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On Gulf Oil Spill Anniversary, Grijalva Says Questions Have to Be Answered – Including Why The Oil Industry Still Gets Big Subsidies

Washington, D.C.– On the one-year anniversary of the Deepwater Horizon oil spill that devastated the Gulf of Mexico, Rep. Raúl M. Grijalva said the region and the country deserve clear answers about how BP and other responsible parties are repairing the damage to the ecosystem and economy – and why oil companies continue to receive record tax giveaways that don’t help the economy.

In an April 14 op-ed he co-authored, Grijalva – the ranking member on the House Subcommittee on National Parks, Forests and Public Lands – called for an end to the approximately $40 billion in annual public subsidies oil and gas companies receive from the federal government, in addition to other policy changes that make up the Congressional Progressive Caucus “People’s Budget” proposal. BP used tax breaks specifically designed for the oil industry to write off 70 percent of the cost of leasing the Deepwater Horizon rig in 2010, a savings of $225,000 per day since the lease began, according to the New York Times.

“This isn’t a philosophical debate about whether corporate tax giveaways somehow help the middle class – this is clear evidence that BP and other companies are gaming the system at taxpayer expense,” Grijalva said. “BP shouldn’t be paid from the public treasury just to go about its daily business, but that’s exactly what’s happening thanks to the loopholes in our tax code.”

Beyond the issue of tax treatment, Grijalva said, BP needs to clarify how its Gulf recovery payout program is achieving its stated goals. A recently published review by the Associated Press showed that BP has cut large checks to state and local governments with little oversight of how the money is being spent or whether it’s going directly to mitigate the effects of the spill.

As the AP reported April 11:

Louis Skrmetta, one of the tens of thousands of business owners and individuals still waiting to get a share of a $20 billion claims fund established by BP, finds the state and local governments’ spending galling, even if it’s almost all BP’s money.

Skrmetta runs a three-boat fleet that has a contract with the National Park Service to ferry day trippers to Ship Island, a recreation area about 10 miles offshore from Gulfport, Miss. He can't understand why BP paid so much to governments while businesses were suffering.

“I didn’t think there was much logic in it,” Skrmetta said. “Now, looking back in retrospect, it was a way to win over politicians, a way to win over the media.”

“BP has a responsibility to make sure its recovery efforts are focused on those who need it most,” Grijalva said. “Indiscriminate payouts have not led to the visible and transparent recovery the region deserves. The company needs to make clear how it will address this. Simply writing a check and washing its hands of the process is not enough.”

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