Obama released a TV spot saying McCain's campaign got $2 million from "Big Oil" while McCain proposed "another $4 billion in tax breaks" for the industry.
The truth is that McCain's campaign has received $1.33 million from individuals employed in the oil and gas industry, not $2 million. Obama himself has received nearly $400,000, according to the most authoritative figures available. We find the $2 million figure is based on a mistaken calculation.
Furthermore, McCain is not proposing new tax breaks specifically targeted to the oil industry. He's proposing a general reduction in the corporate income tax rate, which Democrats figure would benefit the five largest oil and gas companies by $3.8 billion.
Sen. Barack Obama's campaign released the ad Aug. 4. Its core claim is that McCain accepted $2 million in campaign contributions from "Big Oil" and is "in the pocket" of the industry. The Obama campaign even named the ad "Pocket."
Barack Obama… A windfall profits tax on big oil to give families a thousand dollar rebate. A president who'll stand up for you.
Obama:I'm Barack Obama and I approve this message.
An Inflated Figure
It's certainly true that McCain gets far more money from donors in the oil and gas industry than Obama does. And there's no question that McCain's recent support for expanding offshore drilling is a position that the industry favors. But the $2 million figure is inflated.
According to the nonpartisan Center for Responsive Politics--which both campaigns cite as authoritative from time to time--McCain had received $1,332,033 from persons in the oil and gas industry (both directly and through company-sponsored political action committees), not $2.1 million as the Obama campaign claims. Those are the most recent and authoritative figures available and are based on reports on file at the Federal Election Commission as of July 28.
The Obama campaign said it cobbled together its $2.1 million figure by adding one total from a report in the Washington Post, which said oil and gas donors gave $1.1 million to McCain in June, and an older total from CRP, which put the McCain campaign's total at just over $1 million through May 30. But that turns out to be adding apples to oranges, and it does not give an accurate figure for money that went directly to "John McCain's campaign," as the ad puts it. Much of the money given in June went to a joint fundraising venture of the McCain campaign, the Republican National Committee and several state GOP committees, an unknown portion of which was passed through to the McCain campaign itself.
The Post said its report was based on an analysis by the Public Campaign Action Fund, a group that advocates taxpayer financing of political campaigns. That group's Campaign Money Watch project released a report July 31, titled "It's a Gusher: As John McCain Fights For Big Oil, They Open Their Wallets." That report refers to $1.2 million that went to "McCain's Victory '08 Fund," a joint fundraising committee. The report does not say how much actually ended up in McCain's own campaign coffers and how much went to other Republican candidates and committees.
Furthermore, the figures given by the Post don't exactly match those in the Campaign Money Watch. David Miller of Campaign Money Watch told us the Post reporter "didn't actually see our report" but was briefed on preliminary findings a few days before the report was completed. David Donnelly, the national campaigns director of the Public Campaign Action Fund, defended the Obama campaign's ad: "There's a strong case to be made that more than $2 million was given by the oil and gas industry to advance John McCain's campaign." But he's counting money to various Republican party committees, for use in supporting McCain and other candidates as well.
We judge the $1.3 million figure from the Center for Responsive Politics, which includes any money transferred to McCain's campaign, to be the most authoritative tally of oil and gas donations to the campaign. And we conclude that the $2 million figure in Obama's ad is the result of counting some donations raised during June that actually went elsewhere.
In Big Oil's Pocket?
It bears repeating, as we've reminded readers before, that oil companies themselves don't make donations. It's illegal under federal law for corporations to donate directly to candidates and has been since 1918. The ad refers to donations from executives and employees of oil companies, given either directly or through company-sponsored political action committees, or PACs.
Both candidates accept donations from individual employees of oil companies. In fact, when Obama claimed in an ad last March that "I don't take money from oil companies," we criticized him for being a little too slick. The CRP puts Obama's total from oil and gas donors at $394,465.
Based on CRP's figures, McCain's oil and gas donations account for just 92 cents out of every $100 he's raised. Obama's oil and gas total comes to 12 cents per $100. That's a significant difference between the two candidates, and it's clear that the industry is favoring McCain with its donations. Whether that puts him "in the pocket" of the industry is a judgment we'll leave to our readers.
Correction, Aug. 6: Our original article incorrectly stated that McCain's oil and gas donations were 0.9 cents per $100 and Obama's were 0.1 cents per $100. We miscalculated the decimal place in both figures.
"Another $4 Billion"
The ad's claim that "McCain wants to give [oil companies] another $4 billion in tax breaks" is also somewhat misleading. McCain is not proposing any special tax breaks for the oil industry. What he's proposing is a reduction in the corporate income tax rate for all companies. The $4 billion figure that Obama and many Democrats have constantly repeated recently is their estimate of the amount by which oil company taxes would be reduced should this proposal be enacted without any additional offsets, such as closing of existing preferences or "loopholes."
McCain's proposal would cut the top corporate rate from 35 percent to 25 percent. It also would allow for immediate write-offs for companies buying new equipment and technology, and a tax credit of 10 percent of the amount companies spend on wages devoted to research and development. The Obama campaign points to an analysis by the Center for American Progress Action Fund from March 27, which estimated that the McCain plan would be worth a total of $3.8 billion per year to the five largest U.S.-based oil companies, Exxon/Mobil, Chevron, ConocoPhillips, Valero Energy and Marathon. That was based on 2007 earnings and tax figures. Since then, the industry's profits have risen substantially, so the reduction in corporate tax rates might benefit them even more by the time it could be enacted in a McCain administration. But the benefit would go to all companies, not just those in the oil business.
Republished with permission from factcheck.org.