Big donors raise questions about Ritter’s tax hike

by | Sep 22, 2008 | Capitol Review, Notes

Looks like Gov. Bill Ritter has mastered a priceless political skill:  the ability to say something absurd or hypocritical while maintaining a straight face.

“The oil-and-gas industry already benefits from taxpayer-funded subsidies, so the question is: How much has this scandal cost us in lost revenue?”

That’s how Ritter responded to the recent sex, drugs and favors controversy involving government regulators and oil company executives.  The campaign for his $320 million oil and gas tax hike says that scandal is a reason to raise taxes.

A campaign commercial intones: “Scandals. Lies.  Huge subsidies.  Tell oil companies you’ve had enough.  Vote yes on (Amendment) 58.

The supreme irony is that one of the companies implicated in the investigation is a key supporter of Ritter’s tax hike.  On June 30, Gary-Williams Company helped jump-start Ritter’s tax campaign with a $100,000 contribution.

Now, executives with Gary-Williams Energy Corporation are at the heart of the corruption probe in which, reports say, “energy companies (were allowed) to twist rules at transaction levels generally unseen by the public.”
One Gary-Williams executive explained: “(You) cannot market oil and get top dollar (while) sitting in an ivory tower.”

Investigators found that oil companies were allowed to submit bids after deadlines to gain a financial edge.  Although the value of gifts given to government bureaucrats was rather paltry by comparison, companies involved in the scandal appear to have reaped more than $4 million in savings.

If a few thousand dollars to government bureaucrats yields millions in savings to big corporations, Colorado taxpayers should be asking themselves what special treatment the likes of Gary-Williams Company expect to gain by contributing $100,000 to Gov. Ritter’s tax hike campaign — especially when most energy companies believe it’s in their best interest to fight Ritter’s plan.

By ponying up to support Ritter’s campaign, it sure looks like Gary-Williams Corp. is pursuing a much different angle.

Likewise, taxpayers – and voters – might be skeptical of a $250,000 contribution that Ritter’s tax hike campaign received from Connecticut billionaire Paul Tudor Jones on Sept. 4.

One of the wealthiest men in America, Jones is president of Tudor Investment Corp., a $15 billion hedge fund, which has profited handsomely from rising oil prices.

In the mid-1990s, Jones bankrolled a proposal to raise taxes on Florida sugar growers, who argued that he intended to profit from increased volatility in sugar markets.

Jones’ allies contended that sugar growers should help pay for restoration of the Everglades, while sugar growers countered that Jones was hypocritical, claiming that bathrooms in his vacation home in Islamorada were polluting the Florida Keys.

A few years earlier, Jones pleaded guilty to violating the Clean Water Act on his Maryland hunting reserve and paid $2 million in penalties to avoid a potential jail sentence.

Then in 1996, Tudor Investment Corp. was fined $800,000 by the Securities and Exchange Commission for violating trading rules and causing drop in the Dow Jones Industrial Average.

So why does a Wall Street commodities trader care about an energy tax in Colorado?

Maybe because, just as opponents of Ritter’s tax hike have argued, passage of Amendment 58 would marginally increase the cost of oil and gas production.  Incremental fluctuations in price can be quite lucrative for investors with the foresight to anticipate them.

Or maybe it’s because Jones owns a 25,000-acre private hunting and fishing preserve in Summit and Grand counties and, for years, has been pursuing a land swap with the Bureau of Land Management to consolidate his holdings. Having Gov. Ritter’s backing certainly couldn’t hurt.

In its first two years, the Ritter administration hasn’t been immune to ethical hiccups.  This strange alliance lining up behind Amendment 58 gives taxpayers cause to wonder if there are more to come.


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