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The [Thursday] Papers

Last April, the Associated Press reported the following:

"Exxon Mobil Corp., the world's largest oil company, reported Thursday the fifth highest quarterly profit for any public company in history, posting gains from higher oil prices that were likely to stoke the furor over outsized oil company earnings."

The AP went on to note that "In January, Exxon posted the highest quarterly profits of any public company in history: $10.71 billion for the fourth quarter of 2005 and $36.13 billion for the full year."

But to hear the industry talk, these are the worst of times to be oil and gas bidness. Seems the greatest beneficiary of high gas prices isn't the oil industry, but government.

On today's New York Times op-ed page, for example, an ExxonMobil advertisement states that the company's U.S. tax bill over the last five years totalled $57 billion, "exceeding our total U.S. earnings during that time by $22 billion."

When the world's largest oil company tells you they paid more in taxes than they earned, you're either dealing with the worst-run company in the world or they're lying.

After all, ExxonMobil is asking you to believe that in the last five years, it took in $35 billion in U.S. earnings and then paid out $57 billion in taxes. Perhaps they put their tax bill on a credit card?

The ad is a lesson in obfuscation. Earnings are not to be confused with revenue. As I understand it, revenue is the amount of money a company takes in from all sales. Earnings is what's left over after operating expenses and taxes. It is also known as profit.

I'm not a financial expert, and I haven't researched this, but what ExxonMobil is probably trying not to say is that the company's U.S. tax bill in the last five years totalled $57 billion - a percentage of a much larger number representing total revenue. What was left over after paying those taxes and expenses was a $22 billion profit. That's more than $4 billion annually.

Then again, that can't be right, because the AP report says the company's 2005 profit was $36.13 billion. Perhaps the company lost money the previous four years.

See, I'd have more sympathy for the oil industry if I didn't feel like they were ripping me off at the pump and then lying about it in the newspaper. Because I don't even know what those numbers really mean. I just know they don't add up to the truth.

What I do know is that the ad is part of a concerted effort by the industry to shift attention away from profits and toward taxes. David Sykuta of the Illinois Petroleum Institute has apparently gotten the memo, and that's why he's peddling an industry talking point about the role of taxes in high gas prices instead of the role of high gas prices in high gas prices. (See the You've Got Gas item here.)

Last spring, ExxonMobil, reacting to bad press and consumer outrage about the company's outlandish profits, reached out to conservative media to plant its meme.

"I participated in a blogger conference call with Ken Cohen, Vice President of Public Affairs of ExxonMobil," Wizbang! wrote then. "Ken was very gracious with his time and answered many, many questions.

"Cohen says that the current negative press surrounding his company's profits has more to do with a lack of understanding of the oil industry than anything else," Amy Ridenour wrote on her National Center blog. "In this regard, he says, ExxonMobil needs to do a better job communicating with the public and helping folks understand all of the forces at play in the oil business."

Some folks were already on board. "The latest annual earnings for ExxonMobil have shattered U.S. annual corporate-profit records," said Investor's Business Daily, in a piece that was republished by the Tax Foundation on its website. "So, predictably, some politicians and pundits are back on the oil-bashing bandwagon that began rolling last fall.

"This is really going to make people mad," said Rush Limbaugh, of The Limbaugh Institute.

Forbes on Fox produced a panel called "Want Lower Gas Prices? Cut Taxes on Big Oil!"

As I've written this week, Chicago's high gas prices are certainly worth investigating as a reporting enterprise - including the city's tax structure. But this much effort to divert attention away from the actual cost of gas probably means that that actual cost of gas, not taxes, is where reporters ought to be looking.

Oil Safari
And that might be just what the Tribune's Paul Salopek did, but I have yet to hear anyone mention what looks from a distance to be a terrific project. Is it too terrific? Perhaps readers have set it aside just as I have and not yet gotten to it?

Exxon Admission
"ExxonMobil Swears It's Going To Start Taxes Early This Year."

The "N" Word
"Chicago politicians are always certain to provide interesting copy," N'Digo Publisher Hermene Hartman writes in the current issue (not yet available online). "But the recent headline on the Sun-Times' front page, 'Mayor Mocks Meeks,' is absolutely ridiculous. A White politician should never get into a verbal confrontation with a Black minister over the 'N' word.

"Perhaps it was a slow news day, because the Sun-Times missed Rev. James Meeks' (of the Salem Baptist Church) point in using the word nigger during one of his sermons, and took him greatly out of context. Additionally, the sermon that they reported on was three weeks old. Why is the media so up in arms about Rev. Meeks using the word nigger?

"The word nigger is a shock word. And its meaning depends on who said it, under what conditions, the tone of the voice, and where it was said. It can be degrading, or it can be endearing for some. The dynamic of the word is complex.

"White people created the word to demean Black Americans, Negroes, and/or African Americans. It was used as a slave word. White folks use the word differently than Black folks.

"When Richard Pryor would say it in his comedy routines, it was funny. But when White supremacist Matthew Hale uses it, you want to fight.

"Meeks was preaching a sermon, and making a point. The point was missed by mainstream medium, which is often the case for Black leaders."

Hartman goes on to address that point, which is that the educational gap in the Chicago Public Schools is "a failure by all standards of calculation." She also asks if the decline and corruption in the city's affirmative action program is "nigger treatment."

Again, Hartman's column can be found in the August 10 - August 16 issue of N'Digo. Pick it up, it's a worthwhile read.

The Beachwood Tip Line: Tax-free.



Permalink

Posted on August 17, 2006


MUSIC - The Weekend In Chicago Rock.
TV - Cricket vs. Brexit.
POLITICS - Corporate Spies Like Us.
SPORTS - Why Was This Game Even Scheduled?

BOOKS - Postdictatorship Argentina.

PEOPLE PLACES & THINGS - Public Lands Matter.


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