Small Donation, Big Bang

Exxon Mobil Takes Heat for $500 Donation to Lampson

Posted October 28, 2005 at 5:40pm

After reporting an eye-popping quarterly profit of nearly $10 billion last week, Exxon Mobil is catching flak from Congressional Republicans for a political contribution that, by comparison, amounts to chump change.

The oil giant recently reported that its political action committee had contributed $500 to the campaign of Nick Lampson, the former Democratic lawmaker who is challenging Rep. Tom DeLay (R-Texas) for his 22nd district seat.

The House Republican leadership noticed the donation — and it is furious about it.

“It clearly forms an overall opinion in Congressional leadership that this company is going to have big problems if this is the way they’re trying to play the game,” said a senior House GOP leadership aide. “They have priorities they want that could be impacted.”

Republicans are angry despite a $5,000 contribution the company made to DeLay’s campaign. Indeed, so far this cycle, the company has steered $180,000, or 91 percent of its political contributions, to Republicans.

The dustup comes at a politically dangerous moment for Exxon. The company’s staggering profit report, during a time when average Americans have been struggling with record-high energy prices, is attracting scrutiny not just from Democrats but from Congressional Republicans, who have typically been allies of the industry.

Speaker Dennis Hastert (R-Ill.) last week warned oil companies that price gouging is “unacceptable” and said firms found to be engaging in it will be prosecuted. He encouraged the industry to explain to the American people what steps they are taking to bring prices down.

Meanwhile, Senate Majority Leader Bill Frist (R-Tenn.) has called for hearings into why prices remain so high. He indicated energy executives may be called to testify. And Democrats in both chambers are renewing calls for a windfall profit tax on oil companies.

“They’re on the wrong side of the American people due to high gas prices,” the GOP aide said. “And they’re quickly getting on the wrong side of the majority party.”

An Exxon spokesman said the $500 contribution — roughly 1/20,000,000 of the single-quarter profit the company reported last week — was made by the PAC because it received a donation from an employee who earmarked it for Lampson’s campaign.

“An individual participant in our political action committee made an earmarked contribution to the PAC,” Dave Gardner said.

He called the reaction from House Republican leadership “unfortunate,” and said the company has tried to explain itself.

A GOP aide acknowledged that the context might ultimately make a difference.

“If it’s a person who lives in Texas and works on an oil rig, that’s a different story,” the aide said. But despite the company’s assertions, “we don’t know where it came from, and our assumption is it’s coming from on high.”

And the damage may already have been done.

“What a bunch of political novices,” said one energy lobbyist. “Everyone on the Hill knows they’ve made this contribution. Everyone has taken note.”

The lobbyist added that Republican wrath over the donation extended beyond the ranks of leadership and into the House Energy and Resources committees.

Spokesmen for the committees did not return calls for comment.

Exxon, the lobbyist added, has “a huge public relations problem coming, and they are running out of friends.”

DeLay had to step aside as House Majority Leader earlier this month after being indicted for money laundering and conspiracy. The laser-like focus on a relatively small donation suggests the continuing importance of DeLay within the House Republican leadership, despite his indictment.

Ed Patru, spokesman for the National Republican Congressional Committee, wondered “why someone at Exxon would want to position the corporation on the wrong side of Tom DeLay and the Republican Party.”

“You’d have to ask them,” he said.

Lampson has raised $841,000 so far this year, much of it from individuals. Indeed, Exxon’s contribution is one of only a few he has received from corporate PACs. DeLay, meanwhile, leads House candidates in the hunt for campaign dollars, pulling in $920,000 for the first nine months of the year.

Mike Malaise, Lampson’s campaign manager, said his candidate is not counting on corporate money to fund his bid. Yet he said as “things get worse, not better for Tom DeLay,” donors of all stripes will be attracted to the man challenging the indicted former Majority Leader.

“Its going to be more and more clear to a lot of folks there’s a good chance DeLay’s not going to be in Congress next time around,” Malaise said. “That’s something they’re going to have to factor into their decisions on who to support.”

DeLay’s campaign dismissed any notion that the donation showed weakness in the former Majority Leader’s re-election prospects.

“That donation isn’t even a blip on the radar screen, especially when you see that MoveOn.org, the trial lawyers and the labor unions have already bought him off,” DeLay spokeswoman Shannon Flaherty said.

Malaise, for his part, dismissed Republican threats to Exxon as akin to “kids trying to ground their parents.”

If in fact the oil company made the contribution to honor an employee’s wishes, it could make a good argument for Exxon Mobil, or other companies, ending the practice of allowing employees to designate their political donations, said one campaign finance expert.

“Earmarking, while permissible, is something that I generally stay away from, so that the PAC administrators maintain full control over who gets the contributions and the corporate interests are not diluted,” said Ken Gross, a lawyer at Skadden, Arps, Slate, Meagher & Flom.