Energy bill a special-interests triumph

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Energy bill a special-interests triumph

 

By Susan Milligan, Globe Staff | October 4, 2004

 

Second of three parts

 

WASHINGTON -- Robert Congel has grand plans and a heady vision for his

upstate New York shopping complex. Billed as the biggest mall in the

world, the yet-to-be-built DestiNY USA would be filled with 400

retailers, thousands of hotel rooms, a 65-acre glass-enclosed indoor

park, a rock- and ice-climbing wall, and a theater suitable for

Broadway shows.

 

 

 

And if its patrons in Congress get their way, the mega-mall would be

partially funded through the federal energy bill, which would provide

$100 million in public money. A fervent lobbying campaign by Congel

paid dividends on Capitol Hill. When members of the House voted last

winter to ramp up domestic oil production, they also voted to help

Congel build the giant mall through tax-exempt " greenbonds. "

 

The greenbonds initiative -- so named because the developments it

funds are supposed to be energy efficient -- was among scores of items

stuck into the energy bill by lawmakers meeting behind closed doors.

These provisions had no official sponsors and weren't part of the

original documents approved by the House and Senate, but were added

later by unseen hands as the 816-page bill was crafted in a secret

conference.

 

Intended to lay out an energy policy for the nation for the first time

in more than a decade, the energy bill became a cash bonanza for

corporate interests in and out of the energy arena. The bill, which is

stalled because of a Senate filibuster but which is still one of

President Bush's top legislative priorities, features initiatives to

encourage production of new and existing energy sources. But it has

also become a phonebook-sized symbol of modern Washington lawmaking,

in which policy is driven by those who have money, power, and access

to a relatively small group of decision-makers.

 

A Globe analysis of tens of thousands of pages of lobbying records

shows that entities with a stated interest in energy policy spent

$387,830,286 lobbying Washington last year. They also paid tens of

millions of dollars in campaign contributions to officials putting

together the package at the White House and on Capitol Hill.

 

The Globe analysis shows that the corporations and others, including

some universities, were rewarded in the bill with tax breaks,

construction projects, and easements of regulations that would save

them much more than they spent making their arguments to the government.

 

In some instances, the beneficiaries were specific companies like Home

Depot, which spent $240,000 lobbying in hopes of gaining tens of

millions in savings. Home Depot -- whose PAC contributed the maximum

$5,000 to Bush's 2004 campaign and whose employees have contributed

$226,400 to Bush and the Republican National Committee this cycle --

benefits from a two-paragraph section in the bill to eliminate tariffs

on Chinese ceiling fans. The change would save Home Depot and other

companies a total of $48 million, according to the bipartisan Joint

Committee on Taxation.

 

Page 2 of 9 -- In other instances, entire industries spent tens of

millions of dollars to leverage billions in government funding and

deregulation.

 

 

 

The nuclear industry, which spent some $71,405,955 lobbying Capitol

Hill, would get $7.37 billion in tax breaks and projects, including

federal funds to construct a $1 billion nuclear plant in Idaho. The

plant, which would be the first nuclear plant commissioned in decades,

would also benefit the hydrogen fuels industry, because the nuclear

facility is intended to create hydrogen fuels.

 

Several large power companies, which spent tens of millions lobbying,

won a historic deregulation of their industry that would strip away

controls dating from the Depression on how they spend their money and

allow them to become conglomerates -- with little recourse for

ratepayers if the companies' speculative investments go sour.

 

Bush's biggest supporters would profit handsomely from the bill. Sixty

of Bush's 400 Pioneers and Rangers -- those who have committed to

raising at least $100,000 and $200,000, respectively, for the

Bush-Cheney reelection effort -- would benefit from the tax breaks,

subsidies, and deregulation in the bill, according to an estimate by

the Sierra Club.

 

Massey Energy of West Virginia -- whose director, James H. " Buck "

Harless, is a major Bush fund-raiser --would get hundreds of millions

of dollars in loan guarantees for a coal gasification plant. Harless

served on President Bush's energy transition team, a precursor to Vice

President Dick Cheney's Energy Task Force, which developed the

critical blueprint for the energy package on Capitol Hill.

 

" The problem is that this has just turned into more of a special

interests bill, " said Charlie Coon, an energy specialist with the

Heritage Foundation, a conservative think tank. " The bottom line is,

it's not going to provide the power that's needed for the economy so

people can turn on their lights. It's such a farce. "

 

Behind closed doors

 

The construction of the bill reflects the way business is done in

Washington in 2004: With Republicans enjoying control of both chambers

of Congress, plus the White House, GOP leaders in the House craft

giant bills behind closed doors, freezing out the minority party and

squelching dissent from moderate Republicans and lobbyists whose

agendas are unsympathetic to the GOP's goals, according to interviews

with members of both parties and former House members.

 

And while other bills have included their share of earmarked projects

or handouts to various industries or interest groups, the energy bill

is considered by consumer and environmental groups to be one of the

most extreme examples of excessive corporate giveaways.

 

" What's really amazing is how a combination of energy industry, oil

and gas industry, utility industry guys, coal industry guys, through a

whole host of policy decisions -- through the Environmental Protection

Agency or the energy bill -- literally got billions of dollars in

payback for millions of dollars " in contributions and lobbying

expenses, said Mark Longabaugh, senior vice president for

publicaffairs for the League of ConservationVoters.

 

 

Page 3 of 9 -- The bill first began to come together as an outgrowth

of Cheney's energy task force, a committee of Washington officials

that met in private to draft a sweeping national energy policy shortly

after Bush took office.

 

 

 

A study by the nonpartisan General Accounting Office last year found

that the energy task force received advice from private " energy

stakeholders, " mainly the petroleum, coal, nuclear, natural gas, and

electricity industries. The report said it was unable to determine the

extent of the influence these industries had on policy, because of the

limited information made available to the GAO.

 

But other records released under a court order show that 15

energy-related entities known to have had contact with the task force

ended up winning provisions in the energy policy that would benefit them.

 

The Edison Electric Institute, which had contact with the task force

14 times and spent $12 million lobbying Washington last year, secured

a historic deregulation of the electricity industry analysts believe

could be worth billions of dollars.

 

The Nuclear Energy Institute, which won billions in tax credits and

projects, had 19 contacts with the task force and dumped $1,280,000

into lobbying efforts in 2003. The nuclear industry also would benefit

from an extension and expansion in the energy bill of the Price

Anderson Act, which caps the financial liability nuclear power plant

owners face in case of a nuclear accident. While no new nuclear power

plant has been commissioned in decades, the bill envisions a rebirth

of the controversial power source.

 

Southern Company, an electricity company that spent $990,000 on

lobbying, would benefit from relaxed regulations on emissions of

mercury, a toxin released from power plants. Southern's executive vice

president and a paid lobbyist met with the task force, according to

records released pursuant to a lawsuit filed by the Natural Resources

Defense Council. The Environmental Protection Agency, which is set to

issue final rules next year, estimated that the deregulation of

mercury rules would save US power plants a total of $2.7 billion.

 

Members of the American Petroleum Institute, which had contact with

the task force six times and spent $3,140,000 lobbying last year,

would be eligible for billions in tax breaks and subsidies to

encourage domestic oil production.

 

Environmentalists, who were shut out of the task force, won little in

the final package after spending a small fraction of what the energy

industry spent on lobbying. The League of Conservation Voters, for

example, spent just $46,516 on lobbying last year; the Natural

Resources Defense Council spent $920,000, and the Union of Concerned

Scientists $150,000, according to an analysis of lobbying reports.

 

Industries that had contact with Cheney's task force had a critical

advantage, said Larry Noble, an analyst for the Center for Responsive

Politics, because they were able to plead their cases in the early

stages of the development of the energy policy. Continued...