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The Trump administration has used federal coronavirus aid money to buy more than $350 million in bonds offered by oil and gas companies, propping up an industry that has been struggling for years. A new report by Public Citizen identified 19 companies in the oil and gas industry that received investment from the Federal Reserve, including Halliburton, a former client of Interior Secretary David Bernhardt, and oil giants like ExxonMobil, BP, and Chevron.
Such an investment in a struggling industry could be risky. Since receiving money from the Fed, 12 of the 19 companies have been downgraded by independent credit rating agencies that assess bond risk.
The Interior Department has also used the pandemic to deliver royalty reductions and lease suspensions to the oil and gas industry. In Wyoming, a bankrupt natural gas company secured a 96% royalty reduction on its federal leases, despite owing $4 million in federal royalties and not having paid local royalties in more than three years. Wyoming Senator John Barrasso acknowledged the impropriety in a statement, saying, "federal funding should not go to any producer delinquent in their taxes."
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When you're handing out taxpayer-backed bailouts and royalty cuts like candy without doing the due diligence and work necessary to protect the public interest, like the Trump administration has done, it's almost assured that countless bad actors like US Realm will grab a handful, leaving the bill and cleanup for the rest of us.”
