Oil Giant’s Rig Crash Could Be A Tax Dodging Attempt Gone Wrong

The latest of a series of Shell mishaps in the Arctic occurred on New Year’s Eve, when Shell’s drilling rig, Kulluk, ran aground while being towed out of Alaskan waters. Harsh weather conditions began shortly after Shell began towing, causing the rig and its 150,000 gallons of fuel and drilling fluid to wash up on an island along the Alaska coastline.

Rep. Ed Markey (D-MA) challenged the suspicious timing of Shell’s decision to move despite the harsh conditions. If Shell had kept its rig stationed in Alaska waters on January 1, the company would have potentially paid $6 million in state taxes:

Shell could have been exposed to potential state tax liability on the Kulluk drill rig if it remained in the state on January 1st. Chapter 43.56 of the Alaska Statutes states that an annual tax of 2 percent can be assessed each tax year on January 1st on “the full and true value of taxable [oil and gas] property taxable under this chapter” Shell had reportedly spent $292 million just on upgrades to the Kulluk since purchasing the drill rig in 2005. That would mean that Shell could have potentially been exposed to state tax liability on the Kulluk in excess of $6 million.

Shell’s official response maintains that the “two-week window of good weather” prompted the decision to move out of Alaskan waters.

Shell has a history of tax dodging. For example, it has offshored pre-tax profits to avoid UK taxes. At the federal level in the U.S., Shell also lowers its tax bill with $200 million in annual tax breaks.

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Largest U.S. Medical Marijuana Dispensary Beats Back Another Shutdown Attempt

Harborside Health Center founder Steve DeAngelo

Last month, a California judge rejected a landlord’s move to evict the nation’s largest medical marijuana dispensary for engaging in a business that is legal under state law. Now, a federal judge has also barred the landlord’s attempt to halt the dispensary’s operations.

In the ongoing federal-local battle over state laws that legalize medical marijuana, the court ruling is the latest victory for Harborside Health Center, a 100-plus-employee operation that Oakland City Attorney Barbara Parker has praised for providing “access to safe, affordable and effective medicine.” While the Obama administration initially said it would not target medical marijuana dispensaries in compliance with state law, it has since fluctuated on this position, and pursued increasingly vigorous crackdowns. To shut down Harborside, the federal government filed a civil action to seize the Oakland and San Jose, Calif. properties Harborside leases for its dispensaries. The owners of the two properties attempted to skirt the federal case by moving to evict Harborside or cease its marijuana distribution. One county judge rejected the move, while another has allowed eviction proceedings to move forward. But U.S. Magistrate Judge Maria-Elena James held Monday that the federal Controlled Substances act cannot be enforced by private parties like these landlords:

As Harborside points out, courts have consistently held that there is no private right of action under the CSA to force compliance. […]

Moreover, while the Court understands Claimants’ concern over the potential forfeiture of their properties, Rule G(7)(a) is not a means to sever business relationships when they suddenly prove risky or to demonstrate cooperation with the Government.

The landlords and the Department of Justice will now litigate between themselves over the move to seize the properties where Harborside is housed. The city of Oakland also filed an unprecedented, affirmative lawsuit to halt federal government crackdowns of medical marijuana dispensaries in the city. The city alleges that the federal government exceeded its authority with its civil forfeiture action by acting contrary to earlier statements and actions that indicated it would not crack down on those dispensaries in compliance with state medical marijuana laws, now in 18 states.

The litigation raises the question of how the federal government will handle Washington and Colorado’s new laws to legalize and regulate recreational marijuana. In the first comment on the measures, President Obama said recreational users are not a “high priority.” He did not, however, refer to marijuana sellers and suppliers, which would be the likely subjects of any federal crackdown.

In the wake of the crackdown, landlords have been unwilling to rent to several other dispensaries that were approved for operation in Oakland.

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Supreme Court Rejects Hobby Lobby Attempt To Block Obamacare Contraception Mandate

NEWS FLASH

Supreme Court Rejects Hobby Lobby Attempt To Block Obamacare Contraception Mandate | The Supreme Court said Wednesday it will not block an Obamacare mandate that employers must provide insurance coverage for contraception. Hobby Lobby, a craft chain, was seeking an emergency injunction against the mandate after both a federal and district judge ruled against it. While Hobby Lobby can still pursue its lawsuit that claims the mandate violates religious freedom, Justice Sonia Sotomayor ruled that it could not show that an injunction blocking the mandate from taking effect was “necessary or appropriate.”

By Travis Waldron on Dec 27, 2012 at 12:45 pm

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