June 29, 2020

Whitehouse Presses Oil Corporations on Lobbying for Coronavirus Giveaway Worth Billions to Industry

Oil companies have claimed nearly $2 billion from NOLs provision in CARES Act

Washington, DC – Today, Senator Sheldon Whitehouse (D-RI) sent letters to Marathon Petroleum, ExxonMobil, Conoco Philips, Denbury Resources, and the Koch Companies requesting information on the corporations’ lobbying for a major corporate giveaway in COVID-19 relief legislation.  The loophole has allowed the companies to claim tax benefits worth hundreds of millions of dollars based on losses that had nothing to do with the COVID-19 pandemic.  Combined, oil companies have claimed nearly $2 billion from the Coronavirus Aid, Relief, and Economic Security (CARES) Act provision.

Over 121,000 Americans have died of COVID-19.  More than two million have been sickened by the disease.  Nearly 40 million Americans have lost their jobs,” Whitehouse writes.  “When Congress passed the [CARES] Act in March, our intent was to respond to the immediate healthcare and economic needs of Americans.  It was not to provide big corporations with large windfalls from tax loopholes, giveaways that will ultimately be paid for by American taxpayers.”

The CARES Act included two particularly problematic provisions that have enabled wealthy corporations and individuals to claim billions of dollars in tax benefits based in large part on losses that are unrelated to the coronavirus crisis.  According to the Joint Committee on Taxation, the two provisions will reduce government revenue by $160 billion over ten years.  Together, they are among the costliest provisions in the COVID-19 relief bill.

Whitehouse’s letter to the oil companies deals with one of the provisions, which alters treatment of net operating losses (NOLs) for corporations.  The adjustment to NOLs is of particular interest to oil companies.  Indeed, disclosures show one of the recipients of Whitehouse’s letter, Marathon Petroleum, lobbied for tax changes in the CARES Act; Marathon disclosed a $411 million windfall as a result of the NOLs changes in filings with the Securities and Exchange Commission. 

Full text of Whitehouse’s letter is below.  A PDF copy of his letter to Marathon is available here.

 

June 29, 2020

 

Michael Hennigan

President and CEO

Marathon Petroleum Corporation

539 South Main Street

Findlay, OH 45840

 

Dear Mr. Hennigan:

As the nation struggles with its largest public health crisis in over a century and confronts its deepest economic downturn in generations, I remain committed to ensuring that Congress provide needed financial assistance to Americans, small businesses, healthcare providers, and state and local governments.  Over 121,000 Americans have died of COVID-19.  More than two million have been sickened by the disease.  Nearly 40 million Americans have lost their jobs.

When Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March, our intent was to respond to the immediate healthcare and economic needs of Americans.  It was not to provide big corporations with large windfalls from tax loopholes, giveaways that will ultimately be paid for by American taxpayers.

Unfortunately, a few such loopholes were inserted into the CARES Act.  One of these concerns the treatment of net operating losses (NOLs).  Under section 2303 of the CARES Act, corporations are allowed to carry back NOLs from 2018, 2019, and 2020 for up to five years, allowing them to amend prior returns to receive bonus refunds.  It has been reported that this change in the tax code is particularly beneficial to oil and gas companies; already, more than three dozen oil and gas companies have claimed almost $2 billion in refunds under this provision.

Marathon Petroleum directly lobbied on CARES tax provisions and hired an outside firm to lobby on tax issues in CARES.  Marathon later claimed a $411 million windfall as a result of the NOLs changes in the CARES Act.

I request the following information regarding your lobbying on the CARES Act and the tax benefit you received as a result of it.  Please respond by July 10, 2020.

Please list the names of all executive branch officials your company or its representatives lobbied on the CARES Act or any other piece of legislation intended to address the coronavirus pandemic, the date(s) on which you communicated with them, and the subject matter discussed.

Has your company amended any prior returns as a result of section 2303 of the CARES Act?  Have you received any related refunds, and, if so, how much did you receive?

Does your company plan to amend any prior returns as a result of section 2303 of the CARES Act?  If so, how much do you anticipate receiving as a result of any such amended returns?

Has your company financially benefited or will it financially benefit from any other tax provisions in the CARES Act?  If so, how much money do you anticipate receiving as a result of such provisions?

What portion of any refunds resulting from section 2303 of the CARES Act do you plan to use to meet expenses pertaining to the COVID-19 pandemic?

Have you avoided layoffs, hired employees, or boosted employee compensation as a result of section 2303 of the CARES Act?  If so, please provide figures on affected jobs and compensation.

I thank you for your attention to this matter.

 

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