Big Oil spent millions on both parties in California — to stop taxes on their profits from price-gouging

On Monday, The Sacramento Beereported on how political groups funded by oil companies spent millions in California to elect both Republicans and moderate Democrats — in large part, to head off threats the state would tax windfall profits after a year of accusations the companies are gouging consumers at the pump.

"The industry spent heavily on the primary and general elections to boost business-friendly Republicans and moderate Democrats," reported Lindsey Holden. "One oil-funded political action committee — The Coalition to Restore California’s Middle Class, Including Energy Companies who Produce Gas, Oil, Jobs and Pay Taxes — spent more than $8 million in 2022 backing candidates it thought might be helpful in fending off a possible windfall penalty. In addition to PAC spending, individual companies also gave directly to some candidates."

"There is no guarantee victorious candidates on the receiving end of the spending will ultimately do oil’s bidding," said the report. "PAC-funded television ads and mailers were typically organized through independent expenditures, meaning campaigns could neither accept nor reject the support. Early indications may emerge Monday as legislators gather for a special session, convened by Gov. Gavin Newsom to tackle alleged oil industry price gouging amid record earnings and high gas prices."

The candidates who won with support from these groups are state Senate candidate Angelique Ashby and state Assembly candidate Stephanie Nguyen, Sacramento-area Democrats who defeated more progressive Democratic opponents; Republican state Assembly candidate Juan Alanis in the Central Valley; Orange County Republican Janet Nguyen for state Senate; and Democratic Assembly candidate Juan Carrillo in Palmdale. Several other candidates they spent on lost, including moderate Democratic Assembly candidate Leticia Perez in Kern County; Republican Assemblywoman Suzette Valladares in Santa Clarita; and Matt Gunderson, a Republican state Senate candidate in San Diego.

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Several factors have increased gas prices that were outside of oil companies' control, including the war in Ukraine. Additionally, California has for decades had more expensive fuel than the rest of the nation, due to the state's especially strict clean-burning standards, enacted in 1996 to improve air quality in Los Angeles, where the mountainous geography causes car exhaust to easily build up into toxic clouds of smog.

However, several politicians have pointed to oil companies' reported record-high profits as evidence that at least some of this year's huge spike in gas prices, at times over $6 a gallon throughout much of California, is a result of oil companies deliberately engineering a scarcity to improve their profit margins, at the expense of consumers and the wider economy. Lawmakers in Sacramento are set to debate a so-called "windfall tax" that could penalize oil companies above the normal corporate tax rate if their profits grow at an excessive rate, although the details of how it would work or be enforced are yet to be ironed out.