In early 2020, the Denver-based Extraction Oil & Gas company filed for Chapter 11 bankruptcy protection, hoping to reorganize or otherwise free itself from $1.7 billion in debt. (Because making a billion dollars suddenly disappear is a privilege reserved for corporations, which are people, except when they're not.)
Since 2018, Extraction had spent about $10 million dollars — the equivalent of $12,000 per day — on political contributions. That's a lot of money on lobbying, which presumably should have paid off for them, thus preventing the need for bankruptcy and financial restructuring, especially under the Trump administration. During the company's bankruptcy proceedings in a Delaware federal court, Extraction acknowledged that they had spent this money on political contributions. But they would not reveal to whom that money had gone.
As the Denver Business Journal explains:
Just over $1.3 million of that went to the Protect Colorado campaign to defeat a 2018 anti-drilling ballot initiative, Proposition 112, state campaign finance filings show. The oil industry as a whole poured $41 million into publicly disclosed efforts to defeat the initiative's 2,500-foot well setback requirement.
David Sirota and Andrew Perez at the Daily Poster further contextualized the rest of the spending:
Many of the political contributions at issue do not appear to be disclosed in state or federal records, according to an analysis by the Denver Business Journal and data compiled by the National Institute for Money in Politics — suggesting some of the money may have gone to "dark money" groups, or politically active nonprofits that aren't required to publicly disclose their donors.
Lawyers for the bankruptcy watchdog organization U.S. Public Trustee filed an objection to Extraction's request to keep the other details secret, arguing that "There is a strong presumption in favor of public access to bankruptcy proceedings and records. During a Chapter 11 reorganization, a debtor's affairs are an open book and the debtor operates in a fishbowl."
Extraction argued that they should be allowed to keep these contributions secret, even during a financial restructuring. Their lawyers wrote:
Such contributions are made to protect both the current interests of the debtors as well as the debtors' long-term interests. It is likely that the disclosure of the specific recipients of the debtors' contributions would jeopardize many of the debtors' business relationships, which in turn would adversely affect the debtors' business. The public disclosure of certain contributions (or the lack thereof) would also adversely affect the debtors' longstanding relationships with both state and local governments. … Competitors would be able to exploit the debtors' lost business relationships while continuing their own political contributions.
Extraction's argument essentially boils down to, "Our donations are a trade secret to advance business interests." Remember that the Citizens United ruling explicitly stated that, "independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption" and "do not lead to, or create the appearance of, quid pro quo corruption."
The federal court ultimately decided that the watchdog group, "has not identified a tangible benefit to the bankruptcy process that would be produced by compelling disclosure."
Extraction Oil & Gas fights in bankruptcy court to maintain secrecy of millions in political donations [Greg Avery / Denver Business Journal]
The Fossil Fuel Industry's Dark Money Just Got Even Darker [David Sirota and Andrew Perez / Daily Poster]
Image via Public Domain