our original article incorrectly stated that McCain's oil and gas donations were 0.9 cents per $100 and Obama's were 0.1 cents per $100. We miscalculated the decimal place in both figures.

"Another $4 Billion"
The ad's claim that "McCain wants to give [oil companies] another $4 billion in tax breaks" is also somewhat misleading. McCain is not proposing any special tax breaks for the oil industry. What he's proposing is a reduction in the corporate income tax rate for all companies. The $4 billion figure that Obama and many Democrats have constantly repeated recently is their estimate of the amount by which oil company taxes would be reduced should this proposal be enacted without any additional offsets, such as closing of existing preferences or "loopholes."

McCain's proposal would cut the top corporate rate from 35 percent to 25 percent. It also would allow for immediate write-offs for companies buying new equipment and technology, and a tax credit of 10 percent of the amount companies spend on wages devoted to research and development. The Obama campaign points to an analysis by the Center for American Progress Action Fund from March 27, which estimated that the McCain plan would be worth a total of $3.8 billion per year to the five largest U.S.-based oil companies, Exxon/Mobil, Chevron, ConocoPhillips, Valero Energy and Marathon. That was based on 2007 earnings and tax figures. Since then, the industry's profits have risen substantially, so the reduction in corporate tax rates might benefit them even more by the time it could be enacted in a McCain administration. But the benefit would go to all companies, not just those in the oil business.

Republished with permission from factcheck.org.

Sources
Mosk, Matthew. "Industry Gushed Money After Reversal on Drilling." Washington Post, 27 July 2008.

Center for American Progress Action Fund. "The McCain Plan to Cut Oil Company Taxes by Nearly $4 Billion," 27 March 2008.

Obama'08. "Senator Barack Obama Announces Emergency Economic Plan," news release 1 Aug 2008.

The Associated Press. "McCain hits Obama on windfall profits tax," 17 June 2008.

Campaign Money Watch: "IT'S A GUSHER: As John McCain Fights For Big Oil, They Open Their Wallets," 31 July 2008.
 

with Emi Kolawole

© 2008