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Wednesday, December 30, 2020

Missing Patterns in Corporate News: Project Censored’s Top 10 Underreported Stories of 2020

Posted By on Wed, Dec 30, 2020 at 6:00 AM

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4. Congressional investments and conflicts of interest

Exposition, political corruption, and conflicts of interest are age-old staples of journalism. So it's notable that two of the most glaring, far-reaching examples of congressional conflicts of interest in the Trump era have been virtually ignored by corporate media: Republicans' support for the 2017 Tax Cuts and Jobs Act, and bipartisan failure to act on catastrophic climate change.

"The cuts likely saved members of Congress hundreds of thousands of dollars in taxes collectively, while the corporate tax cut hiked the value of their holdings," Peter Cary of the Center for Public Integrity reported for Vox in January 2020.

It was sold as a middle-class tax cut that would benefit everyone.

"Promises that the tax act would boost investment have not panned out," he noted. "Corporate investment is now at lower levels than before the act passed, according to the Commerce Department."

Once again, "trickle down tax cuts" didn't trickle down.

"The tax law's centerpiece is its record cut in the corporate tax rate, from 35 percent to 21 percent," Cary wrote. "At the time of its passage, most of the bill's Republican supporters said the cut would result in higher wages, factory expansions, and more jobs. Instead, it was mainly exploited by corporations, which bought back stock and raised dividends."

Buybacks exceeded $1 trillion for the first time ever, the year after the cuts were passed, and dividends topped a record $1.3 trillion high.

The benefits to Congressional Republicans were enormous.

"The 10 richest Republicans in Congress in 2017 who voted for the tax bill held more than $731 million in assets, almost two-thirds of which were in stocks, bonds, mutual funds, and other instruments," which benefitted handsomely as a result of their votes that "doled out nearly $150 billion in corporate tax savings in 2018 alone," Cary noted. "All but one of the 47 Republicans who sat on the three key committees overseeing the drafting of the tax bill own stocks and stock mutual funds.

"Democrats also stood to gain from the tax bill, though not one voted for it," he wrote. "All but 12 Republicans voted for the tax bill."

Two special features deserve notice. First is a newly created 20% deduction for income from 'pass-through' businesses, or smaller, single-owner corporations.

"At least 22 of the 47 members of the House and Senate tax-writing committees have investments in pass-through businesses," Project Censored noted.

Second was a provision allowing real estate companies with relatively few employees — like the Trump organization — to take a 20 percent deduction usually reserved for larger businesses with sizable payrolls.

"Out of the 47 Republicans responsible for drafting the bill, at least 29 held real estate interests at the time of its passage," Project Censored pointed out.

As to the second major conflict, "Members of the U.S. Senate are heavily invested in the fossil fuel companies that drive the current climate crisis, creating a conflict between those senators' financial interests as investors and their responsibilities as elected representatives," Project Censored wrote.

"Twenty-nine U.S. senators and their spouses own between $3.5 million and $13.9 million worth of stock in companies that extract, transport, or burn fossil fuels, or provide services to fossil fuel companies," Donald Shaw reported for Sludge in September 2019.

While unsurprising on the Republican side, this also includes two key Democrats. Sen. Tom Carper, of Delaware, is the top Democrat on the Environment and Public Works Committee. He has "up to $310,000 invested in more than a dozen oil, gas, and utility companies, as well as mutual funds with holdings in the fossil fuel industry," Shaw reported.

But his record is not nearly as questionable as Sen. Joe Manchin, D-West Virginia, the ranking member of the Senate Energy and Natural Resources Committee, who "owns between $1 million and $5 million worth of non-public stock in a family coal business, Enersystems," and reported earning "between $100,001 and $1 million" in reported dividends and interest in 2018, plus $470,000 in 'ordinary business income," Shaw reported.

His support for the industry was significant:

Manchin was the only Democrat to vote against an amendment to protect the Arctic National Wildlife Refuge from oil drilling in 2017, and he was one of just three Democrats to vote against an amendment to phase out taxpayer subsidies for coal, oil, and gas producers in 2016. Manchin has also voted to approve construction of the Keystone XL oil pipeline, expedite the approval process for natural gas pipelines, and override an Obama administration rule requiring coal companies to protect groundwater from toxic coal-mining waste.

While there has been critical coverage of 2017 tax cuts, this has not included coverage of lawmakers' personal profiting, Project Censored noted.

"In addition, despite the significant conflicts of interest exposed by Donald Shaw's reporting for Sludge, the alarming facts about U.S. senators' massive investments in the fossil fuel industry appear to have gone completely unreported in the corporate press."



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