Why is an oil stock owning Congress member pushing to end EV tax credits?
Yesterday we reported that Rep. Kelly proposed legislation to end the Bush era $7500 electric car tax credit, while being an unashamed hater of electric cars who owns a Chevrolet car dealership. Today reports surfaced that Rep. Kelly also owns millions of dollars worth of oil company stock, and our minds leap immediately to the idea many of us share that the oil companies want to kill electric cars.
The theory that oil companies want to kill electric cars is shared by so many of us, is so obviously plausible (e.g. if electric cars are commonplace wouldn't the the oil companies want to stop it?), that the facts of Rep. Kelly's life seem like a walking talking breathing example of this idea in real life. But does that mean the oil industry wants to kill electric cars? No, not necessarily. Rep. Kelly is not the oil industry, he's a Congressman who owns a car dealership and owns (or owned) a large quantity of oil company stock. There is a difference.
To reiterate yesterday's story, HR3768 was filed last week by Rep. Kelly and would terminate the section of the U.S. Tax Code that grants a tax credit of up to $7500 for purchases of electric cars. It was noted yesterday that Rep. Kelly owns a Chevrolet car dealership originally started by his Father, that was nearly closed during the GM bankruptcy proceedings early in Obama's Presidency, and that he's on record with a long series of statements bashing electric cars in general and the Volt in particular. (see Rep. Kelly's HR 3768 proposes repeal of electric car $7500 tax rebate) This is happening in the context of the budget showdown just before Christmas that, as a side effect, killed a couple small tax credits for electric vehicle infrastructure. (see Overhyped bashing of electric car charging station subsidies in the Washington Post and Electric Vehicle charging station tax credits a victim of US Govt budget battles)
Thanks to a report on the ThinkProgress blog we learned today that Rep. Kelly also owns millions of dollars worth of stock in two small Pennsylvania oil companies that are oh-by-the-way engages in hydraulic fracturing (fracking) operations in the Marcellus Shale formation. Financial disclosures filed last May do show ownership stakes in these and other companies. However a flurry of news reports in July indicate Rep. Kelly's office claims that Kelly sold off his stakes in these oil companies.
According to Rep. Kelly's financial disclosure dated May 15, 2011, that he: a) earns $146,000 per year salary from Kelly Chevrolet, the auto dealership he owns; b) his ownership stake in the Kelly Chevrolet and the land it sits on is worth over $10 million; c) he personally owns "partnership" stakes in PC Exploration, Campbells Gas Partners, Phillips Resources, and TWP Inc that appear to collectively earn between $100,000 to $1 million per year in dividends; d) he bought a large chunk of General Motors stock on Nov 23, 2010, shortly after his election to the House of Representatives; e) he still serves as President of Kelly Chevrolet and Kelly Hyundai.
The value of requiring financial disclosure by political leaders is it lets us see the potential for conflict of interest. In this case we see a sitting Congressman whose personal interests would be harmed by the large scale reduction in oil consumption which would result from large scale adoption of electric vehicles. Oil is primarily used as transportation fuel, and for oil companies to continue having customers requires that oil continues to be the fuel that drives our transportation system.
While its debatable or unproven that "the oil companies" really want to kill electric cars, they do have the motive to do so. Rep. Kelly's law (HR3768) is the most obvious "connecting of the dots" we've seen in a long time between this theory ("oil companies want to kill electric cars") and actual actions by anybody associated with an oil company.
Additionally the ThinkProgress blog post demonstrates sheer hypocrisy on the part of Rep. Kelly. Specifically, he is quoted from a Town Hall meeting last summer defending subsidies for oil companies because "number one, we want companies to be profitable". Specifically he was asked "How can you justify continuing subsidies for oil companies with record profits while cutting vital services for working families? Oil companies don’t need subsidies and working families shouldn’t have to pay for them with.." Rep. Kelly cut off the question to launch into talking about pensioners whose pension funds own oil company stock, before saying "number one, we want companies to be profitable". Rep. Kelly himself, at that moment in time he spoke that question, appears to have owned a large chunk of oil company stock that was earning him personally hundreds of thousands of dollars per year in dividends.
Where this becomes hypocrisy is Rep. Kelly's USA Today op-ed piece in December calling for killing electric car tax credits. The op-ed discussed at length the wrong-headedness of governments subsidizing corporations, while as we've seen he is on record supporting subsidies for oil companies. Perhaps it would have been honest of him to write that subsidies for companies that pay dividends to Rep. Kelly's bank account are okay, but subsidies to corporations which would harm companies whose stock Rep. Kelly owns/owned is not okay. But to both defend subsidies to corporations and to also say subsidizing corporations is wrong-headed, is nothing short of hypocrisy.
To add to the appearance of hypocrisy, Rep. Kelly's office issued a press release today concerning HR3768 stating the bill is intended to solve the U.S. debt crisis, that the country cannot afford trillion dollar deficits and that he'll fix this by terminating "an electric vehicle tax credit that has cost tens of millions of dollars". Let's get this right, the tax credit in question is .001% of the national debt, and this will fix the budget problems? Rep. Kelly, may we suggest some remedial math courses?
P.S. please don't shoot me if I got the math wrong on the .001% ...