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Big Oil pays billions to settle with government over allegations of unpaid debts

By Catholic Online (NEWS CONSORTIUM)
5/15/2014 (3 years ago)
Catholic Online (www.catholic.org)

Auditors and activists allege unethical accounting.

According to a report by the Thompson Reuters Foundation, oil companies in the U.S. have paid billions to settle allegations that they routinely defraud the U.S. government and Native Americans of tax revenues by using unethical accounting practices. The report says oil companies have paid $3 billion over the past 15 years.

Big oil firms have not been paying their fair share, a new report alleges.

Big oil firms have not been paying their fair share, a new report alleges.

Highlights

By Catholic Online (NEWS CONSORTIUM)
Catholic Online (www.catholic.org)
5/15/2014 (3 years ago)

Published in U.S.

Keywords: oil, profits, taxes, payments, rules, transparency


LOS ANGELES, CA (Catholic Online) - The Thompson Reuters Foundation reports that Royal Dutch Shell and Exxon Mobile Corp. have been fined for penalties and back payments pertaining to unethical accounting practices that included the undervaluation of resources to minimize public obligations.

These companies, the report claims, are also fighting transparency regulations that are intended to help people in developing countries who may be disenfranchised of their fair share of profits.

Let us pray for the disenfranchised.

According to the U.S. government and whistleblowers, the report claims "it's relatively easy for energy companies to fudge their numbers using dubious accounting techniques and outright fraud."

Audits done by the U.S. Government Office of Natural Resources Revenue have revealed billions in underpayments.

Reuters also quoted Oxfam America senior policy adviser, Isabel Munilla who suggested, "If this is happening in the U.S, where we have a strong legal and regulatory system, which should in theory reduce the incentives for this type of behavior, it's very likely to be happening around the world, especially in places with much weaker governance systems."

Shell and Exxon both are also lobbying against new, proposed Securities and Exchange Commission rules that would require greater transparency and reporting of monies paid to other governments for oil and gas projects.

Shell and Exxon both claim they have paid their obligations, but chose to settle in all cases to avoid the costs of litigation.

The oil industry is one of the world's most lucrative businesses because the world is powerfully reliant on the industry to maintain itself and expand. However, the tremendous profits have long attracted government attention because the resources extracted from the Earth arguably belong to the people themselves.

In many countries, oil and gas profits are shared with the people in one fashion or another, although the revenues from such are frequently poorly distributed. Venezuela provides an excellent example of oil profits fueling corruption as the monies are not all spent on projects to help people, but instead are commonly siphoned and embezzled.

Still, the case is about oil companies paying their fair share, and if these companies follow unethical accounting practices it can be difficult to catch them, and difficult to extract the wealth that is due to the people.

The gifts of creation ought not belong to a single person or one, but should be shared, in reasonable fashion and measure, with those who lose the use of them, or potential use, by means of their development. For example, oil and gas harvested from Native American lands deprives that population of the mineral wealth forever. They deserve fair compensation. Since those extracting the resources are also earning a tremendous profit, it is appropriate to expect a reasonable payment be made.

The U.S. government, as well as various Native American tribes have agreed on what that reasonable payment should be, but if oil companies are dishonest in their accounting, then it becomes difficult to tell if the full, agreed payments have been made.

Overseas, in cases where there is even less government transparency, the situation may be much worse.

All of this can be resolved by the development of a new ecology and a moral understanding of wealth and how it should best be employed. Unfortunately, everybody is listening to the monied lobbyists and lawyers, and nobody is listening to the moral authorities on such issues.

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