Editorial: Dollars and politics

Nov. 10, 2008
The US oil and gas industry, politically unpopular and publicly misunderstood, spent its political money on a losing cause in this year’s general election.

The US oil and gas industry, politically unpopular and publicly misunderstood, spent its political money on a losing cause in this year’s general election. Campaign contributions associated with the industry favored Republicans. At the national level, the other party won.

For the oil and gas business, political weather is never calm. Since the gasoline price leaps that followed Hurricanes Katrina and Rita in 2005, it has been persistently stormy. Once Democrats, always cranky toward oil and gas, settle into new and newly fortified seats of power and notice where the industry spent its political money in the elections of 2008, things can only get worse.

Industry giving

According to the Center for Responsive Politics (CRP), which uses data from the Federal Election Commission, oil and gas giving in the 2007-08 election cycle as of Oct. 19 totaled slightly more than $26 million. That total ranked 16th on the CRP’s list of “top industries.” The number represents contributions by political action committees (PACs) and individuals giving at least $200. Of the total, $18.3 million came from individuals and $7.8 million from PACs.

The oil and gas industry’s giving fell well below levels by the CRP’s top five “industry” donor categories: retired, $204 million; lawyers and law firms, $181 million; securities and investments, $123 million; real estate, $105 million; and health professionals, $70 million. Other “industries” contributing more than oil and gas, in descending order, were candidate committees, business services, insurance, education, TV-movies-music, Democratic-liberal, leadership PACs (set up by politicians to contribute to other candidates’ campaigns), commercial banks, computers-internet, and lobbyists.

The oil and gas category was the only industry among the top 20 with a giving pattern characterized by the CRP as “strongly Republican.” Republicans received 76% of the donations associated with oil and gas. In fact, the industry was one of only three in the top 20 giving more heavily to Republican than to Democratic election efforts. Seventeenth-ranked general contractors and 19th-ranked “miscellaneous manufacturing and distributing” both earned “leans Republican” descriptions from CRP. All other industries in the top 20 were “on the fence” or tilted to varying degrees toward Democrats.

Oil and gas industry donations strongly favored the losing presidential candidate. The campaign of Sen. John McCain (R-Ariz.) received slightly more than $2 million from industry PACs and individuals. The campaign of president-elect, Sen. Barack Obama (D-Ill.), received $523,000. The oil and gas business ranked 12th on the CRP’s list of industries supporting McCain. It wasn’t among the top 20 industries supporting Obama.

The heaviest spending by oil and gas industry donors in congressional races produced mixed results. Twelve of the top 20 senators or senatorial candidates in receipts of oil and gas donations won their elections or were leading in close races at this writing. The top-20 list includes three senators who weren’t seeking reelection: Democrat Hillary Clinton of New York, who unsuccessfully sought her party’s presidential nomination, as well as Republicans Pete Domenici of New Mexico and Kay Bailey Hutchison of Texas. The top 20 list also includes both of the candidates in a single race: incumbent Louisiana Democrat Mary L. Landrieu, who ranked sixth and won, and Republican John Neely Kennedy, No. 11, who lost. The leading senatorial recipient of oil and gas contributions was Republican incumbent John Cornyn of Texas, who in a ranking of all leading recipients of oil and gas industry donations was No. 3 behind McCain and former presidential hopeful and New York Mayor Rudolph W. Giuliani. He won.

Scattered victories

All the top 20 House candidates in receipts from oil and gas donors, 14 Republicans and 6 Democrats, won or were the apparent winners of their elections. All but incumbent Roy Blunt (R-Mo.) are from producing states, mainly Texas and Oklahoma.

Scattered victories in Congress will provide little comfort amid the Democratic political tempest soon to batter the “strongly” Republican-leaning oil and gas industry. The experience will raise useful questions about campaign contributions. In the election cycle just ended, oil and gas political donors probably have bought a $26-million bull’s-eye.