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Boxer throws punch to oil companies

Senator calls huge profits 'unbelievable' in a time of record prices
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The CEOs of five of the world's biggest oil companies were on the hot seat in Washington yesterday.  Lawmakers demanded to know why oil profits were so high and why these companies are getting tax breaks when Americans can barely afford to fill the tank. 

Senator Barbara Boxer, Democrat from California, was at these meetings.  She spoke to MSNBC-TV's Joe Scarborough about the issue.

To read an excerpt of their conversation, continue to the text below. To watch a video report on the bombings, click on the "Launch" button to the right.

BARBARA BOXER, SENATOR (D-CALIFORNIA): Nice to be in your country. 

JOE SCARBOROUGH, MSNBC HOST: Hey, it's great to be here.  Everybody is welcome.  Senator, you know, actually, this really isn't so much of a bipartisan issue, because wasn't it the Republican chairman yesterday who refused to put these oil execs under oath? 

BOXER: This is true. 


BOXER: Well, first, the plus side was that they finally agreed to have the hearing, which Democrats had been asking, and they agreed, which by the way, in and of itself, Joe, is very salutary, because when the light shines, we see oil prices go down.

But the truth is, they should have been sworn in.  I put in the record a picture from 1974.  You probably weren't even born yet. 


BOXER: There was Scoop Jackson, senator, swearing in these executives because they were claiming there were shortages that turned out in many cases to be false.  So, that was the right thing to do, but for some reason, both Senators Domenici and Stevens didn't want to go there, and they kind of shut us down. 

SCARBOROUGH: You know, Senator, these oil execs always talk about market forces.  I am a free market capitalist, but at the same time, I see absolutely no market forces that would justify the type of profits the oil companies are getting. 

Yet as you point out in a press release, and said yesterday, oil CEOs, exec CEOs are getting like, what, 200 percent increases in their own salaries over the past three years? 

BOXER: Well, it's unbelievable. 

Some of them have made $19, $20 million in base pay and stock and so on, and on top of it, $3 or $4 million in bonuses.  And here's the thing about the American people, and you know because you know the American people well.  They communicate with you.  They are fair.  And, you know, if we are hit with hurricanes, we have this war going on, Iraq, regardless of how you feel about it, it's going on.  We have got issues.  We have got problems, and we should all sacrifice.

So when the average family is having to make these sacrifices at the pump, we look over at these guys, and its record profits.  It's unbelievable.  And they just sat there as, you know, very bored with the whole thing, and really said very little at all.  It wasn't a very satisfying experience. 

SCARBOROUGH: Well, they looked contemptuous. 

BOXER: Yes.  Yes. 

SCARBOROUGH: You know what I don't understand?  I don't understand why politicians in Washington, D.C., pass tax breaks for these oil execs at a time when they are making more money than ever before.  Why does big oil need more tax incentives? 

BOXER: Well, I will be honest with you.  If you look at the record on that, it is this administration that has pushed these tax breaks across the board for the biggest energy companies.

You make a very good point.  If you really are a free market individual, then why come in and pick winners and losers?  You know, I am an old economics major, and I think if you are really going to practice capitalism, then don't come in with government and pick winners and losers
like this, and pay — let them go get huge breaks just to do what they would normally do anyway. 

SCARBOROUGH: You know, Senator, every time you press an oil executive and say, OK, why is it that oil prices are going up and gas prices are going up at the same time your profits are going up, they always go back to the old excuse, oh, it has to do with refineries.  We have a shortage of refineries. 

BOXER: That's right. 

SCARBOROUGH: And yet Exxon has $39 billion in cash right now in reserves, and they are refusing to build refineries. 

BOXER: That's right. 


BOXER: Thank you for understanding this, Joe.  This is a fact, because I think they want to control the supply.  its as just simple as that.  You know, Shell Oil had a refinery in Bakersfield.  Listen to this.  They said, we are shutting it down.  It doesn't make money.  That wasn't true.  They said, we are shutting it down.  We can't get a steady supply of crude oil.  That wasn't true.  They said, we are shutting it down, and there's no buyers.  That wasn't true. 

It was only because political leaders got together in the state and in the Congress and pressed them that they were forced to sell this refinery, and, by the way, the new buyer is very happy and supplying 2 percent of the gasoline for California.  Now, I tried to press that yesterday, and the Shell person said, oh, we are just thrilled that its remained open. 


BOXER: And just sort of ignored the whole thing, that they tried to control the supply, and I think, at the end of the day, that's the true story here. 

SCARBOROUGH: Of course, Senator, you are exactly right.  Americans need to understand, if these oil companies were forced to build more refineries, then we would have more oil.  We would have more gas.  And the prices would be cheaper.