Occidental lobbies for tax break

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During a routine oil industry meeting in Houston two months ago, Occidental Petroleum pushed for the renewal of a federal royalties exemption -- set to expire in November -- that lies at the heart of Vice President Al Gore's energy plan.

In fact, according to sources, Occidental has been the only oil company lobbying for the tax reprieve.

The Gore energy plan would extend the federal royalties exemption for deep oil and natural gas drilling in the Gulf of Mexico. The law providing the break passed in 1995, and will expire at the end of this year. There are several companies that now drill in the Gulf, but, as reported by syndicated columnist Robert D. Novak, only Occidental has been at the forefront of extending the royalty exemption.

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That fact would normally raise a so-what shrug, if not for the longstanding connection between the Gore family and Occidental. Newsweek reporter Bill Turque, in his recent biography of Al Gore -- "Inventing Al Gore: A Biography" -- traced the tight relationship between former Occidental CEO Armand Hammer and Sen. Al Gore, Sr.

When the elder Gore was defeated for re-election in 1970, he was given a high-paying job with Occidental's coal affiliate, and longtime Soviet apologist Hammer devoted himself to launching the younger Gore's career. He also provided the future vice president with a zinc-mining lease, Gore's income from which, "through the early 1990s, exceeded $300,000," wrote Turque.

Moreover, Gore can expect to inherit between $500,000 and $1 million in Occidental stock, and has received substantial income generated by the company. (A Gore spokesman has disputed the vice president's financial connection to Occidental. He said Gore neither owns nor benefits from the stock, even though it will go to Gore upon his mother's death.)

Gore aides contended that Occidental has no interest in pursuing the exemption. They said the company does not currently have an offshore lease and would require five years to get one.

"There's nothing here," Jodi Sakol, a Gore aide, explained to Novak.

But according to officials at the Mineral Management Service, a division of the Interior Department, Occidental heads up the industry's Deep Water Royalty Relief Act extension task force, which deals specifically with the exemption Gore included in his energy plan.

Occidental also was described by a Mineral Management Service official as "pushy" in lobbying for the exemption over the last several months. A source who attended the May meeting in Houston said Occidental even threatened to move to foreign shores if the exemption was not granted, a demand that angered Carolita Kallaur, associate director of the Mineral Management Service.

Other industry officials were surprised that Occidental was so aggressively lobbying for the exemption. According to a GOP Senate aide who handles energy issues, many industry officials believed the exemption "had run its course," and that the need for an extension was unnecessary.

Gore aides tried to deflect criticism of the issue by stressing Texas Gov. George W. Bush's connections to Big Oil. But, as columnist Novak wrote last week, "[N]o company enjoys the intimacy with Bush that Occidental does with Gore."

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