November, 15 2012, 02:50pm EDT
For Immediate Release
Contact:
Phineas Baxandall
Senior Tax and Budget Analyst
U.S. Public Interest Research Group
Phineas@pirg.org
617-747-4351
Â
True Amount of BP Settlement Will Depend on Hidden Tax Giveaways
WASHINGTON
Today, BP agreed to a $4.5 billion settlement to resolve felony and misdemeanor charges related to the Gulf oil spill, but taxpayers may end up indirectly covering up to 35 percent of that amount if the company is allowed to take the settlement as a tax write-off.
"The judge shouldn't approve this settlement if BP could pass off much of this settlement cost onto taxpayers," said Phineas Baxandall, the Senior Tax and Budget Policy Analyst at the U.S. Public Interest Research Group (U.S. PIRG). "Especially in the context of pressing budget shortfalls, every dollar BP writes off means an additional dollar Americans will pay in the form of higher taxes, budget cuts, or more national debt."
According to news accounts, BP has agreed to increase its existing $38.1 billion charge against earnings for the spill by $3.85 billion. The company has already written off almost $10 billion of these costs as tax deductions. If the company treats the entire new amount as a normal deductible business cost, then the oil and gas giant could reduce its future tax bills by an additional $1.3 billion. The total net cost to BP of the settlement would then be only $2.5 billion.
At issue is whether, by agreeing to a settlement, lawyers for BP can assert that these costs are not punitive, even though they are clearly for wrongdoing that brought criminal charges.
BP is expected to pay billions more in a future settlement related to violations of the Clean Water Act and other environmental laws. Whether or not those expenses would be tax deductible will depend on the exact deal those federal agencies negotiate.
"Paying settlements for causing disasters like the Gulf spill is supposed to teach a lesson to corporate wrongdoers. To the extent that taxpayers pick up the tab, it becomes political theater. BP and the Department of Justice both get to tout a big number that isn't real," said Baxandall.
In fact, when a company negotiates a tax-deductible settlement for its misdeeds, the public loses out four times over. First, the public suffers the direct impact of corporate wrongdoing. Second, taxpayers are forced to shoulder the forgone revenue by raising tax rates, cutting public programs, or adding to the national debt. Third, future deterrence of corporate wrongdoing is weakened. And fourth, the absence of a trial eliminates opportunities for a public airing of evidence about corporate misdeeds and the lax regulations that can lead to them.
A 2012 report by U.S. PIRG on the tax deductibility of costs from corporate wrongdoing can be found here.
U.S. PIRG, the federation of state Public Interest Research Groups (PIRGs), stands up to powerful special interests on behalf of the American public, working to win concrete results for our health and our well-being. With a strong network of researchers, advocates, organizers and students in state capitols across the country, we take on the special interests on issues, such as product safety,political corruption, prescription drugs and voting rights,where these interests stand in the way of reform and progress.
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Violent Arrest of Emory Professor Spotlights Brutality of Police Crackdown on Campus Protests
"To sustain this level of blind support for Israel, the U.S. must erode its own democracy," said one foreign policy expert. "And that is what we see happening on U.S. campuses now."
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Emory University economics professor Caroline Fohlin approached several police officers who were holding a student down on the ground on Thursday and demanded an explanation—but by the end of the day videos of her own arrest became some of the most widely circulated images of the rapidly spreading anti-war movement on college campuses across the U.S.
As she knelt down to ask the university officers, "What are you doing?" another law enforcement agent grabbed her arm and pushed her away before repeatedly ordering her to "get on the ground."
"Stop it!" Fohlin yelled before the officer pushed her to the ground and called for more police to help subdue her.
Fohlin then screamed, "Oh my God!" as the police pushed her down and told the police that she was a professor at the university as they held her on the ground.
Fohlin's arrest—after which she was detained for 11 hours and then charged with "battery of a police officer"—came a week after Columbia University suspended more than 100 students for setting up an encampment in solidarity with Gaza, where more than 34,000 Palestinians have been killed by the U.S.-backed Israel Defense Forces (IDF) since October, and allowed police to arrest them. The mass arrests only served to galvanize students and faculty at Columbia and at dozens of other schools, with more than 400 peoplebeing detained so far.
The American Association of University Professors called the arrest "antithetical to the mission of higher education."
"Our institutions exist to foster robust exchanges of ideas and open dialogue in service of knowledge and understanding," said the group. "Sometimes that includes open dissent. Peaceful campus protests should never be met with violence."
Foreign policy expert Trita Parsi suggested that Fohlin's arrest was among the on-campus incidents that have strained the Democratic Party's argument that "democracy is on the ballot in November."
"To sustain this level of blind support for Israel, the U.S. must erode its own democracy. And that is what we see happening on U.S. campuses now," said Parsi, executive vice president of the Quincy Institute for Responsible Statecraft, sharing a video of police tasing an Emory student who was already being held down on the ground.
Emil' Keme, a professor of English and Indigenous studies at Emory, toldDemocracy Now! on Friday that the scene on campus resembled "a war zone," especially after university and Atlanta police deployed tear gas and rubber bullets to disperse protesters.
"I started feeling the tear gas, and I held arms with some people," he said. "We were being pushed back out of the encampment. And the student I was holding arms with, she was then arrested and the next thing I knew I was on the floor and I was being arrested."
Writer Abdullah Shihipar said Emory president Gregory Fenves—and all university administrators who have allowed the arrest of students who have peacefully protested, including several who have unilaterally altered school codes in order to ban protests—should resign.
"It has been a disgusting and embarrassing week for higher education," said Shihipar.
The crackdown on Emory students and faculty came a day after Texas state troopers descended on the University of Texas at Austin campus, some on horseback, and clamped down on a student walkout there, arresting more than 50 protesters.
Also on Thursday, students at Indiana University and Ohio State University (OSU)—where more than 30 and a dozen students were arrested, respectively—reported seeing snipers stationed on the rooftops of campus buildings, which an Ohio State representative denied.
The Biden administration has not directly addressed the protests or their demands since Monday, when President Joe Biden suggested the nationwide student uprising is "antisemitic."
"The use of state violence against peaceful protestors is unacceptable," said Sara Haghdoosti, executive director of Win Without War. "Police batons deployed against students calling for peace in Gaza are not a source of safety on campus, nor are they a bulwark against antisemitism. They hurt people, impinge on fundamental liberties, and serve an extreme right-wing agenda that threatens Jews, Muslims, and the right to protest across the country. University leaders and government officials must take steps to protect students exercising their right to protest, not enlist police to attack them."
"Antisemitism and anti-Muslim bigotry are on the rise and serious issues nationwide, including on college campuses," continued Haghdoosti. "The people endangered by these scourges deserve better than to be the targets of cynical political ploys or to be used as excuses for violent repression. No one is made safer by police violence, and politicians who say otherwise are only attempting to sow division for their own reprehensible ends. What we need from our leaders right now is to de-escalate, permit protests, and not allow state violence against people exercising their fundamental rights."
Irene Khan, the United Nations special rapporteur on the promotion and protection of the right to freedom of opinion and expression, said Thursday that the protests spreading across the U.S. and internationally are a sign that "the Gaza crisis is truly becoming a global crisis of the freedom of expression."
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On Friday, MSF published unnerving testimony from several members of its staff, including Dr. Ruba Suliman, who works at the Indonesian Field Hospital in Rafah, an overcrowded city in southern Gaza that Israeli forces are preparing to invade.
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