Senators Supporting Ethanol Subsidies Reap Riches From Corn Interests

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OpenSecrets Blog

Senators Supporting Ethanol Subsidies Reap Riches From Corn Interests

by
Michael Beckel

In habitually
partisan Washington, D.C., a bipartisan group of senators late last
month helped extend contentious federal tax provisions designed to aid
domestic ethanol production.

The senators
mostly shared common ground on two fronts: geography and contributions
from the political action committees of ethanol producers, high-profile
ethanol promoters and the leading industry groups for corn, a Center for Responsive Politics analysis indicates.

This
bipartisan group of 15 senators signed a letter in late November
demanding an extension of U.S. ethanol subsidies, and they have received
notable campaign contributions during the past six years from
pro-ethanol companies and interest groups. 

These senators each collected, on average, $5,000 from bioengineering and agricultural chemical company Monsanto, $4,100 from farming giant Archer Daniels Midland, $1,600 from the National Corn Growers Association, $1,200 from ethanol producer POET LLC and $200 a piece from Growth Energy and the Iowa Renewable Fuels Association. (You may download a spreadsheet showing the Center's calculations of
these totals and the itemized totals for all senators signing either
letter here: EthanolMoney2010.xls)

The leading Republican behind the letter was Sen. Chuck Grassley
(R-Iowa), who argued in the pro-ethanol missive that "allowing the
provisions to expire or remain expired would threaten jobs, harm the
environment, weaken our renewable fuel industries and increase our
dependence on foreign oil." (Letter available as a pdf file here, via the Washington Post.)

Since
January 2005, Grassley's political committees have received about
$36,000 from the PACs of the Monsanto, POET LLC, Archer Daniels Midland,
the National Corn Growers Association, Growth Energy and the Iowa
Renewable Fuels Association, according to research by the Center for
Responsive Politics. Because senators run for re-election every six
years, using data for six-year periods gives a more complete -- and more
accurate -- picture of what interests are bankrolling a senator.

Grassley's office told OpenSecrets Blog that campaign contributions from ethanol supporters do not influence the senator's thinking on the issue.

"Sen.
Grassley's campaign committee takes contributions that are legal and
have no strings attached," Beth Levine, Grassley's press secretary, told
OpenSecrets Blog.
"Sen. Grassley fights for ethanol because it's good for our national
security, it's good for our environment, and it's good for good-paying
jobs."

Sens. Kit Bond (R-Mo.), Tom Harkin (D-Iowa) and Ben Nelson
(D-Neb.), who all signed onto Grassley's letter, have each received at
least $20,000 to their campaign committees and leadership PACs from
these same ethanol-supporting political action committees since January
2005, according to the Center's research.

And Sens. John Thune (R-S.D.) and Kent Conrad (D-N.D.), who likewise signed the pro-ethanol letter, each received between $10,000 and $15,000 from these interests as well.

Among all pro-ethanol letter-signers, only Sen. Sam Brownback
(R-Kan.) collected no money from any of these six companies and trade
groups. (Brownback is retiring from the Senate in January, having been
elected governor of Kansas.) 

Like Grassley,
Nelson stressed the economic benefits of ethanol in his home state as
the reason for his support for the tax provisions.

"Sen.
Nelson supports the extension of the ethanol tax credit because it will
promote renewable energy, jobs and economic development in Nebraska,
the number two corn-producing and number two ethanol-producing state in
the country," Jake Thompson, Nelson's communications director, told OpenSecrets Blog.
"That's why he wants the ethanol tax credit extended, not because of
campaign contributions from either supporters or opponents of ethanol."

MINIMAL CORN INDUSTRY SUPPORT FOR ANTI-SUBSIDY LAWMAKERS 

A separate letter deeming
the extension of the ethanol subsidies "fiscally irresponsible and
environmentally unwise" was also recently produced by a different
bipartisan group of senators. Major ethanol-supporting interests,
however, doled out only scant amounts of campaign money in the last six
years to these 17 lawmakers.

The only beneficiary of the National Corn Growers Association's PAC to sign the anti-ethanol letter was Sen. Robert Bennett (R-Utah),
who is retiring after being defeated by conservative Republican Party
activists in Utah earlier this year. Bennett received $1,000 in 2008. 

Sen. Barbara Boxer (D-Calif.)
was the only beneficiary of Archer Daniel Midlands' PAC cash to sign
onto the letter opposing the extension of the ethanol tax provisions.
She's raised $3,000 from Archer Daniels Midland's PAC since 2008.

None
of the anti-ethanol letter-signers have raised any money from the Iowa
Renewable Fuels Association, Growth Energy and POET LLC in the last six
years, according to the Center's research.

Meanwhile,
five of the 17 lawmakers who signed letter urging the expiration of the
ethanol tax provisions have received relatively meager donations from
Monsanto -- totaling $12,000 --- in the last six years: Sens. Richard Burr (R-N.C.), Tom Coburn (R-Okla.), Jon Kyl (R-Ariz.), Mike Enzi (R-Wy.), Boxer and Bennett.

Frederick
Boehmke, an associate professor of political science at the University
of Iowa, said the disparity in cash from ethanol supporters between
senators in each camp is telling.

"Groups look for members who are predisposed to support their positions," Boehmke told OpenSecrets Blog.
"They are usually targeting people who are predisposed to support their
positions and trying to get them to devote some energy to helping them
out."

And if a politician bucks a supporter by a
stance they take? Boehmke said there is some political risk for
lawmakers, but also the flexibility to be independent and make up their
own minds.

"They run the risk of not receiving
support from that group in the future," he said. "But members of
Congress usually aren't going to sell their vote for $5,000, the legal
limit of what a PAC can give."

During the past six year, most of
the 17 senators who signed the anti-ethanol subsidy letter have received
significant campaign contributions from key organizations who
themselves publicly opposed the ethanol subsidy extension.

For example, the Grocery Manufacturers Association
has spread $41,500 to eight of these 17 senators during the past six
years, with Susan Collins (R-Maine), Mark Warner (D-Va.), Burr, Enzi and
Bennett each receiving at least $5,500.

The American Meat Institute and National Chicken Council have each donated $17,500 and $13,000, respectively, to six of the 17 senators.

The oil and gas industry
- another outspoken critic of ethanol subsidies and one of the most
powerful political forces in Washington - has likewise generously
donated to the political campaigns of a number of these senators.

Burr,
for one, has received $191,500 from people and PACs associated with the
industry during the past six years. For Bennett, it's $157,200, and
Kyl, $145,000.

SIGNIFICANT PROFITS AT STAKE 

At
stake this month for ethanol supporters was a 54 cent-per-gallon tariff
on ethanol imports, and a 45 cent-per-gallon tax credit for blending
ethanol into gasoline, known as the Volumetric Ethanol Excise Tax
Credit.

Both measures would have expired at the
year's end but are now extended through December 2011 as part of the
tax relief and unemployment insurance extension legislation that
President Barack Obama signed into law on Friday. 

In
addition to building relationships with federal lawmakers through
campaign contributions, companies and special interests supporting
ethanol subsidies are this year spending millions of dollars to lobby
the federal government.

Between January and September, Monsanto,
which bioengineers corn designed to produce the most ethanol per acre,
has also spent $6.6 million on federal lobbying efforts, according to
the Center's research. Archer Daniels Midlands, a leading producer of ethanol and biodiesel, meanwhile, spent $1 million on its lobbying efforts.

Ethanol producers Growth Energy and POET LLC have spent $1.2 million and $700,000, respectively, on lobbying this year, according to the Center's research.

The National Corn Growers Association, meanwhile, has spent $390,000 on lobbying this year.

The Iowa Renewable Fuels Association, another trade group, does not currently hire federal lobbyists. 

A CONTINUING BATTLE  

As
the fight about these tax incentives continue in 2011, officials at
ethanol-producing companies such as POET LLC and Growth Energy hope they
will continue to win supporters -- regardless of party lines and
regardless of geography.

"We think in the near
future support will broaden beyond Midwest," said Nathan Schock,
director of public relations at South Dakota-based POET LLC.

"There
is abundant cellulose in every state," Schock continued, highlighting
his company's push to produce cellulosic ethanol, which can be made from
corncobs, grasses and other plants not exclusive to the Midwest.

In
the meantime, ethanol supporters will continue to raise their political
profile within an energy sector that has long been dominated by
big-spending oil and natural gas interests. And they will continue to
use campaign contributions as part of this outreach.

"Like every industry, we support candidates who understand and support our issues," Schock told OpenSecrets Blog.

His peer at Nebraska-based Growth Energy agreed.

"Growth
Energy's political support has been directed toward those lawmakers who
have demonstrated their commitment to renewable fuels, like ethanol,
and rural America," Chris Thorne, Growth Energy's director of public
affairs, told OpenSecrets Blog

"Ethanol
could never match our political opponents dollar for dollar," Thorne
continued. "Big Oil and Big Food flood Washington, D.C., with lobbyists,
paid media and campaign donations. But even while we fight above our
weight class, we can win the debate because the facts are on our side."

But
a novel -- even bizarre -- coalition of special interest groups may
also factor into the future of domestic ethanol subsidies. 

Although
unsuccessful this year, 60 advocacy groups from across the ideological
spectrum united to oppose ethanol subsidies, criticizing them as
wasteful. These detractors included Democratic-aligned activist group
MoveOn.org, Public Citizen, the Sierra Club, the American Bankers
Association, the National Taxpayers Union, the libertarian Competitive
Enterprise Institute and Tea Party-aligned FreedomWorks. 

This anti-ethanol subsidy letter marked
the first occasion -- and perhaps, not the last -- that adversaries
MoveOn.org and FreedomWorks had cooperated on an issue.

Center for Responsive Politics researcher Spencer MacColl contributed to this report

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