I like clues….
Kaiser-Francis Oil?
Joe Biden’s presidential campaign returned a contribution made by Oklahoma billionaire George Kaiser, who owns stakes in the oil and gas industry, according to a campaign spokesperson. The Biden campaign has said it is not accepting money from executives of fossil fuel companies.
Kaiser, who Forbes estimates is worth $5.8 billion, chairs the Bank of Oklahoma, and holds stakes worth hundreds of millions of dollars in oil and gas exploration and production firms, as well as a liquefied natural gas shipping company. He made a $2,800 contribution to Biden’s campaign on March 9, Federal Election Commission filings show. The campaign returned the contribution on April 20, a campaign spokesperson said, a move that should show up in public records released in May.
Kaiser’s parents fled Nazi Germany in the 1930s and moved to Tulsa, Oklahoma. His family got into the oil business and built what became Kaiser-Francis Oil. George eventually took over. Kaiser purchased an interest in the Bank of Oklahoma in 1991; today his stake is worth about $1.3 billion. He also owns a piece of an NBA team, the Oklahoma City Thunder. Recently Kaiser committed $10 million to coronavirus relief efforts in Tulsa. His family foundation, which focuses on early childhood education and criminal justice reform, has assets worth more than $3.8 billion, according to the latest available public filings.
“I believe that equal opportunity—the most profound shared principle of American Democracy, dating back to the declaration of independence—is disappearing,” Kaiser wrote in an email to Forbes. “Government policy and public indifference have placed increased barriers in the way of young children, born into poverty, denying them access to the American dream. I generally support the Democratic Party at the federal level because they share my concern and are willing to pass legislation that would reverse that trend, generating budget savings to offset additional costs.”
It’s not that Biden’s policies are in Kaiser’s own self-interest. The former vice president wants to rejoin the Paris Agreement and put America on a path to net-zero emissions by 2050. Kaiser has previously supported other environmentally friendly candidates, donating more than $125,000 to Hillary Clinton’s joint fundraising committee in 2015 and 2016 and bundling for Barack Obama.
This isn’t the first time a Democratic candidate has sent back billionaire money because of a fundraising pledge. In November last year, Bernie Sanders, who had promised to accept no money from billionaires, returned $470 in contributions made by Marta Hall, who is married to self-driving car pioneer David Hall.
Digging..
That wasn’t the first time Kaiser caught the attention of government tax officials.
In 1997, the Internal Revenue Service sent Kaiser and his companies bills for more than $72 million in back taxes, interest and penalties, covering individual and corporate returns filed from 1986 to 1992. Kaiser filed returns showing his personal income averaging negative $860,000 between 1986 and 1991; his holding company, GBK Corp., and its subsidiaries reported an aggregate loss from 1989 to 1992 of $507,000 — some years it made money and paid taxes, others it claimed losses and paid none.
The Cheating of America investigated how wealthy individuals and powerful corporations avoid taxes. Tax avoidance is legal — and the strategies Kaiser used to minimize his own and his company’s tax burden were certainly legal. And in the end, the IRS settled both cases for pennies on the dollar. How he did it had as much to do with the economics of the domestic and international energy markets and those of the state of Oklahoma as it did with the Internal Revenue Code.
Kaiser’s first fortune came from domestic energy production.
When he took over his father’s business, Kaiser-Francis Oil, in 1969, it had all of 10 employees. The 1970s energy shocks that resulted in lines at gas stations and natural gas shortages proved to be a boon for the domestic oil and gas industry, and Kaiser built his company into Oklahoma’s largest privately held producer of natural gas. At the peak of the oil boom, when a popular bumper sticker in the state read, “If you don’t own an oil well, get one,” Kaiser started to sell his at peak prices.
When oil prices started to decline in the 1980s due to increased OPEC production, the boom went bust, and affected far more than the Oklahoma energy industry. Unemployment soared and real estate values dropped, leaving many homeowners with negative equity. Banks that had loaned wildly during the boom ended up with mountains of bad debt on their books backed by devalued assets, including empty office towers and bankrupt energy producers.
During the bust, Kaiser changed course again, and started buying up bankrupt firms like Waterford Energy, which had all of $7 million in assets and some $151 million in losses on its books. The losses were valuable – under the Internal Revenue Code, a company can use past losses as credits, known as net operating losses, to reduce their tax burden in profitable years. In 1990, after Kaiser acquired the firm, Waterford filed a plan of reorganization in a Texas bankruptcy court that stated that one of the principal motivations of the plan was to “preserve the tax attributes of the debtor in order to allow the debtor to realize the benefits of the tax attributes.”
Kaiser’s company, GBK Corporation — the parent of Kaiser-Francis Oil — began claiming those losses on its tax returns.
In 1997, the IRS disallowed the Waterford losses, arguing that “losses resulting from acquisitions made to evade or avoid income tax are prohibited.” The service sent Kaiser a bill for $24 million. Kaiser fought the IRS in U.S. Tax Court, ultimately settling the case for $3.7 million, or 15 cents on the dollar. “During the desperate depression of the 1980s, there were no oil and gas companies without net operating losses,” Kaiser said during an interview for the book in 2001. “Any company you’d buy had them. There was no indication that we didn’t comply with the Internal Revenue Code.”
cont: https://publicintegrity.org/politics/how-an-obama-fundraiser-turned-oklahoma-into-a-personal-tax-haven/
https://www.documentcloud.org/documents/256011-cheating-of-america-excerpt.html